[FRONT COVER]
Oppenheimer Strategic Income & Growth Fund
Semiannual Report March 31, 1996
[Picture of Patio Barbecue]
"We want
our money to
work hard,
but we're
concerned
about risk."
[Oppenheimer Logo(R)]
<PAGE>
News
Standardized Yields
For the 30 Days Ended 3/31/96:3
Class A
4.55%
Class B
4.01%
Class C
3.95%
Beat the Average
Cumulative Total Return for
the 3-Year Period Ended 3/31/96:
Oppenheimer Strategic
Income & Growth Fund
Class A (at NAV)1
29.14%
Lipper Multi-Sector Income
Funds Average4
24.02%
This Fund is for people who want high income
with the potential for growth, from an investment
that's strategically designed to lower risk.
How Your Fund Is Managed
Oppenheimer Strategic Income & Growth Fund seeks its objectives by
strategically allocating assets among four sectors: U.S. government issues,
foreign fixed-income securities, higher-yielding, lower-rated corporate bonds,
and domestic stocks. Strategic investing gives the Fund's managers the
flexibility to shift assets among three fixed-income sectors to capitalize on
worldwide investment opportunities to seek high income. Investing in stocks
can help the Fund seek its growth objective. Combining strategically managed
fixed-income investments with stock investments may reduce the risk of
concentrating investments in any one sector, such as high-yield bonds, which
are subject to greater risk that the issuer will default in principal or
interest payments. And the ability to move assets quickly and decisively among
a wide variety of investments and global finan-cial markets is crucial to good
performance and reduced risk.
Performance
Total returns at net asset value for the 6 months ended 3/31/96 for Class A, B
and C shares were 8.82%, 8.43% and 8.18%, respectively.1
Your Fund's average annual total returns at maximum offering price
for Class A shares for the 1-year period ended 3/31/96 and since inception of
the Class on 6/1/92 were 18.74% and 7.72%, respectively. For Class B shares,
average annual total returns for the 1-year period ended 3/31/96 and since
inception of the Class on 11/30/92 were 18.78% and 7.88%, respectively. For
Class C shares, cumulative total return since inception on 10/2/95 was 7.18%.2
Outlook
"The spectacular performance of 1995 is unlikely to be repeated, however, with
worldwide eco-nomic growth still slowing and inflation very low, we think the
outlook remains very promising."
Robert Doll, David Negri and Art Steinmetz,
Portfolio Managers
March 31, 1996
Total returns include change in share price and reinvestment of dividends and
capital gains distributions. Past performance does not guarantee future
results. Investment return and principal value of 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.
1. Based on the change in net asset value per share for the period shown,
without deducting any sales charges. Such performance would have been lower if
sales charges were taken into account.
2. Class A returns show results of hypothetical investments on 3/31/95 and
6/1/92 (inception of class), after deducting the current maximum initial sales
charge of 4.75%. Class B returns show results of hypothetical investments on
3/31/95 and 11/30/92 (inception of class), and the deduction of the applicable
contingent deferred sales charge of 5% (1-year) and 2% (since inception).
Class C returns show results of hypothetical investments on 10/2/95 after the
1% contingent deferred sales charge. An explanation of the different total
returns is in the Fund's prospectus.
3. Standardized yield is net investment income calculated on a
yield-to-maturity basis for the 30-day period ended 3/31/96, divided by the
maximum offering price for Class A shares at the end of the period, compounded
semiannually and then annualized. Falling net asset values will tend to
artificially raise yields.
4. Source: Lipper Analytical Services, 3/31/96, an independent mutual fund
monitoring service. The Lipper total return average for the 3-year period was
for 12 multi-sector income funds. The average is shown for comparative
purposes only. Oppenheimer Strategic Income & Growth Fund is characterized by
Lipper as a multi-sector income fund. Lipper performance does not take sales
charges into consideration.
2 Oppenheimer Strategic Income & Growth Fund
<PAGE>
[PHOTO-JAMES C. SWAIN]
James C. Swain
Chairman
Oppenheimer Strategic
Income & Growth Fund
[PHOTO-BRIDGET A. MACASKILL]
Bridget A. Macaskill
President
Oppenheimer Strategic
Income & Growth Fund
Dear Shareholder,
After posting double-digit returns in 1995, the bond market declined during
the first quarter of 1996 due to increased uncertainty about the strength of
the economy.
With yields on the 30-year U.S. Treasury bond trading between 6% and
6.75%, investors were able to earn substantial income over inflation. But as
interest rates became more volatile, pushing bond yields higher, bond prices
moved lower. This created a negative total return, albeit a slight one, for
the broad bond market.
Although the Federal Reserve Board cut short-term interest rates a
quarter of a percentage point on January 31, intermediate- and long-term bond
yields continued to move higher. This movement in the market came as a result
of recent economic data suggesting the economy might be stronger than previous
statistics had indicated. The market had expected further interest rate cuts
to stimulate what was perceived to be a slowing economy. However, the stronger
economic dataparticularly the February jobs report that showed an increase of
over 700,000 new jobsmade lower interest rates less likely.
Another reason for the increased market volatility was the inability
of Congress and the President to agree on a balanced budget. Further concern
was generated by the rise of anti-business themes during the presidential
primary season, including the possibility of tariffs and tax reform.
Despite the significant decline in bond prices, the market has
already begun to stabilize. Upon closer examination of the economic
fundamentals, the market realized that it may have over-reacted to these
short-term events. As a result, we believe the demand for domestic
fixed-income securities will continue to be strong, both here and abroad.
With the general long-term trend for the U.S. economy being seen as
slow growth and low inflation, long-term interest rates should be able to
return to the 6% level with a corresponding recovery in bond prices. While
that will lower bond yields, our fixed-income managers are on the lookout for
securities that offer high coupon payments without adding undue risk.
While we still anticipate that interest rates will fluctuate and that
bond prices will continue to be volatile, patient investors should continue to
receive total returns which substantially exceed inflation over the long term.
Your portfolio manager discusses the outlook for your Fund in light
of these broad issues on the following pages. Thank you for your confidence in
OppenheimerFunds, and we look forward to helping you reach your investment
goals in the future.
/s/ James C. Swain /s/ Bridget A. Macaskill
James C. Swain Bridget A. Macaskill
April 19, 1996
3 Oppenheimer Strategic Income & Growth Fund
<PAGE>
Robert Doll
David Negri
Art Steinmetz
Portfolio Managers
Q + A
An interview with your Fund's managers.
How has the Fund performed?
The Fund performed very well. Over the last six months we were able to take
advantage of the generally strong stock and bond markets that continued as
interest rates dropped worldwide.
What investments or market conditions made positive contributions to
performance?
While all four of our investment sectors were strong this period, our holdings
in high-yield bonds and large-cap growth stocks provided the majority of the
Fund's returns. The best returns came from our holdings of large-cap stocks,
particularly the stocks of companies in the financial and technology sectors.
As interest rates declined and investors' appetite for income
increased, the demand for high-yield bonds increased and our holdings in this
sector appreciated. And by carefully researching issuers and selecting
companies we felt had the potential for continued strong earnings, we were
able to limit the additional credit risk these bonds typically involve.
After a difficult first half of 1995, many foreign bonds rebounded as
their economies grew in strength. This trend was reflected in our holdings of
emerging market bonds which provided very attractive income as well as
appre-ciation over the period.1
Did any investment not perform as well as expected?
Although the Fund has done quite well over the past six months, our
longer-term view is for slower economic growth both here and abroad. As a
result, we positioned the Fund in intermediate term securities. Even with
intermediate bonds giving up some appreciation recently due to the increases
in interest rates during the first quarter of 1996, we continue to believe the
economy will register slower growth over the long term. Thus we're maintaining
our holdings in this sector.
What areas are you currently targeting?
Within the high yield sector we're looking for companies that should be able
to profit regardless of a slowing economy. This has led us to focus on
companies in the media, cable, telecommunications and broadcasting industries
which stand to benefit from recent changes to the regu-lation of their
industries.
Our focus in the foreign bond sector continues to be in the emerging
markets area.
We expect these bonds to provide high income but with reduced credit risk as
many emerging economies improve. And, finally, as interest rates stabilize and
prepayment fears abate, we believe mortgage bonds will perform well. Having
purchased mortgages earlier this year when prices for these bonds were low, we
expect to see some appreciation in addition to the competitive income they
offer.
What is your outlook for the Fund?
The spectacular performance of 1995 is unlikely to be repeated. However, with
worldwide economic growth still slowing and inflation very low, we think the
outlook remains very promising. [ ]
1. The Fund's portfolio is subject to change.
4 Oppenheimer Strategic Income & Growth Fund
<PAGE>
Statement of Investments March 31, 1996 (Unaudited)
<TABLE>
<CAPTION>
Face Market Value
Amount(1) See Note 1
<S> <C> <C> <C>
=================================================================================================================================
Certificates of Deposit--0.3%
- ---------------------------------------------------------------------------------------------------------------------------------
Indonesia (Republic of) Bank Negara CD, Zero Coupon,
15.914%, 6/17/96 (Cost $217,009)(2)(3) IDR 500,000,000 $ 206,404
=================================================================================================================================
Mortgage-Backed Obligations--6.0%
- ---------------------------------------------------------------------------------------------------------------------------------
Federal Home Loan Mortgage Corp., Series 176, Cl. F, 8.95%, 3/15/20 130,404 131,790
-------------------------------------------------------------------------------------------------------------
Federal National Mortgage Assn.:
Collateralized Mtg. Obligations, Gtd. Real Estate Mtg.
Investment Conduit Pass-Through Certificates, 10.50%, 11/25/20 315,000 356,737
Interest-Only Stripped Mtg.-Backed Security, Trust 257, Cl. 2, 12.977%, 2/1/24(4) 1,790,582 589,213
Series 1994-83, Cl. Z, 7.50%, 6/25/24 364,731 332,132
-------------------------------------------------------------------------------------------------------------
Government National Mortgage Assn., 6%, 3/20/26 1,470,000 1,465,866
-------------------------------------------------------------------------------------------------------------
Resolution Trust Corp., Commercial Mtg. Pass-Through Certificates:
Series 1992-CHF, Cl. D, 8.25%, 12/25/20 270,896 273,944
Series 1993-C1, Cl. D, 9.45%, 5/25/24 252,980 261,756
Series 1994-C2, Cl. E, 8%, 4/25/25 465,326 438,934
Series 1994-C2, Cl. G, 8%, 4/25/25 222,138 186,908
Series 1991-M6, Cl. B4, 7.395%, 6/25/21(5) 79,550 77,014
----------
Total Mortgage-Backed Obligations (Cost $3,979,280) 4,114,294
=================================================================================================================================
U.S. Government Obligations--5.3%
- ---------------------------------------------------------------------------------------------------------------------------------
U.S. Treasury Bonds:
11.625%, 11/15/02 1,100,000 1,414,531
6.875%, 8/15/25(14) 1,500,000 1,520,155
8.125%, 8/15/19 172,000 196,779
-------------------------------------------------------------------------------------------------------------
U.S. Treasury Nts., 9.375%, 4/15/96(14) 448,000 448,840
----------
Total U.S. Government Obligations (Cost $3,585,606) 3,580,305
=================================================================================================================================
Foreign Government Obligations--19.5%
- ---------------------------------------------------------------------------------------------------------------------------------
Algeria--0.2% Algeria (Republic of) Reprofiled Debt Loan Participation,
Tranche A, 6.812%, 9/4/06(5)(6) 300,000 163,500
- ---------------------------------------------------------------------------------------------------------------------------------
Argentina--0.6% Banco Hipotecario Nacional (Argentina) Medium-Term Nts., 10.625%, 3/29/99(7) 30,000 30,015
-------------------------------------------------------------------------------------------------------------
Province of Buenos Aires Sr. Unsub. Unsec. Nts., 11.50%, 10/19/98(7) 350,000 364,000
----------
394,015
- ---------------------------------------------------------------------------------------------------------------------------------
Australia--2.1% Australia (Commonwealth of) Bonds:
10%, 10/15/07 AUD 540,000 452,621
9.50%, 8/15/03 AUD 345,000 279,694
-------------------------------------------------------------------------------------------------------------
Queensland Treasury Corp. Exchangeable Gtd. Nts., 8%, 8/14/01 AUD 615,000 464,528
-------------------------------------------------------------------------------------------------------------
Western Australia Treasury Corp. Gtd. Bonds, 10%, 7/15/05 AUD 290,000 242,346
----------
1,439,189
- ---------------------------------------------------------------------------------------------------------------------------------
Bulgaria--0.2% Bulgaria (Republic of) Disc. Bonds, Tranche A, 6.25%, 7/28/24(5) 250,000 124,688
- ---------------------------------------------------------------------------------------------------------------------------------
Canada--2.7% Canada (Government of):
Bonds, 8.75%, 12/1/05 CAD 190,000 150,275
Bonds, 9%, 12/1/04 CAD 1,100,000 881,396
Bonds, Series A33, 11.50%, 9/1/00 CAD 835,000 719,076
Debs., 10%, 6/1/08 CAD 115,000 98,802
----------
1,849,549
</TABLE>
5 Oppenheimer Strategic Income & Growth Fund
<PAGE>
Statement of Investments (Unaudited) (Continued)
<TABLE>
<CAPTION>
Face Market Value
Amount(1) See Note 1
<S> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------------------------------
Colombia--0.5% Colombia (Republic of) 1989-1990 Integrated Loan Facility Bonds,
6.875%, 7/1/01(5)(6) $ 342,880 $ 320,593
- ---------------------------------------------------------------------------------------------------------------------------------
Costa Rica--0.2% Central Bank of Costa Rica Interest Claim Bonds, Series B, 6.094%, 5/21/05(5) 176,425 157,019
- ---------------------------------------------------------------------------------------------------------------------------------
Czech Republic--0.2%
CEZ AS, Zero Coupon Disc. Promissory Nts., 8.253%, 7/1/96(3)(8) CZK 4,000,000 143,414
- ---------------------------------------------------------------------------------------------------------------------------------
Denmark--1.6% Denmark (Kingdom of) Bonds:
8%, 3/15/06 DKK 2,600,000 471,309
8%, 5/15/03 DKK 3,450,000 639,316
----------
1,110,625
- ---------------------------------------------------------------------------------------------------------------------------------
Ecuador--0.1% Ecuador (Republic of) Disc. Bonds, 6.063%, 2/28/25(5) 130,000 70,525
- ---------------------------------------------------------------------------------------------------------------------------------
Germany--0.3% Germany (Republic of) Bonds:
7.75%, 10/1/04 DEM 150,000 109,382
Series 86, 6%, 6/20/16 DEM 100,000 59,842
Series 94, 7.50%. 11/11/04 DEM 60,000 43,586
----------
212,810
- ---------------------------------------------------------------------------------------------------------------------------------
Great Britain--1.2% United Kingdom Treasury:
Bonds, 10%, 9/8/03 GBP 310,000 525,565
Debs., 8.50%, 12/7/05 GBP 55,000 85,925
Nts., 10%, 2/26/01 GBP 65,000 108,525
Nts., 8%, 6/10/03 GBP 45,000 68,907
----------
788,922
- ---------------------------------------------------------------------------------------------------------------------------------
Italy--1.3% Italy (Republic of) Treasury Bonds, Buoni del Tesoro Poliennali:
10.50%, 4/1/00 ITL 485,000,000 312,113
10.50%, 7/15/00 ITL 840,000,000 540,460
----------
852,573
- ---------------------------------------------------------------------------------------------------------------------------------
Jordan--0.3% Hashemite Kingdom of Jordan Interest Arrears Bonds, 6.438%, 12/23/05(5) 250,000 194,375
- ---------------------------------------------------------------------------------------------------------------------------------
Mexico-- 0.9% Banco Nacional de Comercio Exterior SNC International
Finance BV Gtd. Bonds, 10.555%, 6/23/97(5)(7) 120,000 122,700
-------------------------------------------------------------------------------------------------------------
Bonos de la Tesoreria de la Federacion, Zero Coupon, 37.786%, 3/6/97(3) MXP 2,100,000 201,723
-------------------------------------------------------------------------------------------------------------
United Mexican States:
Bonds, 10.375%, 1/29/03 DEM 325,000 220,022
Combined Facility 3, Loan Participation Agreement,
Tranche A, 6.50%, 9/20/97(5)(6) 104,800 83,316
----------
627,761
- ---------------------------------------------------------------------------------------------------------------------------------
Morocco--0.6% Morocco (Kingdom of) Loan Participation Agreement,
Tranche A, 6.594%, 1/1/09(5) 625,000 431,250
- ---------------------------------------------------------------------------------------------------------------------------------
Netherlands--0.2% Landeskreditbank Baden-Wurttemberg, 6% Gtd. Bonds, 1/25/06 DEM 160,000 103,550
- ---------------------------------------------------------------------------------------------------------------------------------
New Zealand--1.3% New Zealand (Republic of) Bonds:
10%, 7/15/97 NZD 1,045,000 723,787
8%, 4/15/04 NZD 215,000 145,542
----------
869,329
- ---------------------------------------------------------------------------------------------------------------------------------
Panama--0.2% Panama (Republic of) Debs., 6.75%, 5/10/02(5) 125,000 111,250
- ---------------------------------------------------------------------------------------------------------------------------------
Poland--1.1% Poland (Republic of) Treasury Bills, Zero Coupon, 24.963%, 4/17/96(3) PLZ 2,000,000 766,347
</TABLE>
6 Oppenheimer Strategic Income & Growth Fund
<PAGE>
<TABLE>
<CAPTION>
Face Market Value
Amount(1) See Note 1
<S> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------------------------------
Spain--2.1% Spain (Kingdom of):
Bonds, Bonos y Obligacion del Estado, 10.15%, 1/31/06 ESP 60,000,000 $ 495,106
Debs., Bonos y Obligacion del Estado, 10.10%, 2/28/01 ESP 17,300,000 143,841
Debs., Bonos y Obligacion del Estado, 7.30%, 7/30/97 ESP 35,600,000 282,761
Gtd. Bonds, Bonos y Obligacion del Estado, 10.25%, 11/30/98 ESP 39,600,000 330,021
Gtd. Bonds, Bonos y Obligacion del Estado, 12.25%, 3/25/00 ESP 20,300,000 180,005
-----------
1,431,734
- ---------------------------------------------------------------------------------------------------------------------------------
Sweden--0.6% Sweden (Kingdom of) Bonds:
Series 1030, 13%, 6/15/01 SEK 1,500,000 270,929
Series 1033, 10.25%, 5/5/03 SEK 600,000 99,097
Series 1035, 6%, 2/9/05 SEK 500,000 63,309
-----------
433,335
- ---------------------------------------------------------------------------------------------------------------------------------
Trinidad & Tobago--0.6%
Trinidad & Tobago Loan Participation Agreement,
Tranche A, 1.565%, 9/30/00(5)(6) JPY 49,818,182 398,825
- ---------------------------------------------------------------------------------------------------------------------------------
Venezuela--0.4% Venezuela (Republic of) Disc. Bonds, Series DL, 6.563%, 12/18/07(5) 500,000 302,810
-----------
Total Foreign Government Obligations (Cost $13,293,563) 13,297,988
=================================================================================================================================
Corporate Bonds and Notes--20.7%
- ---------------------------------------------------------------------------------------------------------------------------------
Basic Industry--2.1%
- ---------------------------------------------------------------------------------------------------------------------------------
Chemicals--0.3% NL Industries, Inc., 11.75% Sr. Sec. Nts., 10/15/03 200,000 208,500
- ---------------------------------------------------------------------------------------------------------------------------------
Metals/Mining--0.2% UCAR Global Enterprises, Inc., 12% Sr. Sub. Nts., 1/15/05 100,000 115,750
- ---------------------------------------------------------------------------------------------------------------------------------
Paper--1.2% Repap New Brunswick, Inc., 8.875% First Priority Sr. Sec. Nts., 7/15/00(5) 200,000 199,000
-------------------------------------------------------------------------------------------------------------
Riverwood International Corp., 10.25% Sr. Nts., 4/1/06 300,000 303,000
-------------------------------------------------------------------------------------------------------------
Stone Consolidated Corp., 10.25% Sr. Sec. Nts., 12/15/00 125,000 132,500
-------------------------------------------------------------------------------------------------------------
Stone Container Corp., 10.75% First Mtg. Nts., 10/1/02 200,000 200,000
-----------
834,500
- ---------------------------------------------------------------------------------------------------------------------------------
Steel--0.4% Wheel-Pittsburgh Corp., 9.375% Sr. Nts., 11/15/03 250,000 236,250
- ---------------------------------------------------------------------------------------------------------------------------------
Consumer Related--3.6%
- ---------------------------------------------------------------------------------------------------------------------------------
Healthcare--1.9% AmeriSource Health Corp., 11.25% Sr. Debs., 7/15/05(9) 293,419 325,695
-------------------------------------------------------------------------------------------------------------
Capstone Capital Corp., 10.50% Cv. Sub. Debs., 4/1/02 500,000 656,875
-------------------------------------------------------------------------------------------------------------
Tenet Healthcare Corp., 10.125% Sr. Sub. Nts., 3/1/05 300,000 323,250
-----------
1,305,820
- ---------------------------------------------------------------------------------------------------------------------------------
Leisure--0.3% Gillett Holdings, Inc., 12.25% Sr. Sub. Nts., Series A, 6/30/02 160,431 169,054
- ---------------------------------------------------------------------------------------------------------------------------------
Restaurants--0.4% Foodmaker, Inc., 9.75% Sr. Sub. Nts., 6/1/02 300,000 291,000
- ---------------------------------------------------------------------------------------------------------------------------------
Textile/Apparel--1.0%
PT Polysindo Eka Perkasa, Zero Coupon
Promissory Nts., 36.897%, 10/23/96(3) IDR 1,200,000,000 458,571
-------------------------------------------------------------------------------------------------------------
Synthetic Industries, Inc., 12.75% Sr. Sub. Debs., 12/1/02 200,000 211,000
-----------
669,571
</TABLE>
7 Oppenheimer Strategic Income & Growth Fund
<PAGE>
Statement of Investments (Unaudited) (Continued)
<TABLE>
<CAPTION>
Face Market Value
Amount(1) See Note 1
<S> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------------------------------
Energy--0.5%
- ---------------------------------------------------------------------------------------------------------------------------------
Triton Energy Corp., Zero Coupon Sr. Sub. Disc. Nts., 10.394%, 11/1/97(3) $ 400,000 $ 354,000
- ---------------------------------------------------------------------------------------------------------------------------------
Financial Services--1.3%
- ---------------------------------------------------------------------------------------------------------------------------------
Banks & Thrifts--0.7%
Banco de Colombia, 5.20% Cv. Jr. Sub. Unsec. Nts., 2/1/99 250,000 219,375
Banco Ganadero SA, Zero Coupon Nts., 9.931%, 7/1/96(3)(7) 100,000 97,702
Banco Nacional de Mexico SA, 7% Cv. Jr. Sub. Unsec. Gtd. Nts., 12/15/99 100,000 88,375
Morgan Stanley Group, Inc., 14.25% Indian Rupee Indexed Nts., 6/26/96 INR 1,570,500 46,056
-----------
451,508
- ---------------------------------------------------------------------------------------------------------------------------------
Diversified Financial--0.1%
Banco del Atlantico SA, 7.875% Eurobonds, 11/5/98 100,000 92,000
- ---------------------------------------------------------------------------------------------------------------------------------
Insurance--0.5% Life Partners Group, Inc., 12.75% Sr. Sub. Nts., 7/15/02 300,000 331,500
- ---------------------------------------------------------------------------------------------------------------------------------
Housing Related--1.1%
- ---------------------------------------------------------------------------------------------------------------------------------
Homebuilders/Real Estate--1.1%
Blue Bell Funding, Inc., 11.85% Extd. Sec. Nts., 5/1/99 398,000 393,025
-------------------------------------------------------------------------------------------------------------
Tribasa Toll Road Trust, 10.50% Nts., Series 1993-A, 12/1/11(7) 500,000 377,500
-----------
770,525
- ---------------------------------------------------------------------------------------------------------------------------------
Manufacturing--0.4%
- ---------------------------------------------------------------------------------------------------------------------------------
Automotive--0.4% Penda Corp., 10.75% Sr. Nts., Series B, 3/1/04 300,000 247,500
- ---------------------------------------------------------------------------------------------------------------------------------
Media--3.8%
- ---------------------------------------------------------------------------------------------------------------------------------
Cable Television--2.2%
American Telecasting, Inc., 0%/14.50% Sr. Disc. Nts., 6/15/04(10) 100,316 75,864
-------------------------------------------------------------------------------------------------------------
Bell Cablemedia PLC, 0%/11.95% Sr. Disc. Nts., 7/15/04(10) 500,000 358,750
-------------------------------------------------------------------------------------------------------------
Cablevision Systems Corp., 9.875% Sr. Sub. Debs., 2/15/13 250,000 260,625
-------------------------------------------------------------------------------------------------------------
EchoStar Communications Corp., 0%/12.875% Sr. Disc. Nts., 6/1/04(10) 200,000 147,000
-------------------------------------------------------------------------------------------------------------
Rogers Cablesystems Ltd., 10% Sr. Sec. Second Priority Debs., 12/1/07 300,000 313,500
-------------------------------------------------------------------------------------------------------------
TKR Cable I, Inc., 10.50% Sr. Debs., 10/30/07 300,000 343,875
-----------
1,499,614
- ---------------------------------------------------------------------------------------------------------------------------------
Diversified Media--0.9%
Panamsat LP/Panamsat Capital Corp., 0%/11.375% Sr. Sub. Disc. Nts., 8/1/03(10) 750,000 631,875
- ---------------------------------------------------------------------------------------------------------------------------------
Entertainment/Film--0.5%
Imax Corp., 7% Sr. Nts., 3/1/01(11) 320,000 315,200
- ---------------------------------------------------------------------------------------------------------------------------------
Publishing/Printing--0.2%
Bell & Howell Co. (New), 0%/11.50% Sr. Disc. Debs., Series B, 3/1/05(10) 250,000 163,750
- ---------------------------------------------------------------------------------------------------------------------------------
Other--0.9%
- ---------------------------------------------------------------------------------------------------------------------------------
Environmental--0.3% EnviroSource, Inc., 9.75% Sr. Nts., 6/15/03 200,000 180,000
- ---------------------------------------------------------------------------------------------------------------------------------
Services--0.6% Grupo Mexicano de Desarrollo SA, 8.25% Gtd. Nts., 2/17/01(7) 300,000 156,937
-------------------------------------------------------------------------------------------------------------
Sociedad Comercial del Plata SA, 10.75% Medium-Term Nts., 3/6/98(7) 250,000 251,562
-----------
408,499
- ---------------------------------------------------------------------------------------------------------------------------------
Retail--1.7%
- ---------------------------------------------------------------------------------------------------------------------------------
Specialty Retailing--0.6%
Finlay Fine Jewelry Corp., 10.625% Sr. Nts., 5/1/03 400,000 378,000
- ---------------------------------------------------------------------------------------------------------------------------------
Supermarkets--1.1% Grand Union Co., 12% Sr. Nts., 9/1/04 198,000 174,240
-------------------------------------------------------------------------------------------------------------
Kash 'N Karry Food Stores, Inc., 11.50% Sr. Nts., 2/1/03(9) 564,400 561,578
-----------
735,818
</TABLE>
8 Oppenheimer Strategic Income & Growth Fund
<PAGE>
<TABLE>
<CAPTION>
Face Market Value
Amount(1) See Note 1
<S> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------------------------------
Transportation--0.8%
- ---------------------------------------------------------------------------------------------------------------------------------
Air Transportation--0.1%
American International Group, Inc., 11.70% Unsec. Unsub. Bonds, 12/4/01 ITL 95,000,000 $ 64,679
- ---------------------------------------------------------------------------------------------------------------------------------
Railroads--0.5% Transtar Holdings LP/Transtar Capital Corp.,
0%/13.375% Sr. Disc. Nts., Series B, 12/15/03(10) 500,000 347,500
- ---------------------------------------------------------------------------------------------------------------------------------
Shipping--0.2% Sea Containers Ltd., 12.50% Sr. Sub. Debs., Series A, 12/1/04 145,000 158,412
- ---------------------------------------------------------------------------------------------------------------------------------
Utilities--4.5%
- ---------------------------------------------------------------------------------------------------------------------------------
Electric Utilities--1.8%
California Energy Co., 0%/10.25% Sr. Disc. Nts., 1/15/04(10) 450,000 430,875
-------------------------------------------------------------------------------------------------------------
First PV Funding Corp., 10.15% Lease Obligation Bonds, Series 1986B, 1/15/16 300,000 315,624
-------------------------------------------------------------------------------------------------------------
Subic Power Corp.:
9.50% Sr. Sec. Nts., 12/28/08 448,275 430,345
9.50% Sr. Sec. Nts., 12/28/08(7) 89,655 78,000
-----------
1,254,844
- ---------------------------------------------------------------------------------------------------------------------------------
Telecommunications--2.7%
Call-Net Enterprises, Inc., 0%/13.25% Sr. Disc. Nts., 12/1/04(10) 200,000 147,500
-------------------------------------------------------------------------------------------------------------
Celcaribe SA, 0%/13.50% Sr. Sec. Nts., 3/15/04(7)(10) 350,000 257,250
-------------------------------------------------------------------------------------------------------------
Comcast Cellular Corp., Zero Coupon Nts., Series B, 9.203%, 3/5/00(3) 250,000 183,750
-------------------------------------------------------------------------------------------------------------
Comunicacion Celular SA, Units (each unit consists of $1,000 principal
0%/13.125% sr. deferred coupon bond, 11/15/03 and one warrant for 12,860
shares of common stock at $1.32 per 1,000 shares)(7)(10)(12) 300,000 175,500
-------------------------------------------------------------------------------------------------------------
In-Flight Phone Corp., 0%/14% Sr. Disc. Nts., 5/15/02(10) 300,000 94,500
-------------------------------------------------------------------------------------------------------------
MFS Communications Co., Inc., 0%/9.375% Sr. Disc. Nts., 1/15/04(10) 700,000 536,375
-------------------------------------------------------------------------------------------------------------
PriCellular Wireless Corp., 0%/14% Sr. Sub. Disc. Nts., 11/15/01(10) 500,000 447,500
-----------
1,842,375
-----------
Total Corporate Bonds and Notes (Cost $13,803,684) 14,058,044
Shares
=================================================================================================================================
Common Stocks--40.1%
- ---------------------------------------------------------------------------------------------------------------------------------
Basic Industry--4.8%
- ---------------------------------------------------------------------------------------------------------------------------------
Chemicals--4.8% Great Lakes Chemical Corp. 13,000 875,875
-------------------------------------------------------------------------------------------------------------
Morton International, Inc. 24,000 921,000
-------------------------------------------------------------------------------------------------------------
Union Carbide Corp. 29,000 1,439,125
-----------
3,236,000
- ---------------------------------------------------------------------------------------------------------------------------------
Containers--0.0% Equitable Bag, Inc.(13) 1,861 4,652
- ---------------------------------------------------------------------------------------------------------------------------------
Consumer Related--12.4%
- ---------------------------------------------------------------------------------------------------------------------------------
Food/Beverages/Tobacco--4.4%
PepsiCo, Inc. 18,000 1,138,500
-------------------------------------------------------------------------------------------------------------
Philip Morris Cos., Inc. 10,000 877,500
-------------------------------------------------------------------------------------------------------------
UST, Inc. 31,000 988,125
-----------
3,004,125
- ---------------------------------------------------------------------------------------------------------------------------------
Healthcare--6.6% Johnson & Johnson 12,000 1,107,000
-------------------------------------------------------------------------------------------------------------
Medtronic, Inc. 19,000 1,132,875
-------------------------------------------------------------------------------------------------------------
Pfizer, Inc. 17,000 1,139,000
-------------------------------------------------------------------------------------------------------------
Schering-Plough Corp. 19,000 1,104,375
-----------
4,483,250
</TABLE>
9 Oppenheimer Strategic Income & Growth Fund
<PAGE>
Statement of Investments (Unaudited) (Continued)
<TABLE>
<CAPTION>
Market Value
Shares See Note 1
<S> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------------------------------
Restaurants--1.4% McDonald's Corp. 20,000 $ 960,000
- ---------------------------------------------------------------------------------------------------------------------------------
Financial Services--8.2%
- ---------------------------------------------------------------------------------------------------------------------------------
Banks & Thrifts--4.7%
BankAmerica Corp. 18,000 1,395,000
-------------------------------------------------------------------------------------------------------------
NationsBank Corp. 12,000 961,500
-------------------------------------------------------------------------------------------------------------
SunTrust Banks, Inc. 12,000 840,000
-----------
3,196,500
- ---------------------------------------------------------------------------------------------------------------------------------
Diversified Financial--1.8%
Federal National Mortgage Assn. 28,000 892,500
-------------------------------------------------------------------------------------------------------------
Salomon, Inc. 8,000 300,000
-----------
1,192,500
- ---------------------------------------------------------------------------------------------------------------------------------
Insurance--1.7% Loews Corp. 15,000 1,134,375
- ---------------------------------------------------------------------------------------------------------------------------------
Manufacturing--9.2%
- ---------------------------------------------------------------------------------------------------------------------------------
Aerospace/Electronics/
Computers--8.9%
Compaq Computer Corp.(13) 22,000 849,750
-------------------------------------------------------------------------------------------------------------
Hewlett-Packard Co. 11,000 1,034,000
-------------------------------------------------------------------------------------------------------------
Intel Corp. 18,000 1,023,750
-------------------------------------------------------------------------------------------------------------
International Business Machines Corp. 9,000 1,000,125
-------------------------------------------------------------------------------------------------------------
Microsoft Corp.(13) 11,000 1,134,375
-------------------------------------------------------------------------------------------------------------
Oracle Corp.(13) 21,000 989,625
----------
6,031,625
- ---------------------------------------------------------------------------------------------------------------------------------
Capital Goods--0.3% Dover Corp. 4,000 183,000
- ---------------------------------------------------------------------------------------------------------------------------------
Media--1.2%
- ---------------------------------------------------------------------------------------------------------------------------------
Cable Television--0.0%
EchoStar Communications Corp., Cl. A(13) 900 30,375
- ---------------------------------------------------------------------------------------------------------------------------------
Entertainment/Film--1.2%
Walt Disney Co. 13,000 830,375
- ---------------------------------------------------------------------------------------------------------------------------------
Technology--1.1%
- ---------------------------------------------------------------------------------------------------------------------------------
Telecommunications-
Technology--1.1% Sprint Corp. 20,000 760,000
- ---------------------------------------------------------------------------------------------------------------------------------
Transportation--2.8%
- ---------------------------------------------------------------------------------------------------------------------------------
Air Transportation--2.0%
Delta Air Lines, Inc. 18,000 1,383,750
- ---------------------------------------------------------------------------------------------------------------------------------
Railroads--0.8% Burlington Northern Santa Fe Corp. 7,000 574,875
- ---------------------------------------------------------------------------------------------------------------------------------
Utilities--0.4%
- ---------------------------------------------------------------------------------------------------------------------------------
Telecommunications--0.4%
360 Communications Co.(13) 6,666 159,151
-------------------------------------------------------------------------------------------------------------
Celcaribe SA(7)(13) 65,040 97,560
-----------
256,711
-----------
Total Common Stocks (Cost $21,234,335) 27,262,113
</TABLE>
10 Oppenheimer Strategic Income & Growth Fund
<PAGE>
<TABLE>
<CAPTION>
Market Value
Shares See Note 1
<S> <C> <C> <C>
=================================================================================================================================
Preferred Stocks and Other Securities--0.8%
- ---------------------------------------------------------------------------------------------------------------------------------
First Nationwide Bank, 11.50% Non-Cum. 2,500 $ 281,250
-------------------------------------------------------------------------------------------------------------
Kaiser Aluminum Corp., 8.255% Cv. Preferred Redeemable
Increased Dividend Equity Securities 2,400 33,300
-------------------------------------------------------------------------------------------------------------
Prime Retail, Inc., $19.00 Cv., Series B 12,000 202,500
-----------
Total Preferred Stocks and Other Securities (Cost $572,344) 517,050
Units
=================================================================================================================================
Rights, Warrants and Certificates--0.0%
- ---------------------------------------------------------------------------------------------------------------------------------
American Telecasting, Inc. Wts., Exp. 6/99 2,000 15,000
-------------------------------------------------------------------------------------------------------------
In-Flight Phone Corp. Wts., Exp. 8/02(7) 300 --
-----------
Total Rights, Warrants and Certificates (Cost $0) 15,000
Face
Amount(1)
=================================================================================================================================
Structured Instruments--1.4%
- ---------------------------------------------------------------------------------------------------------------------------------
Bayerische Landesbank Girozentrale, New York Branch, 5.60% CD Linked Nts.,
1/30/97 (indexed to the closing Nikkei 225 Index on 1/23/97 10 yr. Japanese
Yen swap rate & New Zealand Dollar on 1/28/97)(2) NZD 45,255 31,353
-------------------------------------------------------------------------------------------------------------
Canadian Imperial Bank of Commerce, New York Branch, 16% CD Linked
Nts., 9/11/96 (indexed to the Russian Federation GKO, Zero Coupon, 9/4/96) 150,000 149,625
-------------------------------------------------------------------------------------------------------------
Swiss Bank Corp., New York Branch, 6.60% CD Linked Nts.,
1/30/97 (indexed to the closing Nikkei 225 Index on 1/23/97)(2) NZD 256,720 181,018
-------------------------------------------------------------------------------------------------------------
United Mexican States Linked Nts. (indexed to the greater
of Cetes Option Amount or USD LIBOR Option Amount, 11/27/96)(7) 525,000 576,187
-----------
Total Structured Instruments (Cost $877,156) 938,183
Date Strike Contracts
=================================================================================================================================
Call Option Purchased--0.0%
- ---------------------------------------------------------------------------------------------------------------------------------
OTC Deutsche Mark/U.S. Dollar Call Opt.
(Cost $2,164) May 96 1.495 DEM 441,560 4,990
=================================================================================================================================
Put Option Purchased--0.0%
- ---------------------------------------------------------------------------------------------------------------------------------
OTC Deutsche Mark/U.S. Dollar Put Opt.
(Cost $8,478) May 96 1.495 DEM 441,560 2,384
</TABLE>
11 Oppenheimer Strategic Income & Growth Fund
<PAGE>
Statement of Investments (Unaudited) (Continued)
<TABLE>
<CAPTION>
Face Market Value
Amount(1) See Note 1
<S> <C> <C> <C>
=================================================================================================================================
Repurchase Agreement--6.0%
- ---------------------------------------------------------------------------------------------------------------------------------
Repurchase agreement with Zion First National Bank, 5.375%, dated 3/29/96, to
be repurchased at $4,101,836 on 4/1/96, collateralized by U.S. Treasury Nts.,
6.75%-8.625%, 8/15/97-11/15/00, with a value of $4,190,614 (Cost $4,100,000) $4,100,000 $ 4,100,000
- ---------------------------------------------------------------------------------------------------------------------------------
Total Investments, at Value (Cost $61,673,619) 100.1% 68,096,755
- ---------------------------------------------------------------------------------------------------------------------------------
Liabilities in Excess of Other Assets (0.1) (44,491)
---------- -----------
Net Assets 100.0% $68,052,264
========== ===========
</TABLE>
1. Face amount is reported in U.S. Dollars, except for those denoted in the
following currencies:
AUD -- Australian Dollar INR -- Indian Rupee
CAD -- Canadian Dollar ITL -- Italian Lira
CZK -- Czech Koruna JPY -- Japanese Yen
DEM -- German Deutsche Mark MXP -- Mexican Peso
DKK -- Danish Krone NZD -- New Zealand Dollar
ESP -- Spanish Peseta PLZ -- Polish Zloty
GBP -- British Pound Sterling SEK -- Swedish Krona
IDR -- Indonesian Rupiah
2. Indexed instrument for which the principal amount and/or interest due at
maturity is affected by the relative value of a foreign currency.
3. For zero coupon bonds, the interest rate shown is the effective yield on
the date of purchase.
4. 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). Interest rates disclosed represent current
yields based upon the current cost basis and estimated timing and amount of
future cash flows.
5. Represents the current interest rate for a variable rate security.
6. Identifies issues considered to be illiquid--See Note 8 of Notes to
Financial Statements.
7. Represents a security sold under Rule 144A, which is exempt from
registration under the Securities Act of 1933, as amended. This security has
been determined to be liquid under guidelines established by the Board of
Trustees. These securities amount to $2,584,913 or 3.80% of the Fund's net
assets, at March 31, 1996.
8. When-issued security to be delivered and settled after March 31, 1996.
9. Interest or dividend is paid in kind.
10. Denotes a step bond: a zero coupon bond that converts to a fixed rate of
interest at a designated future date.
11. Represents the current interest rate for an increasing rate security.
12. Units may be comprised of several components, such as debt and equity
and/or warrants to purchase equity at some point in the future. For units
which represent debt securities, face amount disclosed represents total
underlying principal.
13. Non-income producing security.
14. A sufficient amount of liquid assets has been designated to cover
outstanding written call options, as follows:
<TABLE>
<CAPTION>
Face/Contracts Expiration Exercise Premium Market Value
Subject to Call Date Price Received See Note 1
<S> <C> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------------------------------
Call Option on German Deutsche Mark 441,560 5/96 1.4947 DEM $10,641 $ 8,699
- ---------------------------------------------------------------------------------------------------------------------------------
Call Option on Morocco (Kingdom of) Loan
Participation Agreement, Tranche A, 6.594%, 1/1/09 30,000 4/96 $69.25 525 495
- ---------------------------------------------------------------------------------------------------------------------------------
Call Option on New Zealand Dollar 329,622 4/96 1.46 NZD 2,213 1,351
- ---------------------------------------------------------------------------------------------------------------------------------
Call Option on New Zealand Dollar 164,811 4/96 1.46 NZD 1,114 511
------- -------
$14,493 $11,056
======= =======
</TABLE>
See accompanying Notes to Financial Statements.
12 Oppenheimer Strategic Income & Growth Fund
<PAGE>
Statement of Assets and Liabilities March 31, 1996 (Unaudited)
<TABLE>
<S> <C> <C>
=================================================================================================================================
Assets Investments, at value (cost $61,673,619)--see accompanying statement $68,096,755
-------------------------------------------------------------------------------------------------------------
Cash 37,600
-------------------------------------------------------------------------------------------------------------
Unrealized appreciation on forward foreign currency exchange contracts--Note 5 53,149
-------------------------------------------------------------------------------------------------------------
Receivables:
Investments sold 1,030,054
Interest and principal paydowns 717,713
Shares of beneficial interest sold 195,344
-------------------------------------------------------------------------------------------------------------
Deferred organization costs 3,048
-------------------------------------------------------------------------------------------------------------
Other 5,293
-----------
Total assets 70,138,956
=================================================================================================================================
Liabilities Options written, at value (premiums received $14,493)--
see accompanying statement--Note 7 11,056
-------------------------------------------------------------------------------------------------------------
Unrealized depreciation on forward foreign currency exchange contracts--Note 5 10,638
-------------------------------------------------------------------------------------------------------------
Payables and other liabilities:
Investments purchased 1,547,769
Dividends 277,377
Shares of beneficial interest redeemed 133,068
Distribution and service plan fees 41,991
Transfer and shareholder servicing agent fees 2,389
Daily variation on futures contracts 891
Other 61,513
-----------
Total liabilities 2,086,692
===========
=================================================================================================================================
Net Assets $68,052,264
===========
=================================================================================================================================
Composition of Paid-in capital $60,829,785
Net Assets -------------------------------------------------------------------------------------------------------------
Overdistributed net investment income (175,104)
-------------------------------------------------------------------------------------------------------------
Accumulated net realized gain on investments and foreign currency transactions 922,663
-------------------------------------------------------------------------------------------------------------
Net unrealized appreciation on investments and translation of assets and
liabilities denominated in foreign currencies 6,474,920
-----------
Net assets $68,052,264
===========
=================================================================================================================================
Net Asset Value Class A Shares:
Per Share Net asset value and redemption price per share (based on net assets of
$43,273,054 and 7,646,563 shares of beneficial interest outstanding) $5.66
Maximum offering price per share (net asset value plus sales charge of 4.75%
of offering price) $5.94
-------------------------------------------------------------------------------------------------------------
Class B Shares:
Net asset value, redemption price and offering price per share (based on net
assets of $24,558,516 and 4,346,645 shares of beneficial interest outstanding) $5.65
-------------------------------------------------------------------------------------------------------------
Class C Shares:
Net asset value, redemption price and offering price per share (based on net
assets of $220,694 and 39,056 shares of beneficial interest outstanding) $5.65
</TABLE>
See accompanying Notes to Financial Statements.
13 Oppenheimer Strategic Income & Growth Fund
<PAGE>
Statement of Operations For the Six Months Ended March 31, 1996 (Unaudited)
<TABLE>
<S> <C> <C>
=================================================================================================================================
Investment Income Interest (net of foreign withholding taxes of $4,190) $2,201,409
-------------------------------------------------------------------------------------------------------------
Dividends 210,394
-----------
Total income 2,411,803
=================================================================================================================================
Expenses Management fees--Note 4 245,967
-------------------------------------------------------------------------------------------------------------
Distribution and service plan fees--Note 4:
Class A 51,948
Class B 112,151
Class C 618
-------------------------------------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees--Note 4 54,849
-------------------------------------------------------------------------------------------------------------
Shareholder reports 41,248
-------------------------------------------------------------------------------------------------------------
Custodian fees and expenses 20,020
-------------------------------------------------------------------------------------------------------------
Legal and auditing fees 6,898
-------------------------------------------------------------------------------------------------------------
Trustees' fees and expenses 1,386
-------------------------------------------------------------------------------------------------------------
Registration and filing fees:
Class B 1,048
Class C 76
-------------------------------------------------------------------------------------------------------------
Other 7,580
-----------
Total expenses 543,789
=================================================================================================================================
Net Investment Income 1,868,014
=================================================================================================================================
Realized and Unrealized
Gain (Loss)
Net realized gain (loss) on:
Investments 3,616,912
Closing of futures contracts (4,361)
Closing of options written (81,731)
Foreign currency transactions 59,459
-----------
Net realized gain 3,590,279
-------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation on:
Investments (19,132)
Translation of assets and liabilities denominated in foreign currencies (43,919)
-----------
Net change (63,051)
-----------
Net realized and unrealized gain 3,527,228
=================================================================================================================================
Net Increase in Net Assets Resulting From Operations $5,395,242
==========
</TABLE>
See accompanying Notes to Financial Statements.
14 Oppenheimer Strategic Income & Growth Fund
<PAGE>
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Six Months Ended Year Ended
March 31, 1996 September 30,
(Unaudited) 1995
<S> <C> <C> <C>
=================================================================================================================================
Operations Net investment income $ 1,868,014 $ 3,570,349
-------------------------------------------------------------------------------------------------------------
Net realized gain (loss) 3,590,279 (1,642,262)
-------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation (63,051) 6,666,394
----------- -----------
Net increase in net assets resulting from operations 5,395,242 8,594,481
=================================================================================================================================
Dividends and Dividends from net investment income:
Distributions to Class A (1,311,223) (2,612,318)
Shareholders Class B (599,277) (977,840)
Class C (3,170) --
=================================================================================================================================
Beneficial Interest Net increase (decrease) in net assets resulting from beneficial interest
Transactions transactions--Note 2:
Class A (5,970) (5,203,387)
Class B 3,498,794 2,275,946
Class C 215,370 --
=================================================================================================================================
Net Assets Total increase 7,189,766 2,076,882
-------------------------------------------------------------------------------------------------------------
Beginning of period 60,862,498 58,785,616
----------- -----------
End of period (including overdistributed net investment income
of $175,104 and $129,448, respectively) $68,052,264 $60,862,498
=========== ===========
</TABLE>
See accompanying Notes to Financial Statements.
15 Oppenheimer Strategic Income & Growth Fund
<PAGE>
<TABLE>
<CAPTION>
Financial Highlights
Class A Class B Class C
-------------------------------------------- ------------------------------------- -----------
Six Six
Months Months Period
Ended Ended Ended
Mar. 31, Mar. 31, Mar. 31,
1996 Year Ended September 30, 1996 Year Ended September 30, 1996(1)
(Unaudited) 1995 1994 1993 1992(3) (Unaudited) 1995 1994 1993(2) (Unaudited)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
===================================================================================================================================
Per Share Operating Data:
Net asset value, beginning
of period $5.36 $4.92 $5.26 $5.03 $5.00 $5.35 $4.91 $5.26 $5.10 $5.36
- -----------------------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income .17 .32 .21 .22 .07(4) .15 .28 .19 .14 .14
Net realized and unrealized
gain (loss) .30 .44 (.23) .22 .02 .30 .44 (.25) .16 .30
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Total income (loss) from
investment operations .47 .76 (.02) .44 .09 .45 .72 (.06) .30 .44
- -----------------------------------------------------------------------------------------------------------------------------------
Dividends and distributions to shareholders:
Dividends from net investment
income (.17) (.32) (.21) (.20) (.06) (.15) (.28) (.18) (.13) (.15)
Dividends in excess of
net investment income -- -- (.01) -- -- -- -- (.01) -- --
Distributions from net realized gain -- -- -- (.01) -- -- -- -- (.01) --
Distributions in excess of net
realized gain -- -- (.10) -- -- -- -- (.10) -- --
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Total dividends and
distributions to shareholders (.17) (.32) (.32) (.21) (.06) (.15) (.28) (.29) (.14) (.15)
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $5.66 $5.36 $4.92 $5.26 $5.03 $5.65 $5.35 $4.91 $5.26 $5.65
====== ====== ====== ====== ====== ====== ====== ====== ====== ======
===================================================================================================================================
Total Return, at Net Asset Value(5) 8.82% 16.09% (0.23)% 8.84% 1.74% 8.43% 15.26% (1.17)% 5.86% 8.18%
===================================================================================================================================
Ratios/Supplemental Data:
Net assets, end of period
(in thousands) $43,273 $40,977 $42,733 $55,291 $48,397 $24,559 $19,885 $16,053 $12,386 $221
- -----------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $42,941 $40,799 $48,360 $59,209 $30,264 $22,476 $17,316 $14,986 $ 7,541 $124
- -----------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets:
Net investment income 5.98%(6) 6.37% 4.56% 4.33% 4.59%(6) 5.18%(6) 5.61% 3.86% 3.32%(6) 4.80%(6)
Expenses 1.40%(6) 1.35% 1.43% 1.36% 1.46%(4)(6) 2.16%(6) 2.10% 2.17% 2.21%(6) 2.27%(6)
- -----------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate(7) 80.0% 114.0% 80.0% 122.4% 25.8% 80.0% 114.0% 80.0% 122.4% 80.0%
Average brokerage
commission rate(8) $0.0590 -- -- -- -- $0.0590 -- -- -- $0.0590
</TABLE>
1. For the period from October 2, 1995 (inception of offering) to March 31,
1996.
2. For the period from November 30, 1992 (inception of offering) to September
30, 1993.
3. For the period from June 1, 1992 (commencement of operations) to September
30, 1992.
4. Net investment income would have been $.07 per share absent the voluntary
expense reimbursement, resulting in an expense ratio of 1.74%.
5. 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. Total returns are not
annualized for periods of less than one full year.
6. Annualized.
7. 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 period ended March 31, 1996 were $49,858,144 and $49,454,013,
respectively.
8. Total brokerage commissions paid on applicable purchases and sales of
portfolio securities for the period divided by the total number of related
shares purchased and sold.
See accompanying Notes to Financial Statements.
16 Oppenheimer Strategic Income & Growth Fund
<PAGE>
Notes to Financial Statements (Unaudited)
===============================================================================
1. Significant
Accounting Policies
Oppenheimer Strategic Income & Growth Fund (the Fund) is registered under the
Investment Company Act of 1940, as amended, as a diversified, open-end
management investment company. The Fund's primary investment objective is to
seek a high level of current income. The Fund's investment advisor is
OppenheimerFunds, Inc. (the Manager). The Fund offers Class A, Class B and
Class C shares. Class A shares are sold with a front-end sales charge. Class B
and Class C shares may be subject to a contingent deferred sales charge. All
three 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 the close of the New
York Stock Exchange 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 and
short-term "non-money market" debt securities are valued by a portfolio
pricing service approved by the Board of Trustees. Such securities which
cannot be valued by the approved portfolio pricing service are valued using
dealer-supplied valuations provided the Manager is satisfied that the firm
rendering the quotes is reliable and that the quotes reflect current market
value, or are valued under consistently applied procedures established by the
Board of Trustees to determine fair value in good faith. Short-term "money
market type" 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. Forward foreign currency exchange
contracts are valued based on the closing prices of the forward currency
contract rates in the London foreign exchange markets on a daily basis as
provided by a reliable bank or dealer. Options are valued based upon the last
sale 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
price 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.
- -------------------------------------------------------------------------------
Securities Purchased on a When-Issued Basis. Delivery and payment for
securities that have been purchased by the Fund on a forward commitment or
when-issued basis can take place a month or more after the transaction date.
During this period, such securities do not earn interest, are subject to
market fluctuation and may increase or decrease in value prior to their
delivery. The Fund maintains, in a segregated account with its custodian,
assets with a market value equal to the amount of its purchase commitments.
The purchase of securities on a when-issued or forward commitment basis may
increase the volatility of the Fund's net asset value to the extent the Fund
makes such purchases while remaining substantially fully invested. As of March
31, 1996, the Fund had entered into outstanding when-issued or forward
commitments of $143,139.
In connection with its ability to purchase securities on a when-issued
or forward commitment basis, the Fund may enter into mortgage "dollar-rolls"
in which the Fund sells securities for delivery in the current month and
simultaneously contracts with the same counterparty to repurchase similar
(same type, coupon and maturity) but not identical securities on a specified
future date. The Fund records each dollar-roll as a sale and a new purchase
transaction.
- -------------------------------------------------------------------------------
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 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 Statement of Operations.
- -------------------------------------------------------------------------------
Repurchase Agreements. The Fund requires the custodian to take possession, to
have legally segregated in the Federal Reserve Book Entry System or to have
segregated within the custodian's vault, all securities held as collateral for
repurchase agreements. The market value of the underlying securities is
required to be at least 102% of the resale price at the time of purchase. If
the seller of the agreement defaults and the value of the collateral declines,
or if the seller enters an insolvency proceeding, realization of the value of
the collateral by the Fund may be delayed or limited.
17 Oppenheimer Strategic Income & Growth Fund
<PAGE>
Notes to Financial Statements (Unaudited) (Continued)
===============================================================================
1. Significant
Accounting Policies
(continued)
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 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 or excise tax provision is required.
- -------------------------------------------------------------------------------
Organization Costs. The Manager advanced $20,590 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 Shareholders. The Fund intends to declare dividends
separately for Class A, Class B and Class C 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.
- -------------------------------------------------------------------------------
Classification of Distributions to Shareholders. Net investment income (loss)
and net realized gain (loss) may differ for financial statement and tax
purposes primarily because of paydown gains and losses and the recognition of
certain foreign currency gains (losses) as ordinary income
(loss) for tax purposes. The character of the distributions made during the
year from net investment income or net realized gains may differ from their
ultimate characterization for federal income tax purposes. Also, due to timing
of dividend distributions, the fiscal year in which amounts are distributed
may differ from the year that the income or realized gain (loss) was recorded
by the Fund.
- -------------------------------------------------------------------------------
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. Interest
on payment-in-kind debt instruments is accrued as income at the coupon rate
and a market adjustment is made on the ex-date.
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of income and expenses during the
reporting period. Actual results could differ from those estimates.
18 Oppenheimer Strategic Income & Growth Fund
<PAGE>
===============================================================================
2. Shares of
Beneficial Interest
The Fund has authorized an unlimited number of no par value shares of
beneficial interest of each class. Transactions in shares of beneficial
interest were as follows:
<TABLE>
<CAPTION>
Six Months Ended March 31, 1996(1) Year Ended September 30, 1995
---------------------------------- -----------------------------
Shares Amount Shares Amount
<S> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------------
Class A:
Sold 1,302,054 $ 7,235,360 1,075,489 $ 5,403,694
Dividends and distributions reinvested 202,864 1,126,581 452,310 2,248,812
Redeemed (1,501,732) (8,367,911) (2,567,818) (12,855,893)
---------- ----------- ---------- ------------
Net increase (decrease) 3,186 $ (5,970) (1,040,019) $ (5,203,387)
========== =========== ========== ============
- ----------------------------------------------------------------------------------------------------------------
Class B:
Sold 1,043,193 $ 5,801,897 1,180,146 $ 5,932,623
Dividends and distributions reinvested 85,574 475,392 162,515 808,194
Redeemed (497,059) (2,778,495) (894,830) (4,464,871)
---------- ----------- ---------- ------------
Net increase 631,708 $ 3,498,794 447,831 $ 2,275,946
========== =========== ========== ============
- ----------------------------------------------------------------------------------------------------------------
Class C:
Sold 68,330 $ 377,499 -- $ --
Dividends and distributions reinvested 386 2,170 -- --
Redeemed (29,660) (164,299) -- --
---------- ----------- ---------- ------------
Net increase 39,056 $ 215,370 -- $ --
========== =========== ========== ============
</TABLE>
1. For the six months ended March 31, 1996 for Class A and Class B shares and
for the period from October 2, 1995 (inception of offering) to March 31, 1996
for Class C shares.
===============================================================================
3. Unrealized Gains and
Losses On Investments
At March 31, 1996, net unrealized appreciation on investments and options
written of $6,426,573 was composed of gross appreciation of $7,578,653 and
gross depreciation of $1,152,080.
===============================================================================
4. Management Fees and
Other Transactions
with Affiliates
Management fees paid to the Manager were in accordance with the investment
advisory agreement with the Fund which provides for a fee of .75% on the first
$200 million of average annual 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, 1996, commissions (sales charges
paid by investors) on sales of Class A shares totaled $123,392, of which
$36,570 was retained by OppenheimerFunds Distributor, Inc. (OFDI), a
subsidiary of the Manager, as general distributor, and by an affiliated
broker/dealer. Sales charges advanced to broker/dealers by OFDI on sales of
the Fund's Class B and Class C shares totaled $186,993 and $3,413,
respectively, of which $4,251 was paid to an affiliated broker/dealer for
Class B shares. During the six months ended March 31, 1996, OFDI received
contingent deferred sales charges of $42,000 upon redemption of Class B
shares, as reimbursement for sales commissions advanced by OFDI at the time of
sale of such shares.
OppenheimerFunds Services (OFS), a division of the Manager, is the
transfer and shareholder servicing agent for the Fund, and for other
registered investment companies. OFS's total costs of providing such services
are allocated ratably to these companies.
The Fund has adopted a Service Plan for Class A shares to reimburse
OFDI for a portion of its costs incurred in connection with the personal
service and maintenance of accounts that hold Class A shares. Reimbursement is
made quarterly at an annual rate that may not exceed .25% of the average
annual net assets of Class A shares of the Fund. OFDI uses the service fee to
reimburse brokers, dealers, banks and other financial institutions quarterly
for providing personal service and maintenance of accounts of their customers
that hold Class A shares. During the six months ended March 31, 1996, OFDI
paid $6,138 to an affiliated broker/dealer as reimbursement for Class A
personal service and maintenance expenses.
The Fund has adopted a reimbursement type Distribution and Service
Plan for Class B shares to reimburse OFDI for its services and costs in
distributing Class B shares and servicing accounts. Under the Plan, the Fund
pays OFDI an annual asset-based sales charge of .75% per year on Class B
shares that are outstanding for 6 years or less. OFDI also receives a service
fee of .25% per year to reimburse dealers for providing
19 Oppenheimer Strategic Income & Growth Fund
<PAGE>
Notes to Financial Statements (Unaudited) (Continued)
===============================================================================
4. Management Fees and
Other Transactions
with Affiliates
(continued)
personal services for accounts that hold Class B shares. Both fees are
computed on the average annual net assets of Class B shares, determined as of
the close of each regular business day. If the Plan is terminated by the Fund,
the Board of Trustees may allow the Fund to continue payments of the
asset-based sales charge to OFDI for certain expenses it incurred before the
Plan was terminated. During the six months ended March 31, 1996, OFDI paid
$1,608 to an affiliated broker/dealer as reimbursement for Class B personal
service and maintenance expenses and retained $92,203, as reimbursement for
Class B sales commissions and service fee advances, as well as financing
costs. As of March 31, 1996, OFDI had incurred unreimbursed expenses of
$1,216,919 for Class B.
The Fund has adopted a compensation type Distribution and Service Plan
for Class C shares to compensate OFDI for its services and costs in
distributing Class C shares and servicing accounts. Under the Plan, the Fund
pays OFDI an annual asset-based sales charge of .75% per year on Class C
shares. OFDI also receives a service fee of .25% per year to compensate
dealers for providing personal services for accounts that hold Class C shares.
Both fees are computed on the average annual net assets of Class C shares,
determined as of the close of each regular business day. If the Plan is
terminated by the Fund, the Board of Trustees may allow the Fund to continue
payments of the asset-based sales charge to OFDI for certain expenses it
incurred before the Plan was terminated. During the six months ended March 31,
1996, OFDI retained $618 as compensation for Class C sales commissions and
service fee advances, as well as financing costs. As of March 31, 1996, OFDI
had incurred unreimbursed expenses of $19,178 for Class C.
===============================================================================
5. Forward Contracts
A forward foreign currency exchange contract (forward contract) is a
commitment to purchase or sell a foreign currency at a future date, at a
negotiated rate.
The Fund uses forward contracts to seek to manage foreign currency
risks. They may also be used to tactically shift portfolio currency risk. The
Fund generally enters into forward 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.
Forward contracts are valued based on the closing prices of the
forward currency contract rates in the London foreign exchange markets on a
daily basis as provided by a reliable bank or dealer. The Fund will realize a
gain or loss upon the closing or settlement of the forward transaction.
Securities held in segregated accounts to cover net exposure on
outstanding forward contracts are noted in the Statement of Investments where
applicable. Unrealized appreciation or depreciation on forward contracts is
reported in the Statement of Assets and Liabilities. Realized gains and losses
are reported with all other foreign currency gains and losses in the Fund's
Statement of Operations.
Risks include the potential inability of the counterparty to meet the
terms of the contract and unanticipated movements in the value of a foreign
currency relative to the U.S. dollar.
At March 31, 1996 outstanding forward contracts to buy and sell currencies
were as follows:
<TABLE>
<CAPTION>
Contract
Amount Valuation as of Unrealized Unrealized
Contracts to Buy Expiration Date (000s) March 31, 1996 Appreciation Depreciation
<S> <C> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------------
British Pound (GBP) 4/3/96 72 GBP $ 109,604 $ -- $ 3
Czech Koruna (CZK) 4/1/96 3,895 CZK 143,414 263 --
Deutsche Mark (DEM) 4/22/96 210 DEM 142,209 -- 2,875
New Zealand Dollar (NZD) 12/18/96 680 NZD 453,322 21,576 --
---------- ------- -------
$ 848,549 21,839 2,878
========== ------- -------
Contracts to Sell
- -------------------------------------------------------------------------------------------------------------
Australian Dollar (AUD) 4/9/96 21 AUD $ 16,533 $ -- $ 87
Danish Krona (DKK) 4/3/96 563 DKK 98,800 -- 38
Deutsche Mark (DEM) 4/15/96-6/3/96 1,505 DEM 1,020,780 1,050 37
Italian Lira (ITL) 4/22/96-5/2/96 430,000 ITL 273,186 1,136 1,111
Japanese Yen (JPY) 12/18/96 41,725 JPY 402,624 29,124 --
Swiss Franc (CHF) 4/15/96 740 CHF 622,784 -- 6,487
---------- ------- -------
$2,434,707 31,310 7,760
========== ------- -------
$53,149 $10,638
======= =======
</TABLE>
20 Oppenheimer Strategic Income & Growth Fund
<PAGE>
===============================================================================
6. Futures Contracts
The Fund may buy and sell interest rate futures contracts in order to gain
exposure to or protect against changes in interest rates. The Fund may also
buy or write put or call options on these futures contracts.
The Fund generally sells futures contracts to hedge against increases
in interest rates and the resulting negative effect on the value of fixed rate
portfolio securities. The Fund may also purchase futures contracts to gain
exposure to changes in interest rates as it may be more efficient or cost
effective than actually buying fixed income securities.
Upon entering into a futures contract, the Fund is required to deposit
either cash or securities in an amount (initial margin) equal to a certain
percentage of the contract value. Subsequent payments (variation margin) are
made or received by the Fund each day. The variation margin payments are equal
to the daily changes in the contract value and are recorded as unrealized
gains and losses. The Fund recognizes a realized gain or loss when the
contract is closed or expires.
Securities held in collateralized accounts to cover initial margin
requirements on open futures contracts are noted in the Statement of
Investments. The Statement of Assets and Liabilities reflects a receivable or
payable for the daily mark to market for variation margin.
Risks of entering into futures contracts (and related options) include
the possibility that there may be an illiquid market and that a change in the
value of the contract or option may not correlate with changes in the value of
the underlying securities.
At March 31, 1996, the Fund had outstanding futures contracts to sell debt
securities as follows:
<TABLE>
<CAPTION>
Number of Unrealized
Futures Valuation as of Appreciation
Expiration Date Contracts March 31, 1996 (Depreciation)
<S> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------
U.S. Treasury Nts. 6/96 3 $320,859 $5,063
- ----------------------------------------------------------------------------------------------
U.S. Treasury Bonds 6/96 1 111,469 (188)
-------- ------
$432,328 $4,875
======== ======
</TABLE>
===============================================================================
7. Options Activity
The Fund may buy and sell put and call options, or write covered put and call
options on portfolio securities in order to produce incremental earnings or
protect against changes in the value of portfolio securities.
The Fund generally purchases put options or writes covered call
options to hedge against adverse movements in the value of portfolio holdings.
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.
Options are valued daily based upon the last sale price on the
principal exchange on which the option is traded and unrealized appreciation
or depreciation is recorded. The Fund will realize a gain or loss upon the
expiration or closing of the option transaction. When an option is exercised,
the proceeds on sales for a written call option, the purchase cost for a
written put option, or the cost of the security for a purchased put or call
option is adjusted by the amount of premium received or paid.
Securities designated to cover outstanding call options are noted in
the Statement of Investments where applicable. Shares subject to call,
expiration date, exercise price, premium received and market value are
detailed in a footnote to the Statement of Investments. Options written are
reported as a liability in the Statement of Assets and Liabilities. Gains and
losses are reported in the Statement of Operations.
The risk in writing a call option is that the Fund gives up the
opportunity for profit if the market price of the security increases and the
option is exercised. The risk in writing a put option is that the Fund may
incur a loss if the market price of the security decreases and the option is
exercised. The risk in buying an option is that the Fund pays a premium
whether or not the option is exercised. The Fund also has the additional risk
of not being able to enter into a closing transaction if a liquid secondary
market does not exist.
Written option activity for the six months ended March 31, 1996 was as
follows:
Call Options
-------------------------
Number Amount
- -----------------------------------------------------------------------------
Options outstanding at September 30, 1995 -- $ --
- -----------------------------------------------------------------------------
Options written 937,373 32,418
- -----------------------------------------------------------------------------
Options canceled in closing transactions (1,350) (17,925)
-------- --------
Options outstanding at March 31, 1996 936,023 $ 14,493
======== ========
21 Oppenheimer Strategic Income & Growth Fund
<PAGE>
Notes to Financial Statements (Unaudited) (Continued)
===============================================================================
8. Illiquid and
Restricted Securities
At March 31, 1996, investments in securities included issues that are illiquid
or restricted. The securities are often purchased in private placement
transactions, are not registered under the Securities Act of 1933, may have
contractual restrictions on resale, and 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
illiquid and restricted securities. The aggregate value of these securities
subject to this limitation at March 31, 1996 was $966,234, which represents
1.42% of the Fund's net assets. Information concerning these securities is as
follows:
<TABLE>
<CAPTION>
Valuation
Per Unit as of
Security Acquisition Date Cost Per Unit March 31, 1996
<S> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------------------------
Algeria (Republic of) Reprofiled Debt Loan Participation,
Tranche A, 6.812%, 9/4/06 3/21/96 $55.50 $54.50
- -------------------------------------------------------------------------------------------------------------------------
Colombia (Republic of) 1989-1990 Integrated Loan Facility
Bonds, 6.875%, 7/1/01 12/5/95 $92.00 $93.50
- -------------------------------------------------------------------------------------------------------------------------
Trinidad & Tobago Loan Participation Agreement,
Tranche A, 1.565%, 9/30/00 12/13/95-12/15/95 $ .84 $ .80
- -------------------------------------------------------------------------------------------------------------------------
United Mexican States, Combined Facility 3, Loan Participation
Agreement, Tranche A, 6.50%, 9/20/97 10/25/94 $89.00 $79.50
</TABLE>
Pursuant to guidelines adopted by the Board of Trustees, certain unregistered
securities are determined to be liquid and are not included within the 10%
limitation specified above.
22 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
Raymond J. Kalinowski, Trustee
C. Howard Kast, Trustee
Robert M. Kirchner, Trustee
Bridget A. Macaskill, Trustee and President
Ned M. Steel, Trustee
Robert C. Doll, Jr., Senior Vice President
Andrew J. Donohue, Vice President and Secretary
David P. Negri, Vice President
Arthur P. Steinmetz, Vice President
George C. Bowen, Vice President and Treasurer
Robert J. Bishop, Assistant Treasurer
Scott T. Farrar, Assistant Treasurer
Robert G. Zack, Assistant Secretary
===============================================================================
Investment Advisor OppenheimerFunds, Inc.
===============================================================================
Distributor OppenheimerFunds Distributor, Inc.
===============================================================================
Transfer and Shareholder OppenheimerFunds Services
Servicing Agent
===============================================================================
Custodian of The Bank of New York
Portfolio Securities
===============================================================================
Independent Auditors Deloitte & Touche LLP
===============================================================================
Legal Counsel Myer, Swanson, Adams & Wolf, 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.
Shares of Oppenheimer funds are not deposits or obligations of any bank, are
not guaranteed by any bank, and are not insured by the FDIC or any other
agency, and involve investment risks, including possible loss of the principal
amount invested.
23 Oppenheimer Strategic Income & Growth Fund
<PAGE>
[BACK COVER]
Information
General Information
Monday-Friday 8:30 a.m.-9 p.m. ET
Saturday 10 a.m.-2 p.m. ET
1-800-525-7048
Telephone Transactions
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OppenheimerFunds
Information Hotline
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messages on the economy and
issues that affect your investments
1-800-835-3104
RS0275.001.0396 May 31, 1996
[Picture of Jennifer Leonard]
[Caption] Jennifer Leonard, Customer Service Representative
OppenheimerFunds Service
"How may I help you?"
As an Oppenheimer fund shareholder, you have some special privileges. Whether
it's automatic investment plans, informative newsletters and hotlines, or
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And when you need help, our Customer Service Representatives are only
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When you want to make a transaction, you can do it easily by calling
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PhoneLink gives you access to a variety of fund, account, and market
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You can count on us whenever you need assistance. That's why the
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So call us today--we're here to help.
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