<PAGE>
OPPENHEIMER STRATEGIC INCOME & GROWTH FUND
SEMI-ANNUAL REPORT MARCH 31, 1994
[Oppenheimer Logo] OppenheimerFunds-R-
"I WANT TO GIVE HIM THE BEST OF
EVERYTHING, TODAY AND TOMORROW.
"THIS FUND ADDRESSES BOTH OF MY
INVESTMENT NEEDS--SEEKING CURRENT
INCOME AND LONG-TERM GROWTH--ALL
WHILE ADAPTING TO CHANGING MARKET
CONDITIONS."
<PAGE>
FUND FACTS
- - -------------------------------------------------------------------------------
FIVE FACTS EVERY SHAREHOLDER SHOULD KNOW ABOUT
OPPENHEIMER STRATEGIC INCOME & GROWTH FUND
------------------------------------------------------
1 The Fund's primary objective is to seek
current income. Its secondary objective is
capital appreciation.
- - ---------------------
- - --------------------- ------------------------------------------------------
IN THIS REPORT: 2 The Fund's standardized yield was 3.39% for
Class A shares and 2.79% for Class B shares
ANSWERS TO THREE for the 30-day period ended 3/31/94.(1)
QUESTIONS YOU
SHOULD ASK YOUR ------------------------------------------------------
FUND'S MANAGERS. 3 As of 3/31/94, the Fund's portfolio
allocation was:(2)
/ / HOW HAS THE FUND
RESPONDED TO THE RECENT PIE CHART:
RISE IN U.S. INTEREST
RATES? DOMESTIC STOCKS 47.0%
/ / WHAT IS YOUR OUTLOOK HIGHER-YIELDING, LOWER-RATED
FOR EUROPEAN INTEREST CORPORATE BONDS 21.6%
RATES?
FOREIGN FIXED INCOME SECURITIES 17.9%
/ / MY INVESTMENT
ADVISOR SAYS STOCKS U.S. GOVERNMENT SECURITIES 12.2%
TODAY LOOK EXPENSIVE;
HOW IS THE FUND REPURCHASE AGREEMENTS 1.3%
SEEKING OUT GOOD
INVESTMENT VALUES? ------------------------------------------------------
4 The Fund's average annual total returns for
GET THE FACTS ABOUT Class A shares for the 1-year period ended
BONDS AND BOND 3/31/94 and since inception of the Fund on
MUTUAL FUNDS. CALL 6/1/92 were -5.11% and 1.40%, respectively.
1-800-525-7048 TO For Class B shares, average annual total
RECEIVE YOUR FREE COPY returns for the 1-year period ended 3/31/94
OF OPPENHEIMERFUNDS and since inception of the Class on 11/30/92
"FACTS ABOUT BOND were -6.16% and -1.26% respectively.(3)
FUNDS" BROCHURE.
------------------------------------------------------
5 "The Fund's diversified investment strategy
is well-suited to the current global economic
environment, in which interest rates are
rising in the U.S., but falling in Europe.
Our emphasis on stocks remains strong, as we
continue to pursue growth at a reasonable
price. Anticipating further increases in U.S.
rates, we are emphasizing shorter-term
investments in U.S. government securities. In
Europe, by contrast, we are maintaining our
longer-term, higher-yielding investments,
which should perform well as rates fall. And
we believe the corporate bond sector will
perform well as the U.S. economy
strengthens."
PORTFOLIO MANAGERS ROBERT DOLL,
DAVID NEGRI AND ART STEINMETZ,
MARCH 31, 1994
1. Standardized yield is net Investment Income calculated on a yield-to-maturity
basis for the 30-day period ended 3/31/94, divided by the maximum offering price
at the end of the period, compounded semi-annually and then annualized. Falling
net asset values will tend to artificially raise yields.
2. The Fund's portfolio is subject to change. Investors should be aware that the
lower-rated bonds in which the Fund invests may be subject to greater
fluctuation and risks of loss of income and principal and have less liquidity
than higher-rated fixed income securities. In addition, the risks of investing
in foreign securities, such as currency exchange fluctuation, political
developments and difficulties in trading in foreign markets, can increase the
possibility of share price fluctuation.
3. Average annual total returns are based on a hypothetical investment held
until 3/31/94, after deducting the maximum initial sales charge of 4.75% for
Class A shares and the contingent deferred sales charge of 5% (for 1 year) and
4% (since inception) for Class B shares. All figures assume reinvestment of
dividends and capital gains distributions.
Past performance does not guarantee future results. Investment return and
principal value will fluctuate so that an investor's shares, when redeemed, may
be worth more or less than their original cost.
2 Oppenheimer Strategic Income & Growth Fund
<PAGE>
REPORT TO SHAREHOLDERS
- - -------------------------------------------------------------------------------
Oppenheimer Strategic Income & Growth Fund's
standardized yield for the 30 days ended March 31, 1994
was 3.39% for Class A shares and 2.79% for Class B
shares.(4) Total return at net asset value for the 6
months ended March 31 was -2.74% for Class A shares and
-3.34% for Class B shares.(5)
Your Fund's managers allocate assets
among four sectors: U.S. government securities; higher-
yielding, lower-rated corporate bonds; foreign fixed
income securities; and domestic stocks. These sectors
tend to react differently to economic events, with weak
performance in one sector often offset by strong
performance in another. As a result, the Fund's
managers have the ability to seek high income in
different economic environments, while minimizing the
impact of adverse effects in any one sector.
The U.S. economy strengthened
considerably in the last six months, prompting the
Federal Reserve to raise interest rates---------------
several times as a pre-emptive strike ---------------
against inflation. Because bond prices "WE ARE ADDING
fall when interest rates rise, prices TO THE FUND'S
of U.S. government securities have POSITION IN
correspondingly declined. EUROPEAN
Your Fund's managers SECURITIES."
had already reduced the Fund's exposure to long-term
government bonds by the time interest rates began to
rise, thereby reducing the impact of rising rates on
the securities in the Fund's portfolio. We do not plan
to add to these positions as long as there are more
compelling yield opportunities elsewhere.
In European markets, we believe that
continued economic weakness and the German central
bank's recent decision to cut interest rates will cause
bond prices to rise. Accordingly, we are adding to the
Fund's position in European securities.
In addition, we are maintaining our
sizable position in corporate bonds, which we believe
will rise in price as the U.S. economic recovery
continues and corporate earnings increase.
Approximately half of the Fund's
portfolio is invested in stocks, and we expect that
these investments will benefit from strong U.S.
Economic growth. Your Fund's managers search for
companies that have exceeded expectations for earnings,
that have a relatively low price compared to their
earnings or have demonstrated consistent increases in
earnings. Based on these criteria, we invested in, or
increased our positions in a number of large, well-
known companies, including Texas Instruments, Citicorp,
Goodyear Tire, and Abbott Laboratories.
Thank you for your trust in Oppenheimer
Strategic Income & Growth Fund. We look forward to
helping you seek your investment goals in the future.
/s/ James C. Swain /s/ Jon S. Fossel
James C. Swain Jon S. Fossel
Chairman President
Oppenheimer Strategic Oppenheimer Strategic
Income & Growth Fund Income & Growth Fund
April 25, 1994
4. See footnote 1, page 2.
5. Based on the change in net asset value per share
from 9/30/93 and 3/31/93 to 3/31/94, respectively,
without considering a sales charge. All figures assume
reinvestment of dividends and capital gains
distributions.
3 Oppenheimer Strategic Income & Growth Fund
<PAGE>
<TABLE>
<CAPTION>
------------
Statement of Investments March 31, 1994 (Unaudited)
Face Market Value
Amount See Note 1
- - ------------
<S> <C> <C>
Repurchase Agreements--1.3%
- - ------------
Repurchase agreement with J.P. Morgan Securities, Inc.,
3.53%, dated 3/31/94, to be repurchased at $803,138 on 4/4/94,
collateralized by U.S. Treasury Nts., 4.25%--8.875%,
5/15/95--10/15/96, with a value of $819,249 (Cost $800,000) $800,000 $800,000
- - ------------
Government Obligations--27.7%
- - ------------
Argentina (Republic of):
Bonos de Consolidacion de Deudas:
Bonds, Series I, 3.1875%, 4/1/01(4)(6) 2,821,750(1) 1,939,270
Bonds, Series I, 4.25%, 4/1/01(4)(6) 282,175 159,177
Par Bonds, 4%, 3/31/23(7) 1,246,800(1) 794,316
Past Due Interest Bonds, 4.1875%, 3/31/05(2) 250,000 175,938
- - ------------
Banco Nacional de Mexico SA, Exch. Sub. Debs., 7%, 12/15/99(5) 400,000 462,000
- - ------------
Bariven SA Sr. Nts., Gtd. by Petroleos de Venezuela, 10.75%, 7/8/97 500,000 312,973
- - ------------
European Investment Bank Debs., 12.75%, 2/15/00 1,000,000,000(1) 732,030
- - ------------
Italy (Republic of) Treasury Bonds, 11%, 6/1/03 800,000,000(1) 539,968
- - ------------
Morocco (Kingdom of) Loan Participation Agreement,
Tranche A, 4.50%, 1/1/09(4)(5) 400,000 250,400
- - ------------
Polish People's Republic Loan Participation Agreement:
5.0625%, 2/3/24(2) 250,000(1) 55,452
7.9375%, 2/8/24(2) 500,000 157,500
- - ------------
South Australia Government Finance Authority Bonds, 10%, 1/15/03 1,680,000(1) 1,278,438
- - ------------
Spain (Kingdom of) Bonos y Obligacion del Estado Gtd. Bonds:
11%, 6/15/97 40,000,000(1) 314,956
Bank Debs., 12.25%, 3/25/00 185,000,000(1) 1,570,089
- - ------------
U.S. Treasury Bonds:
7.875%, 2/15/21 2,000,000 2,142,500
7.125%, 2/15/23 2,000,000 1,978,124
- - ------------
U.S. Treasury Nts.:
4.625%, 8/15/95 1,130,000 1,127,881
5.125%, 11/15/95 1,700,000 1,703,718
5.75%, 10/31/97(8) 500,000 497,968
- - ------------
Venezuela (Republic of):
Bonds, Series DL, 6%, 3/31/07 750,000 408,281
Front-Loaded Interest Reduction Bonds, Series A, 6%, 3/31/07(4) 500,000 272,188
------------
Total Government Obligations (Cost $17,950,717) 16,873,167
------------
------------
Corporate Bonds and Notes--24.3%
- - ------------
Basic Materials--1.4%
- - ------------
Paper and Forest Products--1.4%
Equitable Bag, Inc., 12.375% Sr. Nts., 8/15/02(2) 50,000 38,250
- - ------------
Gaylord Container Corp., 11.50% Sr. Nts., 5/15/01 600,000 609,000
- - ------------
PT Inti Indorayon Utama, 9.125% Sr. Nts., 10/15/00 250,000 233,750
------------
881,000
------------
------------
Consumer Cyclicals--5.6%
- - ------------
Automotive--0.3%
Envirotest Systems Corp., 9.625% Sr. Sub. Nts., 4/1/03 $200,000 $192,000
- - ------------
Construction Supplies and
Development--1.3%
Trizec Corp. Ltd., 10.25% Sr. Debs., 6/22/99(2) 500,000(1) 313,737
- - ------------
USG Corp., 10.25% Sr. Sec. Nts., 12/15/02 500,000 505,000
------------
818,737
------------
------------
</TABLE>
4 Oppenheimer Strategic Income & Growth Fund
<PAGE>
- - ------------
<TABLE>
<CAPTION>
Face Market Value
Amount See Note 1
<S> <C> <C>
- - ------------
Consumer Goods and
Services--1.2%
Amstar Corp., 11.375% Sr. Sub. Nts., 2/15/97 300,000 298,500
- - ------------
Collins & Aikman Group, Inc., 11.875% Sr. Sub. Debs., 6/1/01 250,000 251,875
- - ------------
Empresas La Moderna SA, 10.25% Gtd. Nts., 11/12/97(5) 200,000 208,000
------------
758,375
------------
------------
Entertainment--0.8%
Gillett Holdings, Inc., 12.25% Sr. Sub. Nts., Series A, 6/30/02 300,000 328,500
- - ------------
Marvel Holdings, Inc., 0% Sr. Sec. Disc. Nts., Series B, 4/15/98 250,000 155,625
------------
484,125
------------
------------
Media--1.3%
Argyle Television Operations, 9.875% Sr. Sub. Nts., 12/30/03 300,000 282,000
- - ------------
SCI Television, Inc., 11% Sr. Sec. Nts., 6/30/05 500,000 500,000
------------
782,000
------------
------------
Retail--0.7% Finlay Fine Jewelry Corp., 10.625% Sr. Nts., 5/1/03 400,000 402,000
- - ------------
Consumer Non-Cyclicals--3.7%
- - ------------
Food--0.9% Foodmaker, Inc., 14.25% Sr. Sub. Nts., 5/15/98 500,000 531,250
- - ------------
Food and Drug
Distribution--2.2%
Alco Health Distribution Corp., 11.25% Sr. Debs., 7/15/05(6) 526,000 535,863
- - ------------
Grand Union Co., 11.25% Sr. Nts., 7/15/00 500,000 498,750
- - ------------
Purity Supreme, Inc., 11.75% Sr. Sec. Nts., Series B, 8/1/99 300,000 295,500
------------
1,330,113
------------
------------
Healthcare--0.6%
American Medical International, Inc., 13.50% Sr. Sub. Nts., 8/15/01 300,000 339,000
- - ------------
Energy--1.0%
- - ------------
Maxus Energy Corp., 9.875% Nts., 10/15/02 300,000 286,500
- - ------------
Mesa Capital Corp., 0%/12.75% Sec. Disc. Nts., 6/30/98(3) 386,000 344,505
------------
631,005
------------
------------
Financial--3.3%
- - ------------
Blue Bell Funding, Inc., 11.85% Extd. Sec. Nts., 5/1/99(4) 400,000 422,000
- - ------------
Grupo Mexicano de Desarrollo SA, 8.25% Gtd. Nts., 2/17/01(5) 300,000 273,000
- - ------------
Life Partners Group, Inc., 12.75% Sr. Sub. Nts., 7/15/02 300,000 343,500
- - ------------
Tribasa Toll Road Trust, 10.50% Nts., Series 1993-A, 12/1/11(5) 500,000 475,000
------------
1,513,500
------------
------------
Industrial--3.3%
- - ------------
Containers--1.4%
Owens-Illinois, Inc., 10% Sr. Sub. Nts., 8/1/02 $400,000 $402,000
- - ------------
Sea Containers Ltd., 12.50% Sr. Sub. Debs., Series A, 12/1/04 400,000 445,000
------------
847,000
------------
------------
General Industrial--0.8%
EnviroSource, Inc., 9.75% Sr. Nts., 6/15/03 500,000 472,500
- - ------------
Transportation--1.1%
Tiphook Financial Corp., 8% Gtd. Nts., 3/15/00 179,000 136,935
- - ------------
Transportacion Maritima Mexicana SA, 9.25% Nts., 5/15/03 585,000 546,975
------------
683,910
------------
------------
Technology--5.8%
- - ------------
Cable Television--4.0%
Adelphia Communications Corp., 12.50% Sr. Nts., 5/15/02 300,000 318,750
- - ------------
Cablevision Systems Corp., 9.875% Sr. Sub. Debs., 2/15/13 600,000 609,000
- - ------------
Continental Cablevision, Inc., 9.50% Sr. Debs., 8/1/13 500,000 487,500
- - ------------
Time Warner, Inc./Time Warner Entertainment LP, 8.375% Sr. Debs., 3/15/23 500,000 477,500
- - ------------
TKR Cable I, Inc., 10.50% Sr. Debs., 10/30/07 500,000 567,500
------------
2,460,250
------------
------------
</TABLE>
5 Oppenheimer Strategic Income & Growth Fund
<PAGE>
<TABLE>
<CAPTION>
------------
Statement of Investments (Unaudited) (Continued)
Face Market Value
Amount See Note 1
<S> <C> <C>
- - ------------
Communications--0.8%
Panamsat LP/Panamsat Capital Corp., 0%/11.375% Sr. Sub. Disc. Nts., 8/1/03(3) 750,000 461,250
- - ------------
Technology--1.0%
Bell & Howell Holdings Co., 0%/11.50% Sr. Disc. Debs., Series B, 3/31/05(3) 600,000 321,000
- - ------------
Imax Corp., 7% Sr. Nts., 3/1/01(4)(5) 320,000 296,000
------------
617,000
------------
------------
Utilities--0.2%
- - ------------
Subic Power Corp., 9.50% Sr. Sec. Nts., Series A, 12/28/08(5) 100,000 96,500
------------
Total Corporate Bonds and Notes (Cost $14,376,923) 14,301,515
------------
------------
Derivative Securities--0.8%
- - ------------
Morgan Guaranty Trust Co. of New York, 12.15% CD, 2/3/95
(Cost $500,000) 1,056,625,000(1) 490,330
<CAPTION>
Shares
<S> <C> <C>
- - ------------
Common Stocks--46.1%
- - ------------
Basic Materials--2.0%
- - ------------
Chemicals--2.0% Great Lakes Chemical Corp. 17,000 1,198,500
- - ------------
Consumer Cyclicals--3.8%
- - ------------
Auto Parts: After Market--1.6%
Goodyear Tire & Rubber Co. 24,000 972,000
- - ------------
Retail Stores:
May Department Stores Co. 2,000 83,250
Department Stores--0.1%
- - ------------
Retail: Specialty--2.1% Walgreen Co. 32,000 1,284,000
- - ------------
Consumer Non-Cyclicals--14.1%
- - ------------
Beverages: Soft Drinks--3.6% Coca-Cola Co. (The) 29,000 1,178,125
- - ------------
PepsiCo, Inc. 28,000 1,025,500
------------
2,203,625
------------
------------
Drugs--3.2% Merck & Co., Inc. 22,000 $654,500
- - ------------
Pfizer, Inc. 4,000 216,000
- - ------------
Schering-Plough Corp. 19,000 1,068,750
------------
1,939,250
------------
------------
Healthcare: Diversified--2.5% Abbott Laboratories 44,000 1,171,500
- - ------------
American Home Products Corp. 6,000 348,000
------------
1,519,500
------------
------------
Household Products--2.0% Procter & Gamble Co. 23,000 1,233,375
- - ------------
Medical Products--2.1% Medtronic, Inc. 16,000 1,280,000
- - ------------
Tobacco--0.7% UST, Inc. 16,300 403,425
- - ------------
Financial--15.8%
- - ------------
Financial Services: American Express Co. 38,000 1,049,750
------------
Miscellaneous--5.2% Federal National Mortgage Assn. 14,000 1,088,500
- - ------------
Merrill Lynch & Co., Inc. 28,000 1,043,000
------------
3,181,250
------------
------------
</TABLE>
6 Oppenheimer Strategic Income & Growth Fund
<PAGE>
------------
<TABLE>
<CAPTION>
Market Value
Shares See Note 1
<S> <C> <C>
- - ------------
Major Banks: Regional--5.2% BANC ONE CORP. 36,025 1,188,825
- - ------------
First Interstate Bancorp 17,000 1,245,250
- - ------------
Nationsbank Corp. 6,000 274,500
- - ------------
Wachovia Corp. 14,000 444,500
------------
3,153,075
------------
------------
Money Center Banks--5.4% Bankers Trust New York Corp. 16,000 1,134,000
- - ------------
Chase Manhattan Corp. 34,000 1,100,750
- - ------------
Citicorp(2) 28,000 1,050,000
------------
3,284,750
------------
------------
Industrial--2.6%
- - ------------
Containers:
Metals and Glass--0.6%
Crown Cork & Seal, Inc.(2) 9,000 352,125
- - ------------
Electrical Equipment--2.0% General Electric Co. 12,000 1,195,500
- - ------------
Technology--7.8%
- - ------------
Computer Software
And Services--1.9%
Microsoft Corp.(2) 14,000 1,186,500
- - ------------
Electronics:
Instrumentation--1.9%
Avnet, Inc. 30,000 1,143,750
- - ------------
Electronics:
Semiconductors--4.0%
Intel Corp. 19,000 1,282,500
- - ------------
Texas Instruments, Inc. 15,000 1,158,750
------------
2,441,250
------------
------------
Total Common Stocks (Cost $27,580,071) 28,055,125
- - ------------
Preferred Stocks--1.1%
- - ------------
AMR Corp., $3.00 Cum. Cv. Depositary Shares, Series A(5) 9,000 $387,000
- - ------------
Unisys Corp., $3.75 Cv., Series A 7,000 295,750
- - ------------
Total Preferred Stocks (Cost $726,750) 682,750
------------
Total Investments, at Value (Cost $61,934,461) 100.5% 61,202,887
------------
Liabilities in Excess of Other Assets (.5) (280,624)
------------ ------------
Net Assets 100.0% $60,922,263
------------ ------------
------------ ------------
<FN>
1. Face amount is reported in foreign currency.
2. Non-income producing security.
3. Represents a zero coupon bond that converts to a fixed rate of interest at a
designated future date.
4. Represents the current interest rate for a variable rate security.
5. Restricted security--See Note 6 of Notes to Financial Statements.
6. Interest or dividend is paid in kind.
7. Represents the current interest rate for an increasing rate security.
8. Liquid assets have been segregated to cover outstanding put options written,
as follows:
</TABLE>
<TABLE>
<CAPTION>
Face Amount Expiration Exercise Premium Market Value
Subject to Put Date Price Received See Note 1
- - ---------------------------------------------------------------------------------------------------------------------
Japanese Government Bond, Series 22,
<S> <C> <C> <C> <C> <C>
5.30%, 3/20/13 15,000,000(1) 4/94 $102.225 $2,129 $293
</TABLE>
See accompanying Notes to Financial Statements.
7 Oppenheimer Strategic Income & Growth Fund
<PAGE>
<TABLE>
<CAPTION>
- - ------------
Statement of Assets and Liabilities March 31, 1994 (Unaudited)
- - ------------
<S> <C>
Assets
Investments, at value (cost $61,934,461)--see accompanying statement $61,202,887
- - ------------
Receivables:
Dividends and interest 866,103
Shares of beneficial interest sold 163,105
Investments sold 20,447
- - ------------
Deferred organization costs 11,980
- - ------------
Other 109,262
------------
Total assets 62,373,784
------------
------------
Liabilities
Options written, at value (premiums received $2,129)--see accompanying
statement--Note 4 293
- - ------------
Bank overdraft 365,144
------------
Payables and other liabilities:
Shares of beneficial interest redeemed 502,018
Investments purchased 305,250
Dividends 169,482
Distribution and service plan fees--Note 5 42,371
Other 66,963
------------
Total liabilities 1,451,521
------------
Net Assets $60,922,263
------------
------------
- - ------------
Composition of
Net Assets
Paid-in capital $62,209,209
- - ------------
Undistributed net investment income 390,416
------------
Distributions in excess of net realized gain from investment,
written option and foreign currency transactions (949,885)
- - ------------
Net unrealized depreciation on investments, options written
and translation of assets and liabilities denominated in foreign currencies (727,477)
------------
Net assets $60,922,263
------------
------------
- - ------------
Net Asset Value Per Share Class A Shares:
Net asset value and redemption price per share (based on net assets of
$46,157,103 and 9,379,274 shares of beneficial interest outstanding) $4.92
Maximum offering price per share (net asset value plus
sales charge of 4.75% of offering price) $5.17
- - ------------
Class B Shares:
Net asset value, redemption price and offering price per share
(based on net assets of $14,765,160 and 3,009,641 shares of
beneficial interest outstanding) $4.91
</TABLE>
See accompanying Notes to Financial Statements.
8 Oppenheimer Strategic Income & Growth Fund
<PAGE>
<TABLE>
<CAPTION>
- - ------------
Statement of Operations For the Six Months Ended March 31, 1994 (Unaudited)
<S> <C>
- - ------------
Investment Income Interest $1,442,131
- - ------------
Dividends 397,655
------------
Total income 1,839,786
- - ------------
Expenses Management fees--Note 5 249,764
- - ------------
Distribution and service plan fees:
Class A--Note 5 65,363
Class B--Note 5 71,520
- - ------------
Transfer and shareholder servicing agent fees--Note 5 67,839
- - ------------
Shareholder reports 60,568
- - ------------
Legal and auditing fees 6,370
- - ------------
Custodian fees and expenses 4,209
- - ------------
Trustees' fees and expenses 1,274
- - ------------
Other 12,118
------------
Total expenses 539,025
------------
Net Investment Income 1,300,761
------------
------------
Realized and Unrealized
Gain (Loss) on Investments,
Options Written and Foreign
Currency Transactions
Net realized gain (loss) from:
Investments (322,303)
Expiration of option contracts written--Note 4 89,375
Foreign currency transactions (76,872)
------------
Net realized loss (309,800)
------------
Net change in unrealized appreciation or depreciation on:
Investments and options written (3,147,126)
Translation of assets and liabilities denominated in foreign currencies 420,071
------------
Net change (2,727,055)
------------
Net realized and unrealized loss on investments, options written and foreign
currency transactions (3,036,855)
- - ------------
Net Decrease in Net Assets Resulting From Operations $(1,736,094)
------------
------------
</TABLE>
See accompanying Notes to Financial Statements.
9 Oppenheimer Strategic Income & Growth Fund
<PAGE>
<TABLE>
<CAPTION>
Statements of Changes in Net Assets
Six Months Ended Year Ended
March 31, 1994 September 30,
(Unaudited) 1993
- - ------------
<S> <C> <C>
Operations Net investment income $1,300,761 $2,774,685
- - ------------
Net realized gain (loss) on investments, options written and foreign
currency transactions (309,800) 726,649
------------
Net change in unrealized appreciation or depreciation on investments,
options written and translation of assets and liabilities denominated
in foreign currencies (2,727,055) 1,990,636
------------ ------------
Net increase (decrease) in net assets resulting from operations (1,736,094) 5,491,970
- - ------------
Dividends and Distributions
To Shareholders
Dividends from net investment income:
Class A ($.1142 and $.2016 per share, respectively) (1,081,002) (2,309,909)
Class B ($.0865 and $.1298 per share, respectively) (232,920) (193,606)
- - ------------
Distributions from net realized gain on investments, options written
and foreign currency transactions:
Class A ($.0967 and $.0054 per share, respectively) (955,795) (62,907)
Class B ($.0967 and $.0054 per share, respectively) (261,395) (1,304)
- - ------------
Beneficial Interest Transactions
Net increase (decrease) in net assets resulting from Class A beneficial
interest transactions--Note 2 (5,911,051) 4,173,905
- - ------------
Net increase in net assets resulting from Class B beneficial interest
transactions--Note 2 3,423,271 12,182,278
- - ------------
Net Assets
Total increase (decrease) (6,754,986) 19,280,427
- - ------------
Beginning of period 67,677,249 48,396,822
------------ ------------
End of period (including undistributed net investment income
of $390,416 and $403,577, respectively) $60,922,263 $67,677,249
------------ ------------
------------ ------------
</TABLE>
See accompanying Notes to Financial Statements.
10 Oppenheimer Strategic Income & Growth Fund
<PAGE>
<TABLE>
<CAPTION>
------------
Financial Highlights
Class A Class B
--------------------------------------- ------------------------
Six Months Six Months Period
Ended Ended Ended
March 31, 1994 Year Ended September 30, March 31, 1994 Sept. 30,
(Unaudited) 1993 1992(2) (Unaudited) 1993(1)
- - ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Per Share Operating Data:
Net asset value, beginning of period $5.26 $5.03 $5.00 $5.26 $5.10
- - ------------
Income (loss) from investment operations:
Net investment income .12 .22 .07(3) .09 .14
Net realized and unrealized gain (loss) on
investments, options written and foreign
currency transactions (.25) .22 .02 (.25) .16
------------ ------------ ------------ ------------ ------------
Total income (loss) from investment
operations (.13) .44 .09 (.16) .30
- - ------------
Dividends and distributions to shareholders:
Dividends from net investment income (.11) (.20) (.06) (.09) (.13)
Distributions from net realized gain on
investments, options written and foreign
currency transactions (.10) (.01) -- (.10) (.01)
------------ ------------ ------------ ------------ ------------
Total dividends and distributions to
shareholders (.21) (.21) (.06) (.19) (.14)
- - ------------
Net asset value, end of period $4.92 $5.26 $5.03 $4.91 $5.26
------------ ------------ ------------ ------------ ------------
------------ ------------ ------------ ------------ ------------
- - ------------
Total Return, at Net Asset Value(4) (2.74)% 8.84% 1.74% (3.34)% 5.86%
- - ------------
Ratios/Supplemental Data:
Net assets, end of period (in thousands) $46,157 $55,291 $48,397 $14,765 $12,386
- - ------------
Average net assets (in thousands) $53,208 $59,209 $30,264 $13,868 $7,541
- - ------------
Number of shares outstanding at end of
period (in thousands) 9,379 10,513 9,628 3,010 2,357
- - ------------
Ratios to average net assets:
Net investment income 4.03%(5) 5.69% 4.59%(5) 3.36%(5) 5.53%(5)
Expenses 1.42%(5) 1.36% 1.46%(3)(5) 2.35%(5) 2.21%(5)
- - ------------
Portfolio turnover rate(6) 34.4% 122.4% 25.8% 34.4% 122.4%
<FN>
1. For the period from November 30, 1992 (inception of offering) to
September 30, 1993.
2. For the period from June 1, 1992 (commencement of operations) to
September 30, 1992.
3. Net investment income would have been $.07 absent the voluntary expense
reimbursement, resulting in an expense ratio of 1.74%.
4. Assumes a hypothetical initial investment on the business day before the
first day of the fiscal period, with all dividends and distributions reinvested
in additional shares on the reinvestment date, and redemption at the net asset
value calculated on the last business day of the fiscal period. Sales charges
are not reflected in the total returns.
5. Annualized.
6. The lesser of purchases or sales of portfolio securities for a period,
divided by the monthly average of the market value of portfolio securities owned
during the period. Securities with a maturity or expiration date at the time of
acquisition of one year or less are excluded from the calculation. Purchases and
sales of investment securities (excluding short-term securities) for the six
months ended March 31, 1994 were $22,573,591 and $28,108,762, respectively.
</TABLE>
See accompanying Notes to Financial Statements.
11 Oppenheimer Strategic Income & Growth Fund
<PAGE>
------------
Notes to Financial Statements (Unaudited)
- - ------------
1. Significant Oppenheimer Strategic Income & Growth Fund (the Fund)
Accounting Policies is registered under the Investment Company Act of 1940,
as amended, as a diversified, open-end management
investment company. The Fund's investment advisor is
Oppenheimer Management Corporation (the Manager). The
Fund offers both Class A and Class B shares. Class A
shares are sold with a front-end sales charge. Class B
shares may be subject to a contingent deferred sales
charge. Both classes of shares have identical rights to
earnings, assets and voting privileges, except that
each class has its own distribution and/or service
plan, expenses directly attributable to a particular
class and exclusive voting rights with respect to
matters affecting a single class. Class B shares will
automatically convert to Class A shares six years after
the date of purchase. The following is a summary of
significant accounting policies consistently followed
by the Fund.
- - ------------
Investment Valuation. Portfolio securities are valued at 4:00 p.m. (New York
time) on each trading day. Listed and unlisted
securities for which such information is regularly
reported are valued at the last sale price of the day
or, in the absence of sales, at values based on the
closing bid or asked price or the last sale price on
the prior trading day. Long-term debt securities are
valued by a portfolio pricing service approved by the
Board of Trustees. Long- term debt securities which
cannot be valued by the approved portfolio pricing
service are valued by averaging the mean between the
bid and asked prices obtained from two active market
makers in such securities. Short-term debt securities
having a remaining maturity of 60 days or less are
valued at cost (or last determined market value)
adjusted for amortization to maturity of any premium or
discount. Securities for which market quotes are not
readily available are valued under procedures
established by the Board of Trustees to determine fair
value in good faith. An option is valued based upon the
last sales price on the principal exchange on which the
option is traded or, in the absence of any transactions
that day, the value is based upon the last sale on the
prior trading date if it is within the spread between
the closing bid and asked prices. If the last sale
price is outside the spread, the closing bid or asked
price closest to the last reported sale price is used.
- - ------------
Foreign Currency The accounting records of the Fund are maintained in
Translation. U.S. dollars. Prices of securities denominated in
foreign currencies are translated into U.S. dollars at
the closing rates of exchange. Amounts related to the
purchase and sale of securities and investment income
are translated at the rates of exchange prevailing on
the respective dates of such transactions.
The Fund generally enters into forward
currency exchange contracts as a hedge, upon the
purchase or sale of a security denominated in a foreign
currency. In addition, the Fund may enter into such
contracts as a hedge against changes in foreign
currency exchange rates on portfolio positions. A
forward exchange contract is a commitment to purchase
or sell a foreign currency at a future date, at a
negotiated rate. Risks may arise from the potential
inability of the counterparty to meet the terms of the
contract and from unanticipated movements in the value
of a foreign currency relative to the U.S. dollar.
The effect of changes in foreign currency
exchange rates on investments is separately identified
from the fluctuations arising from changes in market
values of securities held and reported with all other
foreign currency gains and losses in the Fund's results
of operations.
- - ------------
Options Written. The Fund may write covered call and put options. When
an option is written, the Fund receives a premium and
becomes obligated to sell or purchase the underlying
security at a fixed price, upon exercise of the
option. In writing an option, the Fund bears the market
risk of an unfavorable change in the price of the
security underlying the written option. Exercise of an
option written by the Fund could result in the Fund
selling or purchasing a security at a price different
from the current market value. All securities covering
call options written are held in escrow by the
custodian bank and the Fund maintains liquid assets
sufficient to cover written put options in the event of
exercise by the holder.
- - ------------
Allocation of Income, Income, expenses (other than those attributable to a
Expenses and Gains specific class) and gains and losses are allocated
and Losses. daily to each class of shares based upon the relative
proportion of net assets represented by such class.
Operating expenses directly attributable to a specific
class are charged against the operations of that class.
- - ------------
Federal Income Taxes. The Fund intends to continue to comply with provisions
of the Internal Revenue Code applicable to regulated
investment companies and to distribute all of its
taxable income, including any net realized gain on
investments not offset by loss carryovers, to
shareholders. Therefore, no federal income tax
provision is required.
12 Oppenheimer Strategic Income & Growth Fund
<PAGE>
------------
Notes to Financial Statements (Unaudited) (Continued)
- - ------------
1. Significant Accounting Policies (continued)
Organization Costs. The Manager advanced $26,000 for organization and
start-up costs of the Fund. Such expenses are being
amortized over a five-year period from the date
operations commenced. In the event that all or part of
the Manager's initial investment in shares of the Fund
is withdrawn during the amortization period, the
redemption proceeds will be reduced to reimburse the
Fund for any unamortized expenses, in the same ratio as
the number of shares redeemed bears to the number of
initial shares outstanding at the time of such
redemption.
- - ------------
Distributions to The Fund intends to declare dividends separately for
Shareholders. Class A and Class B shares from net investment income
each day the New York Stock Exchange is open for
business and pay such dividends monthly. Distributions
from net realized gains on investments, if any, will be
declared at least once each year.
------------
Other. Investment transactions are accounted for on the date
the investments are purchased or sold (trade date) and
dividend income is recorded on the ex-dividend date.
Discount on securities purchased is amortized over the
life of the respective securities, in accordance with
federal income tax requirements. Realized gains and
losses on investments and options written and
unrealized appreciation and depreciation are determined
on an identified cost basis, which is the same basis
used for federal income tax purposes.
- - ------------
2. Shares of The Fund has authorized an unlimited number of no par
Beneficial value shares of beneficial interest of each class.
Interest Transactions in shares of beneficial interest were as
follows:
<TABLE>
<CAPTION>
Six Months Ended March 31, 1994 Year Ended September 30, 1993(1)
------------ ------------
Shares Amount Shares Amount
------------
<S> <C> <C> <C> <C>
Class A:
Sold 1,033,040 $5,438,706 5,776,034 $29,480,167
Dividends and distributions reinvested 341,103 1,794,043 406,080 2,091,310
Redeemed (2,507,974) (13,143,800) (5,297,441) (27,397,572)
------------ ------------ ------------ ------------
Net increase (decrease) (1,133,831) $(5,911,051) 884,673 $4,173,905
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
------------
Class B:
Sold 1,095,226 $5,745,841 2,860,426 $14,798,939
Dividends and distributions reinvested 84,064 441,043 30,122 156,143
Redeemed (526,350) (2,763,613) (533,847) (2,772,804)
------------ ------------ ------------ ------------
Net increase 652,940 $3,423,271 2,356,701 $12,182,278
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
<FN>
1. For the year ended September 30, 1993 for Class A shares and for the period
from November 30, 1992 (inception of offering) to September 30, 1993 for Class B
shares.
</TABLE>
- - ------------
3. Unrealized Gains and At March 31, 1994, net unrealized depreciation of
Losses on Investments investments and options written of $729,738 was
And Options Written composed of gross appreciation of $2,266,362, and
gross depreciation of $2,996,100.
- - ------------
4. Option Option activity for the six months ended
Activity March 31, 1994 was as follows:
<TABLE>
<CAPTION>
Put Options Call Options
------------ ------------
Number Amount Number Amount
of Options of Premiums of Options of Premiums
------------
<S> <C> <C> <C> <C>
Options outstanding at September 30, 1993 -- $-- 400 $56,875
------------
Options written 1,500 2,129 200 32,500
------------
Options expired prior to exercise -- -- (600) (89,375)
------------ ------------ ------------ ------------
Options outstanding at March 31, 1994 1,500 $2,129 -- $--
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
</TABLE>
13 Oppenheimer Strategic Income & Growth Fund
<PAGE>
------------
- - ------------
5. Management Fees and Management fees paid to the Manager were in
Other Transactions accordance with the investment advisory agreement
With Affiliates with the Fund which provides for an annual fee
of .75% on the first $200 million of net assets, with a
reduction of .03% on each $200 million thereafter to
$800 million, .60% on the next $200 million and .50% on
net assets in excess of $1 billion. The Manager has
agreed to reimburse the Fund if aggregate expenses
(with specified exceptions) exceed the most stringent
applicable regulatory limit on Fund expenses.
For the six months ended March 31, 1994,
commissions (sales charges paid by investors) on sales
of Class A shares totaled $134,651, of which $39,887
was retained by Oppenheimer Funds Distributor, Inc.
(OFDI), a subsidiary of the Manager, as general
distributor, and by an affiliated broker/dealer. During
the six months ended March 31, 1994, OFDI received
contingent deferred sales charges of $25,325 upon
redemption of Class B shares, as reimbursement for
sales commissions advanced by OFDI at the time of sale
of such shares.
Oppenheimer Shareholder Services (OSS), a
division of the Manager, is the transfer and
shareholder servicing agent for the Fund, and for other
registered investment companies. OSS's total costs of
providing such services are allocated ratably to these
companies.
Under separate approved plans, each class may
expend up to .25% of its net assets annually to
reimburse OFDI for costs incurred in connection with
the personal service and maintenance of accounts that
hold shares of the Fund, including amounts paid to
brokers, dealers, banks and other institutions. In
addition, Class B shares are subject to an asset-based
sales charge of .75% of net assets annually, to
reimburse OFDI for sales commissions paid from its own
resources at the time of sale and associated financing
costs. In the event of termination or discontinuance of
the Class B plan, the Board of Trustees may allow the
Fund to continue payment of the asset-based sales
charge to OFDI for distribution expenses incurred on
Class B shares sold prior to termination or
discontinuance of the plan. During the six months ended
March 31, 1994, OFDI paid $8,064 and $247,
respectively, to an affiliated broker/dealer as
reimbursement for Class A and Class B personal service
and maintenance expenses and retained $69,067 as
reimbursement for Class B sales commissions and service
fee advances, as well as financing costs.
- - ------------
6. Restricted The Fund owns securities purchased in private
Securities placement transactions, without registration under
the Securities Act of 1933 (the Act). The securities
are valued under methods approved by the Board of
Trustees as reflecting fair value. The Fund intends to
invest no more than 10% of its net assets (determined
at the time of purchase) in restricted and illiquid
securities, excluding securities eligible for resale
pursuant to Rule 144A of the Act that are determined to
be liquid by the Board of Trustees or by the Manager
under Board-approved guidelines. Restricted and
illiquid securities amount to $250,400, or .41% of the
Fund's net assets, at March 31, 1994.
<TABLE>
<CAPTION>
Valuation Per Unit
Security Acquisition Date Cost Per Unit as of March 31, 1994
- - ------------
<S> <C> <C> <C>
AMR Corp., $3.00 Cum. Cv. Depositary Shares, Series A(1) 12/2/93 $ 52.88 $ 43.00
- - ------------
Banco Nacional de Mexico SA Exch. Sub. Debs., 7%, 12/15/99(1) 5/24/93 $104.00 $115.50
- - ------------
Empresas La Moderna SA, 10.25% Gtd. Nts., 11/12/97(1) 12/9/92 $ 97.35 $104.00
- - ------------
Grupo Mexicano de Desarrollo SA,
8.25% Gtd. Nts., 2/17/01(1) 2/8/94 $100.00 $ 91.00
- - ------------
Imax Corp., 7% Sr. Nts., 3/1/01(1) 2/22/94 $ 92.39 $ 92.50
- - ------------
Morocco (Kingdom of) Loan Participation Agreement,
Tranche A, 4.50%, 1/1/09 2/23/94 $ 79.29 $ 62.60
- - ------------
Subic Power Corp., 9.50% Sr. Sec. Nts., Series A, 12/28/08(1) 12/20/93 $ 99.93 $ 96.50
- - ------------
Tribasa Toll Road Trust, 10.50% Nts., Series 1993-A, 12/1/11(1) 11/8/93 $100.00 $ 95.00
<FN>
1. Transferable under Rule 144A of the Act.
</TABLE>
14 Oppenheimer Strategic Income & Growth Fund
<PAGE>
------------
Oppenheimer Strategic Income & Growth Fund
- - ------------
Officers and Trustees James C. Swain, Chairman and Chief Executive Officer
Robert G. Avis, Trustee
William A. Baker, Trustee
Charles Conrad, Jr., Trustee
Jon S. Fossel, Trustee and President
Raymond J. Kalinowski, Trustee
C. Howard Kast, Trustee
Robert M. Kirchner, Trustee
Ned M. Steel, Trustee
Robert C. Doll, Jr., Senior Vice President
Andrew J. Donohue, Vice President
Margaret M. Johnson, Vice President
David P. Negri, Vice President
Arthur P. Steinmetz, Vice President
George C. Bowen, Vice President, Secretary and Treasurer
Lynn M. Coluccy, Assistant Treasurer
Robert G. Zack, Assistant Secretary
- - ------------
Investment Advisor Oppenheimer Management Corporation
- - ------------
Distributor Oppenheimer Funds Distributor, Inc.
- - ------------
Transfer and Shareholder
Servicing Agent
Oppenheimer Shareholder Services
- - ------------
Custodian of
Portfolio Securities
The Bank of New York
- - ------------
Independent Auditors Deloitte & Touche
- - ------------
Legal Counsel Myer, Swanson & Adams, P.C.
The financial statements included herein have been taken from the records of the
Fund without examination by the independent auditors.
This is a copy of a report to shareholders of Oppenheimer Strategic Income &
Growth Fund. This report must be preceded or accompanied by a Prospectus of
Oppenheimer Strategic Income & Growth Fund. For material information concerning
the Fund, see the Prospectus.
15 Oppenheimer Strategic Income & Growth Fund
<PAGE>
- - ------------
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- - ------------
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- - ------------
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