<PAGE>
OPPENHEIMER STRATEGIC INCOME & GROWTH FUND
ANNUAL REPORT SEPTEMBER 30, 1994
[Logo] OPPENHEIMERFUNDS
"WE HAVE BIG PLANS--COLLEGE FOR THE KIDS,
TRAVEL, A COMFORTABLE RETIREMENT.
"I NEED AN INVESTMENT THAT GIVES ME
THE POTENTIAL FOR GROWTH THAT STOCKS OFFER
WHILE PROVIDING INCOME FROM BONDS, TOO."
WOMAN SITTING BY
WOMAN HUGGING CHILD
<PAGE>
- --------------------------------------------------------------------------------
FUND FACTS
IN THIS REPORT:
ANSWERS TO TIMELY QUESTIONS YOU SHOULD ASK YOUR FUND'S MANAGERS.
- - HOW DID THE FUND RESPOND TO RISING INTEREST RATES IN THE U.S. AND OVERSEAS?
- - WHAT'S THE OUTLOOK FOR THE HIGH-YIELD CORPORATE BOND MARKET?
- - WHERE ARE YOU FINDING THE MOST ATTRACTIVE INVESTMENT OPPORTUNITIES TODAY?
- --------------------------------------------------------------------------------
FACTS EVERY SHAREHOLDER SHOULD KNOW ABOUT
OPPENHEIMER STRATEGIC INCOME & GROWTH FUND
- --------------------------------------------------------------------------------
1 The Fund seeks current income and capital appreciation by investing among
four market sectors: U.S. government securities, foreign fixed income
securities and high yield, lower-rated corporate bonds (for income) and
stocks (for growth).
- --------------------------------------------------------------------------------
2 Standardized yield for the 30 days ended September 30, 1994 for Class A
shares was 4.79% and 4.45% for Class B shares.(1)
- --------------------------------------------------------------------------------
3 Total return at net asset value for the year ended September 30, 1994 was
--0.23% for Class A shares and --1.17% for Class B shares.(2)
- --------------------------------------------------------------------------------
4 Average annual total returns for Class A shares for the 1-year period ended
9/30/94 and since inception of the Fund on 6/1/92 were --4.97% and 2.21%,
respectively. For Class B shares, average annual total returns for the
1-year period ended 9/30/94 and since inception of the Class on 11/30/92
were --6.11% and 0.34%, respectively.(3)
- --------------------------------------------------------------------------------
5 "The Fund's flexibility to shift assets strategically among investment
market sectors is a major plus for shareholders in the current environment.
It has allowed us to capitalize on opportunities offered in higher-yielding
corporate bonds, the best performing bond market sector over the last 12
months, while limiting the adverse impact of rising interest rates
worldwide. And it has enabled us to seek out reasonably priced growth
stocks in the U.S. stock market."
PORTFOLIO MANAGERS ROBERT DOLL, DAVID NEGRI AND ART STEINMETZ,
SEPTEMBER 30, 1994
1. Standardized yield is net investment income calculated on a
yield-to-maturity basis for the 30-day period ended 9/30/94, 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. Based on the changes in net asset value per share from 9/30/93 to 9/30/94,
without deducting any sales charges. Such performance would have been lower if
sales charges were taken into account.
3. Average annual total returns are based on a hypothetical investment held
until 9/30/94, after deducting the current maximum initial sales charge of 4.75%
for Class A shares and the contingent deferred sales charge of 5% (1-year) and
4% (since inception) for Class B shares.
The Fund's portfolio is subject to change.
All figures assume reinvestment of dividends and capital gains distributions.
Past performance is not indicative of future results. Investment and principal
value on an investment in the Fund will fluctuate so that an investor's shares,
when redeemed, may be worth more or less than the original cost.
2 Oppenheimer Strategic Income & Growth Fund
<PAGE>
- -------------------------------------------------------------------------------
REPORT TO SHAREHOLDERS
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Oppenheimer Strategic Income & Growth Fund provided an attractive level of
income for the 12 months ended September 30, 1994. At that date, the Fund's
standardized 30-day yield was 4.79% for Class A shares and 4.45% for Class B
shares.(4)
Once again, your managers' ability to shift assets strategically among
four sectors--U.S. government securities, high yielding corporate bonds, foreign
fixed income securities, and stocks--played an important role in the Fund's
performance.
As the Federal Reserve and central banks worldwide moved aggressively
to raise short-term interest rates to fend off inflation, your managers were
able to capture rising yields while limiting the volatility of the fixed income
portion of the portfolio.
In the U.S., your managers reduced the Fund's exposure to long-term
U.S. government bonds, as well as to corporate bonds issued by interest
rate-sensitive companies. The proceeds were used to purchase high yield bonds
issued by larger industrial companies, notably in chemicals, mining, metals, and
forest products sectors. These companies' earnings tend to rise in the
middle-to-late stages of an economic expansion.
As interest rates rose offshore and the dollar weakened against major
currencies, positions in Latin America and other emerging markets also were
reduced, while more investments were centered in Europe.
Approximately 42% of the Fund's portfolio currently is invested in
stocks, with substantial emphasis on growth companies in the financial services
and consumer sectors. Over the last few months, stocks issued by companies
such as NationsBank, Sun Trust, Colgate-Palmolive, and Pfizer have been
selling at extremely attractive prices relative to their growth prospects.
Your managers purchased these stocks to take advantage of the growth
opportunities they offer.
We appreciate the confidence you have placed in Oppenheimer Strategic
Income & Growth Fund, and we look forward to continuing to help you reach your
investment goals.
James C. Swain
Chairman
Oppenheimer Strategic Income & Growth Fund
Jon S. Fossel
President
Oppenheimer Strategic Income & Growth Fund
October 21, 1994
4. See footnote 1, page 2.
3 Oppenheimer Strategic Income & Growth Fund
<PAGE>
-----------------------------------------------------------
STATEMENT OF INVESTMENTS SEPTEMBER 30, 1994
<TABLE>
<CAPTION>
FACE MARKET VALUE
AMOUNT SEE NOTE 1
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
REPURCHASE AGREEMENTS--3.2%
- ---------------------------------------------------------------------------------------------------------------------------------
Repurchase agreement with First Chicago Capital Markets, 4.95%,
dated 9/30/94, to be repurchased at $1,900,784 on 10/3/94,
collateralized by U.S. Treasury Nts. 4.25%--8.50%, 4/15/95--
7/15/98, with a value of $1,074,386 and U.S. Treasury Bills,
0%, 3/16/95--3/23/95, with a value of $865,377 (Cost $1,900,000) $1,900,000 $1,900,000
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
LONG-TERM GOVERNMENT OBLIGATIONS--24.0%
- ---------------------------------------------------------------------------------------------------------------------------------
Argentina (Republic of) Bonds, Bonos de Consolidacion de Deudas,
Series I:
3.704%, 4/1/01(4)(6) 1,264,378(1) 737,853
4.375%, 4/1/01(4)(6) 1,723,903 1,306,567
4.8125%, 9/1/02(4)(6) 267,900 180,399
4.8125%, 4/1/07(4)(6) 287,317 178,886
---------------------------------------------------------------------------------------------------
Banco Nacional de Mexico S.A., 7% Exch. Sub. Debs., 12/15/99(5) 400,000 464,500
---------------------------------------------------------------------------------------------------
Denmark (Kingdom of) Bonds., 9%, 11/15/98 2,980,000(1) 493,948
---------------------------------------------------------------------------------------------------
Empresa Columbiana de Petroleos Nts., 7.25%, 7/8/98(5) 300,000 286,125
---------------------------------------------------------------------------------------------------
Italy (Republic of) Treasury Bonds, Buoni Poliennali del Tes:
12%, 1/1/96 50,000,000(1) 32,452
12%, 5/1/97 850,000,000(1) 552,228
---------------------------------------------------------------------------------------------------
Morocco (Kingdom of) Loan Participation Agreement,
Tranche A, 5.9375%, 1/1/09(4)(5) 650,000 474,500
---------------------------------------------------------------------------------------------------
New South Wales Treasury Corp., 7% Gtd. Bonds, 4/1/04 500,000(1) 292,991
---------------------------------------------------------------------------------------------------
New Zealand (Republic of) Bonds, 10%, 7/15/97 390,000(1) 240,946
---------------------------------------------------------------------------------------------------
Petacalco Topolobampo Trust, Sr. Sec. Unsub. Nts., 8.125%, 12/15/03 100,000 85,875
---------------------------------------------------------------------------------------------------
Polish People's Republic Loan Participation Agreement, 5.0625%,
2/3/24(5)(9) 500,000 276,671
---------------------------------------------------------------------------------------------------
South Australia Government Finance Authority Bonds, 10%, 1/15/03 120,000(1) 85,200
---------------------------------------------------------------------------------------------------
Spain (Kingdom of) Bonds, 11.45%, 8/30/98 74,000,000(1) 582,733
---------------------------------------------------------------------------------------------------
Treasury Corp. of Victoria Gtd. Bonds, 8.25%, 10/15/03 680,000(1) 433,036
---------------------------------------------------------------------------------------------------
United Kingdom Treasury Nts., 12%, 11/20/98 390,000(1) 681,915
---------------------------------------------------------------------------------------------------
U.S. Treasury Bonds:
7.875%, 2/15/21 600,000 592,500
7.125%, 2/15/23(10) 2,000,000 1,818,124
---------------------------------------------------------------------------------------------------
U.S. Treasury Nts.:
4.625%, 8/15/95(11) 1,130,000 1,117,994
5.125%, 11/15/95 1,470,000 1,455,300
5.75%, 10/31/97 1,300,000 1,258,563
---------------------------------------------------------------------------------------------------
Venezuela (Republic of), 6.75% Debs., 9/20/95(5) 500,000 474,375
------------
Total Long-Term Government Obligations (Cost $14,434,331) 14,103,681
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
MORTGAGE/ASSET-BACKED OBLIGATIONS--1.7%
- ---------------------------------------------------------------------------------------------------------------------------------
GOVERNMENT AGENCY--1.7%
- ---------------------------------------------------------------------------------------------------------------------------------
Federal National Mortage Assn. Interest-Only Stripped Mtg.-Backed
Security, Trust 257, Class 2, 7%, 2/25/24(8) 1,950,245 748,407
---------------------------------------------------------------------------------------------------
Federal Home Loan Mortgage Corp., 8.95%, 3/15/20 226,000 231,062
-------
Total Mortgage/Asset-Backed Obligations (Cost $916,941) 979,469
- ---------------------------------------------------------------------------------------------------------------------------------
LONG-TERM CORPORATE BONDS AND NOTES--26.7%
- ---------------------------------------------------------------------------------------------------------------------------------
BASIC MATERIALS--3.1%
- ---------------------------------------------------------------------------------------------------------------------------------
CHEMICALS--0.5% Rexene Corp., 10% 2nd Priority Nts., 11/15/02(6) 309,000 294,838
- ---------------------------------------------------------------------------------------------------------------------------------
METALS--0.5% Kaiser Aluminum & Chemical Corp., 12.75% Sr. Sub. Nts., 2/1/03 300,000 291,750
</TABLE>
4 Oppenheimer Strategic Income & Growth Fund
<PAGE>
<TABLE>
<CAPTION>
FACE MARKET VALUE
AMOUNT SEE NOTE 1
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
PAPER AND FOREST PRODUCTS--2.1%
Equitable Bag, Inc., 12.375% Sr. Nts., 8/15/02(2) $ 50,000 $ 29,250
---------------------------------------------------------------------------------------------------
Gaylord Container Corp., 11.50% Sr. Nts., 5/15/01 600,000 615,000
---------------------------------------------------------------------------------------------------
PT Inti Indorayon Utama, 9.125% Sr. Nts., 10/15/00 100,000 87,500
---------------------------------------------------------------------------------------------------
Stone Consolidated Corp., 10.25% Sr. Sec. Nts., 12/15/00 300,000 296,250
---------------------------------------------------------------------------------------------------
Stone Container Corp., 10.75% Fst. Mtg. Nts., 10/1/02 200,000 199,750
----------
1,227,750
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
CONSUMER CYCLICALS--5.3%
- ---------------------------------------------------------------------------------------------------------------------------------
AUTOMOTIVE--0.8% Envirotest Systems Corp., 9.625% Sr. Sub. Nts., 4/1/03 200,000 184,000
---------------------------------------------------------------------------------------------------
Penda Corp., 10.75% Sr. Nts., Series B, 3/1/04 300,000 277,500
----------
461,500
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
CONSTRUCTION SUPPLIES AND
DEVELOPMENT--0.9% USG Corp., 10.25% Sr. Sec. Nts., 12/15/02 500,000 512,500
- ---------------------------------------------------------------------------------------------------------------------------------
CONSUMER GOODS AND SERVICES--0.8%
Amstar Corp., 11.375% Sr. Sub. Nts., 2/15/97 300,000 297,000
---------------------------------------------------------------------------------------------------
Revlon Consumer Products Corp., 9.375% Sr. Nts., 4/1/01 200,000 175,502
----------
472,502
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
ENTERTAINMENT--1.3% Gillett Holdings, Inc., 12.25% Sr. Sub. Nts., Series A, 6/30/02 300,000 318,750
---------------------------------------------------------------------------------------------------
Lady Luck Gaming Finance Corp., 10.50% Fst. Mtg. Nts., 3/1/01 50,000 22,500
---------------------------------------------------------------------------------------------------
Marvel (Parent) Holdings, Inc., 0% Sr. Sec. Disc. Nts., 4/15/98 700,000 437,500
----------
778,750
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
MEDIA--0.9% SCI Television, Inc., 11% Sr. Nts., 6/30/05 500,000 509,375
- ---------------------------------------------------------------------------------------------------------------------------------
RETAIL--0.6% Finlay Fine Jewelry Corp., 10.625% Sr. Nts., 5/1/03 400,000 380,000
- ---------------------------------------------------------------------------------------------------------------------------------
CONSUMER NON-CYCLICALS--3.2%
- ---------------------------------------------------------------------------------------------------------------------------------
FOOD--0.9% Foodmaker, Inc., 14.25% Sr. Sub. Nts., 5/15/98 500,000 525,625
- ---------------------------------------------------------------------------------------------------------------------------------
FOOD AND DRUG
DISTRIBUTION--1.7% Alco Health Distribution Corp., 11.25% Sr. Debs., 7/15/05(6) 555,587 543,607
---------------------------------------------------------------------------------------------------
Grand Union Co., 11.25% Sr. Nts., 7/15/00 500,000 453,750
----------
997,357
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
HEALTHCARE--0.6% American Medical International, Inc., 13.50% Sr. Sub. Nts., 8/15/01 300,000 335,625
- ---------------------------------------------------------------------------------------------------------------------------------
ENERGY--0.5% Maxus Energy Corp., 9.875% Nts., 10/15/02 300,000 289,500
- ---------------------------------------------------------------------------------------------------------------------------------
FINANCIAL--3.6% Blue Bell Funding, Inc., 11.85% Extd. Sec. Nts., 5/1/99 400,000 428,500
---------------------------------------------------------------------------------------------------
Grupo Mexicano de Desarrollo S.A., 8.25% Gtd. Nts., 2/18/01(5) 300,000 246,750
---------------------------------------------------------------------------------------------------
International Bank for Reconstruction and Development Bonds,
12.50%, 7/25/97 1,015,000(1) 660,522
---------------------------------------------------------------------------------------------------
Life Partners Group, Inc., 12.75% Sr. Sub. Nts., 7/15/02 300,000 326,250
---------------------------------------------------------------------------------------------------
Tribasa Toll Road Trust, 10.50% Nts., Series 1993-A,
12/1/11(5) 500,000 451,250
----------
2,113,272
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
INDUSTRIAL--3.8%
- ---------------------------------------------------------------------------------------------------------------------------------
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, 12/1/04 400,000 419,000
----------
821,000
</TABLE>
5 Oppenheimer Strategic Income & Growth Fund
<PAGE>
<TABLE>
<CAPTION>
-----------------------------------------------------------
STATEMENT OF INVESTMENTS (CONTINUED)
FACE MARKET VALUE
AMOUNT SEE NOTE 1
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
GENERAL INDUSTRIAL--1.3% EnviroSource, Inc., 9.75% Sr. Nts., 6/15/03 $ 500,000 $ 455,000
---------------------------------------------------------------------------------------------------
Polymer Group, Inc., 12.25% Sr. Nts., 7/15/02(5) 300,000 300,000
----------
755,000
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
TRANSPORTATION--1.1% Tiphook Financial Corp., 8% Gtd. Nts., 3/15/00 179,000 123,510
---------------------------------------------------------------------------------------------------
Transportacion Maritima Mexicana SA, 8.50% Nts., 10/15/00 585,000 515,531
----------
639,041
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
TECHNOLOGY--6.7%
- ---------------------------------------------------------------------------------------------------------------------------------
CABLE TELEVISION--4.2% Adelphia Communications Corp., 12.50% Sr. Nts., 5/15/02 300,000 300,000
---------------------------------------------------------------------------------------------------
Cablevision Systems Corp., 9.875% Sr. Sub. Debs., 2/15/13 250,000 233,125
---------------------------------------------------------------------------------------------------
Celcaribe SA, 0%/13.50% Sr. Sec. Nts., 3/15/04(3)(5) 400,000 253,499
---------------------------------------------------------------------------------------------------
Comcast Cellular Corp., 0% Nts., Series B, 3/5/00 300,000 186,000
---------------------------------------------------------------------------------------------------
Continental Cablevision, Inc., 9.50% Sr. Debs., 8/1/13 500,000 455,000
---------------------------------------------------------------------------------------------------
Echostar Communications Corp. Units 200,000 96,000
---------------------------------------------------------------------------------------------------
Time Warner, Inc./Time Warner Entertainment LP, 8.375% Sr. Debs.,
3/15/23 500,000 438,340
---------------------------------------------------------------------------------------------------
TKR Cable I, Inc., 10.50% Sr. Debs., 10/30/07 500,000 543,125
----------
2,505,089
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
COMMUNICATIONS--1.5% MFS Communications, Inc., 0%/9.375% Sr. Disc. Nts., 1/15/04(3) 300,000 177,750
---------------------------------------------------------------------------------------------------
NewCity Communications, Inc., 11.375% Sr. Sub. Nts., 11/1/03 200,000 202,500
---------------------------------------------------------------------------------------------------
Panamsat LP/Panamsat Capital Corp., 0%/11.375% Sr. Sub. Disc. Nts.,
8/1/03(3) 750,000 504,375
----------
884,625
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
Technology--1.0% Bell & Howell Holdings Co., 0%/11.50% Sr. Disc. Debs., Series B,
3/1/05(3) 600,000 315,000
---------------------------------------------------------------------------------------------------
Imax Corp., 7% Sr. Nts., 3/1/01(7) 320,000 280,000
----------
595,000
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
UTILITIES--0.5% El Paso Electric, 10.375% Lease Oblig. Debs., 1/2/11(9) 400,000 216,337
---------------------------------------------------------------------------------------------------
Subic Power Corp., 9.50% Sr. Sec. Nts., Series A, 12/28/08(5) 100,000 92,250
----------
308,587
-----------
Total Long-Term Coporate Bonds and Notes (Cost $16,726,455) $15,698,686
SHARES
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
COMMON STOCKS--39.9%
- ---------------------------------------------------------------------------------------------------------------------------------
CONSUMER CYCLICALS--4.1%
- ---------------------------------------------------------------------------------------------------------------------------------
AUTO PARTS: AFTER MARKET
- --1.4% Goodyear Tire & Rubber Co. 24,000 801,000
- ---------------------------------------------------------------------------------------------------------------------------------
BROADCAST MEDIA--0.1% Celcaribe SA(2)(5) 65,040 79,501
- ---------------------------------------------------------------------------------------------------------------------------------
RETAIL STORES:
DEPARTMENT STORES--1.2% May Department Stores Co. 18,000 708,750
- ---------------------------------------------------------------------------------------------------------------------------------
RETAIL: SPECIALTY--1.4% Gap, Inc. (The) 25,000 821,875
- ---------------------------------------------------------------------------------------------------------------------------------
CONSUMER NON-CYCLICALS--15.7%
- ---------------------------------------------------------------------------------------------------------------------------------
BEVERAGES: SOFT DRINKS--3.4% Coca-Cola Co. (The) 22,000 1,069,750
---------------------------------------------------------------------------------------------------
PepsiCo, Inc. 28,000 927,500
----------
1,997,250
</TABLE>
6 Oppenheimer Strategic Income & Growth Fund
<PAGE>
<TABLE>
<CAPTION>
MARKET VALUE
SHARES SEE NOTE 1
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
DRUGS--4.9% Merck & Co., Inc. 22,000 $ 781,000
---------------------------------------------------------------------------------------------------
Pfizer, Inc. 16,000 1,106,000
---------------------------------------------------------------------------------------------------
Schering-Plough Corp. 14,000 994,000
----------
2,881,000
- ---------------------------------------------------------------------------------------------------------------------------------
HEALTHCARE: DIVERSIFIED--1.8% Abbott Laboratories 34,000 1,066,750
- ---------------------------------------------------------------------------------------------------------------------------------
HOUSEHOLD PRODUCTS--1.8% Colgate-Palmolive Co. 18,000 1,044,000
- ---------------------------------------------------------------------------------------------------------------------------------
MEDICAL PRODUCTS--2.2% Medtronic, Inc. 22,000 1,163,250
---------------------------------------------------------------------------------------------------
Stryker Corp. 3,000 104,250
----------
1,267,500
- ---------------------------------------------------------------------------------------------------------------------------------
TOBACCO--1.6% UST, Inc. 33,000 944,625
- ---------------------------------------------------------------------------------------------------------------------------------
FINANCIAL--12.1%
Financial Services:
Miscellaneous--3.4% American Express Co. 34,000 1,032,750
---------------------------------------------------------------------------------------------------
Federal National Mortgage Assn. 12,000 945,000
----------
1,977,750
Major Banks: Regional--6.6%
Banc One Corp. 30,000 896,250
---------------------------------------------------------------------------------------------------
First Interstate Bancorp 13,000 1,054,625
---------------------------------------------------------------------------------------------------
NationsBank Corp. 19,000 931,000
---------------------------------------------------------------------------------------------------
SunTrust Banks, Inc. 21,000 1,023,750
----------
3,905,625
---------------------------------------------------------------------------------------------------
Money Center Banks--2.1%
Chase Manhattan Corp. 26,000 900,250
---------------------------------------------------------------------------------------------------
Citicorp 8,000 340,000
----------
1,240,250
- ---------------------------------------------------------------------------------------------------------------------------------
INDUSTRIAL--1.8%
- ---------------------------------------------------------------------------------------------------------------------------------
ELECTRICAL EQUIPMENT--1.8% General Electric Co. 22,000 1,058,750
- ---------------------------------------------------------------------------------------------------------------------------------
TECHNOLOGY--6.2%
Computer Software
And Services--3.1% Automatic Data Processing, Inc. 13,000 729,625
---------------------------------------------------------------------------------------------------
Microsoft Corp.(2) 19,000 1,066,375
----------
1,796,000
- ---------------------------------------------------------------------------------------------------------------------------------
ELECTRONICS:
SEMICONDUCTORS--3.1% Intel Corp. 15,000 922,500
---------------------------------------------------------------------------------------------------
Texas Instruments, Inc. 13,000 888,875
----------
1,811,375
----------
Total Common Stocks (Cost $22,066,990) 23,402,001
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
PREFERRED STOCKS--2.0% AMR Corp., $3.00 Cum. Cv. Depositary Shares, Series A(5) 9,000 364,500
---------------------------------------------------------------------------------------------------
First Madison Bank, FSB, 11.50%(12) 2,500 262,500
---------------------------------------------------------------------------------------------------
Prime Retail, Inc., $19.00 Cv., Series B 12,000 289,500
---------------------------------------------------------------------------------------------------
Unisys Corp., $3.75 Cv., Series A 7,000 255,500
----------
Total Preferred Stocks (Cost $1,273,750) 1,172,000
</TABLE>
7 Oppenheimer Strategic Income & Growth Fund
<PAGE>
<TABLE>
<CAPTION>
------------------------------------------------------------
STATEMENT OF INVESTMENTS (CONTINUED)
MARKET VALUE
DATE/PRICE FACE AMOUNT SEE NOTE 1
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
PUT OPTIONS PURCHASED--0.0% European OTC Deutsche Mark/U.S. Dollar Put
Nov. 2/1.60 DEM 2,072,494(1) $ 4,274
---------------------------------------------------------------------------------------------------
European OTC Deutsche Mark/U.S. Dollar Put
Nov. 4/1.60 DEM 1,036,247(1) 2,722
---------------------------------------------------------------------------------------------------
European OTC Deutsche Mark/U.S. Dollar Put
Nov. 8/1.60 DEM 1,036,247(1) 2,338
----------
Total Put Options Purchased (Cost $45,163) 9,334
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
STRUCTURED INSTRUMENTS--2.0% Bayerische Landesbank, N.Y. Branch:
Mexican Peso Linked Confidence Nt., Girozentrale Branch,
35.50%, 12/30/94(5) 170,000 167,025
---------------------------------------------------------------------------------------------------
Italian Lira Linked Confidence Nt., Girozentrale Branch, 10%, 8/7/95 190,000 185,744
---------------------------------------------------------------------------------------------------
Goldman Sachs International Limited, 5.10%, 2/28/95 70,000 68,082
---------------------------------------------------------------------------------------------------
Morgan Guaranty Trust Co. of New York
(Singapore Branch) CD, 12.15%, 2/3/95 1,056,625,000(1) 485,570
---------------------------------------------------------------------------------------------------
Swiss Bank Corp. Investment Banking, Inc.,
10% CD Sterling Rate Linked Nts., 7/3/95 300,000 295,920
----------
Total Structured Instruments (Cost $1,230,001) 1,202,341
Total Investments, at Value (Cost $58,593,631) 99.5% 58,467,512
---------------------------------------------------------------------------------------------------
Other Assets Net of Liabilities .5 318,104
---------- ----------
Net Assets 100.0% $58,785,616
---------- ----------
---------- ----------
<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. Interest-Only Strips represent the right to
receive the monthly interest payments on an
underlying pool of mortgage loans. These
securities typically decline in price as
interest rates decline. Most other fixed-income\
securities increase in price when interest
rates decline. The principal amount of the
underlying pool represents the notional amount
on which current interest is calculated. The
price of these securities is typically more
sensitive to changes in prepayment rates than
traditional mortgage backed securities (for
example, GNMA pass-throughs).
9. Partial interest payment was received.
10. Securities with an aggregate market value of $119,996 are held in escrow to cover outstanding
call options, as follows:
</TABLE>
<TABLE>
<CAPTION>
FACE EXPIRATION EXERCISE PREMIUM MARKET VALUE
SUBJECT TO CALL DATE PRICE RECEIVED SEE NOTE 1
--------------- -------- ----- -------- ------------
<S> <C> <C> <C> <C>
European OTC Deutsche Mark/U.S. Dollar
904,467 11/2/94 1.50 DEM $ 4,201 $ 2,385
European OTC Deutsche Mark/U.S. Dollar
406,355 11/2/94 1.60 DEM 10,598 13,542
European OTC Deutsche Mark/U.S. Dollar
452,234 11/4/94 1.50 DEM 2,177 1,336
European OTC Deutsche Mark/U.S. Dollar
203,178 11/4/94 1.60 DEM 5,339 6,711
European OTC Deutsche Mark/U.S. Dollar
452,234 11/8/94 1.54 DEM 5,396 5,560
European OTC Deutsche Mark/U.S. Dollar
203,178 11/8/94 1.60 DEM 5,525 6,952
------- -------
$33,236 $36,486
<FN>
11. Securities with an aggregate market value of
$9,894 are held in escrow to cover initial
margin requirements on open interest rate
futures sales contracts, as follows:
</TABLE>
<TABLE>
<CAPTION>
NUMBER FACE
TYPE OF CONTRACT OF CONTRACTS AMOUNT
-------------------------------------------------------------------------------------------------
<S> <C> <C>
U.S. Treasury Nts., 12/94 3 $305,156
</TABLE>
The market value of the open contracts was
$304,406 at September 30, 1994 with a net
unrealized gain of $750.
See accompanying Notes to Financial Statements.
8 Oppenheimer Strategic Income & Growth Fund
<PAGE>
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES September 30, 1994
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
ASSETS Investments, at value (cost $58,593,631)--see accompanying statement $58,467,512
---------------------------------------------------------------------------------------------------
Cash 212,885
Unrealized appreciation on futures contracts--Note 7 750
Receivables:
Dividends and interest 724,816
Shares of beneficial interest sold 194,089
Investments sold 215,553
---------------------------------------------------------------------------------------------------
Deferred organization costs 9,934
---------------------------------------------------------------------------------------------------
Other 21,177
---------------------------------------------------------------------------------------------------
Total assets 59,846,716
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
LIABILITIES Options written, at value (premiums received $33,236)
--see accompanying statement--Note 4 36,485
---------------------------------------------------------------------------------------------------
Payables and other liabilities:
Investments purchased 293,833
Dividends 225,905
Shares of beneficial interest redeemed 390,956
Distribution and service plan fees--Note 5 37,514
Other 76,407
----------
Total liabilities 1,061,100
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
NET ASSETS $58,785,616
-----------
-----------
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
COMPOSITION OF
NET ASSETS Paid-in capital $60,049,032
---------------------------------------------------------------------------------------------------
Overdistributed net investment income (119,994)
---------------------------------------------------------------------------------------------------
Accumulated net realized loss from investment, written option and foreign
currency transactions (1,014,999)
---------------------------------------------------------------------------------------------------
Net unrealized depreciation on investments, options written and
translation of assets and liabilities denominated in foreign currencies (128,423)
-----------
Net assets $58,785,616
-----------
-----------
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE
PER SHARE Class A Shares:
Net asset value and redemption price per share (based on net assets
of $42,732,778 and 8,683,396 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 $16,052,838 and 3,267,106 shares of beneficial interest outstanding) $ 4.91
</TABLE>
See accompanying Notes to Financial Statements.
9 Oppenheimer Strategic Income & Growth Fund
<PAGE>
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
STATEMENT OF OPERATIONS For the Year Ended September 30, 1994
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
INVESTMENT INCOME Interest (net of withholding taxes of $8,073) $ 3,069,864
---------------------------------------------------------------------------------------------------
Dividends 726,569
-----------
Total income 3,796,433
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
EXPENSES Management fees--Note 5 475,265
---------------------------------------------------------------------------------------------------
Distribution and service plan fees:
Class A--Note 5 118,925
Class B--Note 5 149,517
---------------------------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees--Note 5 124,051
---------------------------------------------------------------------------------------------------
Shareholder reports 69,181
---------------------------------------------------------------------------------------------------
Custodian fees and expenses 34,248
---------------------------------------------------------------------------------------------------
Legal and auditing fees 17,736
---------------------------------------------------------------------------------------------------
Trustees' fees and expenses 2,885
---------------------------------------------------------------------------------------------------
Other 22,877
-----------
Total expenses 1,014,685
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME 2,781,748
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS,
OPTIONS WRITTEN AND FOREIGN
CURRENCY TRANSACTIONS Net realized gain (loss) from:
Investments and options written (991,862)
Expiration and closing of option contracts written--Note 4 (9,184)
Foreign currency transactions 109,713
-----------
Net realized loss (891,333)
---------------------------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation on:
Investments and options written (2,460,438)
Translation of assets and liabilities denominated in foreign currencies 332,437
---------------------------------------------------------------------------------------------------
Net change (2,128,001)
Net realized and unrealized loss on investments, options written and foreign
currency transactions (3,019,334)
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS $ (237,586)
-----------
-----------
</TABLE>
See accompanying Notes to Financial Statements.
10 Oppenheimer Strategic Income & Growth Fund
<PAGE>
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
YEAR ENDED SEPTEMBER 30,
1994 1993
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
OPERATIONS Net investment income $ 2,781,748 $ 2,774,685
---------------------------------------------------------------------------------------------------
Net realized gain (loss) on investments, options written and foreign
currency transactions (891,333) 726,649
---------------------------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation on investments,
options written and translation of assets and liabilities denominated
in foreign currencies (2,128,001) 1,990,636
------------ ------------
Net increase (decrease) in net assets resulting from operations (237,586) 5,491,970
---------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
DIVIDENDS AND
DISTRIBUTIONS TO
SHAREHOLDERS Dividends from net investment income:
Class A ($.209 and $.202 per share,
respectively) (1,931,946) (2,309,909)
Class B ($.185 and $.130 per share, respectively) (722,244) (193,606)
---------------------------------------------------------------------------------------------------
Dividends in excess of net investment income:
Class A ($.011 per share) (98,470) --
Class B ($.011 per share) (36,812) --
---------------------------------------------------------------------------------------------------
Distributions from net realized gain on investments, options written,
and foreign currency transactions:
Class A ($.005 per share) -- (62,907)
Class B ($.005 per share) -- (1,304)
---------------------------------------------------------------------------------------------------
Distributions in excess of net realized gain on investments, options written,
and foreign currency transactions:
Class A ($.097 per share) (885,559) --
Class B ($.097 per share) (331,059) --
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
BENEFICIAL INTEREST
TRANSACTIONS Net increase (decrease) in net assets resulting from Class A beneficial
interest transactions--Note 2 (9,347,360) 4,173,905
---------------------------------------------------------------------------------------------------
Net increase in net assets resulting from Class B beneficial interest
transactions--Note 2 4,699,403 12,182,278
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
NET ASSETS Total increase (decrease) (8,891,633) 19,280,427
---------------------------------------------------------------------------------------------------
Beginning of year 67,677,249 48,396,822
------------ ------------
End of year [including undistributed (overdistributed) net investment
income of ($119,994) and $403,577, respectively] $ 58,785,616 $ 67,677,249
------------ ------------
------------ ------------
</TABLE>
See accompanying Notes to Financial Statements.
11 Oppenheimer Strategic Income & Growth Fund
<PAGE>
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
Class A Class B
-------------------------------------------------------------------------------------------------
YEAR ENDED YEAR ENDED
SEPTEMBER 30, SEPTEMBER 30,
1994 1993 1992(2) 1994 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 from investment operations:
Net investment income .21 .22 .07(3) .19 .14
Net realized and unrealized gain on
investments, options written and foreign
currency transactions (.23) .22 .02 (.25) .16
------- ------- ------- ------- ------
Total income (loss) from investment
operations (.02) .44 .09 (.06) .30
---------------------------------------------------------------------------------------------------
Dividends and distributions to shareholders:
Dividends from net investment income (.21) (.20) (.06) (.18) (.13)
Dividends in excess of net investment income (.01) -- -- (.01) --
Distributions from net realized gain on
investments, options written and foreign
currency transactions -- (.01) -- -- (.01)
Distributions in excess of net realized gain
on investments, options written, and foreign
currency transactions (.10) -- -- (.10) --
-------- ------- ------- ------- ------
Total dividends and distributions
to shareholders (.32) (.21) (.06) (.29) (.14)
---------------------------------------------------------------------------------------------------
Net asset value, end of period $4.92 $5.26 $5.03 $4.91 $5.26
------- ------- ------- ------- ------
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE(4) (.23)% 8.84% 1.74% (1.17)% 5.86%
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $42,733 $55,291 $48,397 $16,053 $12,386
---------------------------------------------------------------------------------------------------
Average net assets (in thousands) $48,360 $59,209 $30,264 $14,986 $7,541
---------------------------------------------------------------------------------------------------
Number of shares outstanding
at end of period (in thousands) 8,683 10,513 9,628 3,267 2,357
---------------------------------------------------------------------------------------------------
Ratios to average net assets:
Net investment income 4.56% 4.33% 4.59%(5) 3.86% 3.32%(5)
Expenses 1.43% 1.36% 1.46%(3)(5) 2.17% 2.21%(5)
---------------------------------------------------------------------------------------------------
Portfolio turnover (6) 80.0% 122.4% 25.8% 80.0% 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 year ended September 30,
1994 were $53,695,271 and $49,725,672,
respectively.
</TABLE>
See accompanying Notes to Financial Statements.
12 Oppenheimer Strategic Income & Growth Fund
<PAGE>
--------------------------------------------------
--------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT Oppenheimer Strategic Income & Growth Fund (the
ACCOUNTING POLICIES Fund) 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 TRANSLATION. The accounting
records of the Fund are maintained in 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
foreign 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, EXPENSES AND GAINS AND
LOSSES. Income, expenses (other than those
attributable to a specific class) and gains and
losses are allocated 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. At September 30, 1994, the
Fund had available for federal income tax purposes
an unused capital loss carryover of approximately
$200,000 expiring in 2002.
13 Oppenheimer Strategic Income & Growth Fund
<PAGE>
--------------------------------------------------
--------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (Continued)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT ORGANIZATION COSTS. The Manager advanced $26,000
ACCOUNTING POLICIES for organization and start-up costs of the Fund.
(CONTINUED) 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 SHAREHOLDERS. The Fund intends
to declare dividends separately for 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.
--------------------------------------------------
CHANGE IN ACCOUNTING FOR DISTRIBUTIONS TO
SHAREHOLDERS. Effective October 1, 1993, the Fund
adopted Statement of Position 93-2: Determination,
Disclosure, and Financial Statement Presentation
of Income, Capital Gain, and Return of Capital
Distributions by Investment Companies. As a
result, the Fund changed the classification of
distributions to shareholders to better disclose
the differences between financial statement
amounts and distributions determined in accordance
with income tax regulations. Accordingly,
subsequent to September 30, 1993, amounts have
been reclassified to reflect a decrease in
undistributed net investment income and an
increase in undistributed capital gain on
investments of $382,503. During the year ended
September 30, 1994, in accordance with Statement
of Position 93-2, undistributed net investment
income and undistributed capital loss were
decreased by $133,344.
--------------------------------------------------
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
BENEFICIAL INTEREST par value shares of beneficial interest of each
class. Transactions in shares of beneficial
interest were as follows:
<TABLE>
<CAPTION>
YEAR ENDED SEPTEMBER 30, 1994 PERIOD ENDED SEPTEMBER 30,
1993(1)
-------------------------- --------------------------
SHARES AMOUNT SHARES AMOUNT
----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A:
Sold 1,797,523 $ 9,177,865 5,776,034 $29,480,167
Dividends and distributions reinvested 535,980 2,757,772 406,080 2,091,310
Redeemed (4,163,212) (21,282,997) (5,297,441) (27,397,572)
---------- ----------- ---------- -----------
Net increase (decrease) (1,829,709) $(9,347,360) 884,673 $ 4,173,905
---------- ----------- ---------- -----------
---------- ----------- ---------- -----------
Class B:
Sold 1,752,588 $ 8,784,884 2,860,426 $14,798,939
Dividends and distributions reinvested 100,839 724,590 30,122 156,143
Redeemed (943,022) (4,810,071) (533,847) (2,772,804)
---------- ----------- ---------- -----------
Net increase 910,405 $ 4,699,403 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.
3. Unrealized Gains and Losses on Investments And
Options Written At September 30, 1994, net
unrealized depreciation on investments and
options written of $128,618 was composed of
gross appreciation of $2,704,691, and gross
depreciation of $2,833,309.
</TABLE>
14 Oppenheimer Strategic Income & Growth Fund
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
4. OPTION ACTIVITY Option activity for the year ended September 30,
1994 was as follows:
<TABLE>
<CAPTION>
CALL OPTIONS PUT 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 2,621,846 65,736 4,702 17,320
Options expired prior to exercise (600) (89,375) (4,702) (17,320)
Options outstanding at September 30, 1994 2,621,646 $33,236 -- $ --
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
5. MANAGEMENT FEES Management fees paid to the Manager were in
AND OTHER TRANSACTIONS accordance with the investment advisory
WITH AFFILIATES agreement 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 year ended September 30, 1994,
commissions (sales charges paid by investors) on
sales of Class A shares totaled $231,950, of which
$73,286 was retained by Oppenheimer Funds
Distributor, Inc. (OFDI), a subsidiary of the
Manager, as general distributor, and by an
affiliated broker/dealer. During the year ended
September 30, 1994, OFDI received contingent
deferred sales charges of $50,191 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 financial 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 year ended
September 30, 1994, OFDI paid $14,477 and $1,013,
respectively, to an affiliated broker/dealer as
reimbursement for Class A and Class B personal
service and maintenance expenses and retained
$137,454 as reimbursement for Class B sales
commissions and service fee advances, as well as
financing costs.
15 Oppenheimer Strategic Income & Growth Fund
<PAGE>
--------------------------------------------------
--------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (Continued)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
6. RESTRICTED SECURITIES The Fund owns securities purchased in private
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, excluding securities eligible for
resale pursuant to Rule 144A of the Act amount to
$918,196 or 1.6% of the Fund's net assets, at
September 30, 1994. Illiquid and/or restricted
securities, including those restricted securities
that are transferable under Rule 144A of the Act
are listed below.
<TABLE>
<CAPTION>
VALUATION PER UNIT
AS OF
SECURITY ACQUISITION DATE COST PER UNIT SEPTEMBER 30, 1994
-----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
AMR Corp., $3.00 Cum. Cv.Depositary Shares,
Series A(1) 12/2/93--11/14/94 $ 53.43 $ 40.50
-----------------------------------------------------------------------------------------------------
Banco Nacional de Mexico SA, 7% Exch. Sub.
Debs., 12/15/99(1) 5/24/93 $104.00 $116.13
-----------------------------------------------------------------------------------------------------
Bayericshe Landesbank, N.Y. Branch, Mexican
Peso Linked
-----------------------------------------------------------------------------------------------------
Confidence Nt., Girozentrale Branch, 35.50%,
12/30/94 9/23/94 $100.00 $ 98.25
-----------------------------------------------------------------------------------------------------
Celcaribe SA(1) 5/17/94 $ 1.19 $ 1.22
-----------------------------------------------------------------------------------------------------
Celcaribe SA, 0%/13.50% Sr. Sec. Nts.,
3/15/04(1) 5/17/94 $ 63.33 $ 63.37
-----------------------------------------------------------------------------------------------------
Empresa Columbiana de Petroleos Nts., 7.25%,
7/8/98(1) 4/25/94 $ 93.92 $ 95.38
-----------------------------------------------------------------------------------------------------
Grupo Mexicano de Desarrollo SA, 8.25% Gtd.
Nts., 2/18/01(1) 2/8/94 $100.00 $ 82.25
-----------------------------------------------------------------------------------------------------
Morocco (Kingdom of) Loan Participation
Agreement, Tranche A, 5.9375%, 1/1/09 2/23/94--4/19/94 $ 72.57 $ 73.00
-----------------------------------------------------------------------------------------------------
Polish People's Republic Loan Participation
Agreement, 5.0625%, 2/3/24 1/12/94--1/13/94 $ 65.11 $ 55.33
-----------------------------------------------------------------------------------------------------
Polymer Group, Inc., 12.25% Sr. Nts., 7/15/02(1) 6/17/94 $100.00 $100.00
-----------------------------------------------------------------------------------------------------
Subic Power Corp., 9.50% Sr. Sec. Nts., Series A,
12/28/08(1) 12/20/93 $ 99.94 $ 92.25
-----------------------------------------------------------------------------------------------------
Tribasa Toll Road Trust, 10.50% Nts., Series
1993-A, 12/1/11(1) 11/8/93 $100.00 $ 90.25
-----------------------------------------------------------------------------------------------------
Venezuela (Republic of) 6.75% Debs., 9/20/95(1) 5/2/94 $ 96.28 $ 94.88
<FN>
1. Transferable under Rule 144A of the Act.
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
7. FUTURES CONTRACTS At September 30, 1994, the Fund had outstanding
futures contracts to sell debt securities as
follows:
<TABLE>
<CAPTION>
EXPIRATION NUMBER OF VALUATION AS OF UNREALIZED
DATE FUTURES CONTRACTS SEPTEMBER 30, 1994 APPRECIATION
--------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
U.S. Treasury Nts. 12/20/94 3 $304,406 $750
</TABLE>
--------------------------------------------------
--------------------------------------------------
FEDERAL INCOME TAX INFORMATION (UNAUDITED)
In early 1995, shareholders will receive
information regarding all dividends and
distributions paid to them by the Fund during
calendar year 1994. Regulations of the U.S.
Treasury Department require the Fund to report
this information to the Internal Revenue Service.
Dividends paid by the Fund during the
fiscal year ended September 30, 1994 which are not
designated as capital gain distributions should be
multiplied by 27.77% to arrive at the net amount
eligible for the corporate dividend-received
deduction.
The foregoing information is presented
to assist shareholders in reporting distributions
received from the Fund to the Internal Revenue
Service. Because of the complexity of the federal
regulations which may affect your individual tax
return and the many variations in state and local
tax regulations, we recommend that you consult
your tax advisor for specific guidance.
16 Oppenheimer Strategic Income & Growth Fund
<PAGE>
--------------------------------------------------
--------------------------------------------------
INDEPENDENT AUDITORS' REPORT
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
The Board of Trustees and Shareholders of
Oppenheimer Strategic Income & Growth Fund:
We have audited the accompanying statement of
assets and liabilities, including the statement of
investments, of Oppenheimer Strategic Income &
Growth Fund as of September 30, 1994, the related
statement of operations for the year then ended,
the statements of changes in net assets for the
years ended September 30, 1994 and 1993 and the
financial highlights for the period June 1, 1992
(commencement of operations) to September 30,
1994. These financial statements and financial
highlights are the responsibility of the Fund's
management. Our responsibility is to express an
opinion on these financial statements and
financial highlights based on our audits.
We conducted our audits in accordance
with generally accepted auditing standards. Those
standards require that we plan and perform the
audit to obtain reasonable assurance about whether
the financial statements and financial highlights
are free of material misstatement. An audit also
includes examining, on a test basis, evidence
supporting the amounts and disclosures in the
financial statements. Our procedures included
confirmation of securities owned at September 30,
1994 by correspondence with the custodian and
brokers; where replies were not received from
brokers, we performed other auditing procedures.
An audit also includes assessing the accounting
principles used and significant estimates made by
management, as well as evaluating the overall
financial statement presentation. We believe that
our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements
and financial highlights present fairly, in all
material respects, the financial position of
Oppenheimer Strategic Income & Growth Fund at
September 30, 1994, the results of its operations,
the changes in its net assets, and the financial
highlights for the respective stated periods, in
conformity with generally accepted accounting
principles.
DELOITTE & TOUCHE LLP
Denver, Colorado
October 21, 1994
17 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
David P. Negri, Vice President
Arthur P. Steinmetz, Vice President
George C. Bowen, Vice President, Secretary and
Treasurer
Robert J. Bishop, Assistant Treasurer
Scott Farrar, Assistant Treasurer
Robert G. Zack, Assistant Secretary
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
INVESTMENT ADVISOR Oppenheimer Management Corporation
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
DISTRIBUTOR Oppenheimer Funds Distributor, Inc.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TRANSFER AND SHAREHOLDER Oppenheimer Shareholder Services
SERVICING AGENT
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
CUSTODIAN OF The Bank of New York
PORTFOLIO SECURITIES
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
INDEPENDENT AUDITORS Deloitte & Touche LLP
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
LEGAL COUNSEL Myer, Swanson & Adams, P.C.
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.
18 Oppenheimer Strategic Income & Growth Fund
<PAGE>
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OPPENHEIMERFUNDS FAMILY
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OppenheimerFunds offers over 35 funds designed to
fit virtually every investment goal. Whether
you're investing for retirement, your children's
education or tax-free income, we have the funds to
help you seek your objective.
When you invest with OppenheimerFunds,
you can feel comfortable knowing that you are
investing with a respected financial institution
with over 30 years of experience in helping people
just like you reach their financial goals. And
you're investing with a leader in global, growth
stock and flexible fixed-income investments--with
over 1.8 million shareholder accounts and more
than $26 billion under Oppenheimer's management
and that of our affiliates.
As an OppenheimerFunds shareholder, you
can easily exchange shares of eligible funds of
the same class by mail or by telephone for a small
administrative fee.1 For more information on
OppenheimerFunds, please contact your financial
advisor or call us at 1-800-525-7048 for a
prospectus. You may also write us at the address
shown on the back cover. As always, please read
the prospectus carefully before you invest.
<TABLE>
<CAPTION>
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<S> <C> <C>
STOCK FUNDS Discovery Fund Global Fund
Global Emerging Growth Fund(2) Oppenheimer Fund
Time Fund Value Stock Fund
Target Fund Gold & Special Minerals Fund
Growth Fund(3)
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STOCK & BOND FUNDS Main Street Income & Growth Fund Equity Income Fund
Total Return Fund Asset Allocation Fund
Global Growth & Income Fund
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BOND FUNDS High Yield Fund Strategic Short-Term Income Fund
Champion High Yield Fund Investment Grade Bond Fund
Strategic Income & Growth Fund Mortgage Income Fund
Strategic Income Fund U.S. Government Trust
Strategic Diversified Income Fund Limited-Term Government
Strategic Investment Grade Bond Fund
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TAX-EXEMPT FUNDS New York Tax-Exempt Fund(4) New Jersey Tax-Exempt Fund(4)
California Tax-Exempt Fund(4) Tax-Free Bond Fund
Pennsylvania Tax-Exempt Fund(4) Insured Tax-Exempt Bond Fund
Florida Tax-Exempt Fund(4) Intermediate Tax-Exempt Bond Fund
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MONEY MARKET FUNDS Money Market Fund Cash Reserves
<FN>
1. The fee is waived for PhoneLink exchanges
between existing accounts. Exchange privileges
are subject to change or termination.
2. Formerly Oppenheimer Global Bio-Tech Fund and
Oppenheimer Global Environment Fund.
3. Formerly Special Fund.
4. Available only to residents of those states.
OppenheimerFunds are distributed by Oppenheimer
Funds Distributor, Inc., Two World Trade Center,
New York, NY 10048-0203.
(C) Copyright 1994 Oppenheimer Management
Corporation. All rights reserved.
</TABLE>
19 Oppenheimer Strategic Income & Growth Fund
<PAGE>
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"HOW MAY I HELP YOU?"
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GENERAL INFORMATION
1-800-525-7048
TALK TO A CUSTOMER SERVICE REPRESENTATIVE.
MONDAY THROUGH FRIDAY FROM
8:30 A.M. TO 8:00 P.M., AND SATURDAY FROM 10:00 A.M.
TO 2:00 P.M. ET.
TELEPHONE TRANSACTIONS
1-800-852-8457
MAKE ACCOUNT TRANSACTIONS WITH A CUSTOMER SERVICE REPRESENTATIVE.
MONDAY THROUGH FRIDAY FROM
8:30 A.M. TO 8:00 P.M. ET.
PHONELINK
1-800-533-3310
GET AUTOMATED INFORMATION OR MAKE AUTOMATED TRANSACTIONS.
24 HOURS A DAY, 7 DAYS A WEEK.
TELECOMMUNICATION PHOTO BARBARA H.
DEVICE FOR THE DEAF
1-800-843-4461 ICSA LOGO
SERVICE FOR THE HEARING IMPAIRED.
MONDAY THROUGH FRIDAY FROM
8:30 A.M. TO 8:00 P.M. ET.
OPPENHEIMERFUNDS
INFORMATION HOTLINE
1-800-835-3104
HEAR TIMELY AND INSIGHTFUL MESSAGES ON THE ECONOMY AND ISSUES THAT AFFECT YOUR
FINANCES. 24 HOURS A DAY, 7 DAYS A WEEK.
"Just as OppenheimerFunds offers over 35 different mutual funds designed to help
meet virtually every investment need, Oppenheimer Shareholder Services offers a
variety of services to satisfy your individual needs. Whenever you require help,
we're only a toll-free phone call away.
"For personalized assistance and account information, call our General
Information number to speak with our knowledgeable Customer Service
Representatives and get the help you need.
"When you want to make account transactions, it's easy for you to
redeem shares, exchange shares, or conduct AccountLink transactions, simply by
calling our Telephone Transactions number.
"And for added convenience, OppenheimerFunds' PhoneLink, an automated
voice response system is available 24 hours a day, 7 days a week. PhoneLink
gives you access to a variety of fund, account, and market information. You can
even make purchases, exchanges and redemptions using your touch-tone phone. Of
course, PhoneLink will always give you the option to speak with a Customer
Service Representative during the hours shown to the left.
"When you invest in OppenheimerFunds, you know you'll receive a high
level of customer service. The International Customer Service Association knows
it, too, as it awarded Oppenheimer Shareholder Services a 1993 Award of
Excellence for consistently demonstrating superior customer service.
"Whatever your needs, we're ready to assist you."
[Logo] OPPENHEIMERFUNDS
Oppenheimer Funds Distributor, Inc.
P.O. Box 5270
Denver, CO 80217-5270
Bulk Rate
U.S. Postage
PAID
Permit No. 377
Hackensack, NJ
