UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES
Investment Company Act file number 811-21686
Oppenheimer Portfolio Series
(Exact name of registrant as specified in charter)
6803 South Tucson Way, Centennial, Colorado 80112-3924
(Address of principal executive offices) (Zip code)
Cynthia Lo Bessette
OFI Global Asset Management, Inc.
225 Liberty Street, New York, New York 10281-1008
(Name and address of agent for service)
Registrant’s telephone number, including area code: (303) 768-3200
Date of fiscal year end: January 31
Date of reporting period: 1/31/2018
Item 1. Reports to Stockholders.
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Board Approval of the Fund’s Investment Advisory and Sub-Advisory Agreements | 37 | |||
Portfolio Proxy Voting Policies and Guidelines; Updates to Statement of Investments | 40 | |||
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47 |
Class A Shares
AVERAGE ANNUAL TOTAL RETURNS AT 1/31/18
Class A Shares of the Fund | ||||||||
Without Sales Charge | With Sales Charge | Bloomberg Barclays U.S. Aggregate Bond Index | S&P 500 Index | |||||
1-Year | 9.53% | 3.23% | 2.15% | 26.41% | ||||
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5-Year | 4.51 | 3.28 | 2.01 | 15.91 | ||||
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10-Year | 1.48 | 0.88 | 3.71 | 9.78 | ||||
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Performance data quoted represents past performance, which does not guarantee future results. The 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 their original cost. Fund returns include changes in share price, reinvested distributions, and a 5.75% maximum applicable sales charge except where “without sales charge” is indicated. Current performance may be lower or higher than the performance quoted. Returns do not consider capital gains or income taxes on an individual’s investment. Returns for periods of less than one year are cumulative and not annualized. For performance data current to the most recent month-end, visit oppenheimerfunds.com or call 1.800.CALL OPP (225.5677). See Fund prospectuses and summary prospectuses for more information on share classes and sales charges.
2 OPPENHEIMER PORTFOLIO SERIES CONSERVATIVE INVESTOR FUND
MARKET OVERVIEW
Markets continued their general risk-on mode throughout 2017 and into January 2018. The U.S. economy outperformed expectations in the second half of 2017, with gross domestic product (GDP) growth exceeding the 2% trend growth rate witnessed so far during the expansion. With the economy’s continued expansion, the Federal Reserve (“Fed”) is nearing its dual mandate of full employment and price stability. While inflation has surprised to the downside for a number of months recently, the Fed believes this to be temporary and continues down its prescribed course of gradual tightening. The Fed began normalizing its balance sheet during the reporting period by discontinuing its interest reinvestment program and raised rates in December for the third time in 2017. Despite
these tightening measures, by many measures financial conditions eased in 2017.
As alluded to above, market performance was positive for most risk assets during the reporting period. Equities in the U.S. and globally performed well with the S&P 500 Index and the MSCI World Index returning 26.41% and 25.83%, respectively. Emerging market equities outperformed their developed market peers, as the MSCI Emerging Markets Index produced a return of 41.01%. U.S. Treasuries (as represented by the Bloomberg Barclays U.S. Treasury Index) generated a positive total return of 2.15%. Credit outperformed U.S. Treasuries for the year, with the Bloomberg Barclays U.S. Credit Index rising 4.84%.
COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN:
1. The Fund is invested in Class I shares of all underlying funds discussed in this Fund Performance Discussion.
3 OPPENHEIMER PORTFOLIO SERIES CONSERVATIVE INVESTOR FUND
FUND REVIEW
Against this market backdrop, the Fund’s Class A shares (without sales charge) produced a total return of 9.53%. The Fund employs a combination of sophisticated quantitative tools and qualitative analysis to seek to construct a well-diversified, globally allocated portfolio. The portfolio is allocated among OppenheimerFunds’ actively managed funds according to risk and strategically rebalanced based on market conditions. At period end, the Fund had its largest exposure to fixed-income funds. In an environment that favored equities over fixed-income, the Fund’s diversified allocation resulted in outperformance versus the Bloomberg Barclays U.S. Aggregate Bond Index’s return of 2.15% and underperformance versus the S&P 500 Index’s return of 26.41%.
Equity funds produced the strongest contribution to the Fund’s total return. All of the Fund’s domestic and foreign equity holdings provided positive returns, including its top two equity holdings: Oppenheimer Capital Appreciation Fund and Oppenheimer Value Fund. Oppenheimer Capital Appreciation Fund typically invests in large-cap U.S. growth stocks. In an environment where growth outperformed value, the underlying fund benefited. That said, value also produced positive returns this period and Oppenheimer Value Fund generated strong results. All of the underlying foreign equity funds produced positive results for the Fund this period as well, led by Oppenheimer International Growth Fund and Oppenheimer
International Equity Fund. European markets continued to outperform U.S. markets during this reporting period. This benefited both of these underlying funds, which have large allocations to Europe. Oppenheimer International Equity Fund also benefited from its exposure to Japan.
Although fixed-income underperformed equities this reporting period, the Fund did receive positive contributions from each of its fixed-income holdings, led by its exposure to Oppenheimer International Bond Fund, which typically invests in international fixed income securities in both developed and emerging market countries. This underlying fund invests in three major risk categories, or “levers” – interest rates (typically government bonds), currencies, and credit (corporate bonds and other fixed-income instruments containing credit risk). All three areas produced positive absolute results. Oppenheimer Total Return Bond Fund also performed well. This underlying fund benefited from an underweight to U.S. Treasuries relative to the Bloomberg Barclays U.S. Aggregate Bond Index, along with its exposure to both investment grade credit, high yield credit, and non-agency mortgage-backed securities (“MBS”).
In alternatives, most underlying holdings produced muted positive returns, led by Oppenheimer Global Multi Strategies Fund and Oppenheimer Fundamental Alternatives Fund. Oppenheimer Gold & Special Minerals Fund had a negative impact on performance.
4 OPPENHEIMER PORTFOLIO SERIES CONSERVATIVE INVESTOR FUND
In a risk-on market environment, the stocks of gold and special minerals companies underperformed.
FUND UPDATE
After the reporting period ended, Jeffrey Bennett, CFA, was named the Portfolio Manager of the Fund, effective February 27, 2018. Jeff joined OppenheimerFunds in 2016 from AllianceBernstein, where he was a Managing Director on the Alternative Investment Management team, focusing on asset allocation and portfolio construction as well as manager identification and due diligence. Previously, Jeff was director of research for Fischer & Co., a multi-family office, before which Jeff was the primary analyst at Summit Private Investments, a fund-of-hedge funds that focuses on long/ short and event-driven strategies. Jeff is a CFA® charter holder and holds a BS in chemical engineering from the University of California, Los Angeles, as well as an MBA in analytic finance and econometrics from the University of Chicago.
5 OPPENHEIMER PORTFOLIO SERIES CONSERVATIVE INVESTOR FUND
ASSET CLASS ALLOCATION
Domestic Fixed Income Funds | 39.6% | |
Domestic Equity Funds | 26.5 | |
Alternative Funds | 17.5 | |
Foreign Fixed Income Funds | 11.1 | |
Foreign Equity Funds | 5.3 | |
Money Market Funds | —* |
* | Less than 0.05%. |
Portfolio holdings and allocations are subject to change. Percentages are as of January 31, 2018, and are based on the total market value of investments.
TOP TEN HOLDINGS
Oppenheimer Total Return Bond Fund, Cl. I | 24.2% | |
Oppenheimer Value Fund, Cl. I | 11.4 | |
Oppenheimer Capital Appreciation Fund, Cl. I | 11.3 | |
Oppenheimer International Bond Fund, Cl. I | 11.1 | |
Oppenheimer Limited-Term Government Fund, Cl. I | 10.3 | |
Oppenheimer Master Inflation Protected Securities Fund, LLC | 6.6 | |
Oppenheimer Master Loan Fund, LLC | 5.0 | |
Oppenheimer Global Multi Strategies Fund, Cl. I | 4.2 | |
Oppenheimer Real Estate Fund, Cl. I | 3.0 | |
Oppenheimer Fundamental Alternatives Fund, Cl. I | 2.1 |
Portfolio holdings and allocations are subject to change. Percentages are as of January 31, 2018, and are based on net assets. For more current Top 10 Fund holdings, please visit oppenheimerfunds.com.
6 OPPENHEIMER PORTFOLIO SERIES CONSERVATIVE INVESTOR FUND
Share Class Performance
AVERAGE ANNUAL TOTAL RETURNS WITHOUT SALES CHARGE AS OF 1/31/18
Inception Date | 1-Year | 5-Year | 10-Year | |||||||||||||||||||||||||||||
Class A (OACIX) | 4/5/05 | 9.53 | % | 4.51 | % | 1.48 | % | |||||||||||||||||||||||||
Class B (OBCIX) | 4/5/05 | 8.76 | 3.72 | 0.98 | ||||||||||||||||||||||||||||
Class C (OCCIX) | 4/5/05 | 8.69 | 3.74 | 0.72 | ||||||||||||||||||||||||||||
Class R (ONCIX) | 4/5/05 | 9.18 | 4.23 | 1.19 | ||||||||||||||||||||||||||||
Class Y (OYCIX) | 4/5/05 | 9.78 | 4.77 | 1.77 | ||||||||||||||||||||||||||||
AVERAGE ANNUAL TOTAL RETURNS WITH SALES CHARGE AS OF 1/31/18
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Inception Date | 1-Year | 5-Year | 10-Year | |||||||||||||||||||||||||||||
Class A (OACIX) | 4/5/05 | 3.23 | % | 3.28 | % | 0.88 | % | |||||||||||||||||||||||||
Class B (OBCIX) | 4/5/05 | 3.76 | 3.37 | 0.98 | ||||||||||||||||||||||||||||
Class C (OCCIX) | 4/5/05 | 7.69 | 3.74 | 0.72 | ||||||||||||||||||||||||||||
Class R (ONCIX) | 4/5/05 | 9.18 | 4.23 | 1.19 | ||||||||||||||||||||||||||||
Class Y (OYCIX) | 4/5/05 | 9.78 | 4.77 | 1.77 |
Performance data quoted represents past performance, which does not guarantee future results. The 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 their original cost. Current performance may be lower or higher than the performance quoted. Returns do not consider capital gains or income taxes on an individual’s investment. For performance data current to the most recent month-end, visit oppenheimerfunds.com or call 1.800. CALL OPP (225.5677). Fund returns include changes in share price, reinvested distributions, and the applicable sales charge: for Class A shares, the current maximum initial sales charge of 5.75%; for Class B shares, the contingent deferred sales charge of 5% (1-year) and 2% (5-year); and for Class C shares, the contingent deferred sales charge of 1% for the 1-year period. There is no sales charge for Class R and Class Y shares. Because Class B shares convert to Class A shares 72 months after purchase, the 10-year return for Class B shares uses Class A performance for the period after conversion. Returns for periods of less than one year are cumulative and not annualized. See Fund prospectuses and summary prospectuses for more information on share classes and sales charges.
The Fund’s performance is compared to the performance of the S&P 500 Index and the Bloomberg Barclays U.S. Aggregate Bond Index. The S&P 500 Index is a capitalization-weighted index of 500 stocks intended to be a representative sample of leading companies in leading industries within the U.S. economy. The Bloomberg Barclays U.S. Aggregate Bond Index is an index of U.S.-dollar-denominated, investment-grade U.S. corporate government and mortgage-backed securities. The indices unmanaged and cannot be purchased directly by investors. While index comparisons may be useful to provide a benchmark for the Fund’s performance, it must be noted that the Fund’s investments are not limited to the investments comprising the indices. Index performance includes reinvestment of income, but does not reflect transaction costs, fees, expenses or taxes. Index performance is shown for illustrative purposes only as a benchmark for the Fund’s performance, and does not predict or depict
7 OPPENHEIMER PORTFOLIO SERIES CONSERVATIVE INVESTOR FUND
performance of the Fund. The Fund’s performance reflects the effects of the Fund’s business and operating expenses.
The views in the Fund Performance Discussion represent the opinions of this Fund’s portfolio managers and are not intended as investment advice or to predict or depict the performance of any investment. These views are as of the close of business on January 31, 2018, and are subject to change based on subsequent developments. The Fund’s portfolio and strategies are subject to change.
Before investing in any of the Oppenheimer funds, investors should carefully consider a fund’s investment objectives, risks, charges and expenses. Fund prospectuses and summary prospectuses contain this and other information about the funds, and may be obtained by asking your financial advisor, visiting oppenheimerfunds.com, or calling 1.800.CALL OPP (225.5677). Read prospectuses and summary prospectuses carefully before investing.
Shares of Oppenheimer funds are not deposits or obligations of any bank, are not guaranteed by any bank, are not insured by the FDIC or any other agency, and involve investment risks, including the possible loss of the principal amount invested.
8 OPPENHEIMER PORTFOLIO SERIES CONSERVATIVE INVESTOR FUND
Fund Expenses. As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, which may include sales charges (loads) on purchase payments and/or contingent deferred sales charges on redemptions; and (2) ongoing costs, including management fees; distribution and service fees; and other Fund expenses. These examples are intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
The examples are based on an investment of $1,000.00 invested at the beginning of the period and held for the entire 6-month period ended January 31, 2018.
Actual Expenses. The first section of the table provides information about actual account values and actual expenses. You may use the information in this section for the class of shares you hold, together with the amount you invested, to estimate the expense that you paid over the period. Simply divide your account value by $1,000.00 (for example, an $8,600.00 account value divided by $1,000.00 = 8.60), then multiply the result by the number in the first section under the heading entitled “Expenses Paid During 6 Months Ended January 31, 2018” to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes. The second section of the table provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio for each class of shares, and an assumed rate of return of 5% per year for each class before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example for the class of shares you hold with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as front-end or contingent deferred sales charges (loads). Therefore, the “hypothetical” section of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
9 OPPENHEIMER PORTFOLIO SERIES CONSERVATIVE INVESTOR FUND
Actual | Beginning Account Value August 1, 2017 | Ending Account Value January 31, 2018 | Expenses Paid During 6 Months Ended | |||||||||
Class A | $ 1,000.00 | $ 1,045.50 | $ 2.12 | |||||||||
Class B | 1,000.00 | 1,042.70 | 6.14 | |||||||||
Class C | 1,000.00 | 1,042.50 | 5.99 | |||||||||
Class R | 1,000.00 | 1,044.30 | 3.41 | |||||||||
Class Y | 1,000.00 | 1,047.00 | 0.88 | |||||||||
Hypothetical (5% return before expenses) | ||||||||||||
Class A | 1,000.00 | 1,023.14 | 2.09 | |||||||||
Class B | 1,000.00 | 1,019.21 | 6.07 | |||||||||
Class C | 1,000.00 | 1,019.36 | 5.92 | |||||||||
Class R | 1,000.00 | 1,021.88 | 3.37 | |||||||||
Class Y | 1,000.00 | 1,024.35 | 0.87 |
Expenses are equal to the Fund’s annualized expense ratio for that class, multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period). Those annualized expense ratios, excluding indirect expenses from affiliated funds, based on the 6-month period ended January 31, 2018 are as follows:
Class | Expense Ratios | |||||||
Class A | 0.41 | % | ||||||
Class B | 1.19 | |||||||
Class C | 1.16 | |||||||
Class R | 0.66 | |||||||
Class Y | 0.17 |
The expense ratios reflect voluntary and/or contractual waivers and/or reimbursements of expenses by the Fund’s Manager and Transfer Agent. Some of these undertakings may be modified or terminated at any time, as indicated in the Fund’s prospectus. The “Financial Highlights” tables in the Fund’s financial statements, included in this report, also show the gross expense ratios, without such waivers or reimbursements and reduction to custodian expenses, if applicable.
10 OPPENHEIMER PORTFOLIO SERIES CONSERVATIVE INVESTOR FUND
STATEMENT OF INVESTMENTS January 31, 2018
Shares | Value | |||||||
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Investment Companies—99.9%1 |
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Alternative Funds—17.5% | ||||||||
Oppenheimer Fundamental Alternatives Fund, Cl. I | 485,515 | $ | 13,604,122 | |||||
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Oppenheimer Global Multi Strategies Fund, Cl. I | 1,155,713 | 26,592,946 | ||||||
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Oppenheimer Gold & Special Minerals Fund, Cl. I | 610,836 | 9,993,273 | ||||||
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Oppenheimer Master Inflation Protected Securities Fund, LLC | 3,517,926 | 42,451,488 | ||||||
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Oppenheimer Real Estate Fund, Cl. I | 793,943 | 19,149,912 | ||||||
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111,791,741 | ||||||||
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Domestic Equity Funds—26.5% | ||||||||
Oppenheimer Capital Appreciation Fund, Cl. I | 1,068,074 | 72,340,644 | ||||||
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Oppenheimer Main Street Mid Cap Fund, Cl. I | 423,476 | 12,564,534 | ||||||
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Oppenheimer Main Street Small Cap Fund, Cl. I | 735,252 | 11,411,117 | ||||||
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Oppenheimer Value Fund, Cl. I | 1,833,645 | 73,052,415 | ||||||
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169,368,710 | ||||||||
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Domestic Fixed Income Funds—39.5% | ||||||||
Oppenheimer Limited-Term Government Fund, Cl. I | 15,119,183 | 65,768,447 | ||||||
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Oppenheimer Master Loan Fund, LLC | 1,883,024 | 32,079,340 | ||||||
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Oppenheimer Total Return Bond Fund, Cl. I | 22,817,338 | 154,701,554 | ||||||
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252,549,341 | ||||||||
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Foreign Equity Funds—5.3% | ||||||||
Oppenheimer Developing Markets Fund, Cl. I | 110,827 | 5,145,687 | ||||||
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Oppenheimer International Equity Fund, Cl. I | 490,134 | 11,478,927 | ||||||
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Oppenheimer International Growth Fund, Cl. I | 274,637 | 12,608,599 | ||||||
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Oppenheimer International Small-Mid Company Fund, Cl. I | 81,335 | 4,270,074 | ||||||
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33,503,287 | ||||||||
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Foreign Fixed Income Fund—11.1% | ||||||||
Oppenheimer International Bond Fund, Cl. I | 11,588,336 | 70,688,848 | ||||||
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Money Market Fund—0.0% | ||||||||
Oppenheimer Institutional Government Money Market Fund, Cl. E, 1.26%2 | 199,526 | 199,526 | ||||||
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Total Investments, at Value (Cost $585,574,366) | 99.9% | 638,101,453 | ||||||
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Net Other Assets (Liabilities) | 0.1 | 594,513 | ||||||
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Net Assets | 100.0% | $ | 638,695,966 | |||||
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Footnotes to Statement of Investments
1. Is or was an affiliate, as defined in the Investment Company Act of 1940, as amended, at or during the reporting period, by virtue of the Fund owning at least 5% of the voting securities of the issuer or as a result of the Fund and the issuer having the same investment adviser. Transactions during the reporting period in which the issuer was an affiliate are as follows:
Shares January 31, 2017 | Gross Additions | Gross Reductions | Shares January 31, 2018 | |||||||||||||
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Oppenheimer Capital Appreciation Fund, Cl. I | 1,047,702 | 119,213 | 98,841 | 1,068,074 | ||||||||||||
Oppenheimer Developing Markets Fund, Cl. I | 119,978 | 5,306 | 14,457 | 110,827 | ||||||||||||
Oppenheimer Fundamental Alternatives Fund, Cl. I | 520,002 | 28,553 | 63,040 | 485,515 | ||||||||||||
Oppenheimer Global Multi Strategies Fund, Cl. I | 1,218,770 | 91,385 | 154,442 | 1,155,713 | ||||||||||||
Oppenheimer Gold & Special Minerals Fund, Cl. I | 649,773 | 46,330 | 85,267 | 610,836 |
11 OPPENHEIMER PORTFOLIO SERIES CONSERVATIVE INVESTOR FUND
STATEMENT OF INVESTMENTS Continued |
Footnotes to Statement of Investments (Continued)
Shares January 31, 2017 | Gross Additions | Gross Reductions | Shares January 31, 2018 | |||||||||||||
| ||||||||||||||||
Oppenheimer Institutional Government Money Market Fund, Cl. E | 865,415 | 283,794 | 949,683 | 199,526 | ||||||||||||
Oppenheimer International Bond Fund, Cl. I | 12,062,842 | 977,539 | 1,452,045 | 11,588,336 | ||||||||||||
Oppenheimer International Equity Fund, Cl. I | 529,090 | 20,180 | 59,136 | 490,134 | ||||||||||||
Oppenheimer International Growth Fund, Cl. I | 296,019 | 13,729 | 35,111 | 274,637 | ||||||||||||
Oppenheimer International Small- Mid Company Fund, Cl. I | 83,966 | 5,229 | 7,860 | 81,335 | ||||||||||||
Oppenheimer Limited-Term Government Fund, Cl. I | 16,199,892 | 960,600 | 2,041,309 | 15,119,183 | ||||||||||||
Oppenheimer Main Street Mid Cap Fund, Cl. I | 397,772 | 64,520 | 38,816 | 423,476 | ||||||||||||
Oppenheimer Main Street Small Cap Fund, Cl. I | 747,643 | 65,119 | 77,510 | 735,252 | ||||||||||||
Oppenheimer Master Inflation Protected Securities Fund, LLC | 3,849,228 | 141,470 | 472,772 | 3,517,926 | ||||||||||||
Oppenheimer Master Loan Fund, LLC | 2,043,568 | 68,754 | 229,298 | 1,883,024 | ||||||||||||
Oppenheimer Real Estate Fund, Cl. I | 807,449 | 66,361 | 79,867 | 793,943 | ||||||||||||
Oppenheimer Total Return Bond Fund, Cl. Ia | 24,074,319 | 1,583,810 | 2,840,791 | 22,817,338 | ||||||||||||
Oppenheimer Value Fund, Cl. I | 1,862,407 | 160,240 | 189,002 | 1,833,645 | ||||||||||||
Value | Income | Realized Gain (Loss) | Change in Gain (Loss) | |||||||||||||
| ||||||||||||||||
Oppenheimer Capital Appreciation Fund, Cl. Ib | $ | 72,340,644 | $ | 247,820 | $ | 2,444,967 | $ | 9,309,600 | ||||||||
Oppenheimer Developing Markets Fund, Cl. I | 5,145,687 | 34,807 | 162,443 | 1,319,549 | ||||||||||||
Oppenheimer Fundamental Alternatives Fund, Cl. I | 13,604,122 | 266,885 | 35,772 | 290,054 | ||||||||||||
Oppenheimer Global Multi Strategies Fund, Cl. I | 26,592,946 | 1,030,883 | 34,286 | (111,849) | ||||||||||||
Oppenheimer Gold & Special Minerals Fund, Cl. I | 9,993,273 | 320,029 | 63,161 | (506,268) | ||||||||||||
Oppenheimer Institutional Government Money Market Fund, Cl. E | 199,526 | 4,398 | — | — | ||||||||||||
Oppenheimer International Bond Fund, Cl. I | 70,688,848 | 974,305 | 601,372 | 6,819,920 | ||||||||||||
Oppenheimer International Equity Fund, Cl. I | 11,478,927 | 42,187 | 375,614 | 2,584,134 | ||||||||||||
Oppenheimer International Growth Fund, Cl. I | 12,608,599 | 126,788 | 643,902 | 2,319,172 | ||||||||||||
Oppenheimer International Small- Mid Company Fund, Cl. Ic | 4,270,074 | 47,794 | 209,061 | 957,564 |
12 OPPENHEIMER PORTFOLIO SERIES CONSERVATIVE INVESTOR FUND
Footnotes to Statement of Investments (Continued)
Value | Income | Realized Gain (Loss) | Change in Gain (Loss) | |||||||||||||
| ||||||||||||||||
Oppenheimer Limited-Term Government Fund, Cl. I | $ | 65,768,447 | $ | 1,544,207 | $ | (80,726) | $ | (983,166) | ||||||||
Oppenheimer Main Street Mid Cap Fund, Cl. Id | 12,564,534 | 91,813 | 465,581 | (306,593) | ||||||||||||
Oppenheimer Main Street Small Cap Fund, Cl. Ie | 11,411,117 | 65,651 | 230,880 | 691,700 | ||||||||||||
Oppenheimer Master Inflation Protected Securities Fund, LLC | 42,451,488 | 1,130,422f | 46,583f | (522,874)f | ||||||||||||
Oppenheimer Master Loan Fund, LLC | 32,079,340 | 1,955,052g | (121,598)g | (112,235)g | ||||||||||||
Oppenheimer Real Estate Fund, Cl. Ih | 19,149,912 | 365,304 | 1,048,930 | (1,722,296) | ||||||||||||
Oppenheimer Total Return Bond Fund, Cl. Ia | 154,701,554 | 5,014,810 | 1,360,858 | (792,202) | ||||||||||||
Oppenheimer Value Fund, Cl. Ii | 73,052,415 | 939,240 | 3,533,739 | 4,812,324 | ||||||||||||
|
| |||||||||||||||
Total | $ | 638,101,453 | $ | 14,202,395 | $ | 11,054,825 | $ | 24,046,534 | ||||||||
|
|
a. Prior to June 1, 2017, this fund was named Oppenheimer Core Bond Fund.
b. This fund distributed realized gains of $5,388,012.
c. This fund distributed realized gains of $86,474.
d. This fund distributed realized gains of $1,403,900.
e. This fund distributed realized gains of $565,694.
f. Represents the amount allocated to the Fund from Oppenheimer Master Inflation Protected Securities Fund, LLC.
g. Represents the amount allocated to the Fund from Oppenheimer Master Loan Fund, LLC.
h. This fund distributed realized gains of $696,158.
i. This fund distributed realized gains of $2,936,277.
2. Rate shown is the 7-day yield at period end.
See accompanying Notes to Financial Statements.
13 OPPENHEIMER PORTFOLIO SERIES CONSERVATIVE INVESTOR FUND
STATEMENT OF ASSETS AND LIABILITIES January 31, 2018 |
Assets | ||||
Investments, at value—see accompanying statement of investments—affiliated companies (cost $585,574,366) | $ | 638,101,453 | ||
Cash | 993,957 | |||
Receivables and other assets: | ||||
Dividends | 815,138 | |||
Shares of beneficial interest sold | 456,349 | |||
Investments sold | 357,258 | |||
Other | 32,046 | |||
Total assets |
| 640,756,201
|
| |
Liabilities | ||||
Payables and other liabilities: | ||||
Shares of beneficial interest redeemed | 1,040,385 | |||
Investments purchased | 814,884 | |||
Distribution and service plan fees | 134,596 | |||
Trustees’ compensation | 35,718 | |||
Shareholder communications | 6,334 | |||
Other | 28,318 | |||
Total liabilities |
| 2,060,235
|
| |
Net Assets | $ | 638,695,966 | ||
Composition of Net Assets | ||||
Par value of shares of beneficial interest | $ | 66,222 | ||
Additional paid-in capital | 649,913,196 | |||
Accumulated net investment income | 4,021,462 | |||
Accumulated net realized loss on investments | (67,832,001) | |||
Net unrealized appreciation on investments | 52,527,087 | |||
Net Assets | $ | 638,695,966 | ||
14 OPPENHEIMER PORTFOLIO SERIES CONSERVATIVE INVESTOR FUND
Net Asset Value Per Share | ||
Class A Shares: | ||
Net asset value and redemption price per share (based on net assets of $445,731,721 and 46,091,101 shares of beneficial interest outstanding) | $9.67 | |
Maximum offering price per share (net asset value plus sales charge of 5.75% of offering price) | $10.26 | |
Class B Shares: | ||
Net asset value, redemption price (excludes applicable contingent deferred sales charge) and offering price per share (based on net assets of $1,874,378 and 190,749 shares of beneficial interest outstanding) | $9.83 | |
Class C Shares: | ||
Net asset value, redemption price (excludes applicable contingent deferred sales charge) and offering price per share (based on net assets of $139,290,096 and 14,576,075 shares of beneficial interest outstanding) | $9.56 | |
Class R Shares: | ||
Net asset value, redemption price (excludes applicable contingent deferred sales charge) and offering price per share (based on net assets of $45,605,307 and 4,726,289 shares of beneficial interest outstanding) | $9.65 | |
Class Y Shares: | ||
Net asset value, redemption price and offering price per share (based on net assets of $6,194,464 and 638,007 shares of beneficial interest outstanding) | $9.71 |
See accompanying Notes to Financial Statements.
15 OPPENHEIMER PORTFOLIO SERIES CONSERVATIVE INVESTOR FUND
OPERATIONS For the Year Ended January 31, 2018
| ||||
Allocation of Income and Expenses from Master Funds1 | ||||
Net investment income allocated from Oppenheimer Master Inflation Protected Securities Fund, LLC: | ||||
Interest | $ | 1,127,457 | ||
Dividends | 2,965 | |||
Net expenses | (208,823) | |||
|
| |||
Net investment income allocated from Oppenheimer Master Inflation Protected Securities Fund, LLC | 921,599 | |||
| ||||
Net investment income allocated from Oppenheimer Master Loan Fund, LLC: | ||||
Interest | 1,905,884 | |||
Dividends | 49,168 | |||
Net expenses | (116,527) | |||
Net investment income allocated from Oppenheimer Master Loan Fund, LLC | 1,838,525 | |||
|
| |||
Total allocation of net investment income from master funds | 2,760,124 | |||
| ||||
Investment Income | ||||
Dividends from affiliated companies | 11,116,921 | |||
| ||||
Interest | 7,992 | |||
|
| |||
Total investment income | 11,124,913 | |||
| ||||
Expenses | ||||
Distribution and service plan fees: | ||||
Class A | 1,078,781 | |||
Class B | 39,136 | |||
Class C | 1,404,347 | |||
Class R | 218,088 | |||
| ||||
Transfer and shareholder servicing agent fees: | ||||
Class A | 960,142 | |||
Class B | 8,601 | |||
Class C | 307,605 | |||
Class R | 96,199 | |||
Class Y | 12,672 | |||
| ||||
Shareholder communications: | ||||
Class A | 13,800 | |||
Class B | 682 | |||
Class C | 4,490 | |||
Class R | 953 | |||
Class Y | 155 | |||
| ||||
Trustees’ compensation | 8,596 | |||
| ||||
Custodian fees and expenses | 3,821 | |||
| ||||
Other | 53,602 | |||
|
| |||
Total expenses | 4,211,670 | |||
Less waivers and reimbursements of expenses | (731,108) | |||
|
| |||
Net expenses | 3,480,562 | |||
| ||||
Net Investment Income | 10,404,475 |
16 OPPENHEIMER PORTFOLIO SERIES CONSERVATIVE INVESTOR FUND
| ||||
Realized and Unrealized Gain (Loss) | ||||
Net realized gain on: | ||||
Investment transactions in affiliated companies | $ | 11,129,840 | ||
Distributions received from affiliate companies | 11,076,515 | |||
| ||||
Net realized gain (loss) allocated from: | ||||
Oppenheimer Master Inflation Protected Securities Fund, LLC | 46,583 | |||
Oppenheimer Master Loan Fund, LLC | (121,598) | |||
|
| |||
Net realized gain | 22,131,340 | |||
| ||||
Net change in unrealized appreciation/depreciation on investment transactions | 24,681,643 | |||
| ||||
Net change in unrealized appreciation/depreciation allocated from: | ||||
Oppenheimer Master Inflation Protected Securities Fund, LLC | (522,874) | |||
Oppenheimer Master Loan Fund, LLC | (112,235) | |||
|
| |||
Net change in unrealized appreciation/depreciation | 24,046,534 | |||
| ||||
Net Increase in Net Assets Resulting from Operations | $ | 56,582,349 | ||
|
|
1. The Fund invests in certain affiliated mutual funds that expect to be treated as partnerships for tax purposes. See Note 4 of the accompanying Notes.
See accompanying Notes to Financial Statements.
17 OPPENHEIMER PORTFOLIO SERIES CONSERVATIVE INVESTOR FUND
STATEMENTS OF CHANGES IN NET ASSETS
Year Ended January 31, 2018 | Year Ended January 31, 2017 | |||||||
Operations | ||||||||
Net investment income | $ | 10,404,475 | $ | 12,447,789 | ||||
Net realized gain | 22,131,340 | 4,962,814 | ||||||
Net change in unrealized appreciation/depreciation | 24,046,534 | 28,019,826 | ||||||
Net increase in net assets resulting from operations |
| 56,582,349
|
|
| 45,430,429
|
| ||
Dividends and/or Distributions to Shareholders | ||||||||
Dividends from net investment income: | ||||||||
Class A | (9,351,733) | (9,034,827) | ||||||
Class B | (5,347) | (66,676) | ||||||
Class C | (1,929,785) | (2,025,777) | ||||||
Class R | (861,904) | (800,365) | ||||||
Class Y | (153,200) | (122,045) | ||||||
| (12,301,969)
|
|
| (12,049,690)
|
| |||
Beneficial Interest Transactions | ||||||||
Net increase (decrease) in net assets resulting from beneficial interest transactions: | ||||||||
Class A | (13,651,741) | 25,104,936 | ||||||
Class B | (5,059,405) | (5,277,621) | ||||||
Class C | (17,926,869) | (12,054,247) | ||||||
Class R | (162,889) | 5,319,866 | ||||||
Class Y | 522,312 | (58,536) | ||||||
| (36,278,592)
|
|
| 13,034,398
|
| |||
Net Assets | ||||||||
Total increase | 8,001,788 | 46,415,137 | ||||||
Beginning of period | 630,694,178 | 584,279,041 | ||||||
End of period (including accumulated net investment income of $4,021,462 and $3,517,720, respectively) | $ | 638,695,966 | $ | 630,694,178 | ||||
| ||||||||
|
See accompanying Notes to Financial Statements.
18 OPPENHEIMER PORTFOLIO SERIES CONSERVATIVE INVESTOR FUND
Class A | Year Ended January 31, 2018 | Year Ended January 31, 2017 | Year Ended January 29, 20161 | Year Ended January 30, 20151 | Year Ended January 31, 2014 | |||||||||||||||
| ||||||||||||||||||||
Per Share Operating Data | ||||||||||||||||||||
Net asset value, beginning of period | $9.02 | $8.54 | $9.07 | $8.74 | $8.57 | |||||||||||||||
| ||||||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||
Net investment income2 | 0.17 | 0.20 | 0.15 | 0.17 | 0.18 | |||||||||||||||
Net realized and unrealized gain (loss) | 0.69 | 0.47 | (0.48) | 0.31 | 0.14 | |||||||||||||||
|
| |||||||||||||||||||
Total from investment operations | 0.86 | 0.67 | (0.33) | 0.48 | 0.32 | |||||||||||||||
| ||||||||||||||||||||
Dividends and/or distributions to shareholders: | ||||||||||||||||||||
Dividends from net investment income | (0.21) | (0.19) | (0.20) | (0.15) | (0.15) | |||||||||||||||
| ||||||||||||||||||||
Net asset value, end of period | $9.67 | $9.02 | $8.54 | $9.07 | $8.74 | |||||||||||||||
|
| |||||||||||||||||||
| ||||||||||||||||||||
Total Return, at Net Asset Value3 | 9.53% | 7.92% | (3.68)% | 5.54% | 3.75% | |||||||||||||||
| ||||||||||||||||||||
Ratios/Supplemental Data | ||||||||||||||||||||
Net assets, end of period (in thousands) | $445,732 | $428,722 | $381,636 | $377,253 | $328,792 | |||||||||||||||
| ||||||||||||||||||||
Average net assets (in thousands) | $440,897 | $413,080 | $385,849 | $356,752 | $321,008 | |||||||||||||||
| ||||||||||||||||||||
Ratios to average net assets:4,5 | ||||||||||||||||||||
Net investment income | 1.82% | 2.22% | 1.70% | 1.84% | 2.04% | |||||||||||||||
Expenses excluding specific expenses listed below | 0.53% | 0.54% | 0.54% | 0.53% | 0.52% | |||||||||||||||
Interest and fees from borrowings | 0.00% | 0.00%6 | 0.00%6 | 0.00% | 0.00% | |||||||||||||||
|
| |||||||||||||||||||
Total expenses7 | 0.53% | 0.54% | 0.54% | 0.53% | 0.52% | |||||||||||||||
Expenses after payments, waivers and/or reimbursements and reduction to custodian expenses | 0.42% | 0.44% | 0.44% | 0.43% | 0.41% | |||||||||||||||
| ||||||||||||||||||||
Portfolio turnover rate | 7% | 9% | 10% | 14% | 12% |
1. Represents the last business day of the Fund’s reporting period.
2. Per share amounts calculated based on the average shares outstanding during the period.
3. Assumes an 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 less than one full year. Returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares.
4. Annualized for periods less than one full year.
5. Includes the Fund’s share of the allocated expenses and/or net investment income from the master funds.
6. Less than 0.005%.
7. Total expenses including indirect expenses from affiliated fund fees and expenses were as follows:
Year Ended January 31, 2018 | 1.06% | |||||
Year Ended January 31, 2017 | 1.08% | |||||
Year Ended January 29, 2016 | 1.07% | |||||
Year Ended January 30, 2015 | 1.06% | |||||
Year Ended January 31, 2014 | 1.08% |
See accompanying Notes to Financial Statements.
19 OPPENHEIMER PORTFOLIO SERIES CONSERVATIVE INVESTOR FUND
FINANCIAL HIGHLIGHTS Continued |
Class B | Year Ended January 31, 2018 | Year Ended January 31, 2017 | Year Ended January 29, 20161 | Year Ended January 30, 20151 | Year Ended January 31, 2014 | |||||||||||||||
| ||||||||||||||||||||
Per Share Operating Data | ||||||||||||||||||||
Net asset value, beginning of period | $9.06 | $8.54 | $9.05 | $8.70 | $8.52 | |||||||||||||||
| ||||||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||
Net investment income2 | 0.08 | 0.13 | 0.09 | 0.09 | 0.10 | |||||||||||||||
Net realized and unrealized gain (loss) | 0.71 | 0.48 | (0.49) | 0.33 | 0.15 | |||||||||||||||
|
| |||||||||||||||||||
Total from investment operations | 0.79 | 0.61 | (0.40) | 0.42 | 0.25 | |||||||||||||||
| ||||||||||||||||||||
Dividends and/or distributions to shareholders: | ||||||||||||||||||||
Dividends from net investment income | (0.02) | (0.09) | (0.11) | (0.07) | (0.07) | |||||||||||||||
| ||||||||||||||||||||
Net asset value, end of period | $9.83 | $9.06 | $8.54 | $9.05 | $8.70 | |||||||||||||||
|
| |||||||||||||||||||
| ||||||||||||||||||||
Total Return, at Net Asset Value3 | 8.76% | 7.12% | (4.45)% | 4.78% | 2.90% | |||||||||||||||
| ||||||||||||||||||||
Ratios/Supplemental Data | ||||||||||||||||||||
Net assets, end of period (in thousands) | $1,874 | $6,617 | $11,285 | $17,607 | $23,457 | |||||||||||||||
| ||||||||||||||||||||
Average net assets (in thousands) | $3,912 | $8,872 | $14,222 | $20,359 | $26,741 | |||||||||||||||
| ||||||||||||||||||||
Ratios to average net assets:4,5 | ||||||||||||||||||||
Net investment income | 0.82% | 1.43% | 0.95% | 1.04% | 1.16% | |||||||||||||||
Expenses excluding specific expenses listed below | 1.30% | 1.30% | 1.30% | 1.28% | 1.31% | |||||||||||||||
Interest and fees from borrowings | 0.00% | 0.00%6 | 0.00%6 | 0.00% | 0.00% | |||||||||||||||
|
| |||||||||||||||||||
Total expenses7 | 1.30% | 1.30% | 1.30% | 1.28% | 1.31% | |||||||||||||||
Expenses after payments, waivers and/or reimbursements and reduction to custodian expenses | 1.19% | 1.20% | 1.20% | 1.18% | 1.20% | |||||||||||||||
| ||||||||||||||||||||
Portfolio turnover rate | 7% | 9% | 10% | 14% | 12% |
1. Represents the last business day of the Fund’s reporting period.
2. Per share amounts calculated based on the average shares outstanding during the period.
3. Assumes an 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 less than one full year. Returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares.
4. Annualized for periods less than one full year.
5. Includes the Fund’s share of the allocated expenses and/or net investment income from the master funds.
6. Less than 0.005%.
7. Total expenses including indirect expenses from affiliated fund fees and expenses were as follows:
Year Ended January 31, 2018 | 1.83% | |||||
Year Ended January 31, 2017 | 1.84% | |||||
Year Ended January 29, 2016 | 1.83% | |||||
Year Ended January 30, 2015 | 1.81% | |||||
Year Ended January 31, 2014 | 1.87% |
See accompanying Notes to Financial Statements.
20 OPPENHEIMER PORTFOLIO SERIES CONSERVATIVE INVESTOR FUND
Class C | Year Ended January 31, 2018 | Year Ended January 31, 2017 | Year Ended January 29, 20161 | Year Ended January 30, 20151 | Year Ended January 31, 2014 | |||||||||||||||
| ||||||||||||||||||||
Per Share Operating Data | ||||||||||||||||||||
Net asset value, beginning of period | $8.92 | $8.43 | $8.96 | $8.63 | $8.47 | |||||||||||||||
| ||||||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||
Net investment income2 | 0.10 | 0.13 | 0.08 | 0.10 | 0.11 | |||||||||||||||
Net realized and unrealized gain (loss) | 0.67 | 0.48 | (0.48) | 0.32 | 0.14 | |||||||||||||||
|
| |||||||||||||||||||
Total from investment operations | 0.77 | 0.61 | (0.40) | 0.42 | 0.25 | |||||||||||||||
| ||||||||||||||||||||
Dividends and/or distributions to shareholders: | ||||||||||||||||||||
Dividends from net investment income | (0.13) | (0.12) | (0.13) | (0.09) | (0.09) | |||||||||||||||
| ||||||||||||||||||||
Net asset value, end of period | $9.56 | $8.92 | $8.43 | $8.96 | $8.63 | |||||||||||||||
|
| |||||||||||||||||||
| ||||||||||||||||||||
Total Return, at Net Asset Value3 | 8.69% | 7.28% | (4.48)% | 4.83% | 2.89% | |||||||||||||||
| ||||||||||||||||||||
Ratios/Supplemental Data | ||||||||||||||||||||
Net assets, end of period (in thousands) | $139,290 | $147,359 | $150,838 | $163,041 | $153,973 | |||||||||||||||
| ||||||||||||||||||||
Average net assets (in thousands) | $141,175 | $153,128 | $159,469 | $160,307 | $154,195 | |||||||||||||||
| ||||||||||||||||||||
Ratios to average net assets:4,5 | ||||||||||||||||||||
Net investment income | 1.06% | 1.47% | 0.95% | 1.08% | 1.26% | |||||||||||||||
Expenses excluding specific expenses listed below | 1.28% | 1.29% | 1.29% | 1.28% | 1.28% | |||||||||||||||
Interest and fees from borrowings | 0.00% | 0.00%6 | 0.00%6 | 0.00% | 0.00% | |||||||||||||||
|
| |||||||||||||||||||
Total expenses7 | 1.28% | 1.29% | 1.29% | 1.28% | 1.28% | |||||||||||||||
Expenses after payments, waivers and/or reimbursements and reduction to custodian expenses | 1.17% | 1.19% | 1.19% | 1.18% | 1.17% | |||||||||||||||
| ||||||||||||||||||||
Portfolio turnover rate | 7% | 9% | 10% | 14% | 12% |
1. Represents the last business day of the Fund’s reporting period.
2. Per share amounts calculated based on the average shares outstanding during the period.
3. Assumes an 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 less than one full year. Returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares.
4. Annualized for periods less than one full year.
5. Includes the Fund’s share of the allocated expenses and/or net investment income from the master funds.
6. Less than 0.005%.
7. Total expenses including indirect expenses from affiliated fund fees and expenses were as follows:
Year Ended January 31, 2018 | 1.81% | |||||
Year Ended January 31, 2017 | 1.83% | |||||
Year Ended January 29, 2016 | 1.82% | |||||
Year Ended January 30, 2015 | 1.81% | |||||
Year Ended January 31, 2014 | 1.84% |
See accompanying Notes to Financial Statements.
21 OPPENHEIMER PORTFOLIO SERIES CONSERVATIVE INVESTOR FUND
FINANCIAL HIGHLIGHTS Continued |
Class R | Year Ended January 31, 2018 | Year Ended January 31, 2017 | Year Ended January 29, 20161 | Year Ended January 30, 20151 | Year Ended January 31, 2014 | |||||||||||||||
| ||||||||||||||||||||
Per Share Operating Data | ||||||||||||||||||||
Net asset value, beginning of period | $9.01 | $8.53 | $9.05 | $8.72 | $8.55 | |||||||||||||||
| ||||||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||
Net investment income2 | 0.15 | 0.18 | 0.13 | 0.14 | 0.15 | |||||||||||||||
Net realized and unrealized gain (loss) | 0.67 | 0.47 | (0.48) | 0.32 | 0.14 | |||||||||||||||
|
| |||||||||||||||||||
Total from investment operations | 0.82 | 0.65 | (0.35) | 0.46 | 0.29 | |||||||||||||||
| ||||||||||||||||||||
Dividends and/or distributions to shareholders: | ||||||||||||||||||||
Dividends from net investment income | (0.18) | (0.17) | (0.17) | (0.13) | (0.12) | |||||||||||||||
| ||||||||||||||||||||
Net asset value, end of period | $9.65 | $9.01 | $8.53 | $9.05 | $8.72 | |||||||||||||||
|
| |||||||||||||||||||
| ||||||||||||||||||||
Total Return, at Net Asset Value3 | 9.18% | 7.71% | (3.89)% | 5.28% | 3.40% | |||||||||||||||
| ||||||||||||||||||||
Ratios/Supplemental Data | ||||||||||||||||||||
Net assets, end of period (in thousands) | $45,605 | $42,716 | $35,442 | $42,872 | $43,246 | |||||||||||||||
| ||||||||||||||||||||
Average net assets (in thousands) | $44,190 | $38,675 | $39,789 | $43,215 | $47,223 | |||||||||||||||
| ||||||||||||||||||||
Ratios to average net assets:4,5 | ||||||||||||||||||||
Net investment income | 1.59% | 1.99% | 1.44% | 1.58% | 1.69% | |||||||||||||||
Expenses excluding specific expenses listed below | 0.77% | 0.79% | 0.79% | 0.78% | 0.79% | |||||||||||||||
Interest and fees from borrowings | 0.00% | 0.00%6 | 0.00%6 | 0.00% | 0.00% | |||||||||||||||
|
| |||||||||||||||||||
Total expenses7 | 0.77% | 0.79% | 0.79% | 0.78% | 0.79% | |||||||||||||||
Expenses after payments, waivers and/or reimbursements and reduction to custodian expenses | 0.66% | 0.69% | 0.69% | 0.68% | 0.68% | |||||||||||||||
| ||||||||||||||||||||
Portfolio turnover rate | 7% | 9% | 10% | 14% | 12% |
1. Represents the last business day of the Fund’s reporting period.
2. Per share amounts calculated based on the average shares outstanding during the period.
3. Assumes an 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 less than one full year. Returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares.
4. Annualized for periods less than one full year.
5. Includes the Fund’s share of the allocated expenses and/or net investment income from the master funds.
6. Less than 0.005%.
7. Total expenses including indirect expenses from affiliated fund fees and expenses were as follows:
Year Ended January 31, 2018 | 1.30% | |||||
Year Ended January 31, 2017 | 1.33% | |||||
Year Ended January 29, 2016 | 1.32% | |||||
Year Ended January 30, 2015 | 1.31% | |||||
Year Ended January 31, 2014 | 1.35% |
See accompanying Notes to Financial Statements.
22 OPPENHEIMER PORTFOLIO SERIES CONSERVATIVE INVESTOR FUND
Class Y | Year Ended January 31, 2018 | Year Ended January 31, 2017 | Year Ended January 29, 20161 | Year Ended January 30, 20151 | Year Ended January 31, 2014 | |||||||||||||||
| ||||||||||||||||||||
Per Share Operating Data | ||||||||||||||||||||
Net asset value, beginning of period | $9.06 | $8.57 | $9.10 | $8.77 | $8.60 | |||||||||||||||
| ||||||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||
Net investment income2 | 0.20 | 0.23 | 0.17 | 0.20 | 0.21 | |||||||||||||||
Net realized and unrealized gain (loss) | 0.68 | 0.47 | (0.49) | 0.31 | 0.14 | |||||||||||||||
|
| |||||||||||||||||||
Total from investment operations | 0.88 | 0.70 | (0.32) | 0.51 | 0.35 | |||||||||||||||
| ||||||||||||||||||||
Dividends and/or distributions to shareholders: | ||||||||||||||||||||
Dividends from net investment income | (0.23) | (0.21) | (0.21) | (0.18) | (0.18) | |||||||||||||||
| ||||||||||||||||||||
Net asset value, end of period | $9.71 | $9.06 | $8.57 | $9.10 | $8.77 | |||||||||||||||
|
| |||||||||||||||||||
| ||||||||||||||||||||
Total Return, at Net Asset Value3 | 9.78% | 8.27% | (3.54)% | 5.85% | 4.01% | |||||||||||||||
| ||||||||||||||||||||
Ratios/Supplemental Data | ||||||||||||||||||||
Net assets, end of period (in thousands) | $6,195 | $5,280 | $5,078 | $6,947 | $3,546 | |||||||||||||||
| ||||||||||||||||||||
Average net assets (in thousands) | $5,831 | $5,067 | $7,659 | $4,601 | $3,099 | |||||||||||||||
| ||||||||||||||||||||
Ratios to average net assets:4,5 | ||||||||||||||||||||
Net investment income | 2.14% | 2.52% | 1.93% | 2.22% | 2.37% | |||||||||||||||
Expenses excluding specific expenses listed below | 0.28% | 0.29% | 0.29% | 0.28% | 0.27% | |||||||||||||||
Interest and fees from borrowings | 0.00% | 0.00%6 | 0.00%6 | 0.00% | 0.00% | |||||||||||||||
|
| |||||||||||||||||||
Total expenses7 | 0.28% | 0.29% | 0.29% | 0.28% | 0.27% | |||||||||||||||
Expenses after payments, waivers and/or reimbursements and reduction to custodian expenses | 0.17% | 0.19% | 0.19% | 0.18% | 0.16% | |||||||||||||||
| ||||||||||||||||||||
Portfolio turnover rate | 7% | 9% | 10% | 14% | 12% |
1. Represents the last business day of the Fund’s reporting period.
2. Per share amounts calculated based on the average shares outstanding during the period.
3. Assumes an 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 less than one full year. Returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares.
4. Annualized for periods less than one full year.
5. Includes the Fund’s share of the allocated expenses and/or net investment income from the master funds.
6. Less than 0.005%.
7. Total expenses including indirect expenses from affiliated fund fees and expenses were as follows:
Year Ended January 31, 2018 | 0.81% | |||||
Year Ended January 31, 2017 | 0.83% | |||||
Year Ended January 29, 2016 | 0.82% | |||||
Year Ended January 30, 2015 | 0.81% | |||||
Year Ended January 31, 2014 | 0.83% |
See accompanying Notes to Financial Statements.
23 OPPENHEIMER PORTFOLIO SERIES CONSERVATIVE INVESTOR FUND
NOTES TO FINANCIAL STATEMENTS January 31, 2018
1. Organization
Oppenheimer Portfolio Series (the “Trust”) is registered under the Investment Company Act of 1940 (“1940 Act”), as amended, as a diversified open-end management investment company. Conservative Investor Fund (the “Fund”) is a series of the Trust whose investment objective is to seek total return. The Fund normally invests in a diversified portfolio of Oppenheimer mutual funds (individually, an “Underlying Fund” and collectively, the “Underlying Funds”). The Fund’s investment adviser is OFI Global Asset Management, Inc. (“OFI Global” or the “Manager”), a wholly-owned subsidiary of OppenheimerFunds, Inc. (“OFI” or the “Sub-Adviser”). The Manager has entered into a sub-advisory agreement with OFI.
The Fund offers Class A, Class C, Class R and Class Y shares, and previously offered Class B shares for new purchase through June 29, 2012. Subsequent to that date, no new purchases of Class B shares are permitted, however reinvestment of dividend and/or capital gain distributions and exchanges of Class B shares into and from other Oppenheimer funds are allowed. Class A shares are sold at their offering price, which is normally net asset value plus a front-end sales charge. Class C shares are sold, and Class B shares were sold, without a front-end sales charge but may be subject to a contingent deferred sales charge (“CDSC”). Class R shares are sold only through retirement plans. Retirement plans that offer Class R shares may impose charges on those accounts. Class Y shares are sold to certain institutional investors or intermediaries without either a front-end sales charge or a CDSC, however, the intermediaries may impose charges on their accountholders who beneficially own Class Y shares. All classes of shares have identical rights and voting privileges with respect to the Fund in general and exclusive voting rights on matters that affect that class alone. Earnings, net assets and net asset value per share may differ due to each class having its own expenses, such as transfer and shareholder servicing agent fees and shareholder communications, directly attributable to that class. Class A, B, C and R shares have separate distribution and/or service plans under which they pay fees. Class Y shares do not pay such fees. Class B shares will automatically convert to Class A shares 72 months after the date of purchase.
The following is a summary of significant accounting policies followed in the Fund’s preparation of financial statements in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”).
2. Significant Accounting Policies
Security Valuation. All investments in securities are recorded at their estimated fair value, as described in Note 3.
Allocation of Income, Expenses, Gains and Losses. Income, expenses (other than those attributable to a specific class), gains and losses are allocated on a daily basis 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.
Dividends and Distributions to Shareholders. Dividends and distributions to
24 OPPENHEIMER PORTFOLIO SERIES CONSERVATIVE INVESTOR FUND
2. Significant Accounting Policies (Continued)
shareholders, which are determined in accordance with income tax regulations and may differ from U.S. GAAP, are recorded on the ex-dividend date. Income and capital gain distributions, if any, are declared and paid annually or at other times as determined necessary by the Manager.
Investment Income. Dividend distributions received from the Underlying Funds are recorded on the ex-dividend date. Upon receipt of notification from an Underlying Fund, and subsequent to the ex-dividend date, some of the dividend income originally recorded by the Fund may be reclassified as a tax return of capital by reducing the cost basis of the Underlying Fund and/or increasing the realized gain on sales of investments in the Underlying Fund.
Custodian Fees. “Custodian fees and expenses” in the Statement of Operations may include interest expense incurred by the Fund on any cash overdrafts of its custodian account during the period. Such cash overdrafts may result from the effects of failed trades in portfolio securities and from cash outflows resulting from unanticipated shareholder redemption activity. The Fund pays interest to its custodian on such cash overdraft at a rate equal to the Prime Rate plus 0.35%. The “Reduction to custodian expenses” line item, if applicable, represents earnings on cash balances maintained by the Fund during the period. Such interest expense and other custodian fees may be paid with these earnings.
Security Transactions. Security transactions are recorded on the trade date. Realized gains and losses on securities sold are determined on the basis of identified cost.
Indemnifications. The Fund’s organizational documents provide current and former Trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund’s maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.
Federal Taxes. The Fund intends to comply with provisions of the Internal Revenue Code applicable to regulated investment companies and to distribute substantially all of its investment company taxable income, including any net realized gain on investments not offset by capital loss carryforwards, if any, to shareholders. Therefore, no federal income or excise tax provision is required. The Fund files income tax returns in U.S. federal and applicable state jurisdictions. The statute of limitations on the Fund’s tax return filings generally remains open for the three preceding fiscal reporting period ends. The Fund has analyzed its tax positions for the fiscal year ended January 31, 2018, including open tax years, and does not believe there are any uncertain tax positions requiring recognition in the Fund’s financial statements.
The tax components of capital shown in the following table represent distribution requirements the Fund must satisfy under the income tax regulations, losses the Fund may be
25 OPPENHEIMER PORTFOLIO SERIES CONSERVATIVE INVESTOR FUND
NOTES TO FINANCIAL STATEMENTS Continued
2. Significant Accounting Policies (Continued)
able to offset against income and gains realized in future years and unrealized appreciation or depreciation of securities and other investments for federal income tax purposes.
Undistributed Net Investment Income | Undistributed Long-Term Gain | Accumulated Loss Carryforward1,2,3 | Net Unrealized Appreciation Based on cost of Securities and Other Investments for Federal Income Tax Purposes | |||
$3,196,428 | $— | $29,867,171 | $15,422,092 |
1. At period end, the Fund had $29,867,171 of net capital loss carryforward available to offset future realized capital gains, if any, and thereby reduce future taxable gain distributions. Details of the capital loss carryforwards are included in the table below. Capital loss carryovers with no expiration, if any, must be utilized prior to those with expiration dates.
Expiring | ||||
2019 | $ | 29,867,171 |
2. During the reporting period, the Fund utilized $17,263,769 of capital loss carryforward to offset capital gains realized in that fiscal year.
3. During the previous reporting period, the Fund did not utilize any capital loss carryforward.
Net investment income (loss) and net realized gain (loss) may differ for financial statement and tax purposes. The character of dividends and distributions made during the fiscal year from net investment income or net realized gains are determined in accordance with federal income tax requirements, which may differ from the character of net investment income or net realized gains presented in those financial statements in accordance with U.S. GAAP. Also, due to timing of dividends and distributions, the fiscal year in which amounts are distributed may differ from the fiscal year in which the income or net realized gain was recorded by the Fund.
Accordingly, the following amounts have been reclassified for the reporting period. Net assets of the Fund were unaffected by the reclassifications.
Increase | Increase | |||
to Accumulated | to Accumulated Net | |||
Net Investment | Realized Loss | |||
Income | on Investments | |||
$2,401,236 | $2,401,236 |
The tax character of distributions paid during the reporting periods:
Year Ended January 31, 2018 | Year Ended January 31, 2017 | |||||||
Distributions paid from: | ||||||||
Ordinary income | $ | 12,301,969 | $ | 12,049,690 |
The aggregate cost of securities and other investments and the composition of unrealized appreciation and depreciation of securities and other investments for federal income tax purposes at period end are noted in the following table. The primary difference between
26 OPPENHEIMER PORTFOLIO SERIES CONSERVATIVE INVESTOR FUND
2. Significant Accounting Policies (Continued)
book and tax appreciation or depreciation of securities and other investments, if applicable, is attributable to the tax deferral of losses or tax realization of financial statement unrealized gain or loss.
Federal tax cost of securities | $ | 622,679,361 | ||
|
| |||
Gross unrealized appreciation | $ | 30,811,367 | ||
Gross unrealized depreciation | (15,389,275) | |||
|
| |||
Net unrealized appreciation | $ | 15,422,092 | ||
|
|
Use of Estimates. The preparation of financial statements in conformity with U.S. GAAP 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 increases and decreases in net assets from operations during the reporting period. Actual results could differ from those estimates.
3. Securities Valuation
The Fund calculates the net asset value of its shares based upon the net asset value of the applicable investment companies. For each investment company, the net asset value per share for a class of shares is determined as of 4:00 P.M. eastern time, on each day the New York Stock Exchange (the “Exchange”) is open for trading, except in the case of a scheduled early closing of the Exchange, in which case the Fund will calculate net asset value of the shares as of the scheduled early closing time of the Exchange. This is calculated by dividing the value of the investment company’s net assets attributable to that class by the number of outstanding shares of that class on that day.
The Fund’s Board has adopted procedures for the valuation of the Fund’s securities and has delegated the day-to-day responsibility for valuation determinations under those procedures to the Manager. The Manager has established a Valuation Committee which is responsible for determining a fair valuation for any security for which market quotations are not readily available. The Valuation Committee’s fair valuation determinations are subject to review, approval and ratification by the Fund’s Board at least quarterly or more frequently, if necessary.
Valuations Methods and Inputs
To determine their net asset values, the Underlying Funds’ assets are valued primarily on the basis of current market quotations as generally supplied by third party portfolio pricing services or by dealers. Such market quotations are typically based on unadjusted quoted prices in active markets for identical securities or other observable market inputs.
Securities for which market quotations are not readily available or a significant event has occurred that would materially affect the value of the security, are fair valued either (i) by a standardized fair valuation methodology applicable to the security type or the significant event as previously approved by the Valuation Committee and the Fund’s Board or (ii) as determined in good faith by the Manager’s Valuation Committee. The Valuation Committee considers all
27 OPPENHEIMER PORTFOLIO SERIES CONSERVATIVE INVESTOR FUND
NOTES TO FINANCIAL STATEMENTS Continued
3. Securities Valuation (Continued)
relevant facts that are reasonably available, through either public information or information available to the Manager, when determining the fair value of a security. The methodologies used for valuing securities are not necessarily an indication of the risks associated with investing in those Underlying Funds.
Classifications
Each investment asset or liability of the Fund is assigned a level at measurement date based on the significance and source of the inputs to its valuation. Various data inputs may be used in determining the value of each of the Fund’s investments as of the reporting period end. These data inputs are categorized in the following hierarchy under applicable financial accounting standards:
1) Level 1-unadjusted quoted prices in active markets for identical assets or liabilities (including securities actively traded on a securities exchange)
2) Level 2-inputs other than unadjusted quoted prices that are observable for the asset or liability (such as unadjusted quoted prices for similar assets and market corroborated inputs such as interest rates, prepayment speeds, credit risks, etc.)
3) Level 3-significant unobservable inputs (including the Manager’s own judgments about assumptions that market participants would use in pricing the asset or liability).
The inputs used for valuing securities are not necessarily an indication of the risks associated with investing in those securities.
The Fund classifies each of its investments in investment companies which are publicly offered as Level 1. Investment companies that are not publicly offered, if any, are measured using net asset value and are classified as Level 2 in the fair value hierarchy. The table below categorizes amounts that are included in the Fund’s Statement of Assets and Liabilities at period end based on valuation input level:
Level 1— Unadjusted Quoted Prices | Level 2— Other Significant | Level 3— Significant Unobservable Inputs | Value | |||||||||||||||||||||||||||||
Assets Table | ||||||||||||||||||||||||||||||||
Investments, at Value: | ||||||||||||||||||||||||||||||||
Investment Companies | $ | 563,570,625 | $ | 74,530,828 | $ | — | $ | 638,101,453 | ||||||||||||||||||||||||
| ||||||||||||||||||||||||||||||||
Total Assets | $ | 563,570,625 | $ | 74,530,828 | $ | — | $ | 638,101,453 | ||||||||||||||||||||||||
|
Forward currency exchange contracts and futures contracts, if any, are reported at their unrealized appreciation/depreciation at measurement date, which represents the change in the contract’s value from trade date. All additional assets and liabilities included in the above table are reported at their market value at measurement date.
4. Investments and Risks
Risks of Investing in the Underlying Funds. The Fund invests in other mutual funds advised by the Manager. The Underlying Funds are registered open-end management investment companies under the 1940 Act, as amended. The Manager is the investment
28 OPPENHEIMER PORTFOLIO SERIES CONSERVATIVE INVESTOR FUND
4. Investments and Risks (Continued)
adviser of, and the Sub-Adviser provides investment and related advisory services to, the Underlying Funds. The Fund’s Investments in Underlying Funds are included in the Statement of Investments. Shares of Underlying Funds are valued at their net asset value per share. As a shareholder, the Fund is subject to its proportional share of the Underlying Funds’ expenses, including their management fee.
Each of the Underlying Funds in which the Fund invests has its own investment risks, and those risks can affect the value of the Fund’s investments and therefore the value of the Fund’s shares. To the extent that the Fund invests more of its assets in one Underlying Fund than in another, the Fund will have greater exposure to the risks of that Underlying Fund.
Investment in Oppenheimer Institutional Government Money Market Fund.
The Fund is permitted to invest daily available cash balances in an affiliated money market fund. The Fund may invest the available cash in Class E shares of Oppenheimer Institutional Government Money Market Fund (“IGMMF”) to seek current income while preserving liquidity or for defensive purposes. IGMMF is a registered open-end management investment company, regulated as a money market fund under the 1940 Act, as amended. The Manager is the investment adviser of IGMMF, and the Sub-Adviser provides investment and related advisory services to IGMMF. When applicable, the Fund’s investment in IGMMF is included in the Statement of Investments. Shares of IGMMF are valued at their net asset value per share. As a shareholder, the Fund is subject to its proportional share of IGMMF’s Class E expenses, including its management fee.
Investment in Oppenheimer Master Funds. Certain Underlying Funds in which the Fund invests are mutual funds registered under the 1940 Act, as amended, that expect to be treated as partnerships for tax purposes, specifically Oppenheimer Master Loan Fund, LLC (“Master Loan”) and Oppenheimer Master Inflation Protected Securities Fund, LLC (“Master Inflation Protected Securities”) (the “Master Funds”). Each Master Fund has its own investment risks, and those risks can affect the value of the Fund’s investments and therefore the value of the Fund’s shares. To the extent that the Fund invests more of its assets in one Master Fund than in another, the Fund will have greater exposure to the risks of that Master Fund.
The investment objective of Master Loan is to seek income. The investment objective of Master Inflation Protected Securities is to seek total return. The Fund’s investments in the Master Funds are included in the Statement of Investments. The Fund recognizes income and gain/(loss) on its investments in each Master Fund according to its allocated pro-rata share, based on its relative proportion of total outstanding Master Fund shares held, of the total net income earned and the net gain/(loss) realized on investments sold by the Master Funds. As a shareholder, the Fund is subject to its proportional share of the Master Funds’ expenses, including their management fee. The Fund owns 2.2% of Master Loan and 28.5% of Master Inflation Protected Securities at period end.
29 OPPENHEIMER PORTFOLIO SERIES CONSERVATIVE INVESTOR FUND
NOTES TO FINANCIAL STATEMENTS Continued
5. Market Risk Factors
The Fund’s investments in securities and/or financial derivatives may expose the Fund to various market risk factors:
Commodity Risk. Commodity risk relates to the change in value of commodities or commodity indexes as they relate to increases or decreases in the commodities market. Commodities are physical assets that have tangible properties. Examples of these types of assets are crude oil, heating oil, metals, livestock, and agricultural products.
Credit Risk. Credit risk relates to the ability of the issuer of debt to meet interest and principal payments, or both, as they come due. In general, lower-grade, higher-yield debt securities are subject to credit risk to a greater extent than lower-yield, higher-quality securities.
Equity Risk. Equity risk relates to the change in value of equity securities as they relate to increases or decreases in the general market.
Foreign Exchange Rate Risk. Foreign exchange rate risk relates to the change in the U.S. dollar value of a security held that is denominated in a foreign currency. The U.S. dollar value of a foreign currency denominated security will decrease as the dollar appreciates against the currency, while the U.S. dollar value will increase as the dollar depreciates against the currency.
Interest Rate Risk. Interest rate risk refers to the fluctuations in value of fixed-income securities resulting from the inverse relationship between price and yield. For example, an increase in general interest rates will tend to reduce the market value of already issued fixed-income investments, and a decline in general interest rates will tend to increase their value. In addition, debt securities with longer maturities, which tend to have higher yields, are subject to potentially greater fluctuations in value from changes in interest rates than obligations with shorter maturities.
Volatility Risk. Volatility risk refers to the magnitude of the movement, but not the direction of the movement, in a financial instrument’s price over a defined time period. Large increases or decreases in a financial instrument’s price over a relative time period typically indicate greater volatility risk, while small increases or decreases in its price typically indicate lower volatility risk.
6. Shares of Beneficial Interest
The Fund has authorized an unlimited number of $0.001 par value shares of beneficial interest of each class. Transactions in shares of beneficial interest were as follows:
Year Ended January 31, 2018 | Year Ended January 31, 2017 | |||||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||||
Class A | ||||||||||||||||||
Sold | 6,927,441 | $ | 64,650,066 | 12,265,538 | $ | 110,019,935 | ||||||||||||
Dividends and/or distributions reinvested | 969,633 | 9,182,426 | 998,558 | 8,866,800 | ||||||||||||||
Redeemed | (9,321,238) | (87,484,233) | (10,445,651) | (93,781,799) | ||||||||||||||
|
| |||||||||||||||||
Net increase (decrease) | (1,424,164) | $ | (13,651,741) | 2,818,445 | $ | 25,104,936 | ||||||||||||
|
|
30 OPPENHEIMER PORTFOLIO SERIES CONSERVATIVE INVESTOR FUND
6. Shares of Beneficial Interest (Continued)
Year Ended January 31, 2018 | Year Ended January 31, 2017 | |||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||
Class B | ||||||||||||||||
Sold | 14,790 | $ | 139,803 | 72,454 | $ | 652,263 | ||||||||||
Dividends and/or distributions reinvested | 555 | 5,342 | 7,456 | 66,585 | ||||||||||||
Redeemed | (554,543) | (5,204,550) | (671,142) | (5,996,469) | ||||||||||||
|
| |||||||||||||||
Net decrease | (539,198) | $ | (5,059,405) | (591,232) | $ | (5,277,621) | ||||||||||
|
| |||||||||||||||
Class C | ||||||||||||||||
Sold | | 2,487,610 | | $ | 22,996,790 | 3,477,228 | $ | 30,675,565 | ||||||||
Dividends and/or distributions reinvested | 204,382 | 1,913,018 | 227,221 | 1,995,245 | ||||||||||||
Redeemed | (4,642,579) | (42,836,677) | (5,060,265) | (44,725,057) | ||||||||||||
|
| |||||||||||||||
Net decrease | | (1,950,587) | | $ | 17,926,869) | | (1,355,816) | | $ | (12,054,247) | ||||||
|
| |||||||||||||||
Class R | ||||||||||||||||
Sold | 1,474,568 | $ | 13,805,145 | 1,700,052 | $ | 15,266,241 | ||||||||||
Dividends and/or distributions reinvested | 87,314 | 825,116 | 85,218 | 755,036 | ||||||||||||
Redeemed | (1,578,886) | (14,793,150) | (1,199,298) | (10,701,411) | ||||||||||||
|
| |||||||||||||||
Net increase (decrease) | (17,004) | $ | (162,889) | 585,972 | $ | 5,319,866 | ||||||||||
|
| |||||||||||||||
Class Y | ||||||||||||||||
Sold | 491,505 | $ | 4,610,190 | 344,015 | $ | 3,074,103 | ||||||||||
Dividends and/or distributions reinvested | 14,320 | 136,038 | 13,168 | 117,323 | ||||||||||||
Redeemed | (450,688) | (4,223,916) | (366,911) | (3,249,962) | ||||||||||||
|
| |||||||||||||||
Net increase (decrease) | 55,137 | $ | 522,312 | (9,728) | $ | (58,536) | ||||||||||
|
|
7. Purchases and Sales of Securities
The aggregate cost of purchases and proceeds from sales of securities, other than short-term obligations and investments in IGMMF, for the reporting period were as follows:
Purchases | Sales | |||||||
Investment securities | $ | 46,638,103 | $ | 74,421,975 |
8. Fees and Other Transactions with Affiliates
Management Fees. Under the investment advisory agreement, the Manager does not charge a management fee, but rather collects indirect management fees from the Fund’s investments in the Underlying Funds. The weighted indirect management fees collected from the Fund’s investment in the Underlying Funds, as a percent of average daily net assets of the Fund for the reporting period was 0.46%. This amount is gross of any waivers or reimbursements of management fees implemented at the Underlying Fund level.
Sub-Adviser Fees. The Manager has retained the Sub-Adviser to provide the day-to-day portfolio management of the Fund. Under the Sub-Advisory Agreement, the Manager pays the Sub-Adviser an annual fee in monthly installments, equal to a percentage of the indirect
31 OPPENHEIMER PORTFOLIO SERIES CONSERVATIVE INVESTOR FUND
NOTES TO FINANCIAL STATEMENTS Continued
8. Fees and Other Transactions with Affiliates (Continued)
investment management fee collected by the Manager, which shall be calculated after any investment management fee waivers. The fee paid to the Sub-Adviser is paid by the Manager, not by the Fund.
Transfer Agent Fees. OFI Global (the “Transfer Agent”) serves as the transfer and shareholder servicing agent for the Fund. The Fund pays the Transfer Agent a fee based on annual net assets, which shall be calculated after any applicable fee waivers. Fees incurred and average net assets for each class with respect to these services are detailed in the Statement of Operations and Financial Highlights, respectively.
Sub-Transfer Agent Fees. The Transfer Agent has retained Shareholder Services, Inc., a wholly-owned subsidiary of OFI (the “Sub-Transfer Agent”), to provide the day-to-day transfer agent and shareholder servicing of the Fund. Under the Sub-Transfer Agency Agreement, the Transfer Agent pays the Sub-Transfer Agent an annual fee in monthly installments, equal to a percentage of the transfer agent fee collected by the Transfer Agent from the Fund, which shall be calculated after any applicable fee waivers. The fee paid to the Sub-Transfer Agent is paid by the Transfer Agent, not by the Fund.
Trustees’ Compensation. The Fund has adopted an unfunded retirement plan (the “Plan”) for the Fund’s Independent Trustees. Benefits are based on years of service and fees paid to each Trustee during their period of service. The Plan was frozen with respect to adding new participants effective December 31, 2006 (the “Freeze Date”) and existing Plan Participants as of the Freeze Date will continue to receive accrued benefits under the Plan. Active Independent Trustees as of the Freeze Date have each elected a distribution method with respect to their benefits under the Plan.
During the reporting period, the Fund’s projected benefit obligations, payments to retired Trustees and accumulated liability were as follows:
Projected Benefit Obligations Increased | $ — | |
Payments Made to Retired Trustees | 1,019 | |
Accumulated Liability as of January 31, 2018 | 8,636 |
The Fund’s Board of Trustees (“Board”) has adopted a compensation deferral plan for Independent Trustees that enables Trustees to elect to defer receipt of all or a portion of the annual compensation they are entitled to receive from the Fund. For purposes of determining the amount owed to the Trustee under the plan, deferred amounts are treated as though equal dollar amounts had been invested in shares of the Fund or in other Oppenheimer funds selected by the Trustee. The Fund purchases shares of the funds selected for deferral by the Trustee in amounts equal to his or her deemed investment, resulting in a Fund asset equal to the deferred compensation liability. Such assets are included as a component of “Other” within the asset section of the Statement of Assets and Liabilities. Deferral of Trustees’ fees under the plan will not affect the net assets of the Fund and will not materially affect the
32 OPPENHEIMER PORTFOLIO SERIES CONSERVATIVE INVESTOR FUND
8. Fees and Other Transactions with Affiliates (Continued)
Fund’s assets, liabilities or net investment income per share. Amounts will be deferred until distributed in accordance with the compensation deferral plan.
Distribution and Service Plan (12b-1) Fees. Under its General Distributor’s Agreement with the Fund, OppenheimerFunds Distributor, Inc. (the “Distributor”) acts as the Fund’s principal underwriter in the continuous public offering of the Fund’s classes of shares.
Service Plan for Class A Shares. The Fund has adopted a Service Plan (the “Plan”) for Class A shares pursuant to Rule 12b-1 under the 1940 Act. Under the Plan, the Fund reimburses the Distributor for a portion of its costs incurred for services provided to accounts that hold Class A shares. Reimbursement is made periodically at an annual rate of up to 0.25% of the daily net assets of Class A shares of the Fund. The Distributor currently uses all of those fees to pay dealers, brokers, banks and other financial institutions periodically for providing personal service and maintenance of accounts of their customers that hold Class A shares. Any unreimbursed expenses the Distributor incurs with respect to Class A shares in any fiscal year cannot be recovered in subsequent periods. Fees incurred by the Fund under the Plan are detailed in the Statement of Operations.
Distribution and Service Plans for Class B, Class C and Class R Shares. The Fund has adopted Distribution and Service Plans (the “Plans”) for Class B, Class C and Class R shares pursuant to Rule 12b-1 under the 1940 Act to compensate the Distributor for distributing those share classes, maintaining accounts and providing shareholder services. Under the Plans, the Fund pays the Distributor an annual asset-based sales charge of 0.75% on Class B and Class C shares’ daily net assets and 0.25% on Class R shares’ daily net assets. The Fund also pays a service fee under the Plans at an annual rate of 0.25% of daily net assets. The Plans continue in effect from year to year only if the Fund’s Board of Trustees votes annually to approve their continuance at an in person meeting called for that purpose. Fees incurred by the Fund under the Plans are detailed in the Statement of Operations.
Sales Charges. Front-end sales charges and CDSC do not represent expenses of the Fund. They are deducted from the proceeds of sales of Fund shares prior to investment or from redemption proceeds prior to remittance, as applicable. The sales charges retained by the Distributor from the sale of shares and the CDSC retained by the Distributor on the redemption of shares is shown in the following table for the period indicated.
Year Ended | Class A Front-End Sales Charges Retained by Distributor | Class A Contingent Deferred Sales Charges Retained by Distributor | Class B Contingent Deferred Sales Charges Retained by Distributor | Class C Contingent Deferred Sales Charges Retained by Distributor | Class R Contingent Deferred Sales Charges Retained by Distributor | |||||||||||||||
January 31, 2018 | $145,882 | $1,397 | $3,054 | $10,835 | $— |
Waivers and Reimbursements of Expenses. Prior to June 1, 2017, the Manager
33 OPPENHEIMER PORTFOLIO SERIES CONSERVATIVE INVESTOR FUND
NOTES TO FINANCIAL STATEMENTS Continued
8. Fees and Other Transactions with Affiliates (Continued)
voluntarily waived fees and/or reimbursed the Fund for certain expenses in order to limit “Expenses after payments, waivers and/or reimbursements and reduction to custodian expenses”, (the combined direct (Fund level) and indirect (Underlying Fund level) expenses), to the annual rate of 1.25%, 2.00%, 2.00%, 1.50% and 1.00%, for Class A, Class B, Class C, Class R and Class Y, respectively. Effective June 1, 2017, this expense limitation has been removed.
Effective for the period January 1, 2017 through December 31, 2017, the Transfer Agent voluntarily waived and/or reimbursed Fund expenses in an amount equal to 0.015% of average annual net assets for Classes A, B, C, R and Y.
During the reporting period, the Transfer Agent waived fees and/or reimbursed the Fund for transfer agent and shareholder servicing agent fees as follows:
Class A | $ | 65,903 | ||
Class B | 650 | |||
Class C | 21,289 | |||
Class R | 6,582 | |||
Class Y | 861 |
The Manager has also contractually agreed to waive fees and/or reimburse certain Fund expenses at an annual rate of 0.10% as calculated on the daily net assets of the Fund. This waiver and/or reimbursement is applied after (and in addition to) any other applicable waiver and/or expense reimbursements that may apply. During the reporting period, the Manager waived fees and/or reimbursed the Fund $635,823.
34 OPPENHEIMER PORTFOLIO SERIES CONSERVATIVE INVESTOR FUND
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Shareholders and Board of Trustees
Oppenheimer Portfolio Series:
Opinion on the Financial Statements
We have audited the accompanying statement of assets and liabilities of Conservative Investor Fund, a series of Oppenheimer Portfolio Series, (the “Fund”), including the statement of investments, as of January 31, 2018, the related statement of operations for the year then ended, the statements of changes in net assets for each of the years in the two year period then ended, and the related notes (collectively, the “financial statements”) and the financial highlights for each of the years in the five year period then ended. In our opinion, the financial statements and financial highlights present fairly, in all material respects, the financial position of the Fund as of January 31, 2018, the results of its operations for the year then ended, the changes in its net assets for each of the years in the two year period then ended, and the financial highlights for each of the years in the five year period then ended, in conformity with U.S. generally accepted accounting principles.
Basis for Opinion
These financial statements and financial highlights are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements and financial highlights, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements and financial highlights. Such procedures also included confirmation of securities owned as of January 31, 2018, by correspondence with the transfer agent. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements and financial highlights. We believe that our audits provide a reasonable basis for our opinion.
KPMGLLP
We have not been able to determine the specific year that we began serving as the auditor of one or more Oppenheimer Funds investment companies, however we are aware that we have served as the auditor of one or more Oppenheimer Funds investment companies since at least 1969.
Denver, Colorado
March 23, 2018
35 OPPENHEIMER PORTFOLIO SERIES CONSERVATIVE INVESTOR FUND
FEDERAL INCOME TAX INFORMATION Unaudited
In early 2018, if applicable, shareholders of record received information regarding all dividends and distributions paid to them by the Fund during calendar year 2017.
Dividends, if any, paid by the Fund during the reporting period which are not designated as capital gain distributions should be multiplied by the maximum amount allowable but not less than 29.09% to arrive at the amount eligible for the corporate dividend-received deduction.
A portion, if any, of the dividends paid by the Fund during the reporting period which are not designated as capital gain distributions are eligible for lower individual income tax rates to the extent that the Fund has received qualified dividend income as stipulated by recent tax legislation. The maximum amount allowable but not less than $2,738,421 of the Fund’s fiscal year taxable income may be eligible for the lower individual income tax rates. In early 2018, shareholders of record received information regarding the percentage of distributions that are eligible for lower individual income tax rates.
Recent tax legislation allows a regulated investment company to designate distributions not designated as capital gain distributions, as either interest related dividends or short-term capital gain dividends, both of which are exempt from the U.S. withholding tax applicable to non U.S. taxpayers. For the reporting period, the maximum amount allowable but not less than $6,373,042 of the ordinary distributions to be paid by the Fund qualifies as an interest related dividend.
The Fund has elected the application of Section 853 of the Internal Revenue Code to permit shareholders to take a federal income tax credit or deduction, at their option, on a per share basis. The maximum amount allowable but not less than $62,456 of foreign income taxes were paid by the Fund during the reporting period. A separate notice will be mailed to each shareholder, which will reflect the proportionate share of such foreign taxes which must be treated by shareholders as gross income for federal income tax purposes.
Gross income of the maximum amount allowable but not less than $311,085 was derived from sources within foreign countries or possessions of the United States.
The foregoing information is presented to assist shareholders in reporting distributions received from the Fund to the Internal Revenue Service. Because of the complexity of the federal regulations which may affect your individual tax return and the many variations in state and local tax regulations, we recommend that you consult your tax advisor for specific guidance.
36 OPPENHEIMER PORTFOLIO SERIES CONSERVATIVE INVESTOR FUND
BOARD APPROVAL OF THE FUND’S INVESTMENT ADVISORY AND SUB-ADVISORY AGREEMENTS Unaudited
The Fund has entered into an investment advisory agreement with OFI Global Asset Management, Inc. (“OFI Global” or the “Adviser”), a wholly-owned subsidiary of OppenheimerFunds, Inc. (“OFI” or the “Sub-Adviser”) (“OFI Global” and “OFI” together the “Managers”) and OFI Global has entered into a sub-advisory agreement with OFI whereby OFI provides investment sub-advisory services to the Fund (collectively, the “Agreements”). Each year, the Board of Trustees (the “Board”), including a majority of the independent Trustees, is required to determine whether to approve the terms of the Agreements and the renewal thereof. The Investment Company Act of 1940, as amended, requires that the Board request and evaluate, and that the Managers provide, such information as may be reasonably necessary to evaluate the terms of the Agreements. The Board employs an independent consultant to prepare a report that provides information, including comparative information that the Board requests for that purpose. In addition to in-person meetings focused on this evaluation, the Board receives information throughout the year regarding Fund services, fees, expenses and performance.
The Managers and the independent consultant provided information to the Board on the following factors: (i) the nature, quality and extent of the Managers’ services, (ii) the comparative investment performance of the Fund and the Managers, (iii) the fees and expenses of the Fund, including comparative fee and expense information, (iv) the profitability of the Managers and their affiliates, including an analysis of the cost of providing services, (v) whether economies of scale are realized as the Fund grows and whether fee levels reflect these economies of scale for Fund investors and (vi) other benefits to the Managers from their relationship with the Fund. The Board was aware that there are alternatives to retaining the Managers.
Outlined below is a summary of the principal information considered by the Board as well as the Board’s conclusions.
Nature, Quality and Extent of Services. The Board considered information about the nature, quality and extent of the services provided to the Fund and information regarding the Managers’ key personnel who provide such services. The Managers’ duties include providing the Fund with the services of the portfolio managers and the Sub-Adviser’s investment team, who provide research, analysis and other advisory services in regard to the Fund’s investments; and securities trading services. OFI Global is responsible for oversight of third-party service providers; monitoring compliance with applicable Fund policies and procedures and adherence to the Fund’s investment restrictions; risk management; and oversight of the Sub-Adviser. OFI Global is also responsible for providing certain administrative services to the Fund. Those services include providing and supervising all administrative and clerical personnel who are necessary in order to provide effective corporate administration for the Fund; compiling and maintaining records with respect to the Fund’s operations; preparing and filing reports required by the U.S. Securities and Exchange Commission; preparing periodic reports regarding the operations of the Fund for its shareholders; preparing proxy materials for shareholder meetings; and preparing the registration statements required by federal and state securities laws for the sale of the Fund’s shares. OFI Global also provides the Fund with office space, facilities and equipment.
37 OPPENHEIMER PORTFOLIO SERIES CONSERVATIVE INVESTOR FUND
BOARD APPROVAL OF THE FUND’S INVESTMENT ADVISORY AND SUB-ADVISORY AGREEMENTS Unaudited / Continued |
The Board also considered the quality of the services provided and the quality of the Managers’ resources that are available to the Fund. The Board took account of the fact that the Sub-Adviser has over fifty years of experience as an investment adviser and that its assets under management rank it among the top mutual fund managers in the United States. The Board evaluated the Managers’ advisory, administrative, accounting, legal, compliance and risk management services, among other services, and information the Board has received regarding the experience and professional qualifications of the Managers’ key personnel and the size and functions of its staff. In its evaluation of the quality of the portfolio management services provided, the Board considered the experience of Mark Hamilton and Dokyoung Lee, the portfolio managers for the Fund, and the Sub-Adviser’s investment team and analysts. The Board members also considered the totality of their experiences with the Managers as directors or trustees of the Fund and other funds advised by the Managers. The Board considered information regarding the quality of services provided by affiliates of the Managers, which the Board members have become knowledgeable about through their experiences with the Managers and in connection with the review or renewal of the Fund’s service agreements or service providers. The Board concluded, in light of the Managers’ experience, reputation, personnel, operations and resources that the Fund benefits from the services provided under the Agreements.
Investment Performance of the Managers and the Fund. Throughout the year, the Managers provided information on the investment performance of the Fund, the Adviser and the Sub-Adviser, including comparative performance information. The Board also reviewed information, prepared by the Managers and by the independent consultant, comparing the Fund’s historical performance to relevant benchmarks or market indices and to the performance of other retail funds in the allocation – 30% to 50% equity category. The Board noted that the Fund’s one-year, three-year, five-year and ten-year performance was below its category median.
Fees and Expenses of the Fund. The Board reviewed the fees paid to the Adviser and the other expenses borne by the Fund. The Board also considered the comparability of the fees charged and the services provided to the Fund to the fees and services for other clients or accounts advised by the Adviser. The independent consultant provided comparative data in regard to the fees and expenses of the Fund and other retail front-end load allocation – 30% to 50% equity funds with comparable asset levels and distribution features. After discussions with the Board, the Adviser has agreed to contractually waive fees and/or reimburse certain Fund expenses at an annual rate of 0.10% as calculated on the daily net assets of the Fund. This waiver and/or reimbursement is applied after (and in addition to) any other applicable fee waivers and/or expense reimbursements that apply. This fee waiver and/or expense reimbursement may not be amended or withdrawn until one year from the date of the prospectus, unless approved by the Board. The Board noted that the Fund was charged no actual management fees, exclusive of Underlying Fund management fees, while certain peer group funds did charge direct management fees. The Board also noted that the Fund’s total expenses were lower than its peer group median and category median.
Economies of Scale and Profits Realized by the Managers. The Board considered information regarding the Managers’ costs in serving as the Fund’s investment adviser, sub-
38 OPPENHEIMER PORTFOLIO SERIES CONSERVATIVE INVESTOR FUND
adviser, including the costs associated with the personnel and systems necessary to manage the Fund, and information regarding the Managers’ profitability from their relationship with the Fund. The Board also considered that the Managers must be able to pay and retain experienced professional personnel at competitive rates to provide quality services to the Fund. The Board reviewed whether the Managers may realize economies of scale in managing and supporting the Fund and whether those economies of scale benefit the Fund’s shareholders at the current level of Fund assets in relation to its management fee. The Fund currently does not charge a management fee.
Other Benefits to the Managers. In addition to considering the profits realized by the Managers, the Board considered information that was provided regarding the direct and indirect benefits the Managers receive as a result of their relationship with the Fund, including compensation paid to the Managers’ affiliates.
Conclusions. These factors were also considered by the independent Trustees meeting separately from the full Board, assisted by experienced counsel to the Fund and to the independent Trustees. Fund counsel and the independent Trustees’ counsel are independent of the Managers within the meaning and intent of the Securities and Exchange Commission Rules.
Based on its review of the information it received and its evaluations described above, the Board, including a majority of the independent Trustees, decided to continue the Agreements through September 30, 2018. In arriving at its decision, the Board did not identify any factor or factors as being more important than others, but considered all of the above information, and considered the terms and conditions of the Agreements, including the management fees, in light of all the surrounding circumstances.
39 OPPENHEIMER PORTFOLIO SERIES CONSERVATIVE INVESTOR FUND
PORTFOLIO PROXY VOTING POLICIES AND GUIDELINES;
UPDATES TO STATEMENT OF INVESTMENTS Unaudited
The Fund has adopted Portfolio Proxy Voting Policies and Guidelines under which the Fund votes proxies relating to securities (“portfolio proxies”) held by the Fund. A description of the Fund’s Portfolio Proxy Voting Policies and Guidelines is available (i) without charge, upon request, by calling the Fund toll-free at 1.800.CALL OPP (225.5677), (ii) on the Fund’s website at www.oppenheimerfunds.com, and (iii) on the SEC’s website at www.sec.gov. In addition, the Fund is required to file Form N-PX, with its complete proxy voting record for the 12 months ended June 30th, no later than August 31st of each year. The Fund’s voting record is available (i) without charge, upon request, by calling the Fund toll-free at 1.800.CALL OPP (225.5677), and (ii) in the Form N-PX filing on the SEC’s website at www.sec.gov.
The Fund files its complete schedule of portfolio holdings with the SEC for the first quarter and the third quarter of each fiscal year on Form N-Q. The Fund’s Form N-Q filings are available on the SEC’s website at www.sec.gov. Those forms may be reviewed and copied at the SEC’s Public Reference Room in Washington, D.C. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330.
Householding—Delivery of Shareholder Documents
This is to inform you about OppenheimerFunds’ “householding” policy. If more than one member of your household maintains an account in a particular fund, OppenheimerFunds will mail only one copy of the fund’s prospectus (or, if available, the fund’s summary prospectus), annual and semiannual report and privacy policy. The consolidation of these mailings, called householding, benefits your fund through reduced mailing expense, and benefits you by reducing the volume of mail you receive from OppenheimerFunds.
Householding does not affect the delivery of your account statements.
Please note that we will continue to household these mailings for as long as you remain an OppenheimerFunds shareholder, unless you request otherwise. If you prefer to receive multiple copies of these materials, please call us at 1.800.CALL-OPP (225-5677). You may also notify us in writing or via email. We will begin sending you individual copies of the prospectus (or, if available, the summary prospectus), reports and privacy policy within 30 days of receiving your request to stop householding.
40 OPPENHEIMER PORTFOLIO SERIES CONSERVATIVE INVESTOR FUND
TRUSTEES AND OFFICERS Unaudited
Name, Position(s) Held with the Fund, Length of Service, Year of Birth | Principal Occupation(s) During the Past 5 Years; Other Trusteeships/ Directorships Held; Number of Portfolios in the Fund Complex Currently Overseen | |
INDEPENDENT TRUSTEES | The address of each Trustee in the chart below is 6803 S. Tucson Way, Centennial, Colorado 80112-3924. Each Trustee serves for an indefinite term, or until his or her resignation, retirement, death or removal. | |
Brian F. Wruble, Chairman of the Board of Trustees (since 2007) and Trustee (since 2005) Year of Birth: 1943 | Governor of Community Foundation of the Florida Keys (non-profit) (since July 2012); Director of TCP Capital, Inc. (since November 2015); Chairman Emeritus of the Board of Trustees (since August 2011), Chairman of the Board of Trustees (August 2007-August 2011), Trustee of the Board of Trustees (since August 1991) of The Jackson Laboratory (non-profit); Member of Zurich Insurance Group’s Investment Management Advisory Council (insurance) (October 2004-February 2017); Treasurer (since 2007) and Trustee (since May 1992) of the Institute for Advanced Study (non-profit educational institute); Director of Special Value Opportunities Fund, LLC (registered investment company) (affiliate of the Sub- Adviser’s parent company) (September 2004-June 2015); General Partner of Odyssey Partners, L.P. (hedge fund) (September 1995-December 2007); Special Limited Partner of Odyssey Investment Partners, LLC (private equity investment) (January 1999-September 2004). Oversees 56 portfolios in the OppenheimerFunds complex. Mr. Wruble has served on the Boards of certain Oppenheimer funds since April 2001, during which time he has become familiar with the Fund’s (and other Oppenheimer funds’) financial, accounting, regulatory and investment matters and has contributed to the Boards’ deliberations. | |
Beth Ann Brown, Trustee (since 2016) Year of Birth: 1968 | Advisor, Board of Advisors of Caron Engineering Inc. (since December 2014); Independent Consultant (since September 2012); held the following positions at Columbia Management Investment Advisers LLC: Head of Intermediary Distribution (2008-2012), Managing Director, Strategic Relations (2005-2008), Managing Director, Head of National Accounts (2004-2005); Senior Vice President, National Account Manager (2002-2004), Senior Vice President, Key Account Manager (1999-2002) and Vice President, Key Account Manager (1996-1999) of Liberty Funds Distributor, Inc.; President and Director, of Acton Shapleigh Youth Conservation Corps (non-profit) (since 2012); and Vice President and Director of Grahamtastic Connection (non-profit) (since May 2013). Oversees 56 portfolios in the OppenheimerFunds complex. Ms. Brown has served on the Boards of certain Oppenheimer funds since January 2016, during which time she has become familiar with the Fund’s (and other Oppenheimer funds’) financial, accounting, regulatory and investment matters and has contributed to the Board’s deliberations. | |
Edmund P. Giambastiani, Jr., Trustee (since 2013) Year of Birth: 1948 | Advisory Board Member of the Maxwell School of Citizenship and Public Affairs of Syracuse University (since April 2012); Director of Mercury Defense Systems Inc. (information technology) (August 2011-February 2013); Trustee of the U.S. Naval Academy Foundation Athletic & Scholarship Program (since November 2010); Advisory Board Member of the Massachusetts Institute of Technology Lincoln Laboratory (federally-funded research development center) (since May 2010); Director of The Boeing Company (aerospace and defense) (since October 2009); Trustee of MITRE Corporation (federally-funded research development center) (since September 2008); Independent Director of QinetiQ Group Plc (defense technology and security) (February 2008-August 2011); Chairman of Monster Worldwide, Inc. (on-line career services) (March 2015-November 2016), Director of |
41 OPPENHEIMER PORTFOLIO SERIES CONSERVATIVE INVESTOR FUND
TRUSTEES AND OFFICERS Unaudited / Continued
Edmund P. Giambastiani, Jr., (Continued) | Monster Worldwide, Inc. (on-line career services) (February 2008-June 2011); Lead Director (June 2011-March 2015); Chairman of Alenia North America, Inc. (military and defense products) (January 2008-October 2009); Director of SRA International, Inc. (information technology and services) (January 2008-July 2011); President of Giambastiani Group LLC (national security and energy consulting) (since October 2007); United States Navy, career nuclear submarine officer (June 1970-October 2007), Vice Chairman of the Joint Chiefs of Staff (2005-October 2007), Supreme Allied Commander of NATO Commander Transformation (2003-2005), Commander, U.S. Joint Forces Command (2002-2005). Since his retirement from the U.S. Navy in October 2007, Admiral Giambastiani has also served on numerous U.S. Government advisory boards, investigations and task forces for the Secretaries of Defense, State and Interior and the Central Intelligence Agency. He recently completed serving as a federal commissioner on the Military Compensation and Retirement Modernization Commission. Oversees 56 portfolios in the OppenheimerFunds complex. Admiral Giambastiani has served on the Boards of certain Oppenheimer funds since February 2013, during which time he has become familiar with the Fund’s (and other Oppenheimer funds’) financial, accounting, regulatory and investment matters and has contributed to the Boards’ deliberations. | |
Elizabeth Krentzman, Trustee (since 2014) Year of Birth: 1959 | Member of the University of Florida National Board Foundation (since September 2017); Member of the Cartica Funds Board of Directors (private investment funds) (since January 2017); Member of the University of Florida College of Law Association Board of Trustees and Audit Committee Member (since April 2016); Member of University of Florida Law Advisory Board, Washington, DC Alumni Group (since 2015); Advisory Board Member of the Securities and Exchange Commission Historical Society (since 2007); held the following positions at Deloitte & Touche LLP: Principal and Chief Regulatory Advisor for Asset Management Services (2007 - 2014) and U.S. Mutual Fund Leader (2011 - 2014); General Counsel of the Investment Company Institute (trade association) (June 2004 - April 2007); held the following positions at Deloitte & Touche LLP: National Director of the Investment Management Regulatory Consulting Practice (1997 - 2004), Principal (2003 - 2004), Director (1998 - 2003) and Senior Manager (1997 - 1998); Assistant Director of the Division of Investment Management - Office of Disclosure and Investment Adviser Regulation of the U.S. Securities and Exchange Commission (1996 - 1997) and various positions with the Division of Investment Management – Office of Regulatory Policy (1991 - 1996) of the U.S. Securities and Exchange Commission; Associate at Ropes & Gray LLP (1987 – 1991). Oversees 56 portfolios in the OppenheimerFunds complex. Ms. Krentzman has served on the Boards of certain Oppenheimer funds since August 2014, during which time she has become familiar with the Fund’s (and other Oppenheimer funds’) financial, accounting, regulatory and investment matters and has contributed to the Boards’ deliberations. | |
Mary F. Miller, Trustee (since 2005) Year of Birth: 1942 | Trustee of International House (not-for-profit) (since June 2007); Trustee of the American Symphony Orchestra (not-for-profit) (October 1998-November 2011); and Senior Vice President and General Auditor of American Express Company (financial services company) (July 1998-February 2003). Oversees 56 portfolios in the OppenheimerFunds complex. Ms. Miller has served on the Boards of certain Oppenheimer funds since August 2004, during which time she has become familiar with the Fund’s (and other Oppenheimer funds’) financial, accounting, regulatory and investment matters and has contributed to the Boards’ deliberations. |
42 OPPENHEIMER PORTFOLIO SERIES CONSERVATIVE INVESTOR FUND
Joel W. Motley, Trustee (since 2005) Year of Birth: 1952 | Director of Office of Finance Federal Home Loan Bank (since September 2016); Director of Greenwall Foundation (since October 2013); Member of Board and Investment Committee of The Greenwall Foundation (since April 2013); Member of the Vestry of Trinity Wall Street (since April 2012); Director of Southern Africa Legal Services Foundation (since March 2012); Board Member of Pulitzer Center for Crisis Reporting (non-profit journalism) (since March 2011); Managing Director of Public Capital Advisors, LLC (privately-held financial advisor) (since January 2006); Managing Director of Carmona Motley, Inc. (privately-held financial advisor) (since January 2002); Director of Columbia Equity Financial Corp. (privately-held financial advisor) (2002-2007); Managing Director of Carmona Motley Hoffman Inc. (privately-held financial advisor) (January 1998-December 2001); Member of the Finance and Budget Committee of the Council on Foreign Relations, Member of the Investment Committee and Board of Human Rights Watch (since July 2000) and Member of the Investment Committee and Board of Historic Hudson Valley (since February 2010). Oversees 56 portfolios in the OppenheimerFunds complex. Mr. Motley has served on the Boards of certain Oppenheimer funds since October 2002, during which time he has become familiar with the Fund’s (and other Oppenheimer funds’) financial, accounting, regulatory and investment matters and has contributed to the Boards’ deliberations. | |
Joanne Pace, Trustee (since 2012) Year of Birth: 1958 | Advisory Board Director of Massey Quick and Company, LLC (since October 2014); Board Director of Horizon Blue Cross Blue Shield of New Jersey (since November 2012); Advisory Board Director of The Alberleen Group LLC (since March, 2012); Board Member (since January 2015), Board Member of 100 Women in Hedge Funds (non-profit) (since January 2015); Advisory Council Member of Morgan Stanley Children’s Hospital (non-profit) (since May, 2012); Senior Advisor of SECOR Asset Management, LP (2010-2011); Managing Director and Chief Operating Officer of Morgan Stanley Investment Management (2006-2010); Partner and Chief Operating Officer of FrontPoint Partners, LLC (hedge fund) (2005-2006); held the following positions at Credit Suisse: Managing Director (2003-2005); Global Head of Human Resources and member of Executive Board and Operating Committee (2004-2005), Global Head of Operations and Product Control (2003- 2004); held the following positions at Morgan Stanley: Managing Director (1997- 2003), Controller and Principal Accounting Officer (1999-2003); Chief Financial Officer (temporary assignment) for the Oversight Committee, Long Term Capital Management (1998-1999). Lead Independent Director and Chair of the Audit and Nominating Committee of The Global Chartist Fund, LLC of Oppenheimer Asset Management (2011-2012); Board Director of Managed Funds Association (2008- 2010); Board Director of Morgan Stanley Foundation (2007-2010) and Investment Committee Chair (2008-2010). Oversees 56 portfolios in the OppenheimerFunds complex. Ms. Pace has served on the Boards of certain Oppenheimer funds since November 2012, during which time she has become familiar with the Fund’s (and other Oppenheimer funds’) financial, accounting, regulatory and investment matters and has contributed to the Board’s deliberations. |
43 OPPENHEIMER PORTFOLIO SERIES CONSERVATIVE INVESTOR FUND
TRUSTEES AND OFFICERS Unaudited / Continued
Daniel Vandivort, Trustee (since 2014) Year of Birth: 1954 | Chairman and Lead Independent Director/Trustee (March 2010-September 2014), Chairman of the Audit Committee (March 2009-September 2014) and Director/ Trustee (December 2008-September 2014) of the Board of Directors/Trustees of Value Line Funds; Trustee, Board of Trustees of Huntington Disease Foundation of America (since January 2015 and June 2007-December 2013) and Treasurer, Chairman of the Audit and Finance Committee (since January 2016); Trustee, Board of Trustees, RIM Retirement Savings Plan (2005-2007); President and Chief Investment Officer, Robeco Investment Management, formerly known as Weiss Peck and Greer (January 2005-June 2007); Member, Management Committee of Robeco Investment Management (2001-2007); Chairman and Trustee of the Board of Trustees of Weiss, Peck and Greer Funds (2004-2005); Managing Director and Head of Fixed Income, Weiss, Peck and Greer (November 1994-January 2005); Managing Director and Head of Fixed Income, CS First Boston Investment Management (January 1992-November 1994); Director, Global Product Development, First Boston Asset Management (November 1989 to January 1992); Vice President, Fixed Income Sales, First Boston Corp. (May 1984-November 1989). Oversees 56 portfolios in the OppenheimerFunds complex. Mr. Vandivort has served on the Boards of certain Oppenheimer funds since 2014, during which time he has become familiar with the Fund’s (and other Oppenheimer funds’) financial, accounting, regulatory and investment matters and has contributed to the Boards’ deliberations. | |
INTERESTED TRUSTEE AND OFFICER | Mr. Steinmetz is an “Interested Trustee” because he is affiliated with the Manager and the Sub-Adviser by virtue of his positions as Chairman of the Sub-Adviser and officer and director of the Manager. Both as a Trustee and as an officer, Mr. Steinmetz serves for an indefinite term, or until his resignation, retirement, death or removal. Mr. Steinmetz’s address is 225 Liberty Street, New York, New York 10281-1008. | |
Arthur P. Steinmetz, Trustee (since 2015), President and Principal Executive Officer (since 2014) Year of Birth: 1958 | Chairman of the Sub-Adviser (since January 2015); CEO and Chairman of the Manager (since July 2014), President of the Manager (since May 2013), a Director of the Manager (since January 2013), Director of the Sub-Adviser (since July 2014), President, Management Director and CEO of Oppenheimer Acquisition Corp. (the Sub-Adviser’s parent holding company) (since July 2014), and President and Director of OFI SteelPath, Inc. (since January 2013). Chief Investment Officer of the OppenheimerFunds advisory entities from (January 2013-December 2013); Executive Vice President of the Manager (January 2013-May 2013); Chief Investment Officer of the Sub-Adviser (October 2010-December 2012); Chief Investment Officer, Fixed-Income, of the Sub-Adviser (April 2009-October 2010); Executive Vice President of the Sub-Adviser (October 2009-December 2012); Director of Fixed Income of the Sub-Adviser (January 2009-April 2009); and a Senior Vice President of the Sub-Adviser (March 1993-September 2009). An officer of 110 portfolios in the OppenheimerFunds complex. | |
OTHER OFFICERS OF THE FUND | The addresses of the Officers in the chart below are as follows: for Messrs. Hamilton, Lee, Mss. Lo Bessette, Foxson and Picciotto, 225 Liberty Street, New York, New York 10281-1008, for Mr. Petersen, 6803 S. Tucson Way, Centennial, Colorado 80112-3924. Each Officer serves for an indefinite term or until his or her resignation, retirement, death or removal. | |
Mark Hamilton1 , Vice President (since 2013) Year of Birth: 1965 | Chief Investment Officer, Asset Allocation and Senior Vice President of the Sub-Adviser (since April 2013). Mr. Hamilton served at AllianceBernstein L.P. (from 1994-2013) as an Investment Director of Dynamic Asset Allocation (from 2010-2013), Head of North American Blend Team (from 2009-2010), and Senior Portfolio Manager of Blend Strategies (from 2006-2010). A portfolio manager and officer of other portfolios in the OppenheimerFunds complex. |
44 OPPENHEIMER PORTFOLIO SERIES CONSERVATIVE INVESTOR FUND
Dokyoung Lee1 , Vice President (since 2014) Year of Birth: 1965 | Director of Research, Global Multi-Asset Group and a Senior Vice President of the Sub-Adviser (since October 2013). Mr. Lee served at Alliance Bernstein L.P. (1994- 2013): Director of Research for Strategic Asset Allocation (2011-2013), Director of Research for Blend Strategies (2008-2011), Head of Asia Pacific Blend Strategies (2005-2008), Head of Quantitative Research and Senior Portfolio Manager for Japan Value Equities (2001-2005), Portfolio Manager for Emerging Markets Value Equities (1997-2001), and Quantitative Analyst for US Value Equities (1994-1997). A portfolio manager and officer of other portfolios in the OppenheimerFunds complex. | |
Cynthia Lo Bessette, Secretary and Chief Legal Officer (since 2016) Year of Birth: 1969 | Executive Vice President, General Counsel and Secretary of the Manager (since February 2016); Senior Vice President and Deputy General Counsel of the Manager (March 2015-February 2016); Chief Legal Officer of the Sub-Adviser and the Distributor (since February 2016); Vice President, General Counsel and Secretary of Oppenheimer Acquisition Corp. (since February 2016); General Counsel of OFI SteelPath, Inc., OFI Advisors and Index Management Solutions, LLC (since February 2016); Chief Legal Officer of OFI Global Institutional, Inc., HarbourView Asset Management Corporation, OFI Global Trust Company, Oppenheimer Real Asset Management, Inc., OFI Private Investments Inc., Shareholder Services, Inc. and Trinity Investment Management Corporation (since February 2016); Corporate Counsel (February 2012-March 2015) and Deputy Chief Legal Officer (April 2013-March 2015) of Jennison Associates LLC; Assistant General Counsel (April 2008-September 2009) and Deputy General Counsel (October 2009-February 2012) of Lord Abbett & Co. LLC. An officer of 110 portfolios in the OppenheimerFunds complex. | |
Jennifer Foxson, Vice President and Chief Business Officer (since 2014) Year of Birth: 1969 | Senior Vice President of OppenheimerFunds Distributor, Inc. (since June 2014); Vice President of OppenheimerFunds Distributor, Inc. (April 2006-June 2014); Vice President of the Sub-Adviser (January 1998-March 2006); Assistant Vice President of the Sub-Adviser (October 1991-December 1998). An officer of 110 portfolios in the OppenheimerFunds complex. | |
Mary Ann Picciotto, Chief Compliance Officer and Chief Anti-Money Laundering Officer (since 2014) Year of Birth: 1973 | Senior Vice President and Chief Compliance Officer of the Manager (since March 2014); Chief Compliance Officer of the Sub-Adviser, OFI SteelPath, Inc., OFI Global Trust Company, OFI Global Institutional, Inc., Oppenheimer Real Asset Management, Inc., OFI Private Investments, Inc., Harborview Asset Management Corporation, Trinity Investment Management Corporation, and Shareholder Services, Inc. (since March 2014); Managing Director of Morgan Stanley Investment Management Inc. and certain of its various affiliated entities; Chief Compliance Officer of various Morgan Stanley Funds (May 2010-January 2014); Chief Compliance Officer of Morgan Stanley Investment Management Inc. (April 2007-January 2014). An officer of 110 portfolios in the OppenheimerFunds complex. | |
Brian S. Petersen, Treasurer and Principal Financial & Accounting Officer (since 2016) Year of Birth: 1970 | Senior Vice President of the Manager (since January 2017); Vice President of the Manager (January 2013-January 2017); Vice President of the Sub-Adviser (February 2007-December 2012); Assistant Vice President of the Sub-Adviser (August 2002- 2007). An officer of 110 portfolios in the OppenheimerFunds complex. |
1. Effective February 27, 2018, Mark Hamilton and Dokyoung Lee are no longer officers of the Fund.
The Fund’s Statement of Additional Information contains additional information about the Fund’s Trustees and Officers and is available without charge upon request by calling 1.800.CALL OPP (225.5677).
45 OPPENHEIMER PORTFOLIO SERIES CONSERVATIVE INVESTOR FUND
OPPENHEIMER PORTFOLIO SERIES CONSERVATIVE INVESTOR FUND
Manager | OFI Global Asset Management, Inc. | |
Sub-Adviser | OppenheimerFunds, Inc. | |
Distributor | OppenheimerFunds Distributor, Inc. | |
Transfer and Shareholder Servicing Agent | OFI Global Asset Management, Inc. | |
Sub-Transfer Agent | Shareholder Services, Inc. DBA OppenheimerFunds Services | |
Independent Registered Public Accounting Firm | KPMG LLP | |
Legal Counsel | Kramer Levin Naftalis & Frankel LLP |
© 2018 OppenheimerFunds, Inc. All rights reserved.
46 OPPENHEIMER PORTFOLIO SERIES CONSERVATIVE INVESTOR FUND
As an Oppenheimer fund shareholder, you are entitled to know how we protect your personal information and how we limit its disclosure.
Information Sources
We obtain non-public personal information about our shareholders from the following sources:
● Applications or other forms.
● When you create a user ID and password for online account access.
● When you enroll in eDocs Direct,SM our electronic document delivery service.
● Your transactions with us, our affiliates or others.
● Technologies on our website, including: “cookies” and web beacons, which are used to collect data on the pages you visit and the features you use.
If you visit oppenheimerfunds.com and do not log on to the secure account information areas, we do not obtain any personal information about you. When you do log on to a secure area, we do obtain your user ID and password to identify you. We also use this information to provide you with products and services you have requested, to inform you about products and services that you may be interested in and assist you in other ways.
We do not collect personal information through our website unless you willingly provide it to us, either directly by email or in those areas of the website that request information. In order to update your personal information (including your mailing address, email address and phone number) you must first log on and visit your user profile.
If you have set your browser to warn you before accepting cookies, you will receive the warning message with each cookie. You can refuse cookies by turning them off in your browser. However, doing so may limit your access to certain sections of our website.
We use cookies to help us improve and manage our website. For example, cookies help us recognize new versus repeat visitors to the site, track the pages visited, and enable some special features on the website. This data helps us provide better service for our website visitors.
Protection of Information
We do not disclose any non-public personal information (such as names on a customer list) about current or former customers to anyone, except as permitted by law.
Disclosure of Information
Copies of confirmations, account statements and other documents reporting activity in your fund accounts are made available to your financial advisor (as designated by you). We may also use details about you and your investments to help us, our financial service affiliates, or firms that jointly market their financial products and services with ours, to better serve your investment needs or suggest educational material that may be of interest to you. If this requires us to provide you with an opportunity to “opt in” or “opt out” of such information sharing with a firm not affiliated with us, you will receive notification on how to do so, before any such sharing takes place.
Right of Refusal
We will not disclose your personal information to unaffiliated third parties (except as permitted by law), unless we first offer you a reasonable opportunity to refuse or “opt out” of such disclosure.
47 OPPENHEIMER PORTFOLIO SERIES CONSERVATIVE INVESTOR FUND
PRIVACY NOTICE Continued |
Internet Security and Encryption
In general, the email services provided by our website are encrypted and provide a secure and private means of communication with us. To protect your own privacy, confidential and/ or personal information should only be communicated via email when you are advised that you are using a secure website.
As a security measure, we do not include personal or account information in non-secure emails, and we advise you not to send such information to us in non-secure emails. Instead, you may take advantage of the secure features of our website to encrypt your email correspondence. To do this, you will need to use a browser that supports Secure Sockets Layer (SSL) protocol.
● | All transactions conducted via our websites, including redemptions, exchanges and purchases, are secured by the highest encryption standards available. SSL is used to establish a secure connection between your PC and OppenheimerFunds’ server. It transmits information in an encrypted and scrambled format. |
● | Encryption is achieved through an electronic scrambling technology that uses a “key” to code and then decode the data. Encryption acts like the cable converter box you may have on your television set. It scrambles data with a secret code so that no one can make sense of it while it is being transmitted. When the data reaches its destination, the same software unscrambles the data. |
● | You can exit the secure area by closing your browser or, for added security, you can use the Log Out button before you close your browser. |
Other Security Measures
We maintain physical, electronic and procedural safeguards to protect your personal account information. Our employees and agents have access to that information only so that they may offer you products or provide services, for example, when responding to your account questions.
How You Can Help
You can also do your part to keep your account information private and to prevent unauthorized transactions. If you obtain a user ID and password for your account, safeguard that information. Strengthening your online credentials–your online security profile–typically your user name, password, and security questions and answers, can be one of your most important lines of defense on the Internet. For additional information on how you can help prevent identity theft, visit https://www. oppenheimerfunds.com/security.
Who We Are
This joint notice describes the privacy policies of the Oppenheimer funds, OppenheimerFunds, Inc., each of its investment adviser subsidiaries, OppenheimerFunds Distributor, Inc. and OFI Global Trust Co. It applies to all Oppenheimer fund accounts you presently have, or may open in the future, using your Social Security number—whether or not you remain a shareholder of our funds. This notice was last updated as of November 2017. In the event it is updated or changed, we will post an updated notice on our website at oppenheimerfunds.com. If you have any questions about this privacy policy, email us by clicking on the Contact Us section of our website at oppenheimerfunds.com, write to us at P.O. Box 5270, Denver, CO 80217-5270, or call us at 800 CALL OPP (225 5677).
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Oppenheimer Funds® The Right Way to Invest
| ||||
Visit Us oppenheimerfunds.com
Call Us 800 225 5677
Follow Us | Visit us at oppenheimerfunds.com for 24-hr access to account information and transactions or call us at 800.CALL OPP (800.225.5677) for 24-hr automated information and automated transactions. Representatives also available Mon–Fri 8am-8pm ET. | |||
Oppenheimer funds are distributed by OppenheimerFunds Distributor, Inc. 225 Liberty Street, New York, NY 10281-1008 © 2018 OppenheimerFunds Distributor, Inc. All rights reserved.
RA0540.001.0118 March 23, 2018 |
Annual Report 1/31/2018 Oppenheimer Portfolio Series Moderate Investor Fund
Class A Shares
AVERAGE ANNUAL TOTAL RETURNS AT 1/31/18
Class A Shares of the Fund | ||||||||
Without Sales Charge
| With Sales Charge
| Bloomberg Barclays U.S. Aggregate Bond Index | S&P 500 Index
| |||||
1-Year | 16.59% | 9.89% | 2.15% | 26.41% | ||||
| ||||||||
5-Year | 7.76 | 6.50 | 2.01 | 15.91 | ||||
| ||||||||
10-Year | 3.61 | 3.00 | 3.71 | 9.78 | ||||
|
Performance data quoted represents past performance, which does not guarantee future results. The 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 their original cost. Fund returns include changes in share price, reinvested distributions, and a 5.75% maximum applicable sales charge except where “without sales charge” is indicated. Current performance may be lower or higher than the performance quoted. Returns do not consider capital gains or income taxes on an individual’s investment. Returns for periods of less than one year are cumulative and not annualized. For performance data current to the most recent month-end, visit oppenheimerfunds.com or call 1.800.CALL OPP (225.5677). See Fund prospectuses and summary prospectuses for more information on share classes and sales charges.
2 OPPENHEIMER PORTFOLIO SERIES MODERATE INVESTOR FUND
MARKET OVERVIEW
Markets continued their general risk-on mode throughout 2017 and into January 2018. The U.S. economy outperformed expectations in the second half of 2017, with gross domestic product (GDP) growth exceeding the 2% trend growth rate witnessed so far during the expansion. With the economy’s continued expansion, the Federal Reserve (“Fed”) is nearing its dual mandate of full employment and price stability. While inflation has surprised to the downside for a number of months recently, the Fed believes this to be temporary and continues down its prescribed course of gradual tightening. The Fed began normalizing its balance sheet during the reporting period by discontinuing its interest reinvestment program and raised rates in December for the third time in 2017. Despite
these tightening measures, by many measures financial conditions eased in 2017.
As alluded to above, market performance was positive for most risk assets during the reporting period. Equities in the U.S. and globally performed well with the S&P 500 Index and the MSCI World Index returning 26.41% and 25.83%, respectively. Emerging market equities outperformed their developed market peers, as the MSCI Emerging Markets Index produced a return of 41.01%. U.S. Treasuries (as represented by the Bloomberg Barclays U.S. Treasury Index) generated a positive total return of 2.15%. Credit outperformed U.S. Treasuries for the year, with the Bloomberg Barclays U.S. Credit Index rising 4.84%.
COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN:
1. The Fund is invested in Class I shares of all underlying funds discussed in this Fund Performance Discussion.
3 OPPENHEIMER PORTFOLIO SERIES MODERATE INVESTOR FUND
FUND REVIEW
Against this market backdrop, the Fund’s Class A shares (without sales charge) produced a total return of 16.59%. The Fund employs a combination of sophisticated quantitative tools and qualitative analysis to seek to construct a well-diversified, globally allocated portfolio. The portfolio is allocated among OppenheimerFunds’ actively managed funds according to risk and strategically rebalanced based on market conditions. At period end, the Fund had its largest exposure to fixed-income funds. In an environment that favored equities over fixed-income, the Fund’s diversified allocation resulted in outperformance versus the Bloomberg Barclays U.S. Aggregate Bond Index’s return of 2.15% and underperformance versus the S&P 500 Index’s return of 26.41%.
Equity funds produced the strongest contribution to the Fund’s total return. All of the Fund’s domestic and foreign equity holdings provided positive returns, including its top two holdings: Oppenheimer Capital Appreciation Fund and Oppenheimer Value Fund. Oppenheimer Capital Appreciation Fund typically invests in large-cap U.S. growth stocks. In an environment where growth outperformed value, the underlying fund benefited. That said, value also produced positive returns this period and Oppenheimer Value Fund generated strong results. All of the underlying foreign equity funds produced positive results for the Fund this period as well, led by Oppenheimer International Growth Fund and Oppenheimer International
Equity Fund. European markets continued to outperform U.S. markets during this reporting period. This benefited both of these underlying funds, which have large allocations to Europe. Oppenheimer International Equity Fund also benefited from its exposure to Japan.
Although fixed-income underperformed equities this reporting period, the Fund did receive positive contributions from each of its fixed-income holdings, led by its exposure to Oppenheimer International Bond Fund, which typically invests in international fixed income securities in both developed and emerging market countries. This underlying fund invests in three major risk categories, or “levers” – interest rates (typically government bonds), currencies, and credit (corporate bonds and other fixed-income instruments containing credit risk). All three areas produced positive absolute results. Oppenheimer Total Return Bond Fund also performed well. This underlying fund benefited from an underweight to U.S. Treasuries relative to the Bloomberg Barclays U.S. Aggregate Bond Index, along with its exposure to both investment grade credit, high yield credit, and non-agency mortgage-backed securities (“MBS”).
In alternatives, most underlying holdings produced muted positive returns, led by Oppenheimer Global Multi Strategies Fund and Oppenheimer Fundamental Alternatives Fund. Oppenheimer Gold & Special Minerals Fund had a negative impact on performance.
4 OPPENHEIMER PORTFOLIO SERIES MODERATE INVESTOR FUND
In a risk-on market environment, the stocks of gold and special minerals companies underperformed.
FUND UPDATE
After the reporting period ended, Jeffrey Bennett, CFA, was named the Portfolio Manager of the Fund, effective February 27, 2018. Jeff joined OppenheimerFunds in 2016 from AllianceBernstein, where he was a Managing Director on the Alternative Investment Management team, focusing on asset allocation and portfolio construction as well as manager identification and due diligence. Previously, Jeff was director of research for Fischer & Co., a multi-family office, before which Jeff was the primary analyst at Summit Private Investments, a fund-of-hedge funds that focuses on long/ short and event-driven strategies. Jeff is a CFA® charter holder and holds a BS in chemical engineering from the University of California, Los Angeles, as well as an MBA in analytic finance and econometrics from the University of Chicago.
5 OPPENHEIMER PORTFOLIO SERIES MODERATE INVESTOR FUND
ASSET CLASS ALLOCATION
Domestic Equity Funds | 46.8% | |
Domestic Fixed Income Funds | 21.6 | |
Foreign Equity Funds | 17.0 | |
Alternative Funds | 8.5 | |
Foreign Fixed Income Funds | 6.0 | |
Money Market Funds | 0.1 |
Portfolio holdings and allocations are subject to change. Percentages are as of January 31, 2018, and are based on the total market value of investments.
TOP TEN HOLDINGS
Oppenheimer Value Fund, Cl. I | 20.1% | |
Oppenheimer Capital Appreciation Fund, Cl. I | 20.1 | |
Oppenheimer Total Return Bond Fund, Cl. I | 13.2 | |
Oppenheimer International Growth Fund, Cl. I | 6.3 | |
Oppenheimer International Bond Fund, Cl. I | 6.0 | |
Oppenheimer International Equity Fund, Cl. I | 5.8 | |
Oppenheimer Limited-Term Government Fund, Cl. I | 5.6 | |
Oppenheimer Master Inflation Protected Securities Fund, LLC | 3.6 | |
Oppenheimer Main Street Mid Cap Fund, Cl. I | 3.4 | |
Oppenheimer Main Street Small Cap Fund, Cl. I | 3.2 |
Portfolio holdings and allocations are subject to change. Percentages are as of January 31, 2018, and are based on net assets. For more current Top 10 Fund holdings, please visit oppenheimerfunds.com.
6 OPPENHEIMER PORTFOLIO SERIES MODERATE INVESTOR FUND
Share Class Performance
AVERAGE ANNUAL TOTAL RETURNS WITHOUT SALES CHARGE AS OF 1/31/18
Inception | ||||||||||||||||
Date | 1-Year | 5-Year | 10-Year | |||||||||||||
Class A (OAMIX) | 4/5/05 | 16.59 | % | 7.76 | % | 3.61% | ||||||||||
Class B (OBMIX) | 4/5/05 | 15.74 | 6.94 | 3.10 | ||||||||||||
Class C (OCMIX) | 4/5/05 | 15.69 | 6.95 | 2.82 | ||||||||||||
Class R (ONMIX) | 4/5/05 | 16.33 | 7.51 | 3.34 | ||||||||||||
Class Y (OYMIX) | 4/5/05 | 16.91 | 8.04 | 3.91 | ||||||||||||
AVERAGE ANNUAL TOTAL RETURNS WITH SALES CHARGE AS OF 1/31/18 |
| |||||||||||||||
Inception | ||||||||||||||||
Date | 1-Year | 5-Year | 10-Year | |||||||||||||
Class A (OAMIX) | 4/5/05 | 9.89 | % | 6.50 | % | 3.00% | ||||||||||
Class B (OBMIX) | 4/5/05 | 10.74 | 6.63 | 3.10 | ||||||||||||
Class C (OCMIX) | 4/5/05 | 14.69 | 6.95 | 2.82 | ||||||||||||
Class R (ONMIX) | 4/5/05 | 16.33 | 7.51 | 3.34 | ||||||||||||
Class Y (OYMIX) | 4/5/05 | 16.91 | 8.04 | 3.91 |
Performance data quoted represents past performance, which does not guarantee future results. The 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 their original cost. Current performance may be lower or higher than the performance quoted. Returns do not consider capital gains or income taxes on an individual’s investment. For performance data current to the most recent month-end, visit oppenheimerfunds.com or call 1.800. CALL OPP (225.5677). Fund returns include changes in share price, reinvested distributions, and the applicable sales charge: for Class A shares, the current maximum initial sales charge of 5.75%; for Class B shares, the contingent deferred sales charge of 5% (1-year) and 2% (5-year); and for Class C shares, the contingent deferred sales charge of 1% for the 1-year period. There is no sales charge for Class R and Class Y shares. Because Class B shares convert to Class A shares 72 months after purchase, the 10-year return for Class B shares uses Class A performance for the period after conversion. Returns for periods of less than one year are cumulative and not annualized. See Fund prospectuses and summary prospectuses for more information on share classes and sales charges.
The Fund’s performance is compared to the performance of the S&P 500 Index and the Bloomberg Barclays U.S. Aggregate Bond Index. The S&P 500 Index is a capitalization-weighted index of 500 stocks intended to be a representative sample of leading companies in leading industries within the U.S. economy. The Bloomberg Barclays U.S. Aggregate Bond Index is an index of U.S.-dollar-denominated, investment-grade U.S. corporate government and mortgage-backed securities. The indices unmanaged and cannot be purchased directly by investors. While index comparisons may be useful to provide a benchmark for the Fund’s performance, it must be noted that the Fund’s investments are not limited to the investments comprising the indices. Index performance includes reinvestment of income, but does not reflect transaction costs, fees, expenses or taxes. Index performance is shown for illustrative purposes only as a benchmark for the Fund’s performance, and does not predict or depict
7 OPPENHEIMER PORTFOLIO SERIES MODERATE INVESTOR FUND
performance of the Fund. The Fund’s performance reflects the effects of the Fund’s business and operating expenses.
The views in the Fund Performance Discussion represent the opinions of this Fund’s portfolio managers and are not intended as investment advice or to predict or depict the performance of any investment. These views are as of the close of business on January 31, 2018, and are subject to change based on subsequent developments. The Fund’s portfolio and strategies are subject to change.
Before investing in any of the Oppenheimer funds, investors should carefully consider a fund’s investment objectives, risks, charges and expenses. Fund prospectuses and summary prospectuses contain this and other information about the funds, and may be obtained by asking your financial advisor, visiting oppenheimerfunds.com, or calling 1.800.CALL OPP (225.5677). Read prospectuses and summary prospectuses carefully before investing.
Shares of Oppenheimer funds are not deposits or obligations of any bank, are not guaranteed by any bank, are not insured by the FDIC or any other agency, and involve investment risks, including the possible loss of the principal amount invested.
8 OPPENHEIMER PORTFOLIO SERIES MODERATE INVESTOR FUND
Fund Expenses. As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, which may include sales charges (loads) on purchase payments and/or contingent deferred sales charges on redemptions; and (2) ongoing costs, including management fees; distribution and service fees; and other Fund expenses. These examples are intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
The examples are based on an investment of $1,000.00 invested at the beginning of the period and held for the entire 6-month period ended January 31, 2018.
Actual Expenses. The first section of the table provides information about actual account values and actual expenses. You may use the information in this section for the class of shares you hold, together with the amount you invested, to estimate the expense that you paid over the period. Simply divide your account value by $1,000.00 (for example, an $8,600.00 account value divided by $1,000.00 = 8.60), then multiply the result by the number in the first section under the heading entitled “Expenses Paid During 6 Months Ended January 31, 2018” to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes. The second section of the table provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio for each class of shares, and an assumed rate of return of 5% per year for each class before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example for the class of shares you hold with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as front-end or contingent deferred sales charges (loads). Therefore, the “hypothetical” section of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
9 OPPENHEIMER PORTFOLIO SERIES MODERATE INVESTOR FUND
Beginning | Ending | Expenses | ||||||||||||||
Account | Account | Paid During | ||||||||||||||
Value | Value | 6 Months Ended | ||||||||||||||
Actual | August 1, 2017 | January 31, 2018 | January 31, 2018 | |||||||||||||
| ||||||||||||||||
Class A | $ | 1,000.00 | $ | 1,084.50 | $ | 2.10 | ||||||||||
| ||||||||||||||||
Class B | 1,000.00 | 1,080.70 | 6.15 | |||||||||||||
| ||||||||||||||||
Class C | 1,000.00 | 1,080.20 | 6.10 | |||||||||||||
| ||||||||||||||||
Class R | 1,000.00 | 1,083.50 | 3.42 | |||||||||||||
| ||||||||||||||||
Class Y | 1,000.00 | 1,086.00 | 0.84 | |||||||||||||
Hypothetical | ||||||||||||||||
(5% return before expenses) | ||||||||||||||||
| ||||||||||||||||
Class A | 1,000.00 | 1,023.19 | 2.04 | |||||||||||||
| ||||||||||||||||
Class B | 1,000.00 | 1,019.31 | 5.97 | |||||||||||||
| ||||||||||||||||
Class C | 1,000.00 | 1,019.36 | 5.92 | |||||||||||||
| ||||||||||||||||
Class R | 1,000.00 | 1,021.93 | 3.32 | |||||||||||||
| ||||||||||||||||
Class Y | 1,000.00 | 1,024.40 | 0.82 |
Expenses are equal to the Fund’s annualized expense ratio for that class, multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period). Those annualized expense ratios, excluding indirect expenses from affiliated funds, based on the 6-month period ended January 31, 2018 are as follows:
Class | Expense Ratios | |||||||
| ||||||||
Class A | 0.40 | % | ||||||
| ||||||||
Class B | 1.17 | |||||||
| ||||||||
Class C | 1.16 | |||||||
| ||||||||
Class R | 0.65 | |||||||
| ||||||||
Class Y | 0.16 |
The expense ratios reflect voluntary and/or contractual waivers and/or reimbursements of expenses by the Fund’s Manager and Transfer Agent. Some of these undertakings may be modified or terminated at any time, as indicated in the Fund’s prospectus. The “Financial Highlights” tables in the Fund’s financial statements, included in this report, also show the gross expense ratios, without such waivers or reimbursements and reduction to custodian expenses, if applicable.
10 OPPENHEIMER PORTFOLIO SERIES MODERATE INVESTOR FUND
STATEMENT OF INVESTMENTS January 31, 2018
Shares | Value | |||||||
| ||||||||
Investment Companies—99.9%1 | ||||||||
Alternative Funds—8.5% | ||||||||
Oppenheimer Fundamental Alternatives Fund, Cl. I | 587,747 | $ | 16,468,662 | |||||
| ||||||||
Oppenheimer Global Multi Strategies Fund, Cl. I | 1,401,676 | 32,252,575 | ||||||
| ||||||||
Oppenheimer Gold & Special Minerals Fund, Cl. I | 736,866 | 12,055,125 | ||||||
| ||||||||
Oppenheimer Master Inflation Protected Securities Fund, LLC | 5,179,639 | 62,503,700 | ||||||
| ||||||||
Oppenheimer Real Estate Fund, Cl. I | 976,792 | 23,560,211 | ||||||
|
| |||||||
146,840,273 | ||||||||
| ||||||||
Domestic Equity Funds—46.8% | ||||||||
Oppenheimer Capital Appreciation Fund, Cl. I | 5,106,160 | 345,840,184 | ||||||
| ||||||||
Oppenheimer Main Street Mid Cap Fund, Cl. I | 1,983,854 | 58,860,946 | ||||||
| ||||||||
Oppenheimer Main Street Small Cap Fund, Cl. I | 3,563,180 | 55,300,555 | ||||||
| ||||||||
Oppenheimer Value Fund, Cl. I | 8,723,891 | 347,559,806 | ||||||
|
| |||||||
807,561,491 | ||||||||
| ||||||||
Domestic Fixed Income Funds—21.6% | ||||||||
Oppenheimer Limited-Term Government Fund, Cl. I | 22,247,133 | 96,775,030 | ||||||
| ||||||||
Oppenheimer Master Loan Fund, LLC | 2,769,703 | 47,184,857 | ||||||
| ||||||||
Oppenheimer Total Return Bond Fund, Cl. I | 33,673,455 | 228,306,027 | ||||||
|
| |||||||
372,265,914 | ||||||||
| ||||||||
Foreign Equity Funds—16.9% | ||||||||
Oppenheimer Developing Markets Fund, Cl. I | 968,366 | 44,961,252 | ||||||
| ||||||||
Oppenheimer International Equity Fund, Cl. I | 4,275,433 | 100,130,638 | ||||||
| ||||||||
Oppenheimer International Growth Fund, Cl. I | 2,383,911 | 109,445,333 | ||||||
| ||||||||
Oppenheimer International Small-Mid Company Fund, Cl. I | 715,977 | 37,588,781 | ||||||
|
| |||||||
292,126,004 | ||||||||
| ||||||||
Foreign Fixed Income Fund—6.0% | ||||||||
Oppenheimer International Bond Fund, Cl. I | 17,012,232 | 103,774,615 | ||||||
| ||||||||
Money Market Fund—0.1% | ||||||||
Oppenheimer Institutional Government Money Market Fund, Cl. E, 1.26%2 | 1,606,449 | 1,606,449 | ||||||
| ||||||||
Total Investments, at Value (Cost $1,362,474,158) | 99.9% | 1,724,174,746 | ||||||
| ||||||||
Net Other Assets (Liabilities) | 0.1 | 2,165,738 | ||||||
|
| |||||||
Net Assets | 100.0% | $ | 1,726,340,484 | |||||
|
|
Footnotes to Statement of Investments
1. Is or was an affiliate, as defined in the Investment Company Act of 1940, as amended, at or during the reporting period, by virtue of the Fund owning at least 5% of the voting securities of the issuer or as a result of the Fund and the issuer having the same investment adviser. Transactions during the reporting period in which the issuer was an affiliate are as follows:
Shares | Gross | Gross | Shares | |||||||||||||
January 31, 2017 | Additions | Reductions | January 31, 2018 | |||||||||||||
| ||||||||||||||||
Oppenheimer Capital Appreciation Fund, Cl. I | 4,950,190 | 484,755 | 328,785 | 5,106,160 | ||||||||||||
Oppenheimer Developing Markets Fund, Cl. I | 1,034,389 | 23,554 | 89,577 | 968,366 | ||||||||||||
Oppenheimer Fundamental Alternatives Fund, Cl. I | 619,685 | 21,715 | 53,653 | 587,747 | ||||||||||||
Oppenheimer Global Multi Strategies Fund, Cl. I | 1,453,990 | 78,999 | 131,313 | 1,401,676 | ||||||||||||
Oppenheimer Gold & Special Minerals Fund, Cl. I | 770,653 | 38,676 | 72,463 | 736,866 |
11 OPPENHEIMER PORTFOLIO SERIES MODERATE INVESTOR FUND
STATEMENT OF INVESTMENTS Continued
Footnotes to Statement of Investments (Continued)
Shares | Gross | Gross | Shares | |||||||||||||
January 31, 2017 | Additions | Reductions | January 31, 2018 | |||||||||||||
Oppenheimer Institutional Government Money Market Fund, Cl. E | 2,401,483 | 183,693 | 978,727 | 1,606,449 | ||||||||||||
Oppenheimer International Bond Fund, Cl. I | 17,448,407 | 1,063,669 | 1,499,844 | 17,012,232 | ||||||||||||
Oppenheimer International Equity Fund, Cl. I | 4,557,278 | 82,774 | 364,619 | 4,275,433 | ||||||||||||
Oppenheimer International Growth Fund, Cl. I | 2,535,010 | 64,765 | 215,864 | 2,383,911 | ||||||||||||
Oppenheimer International Small-Mid Company Fund, Cl. I | 731,208 | 33,328 | 48,559 | 715,977 | ||||||||||||
Oppenheimer Limited-Term Government Fund, Cl. I | 23,449,648 | 906,869 | 2,109,384 | 22,247,133 | ||||||||||||
Oppenheimer Main Street Mid Cap Fund, Cl. I | 1,841,968 | 271,296 | 129,410 | 1,983,854 | ||||||||||||
Oppenheimer Main Street Small Cap Fund, Cl. I | 3,572,082 | 249,678 | 258,580 | 3,563,180 | ||||||||||||
Oppenheimer Master Inflation Protected Securities Fund, LLC | 5,576,142 | 91,285 | 487,788 | 5,179,639 | ||||||||||||
Oppenheimer Master Loan Fund, LLC | 2,962,152 | 44,199 | 236,648 | 2,769,703 | ||||||||||||
Oppenheimer Real Estate Fund, Cl. I | 979,943 | 64,834 | 67,985 | 976,792 | ||||||||||||
Oppenheimer Total Return Bond Fund, Cl. Ia | 34,989,328 | 1,618,823 | 2,934,696 | 33,673,455 | ||||||||||||
Oppenheimer Value Fund, Cl. I | 8,747,923 | 605,396 | 629,428 | 8,723,891 | ||||||||||||
Value | Income | Realized Gain (Loss) | Change in Gain (Loss) | |||||||||||||
Oppenheimer Capital Appreciation Fund, Cl. Ib | $ | 345,840,184 | $ | 1,178,315 | $ | 7,702,910 | $ | 47,950,738 | ||||||||
Oppenheimer Developing Markets Fund, Cl. I | 44,961,252 | 302,552 | 974,833 | 11,831,650 | ||||||||||||
Oppenheimer Fundamental Alternatives Fund, Cl. I | 16,468,662 | 320,515 | 28,007 | 359,812 | ||||||||||||
Oppenheimer Global Multi Strategies Fund, Cl. I | 32,252,575 | 1,239,921 | 7,935 | (105,889 | ) | |||||||||||
Oppenheimer Gold & Special Minerals Fund, Cl. I | 12,055,125 | 382,792 | (31,133 | ) | (491,756 | ) | ||||||||||
Oppenheimer Institutional Government Money Market Fund, Cl. E | 1,606,449 | 16,898 | — | — | ||||||||||||
Oppenheimer International Bond Fund, Cl. I | 103,774,615 | 1,473,221 | 667,312 | 10,077,647 | ||||||||||||
Oppenheimer International Equity Fund, Cl. I | 100,130,638 | 365,487 | 2,428,342 | 23,090,431 | ||||||||||||
Oppenheimer International Growth Fund, Cl. I | 109,445,333 | 1,092,459 | 3,756,320 | 21,651,138 | ||||||||||||
Oppenheimer International Small- Mid Company Fund, Cl. Ic | 37,588,781 | 419,030 | 1,227,786 | 8,944,795 |
12 OPPENHEIMER PORTFOLIO SERIES MODERATE INVESTOR FUND
Footnotes to Statement of Investments (Continued)
Value | Income | Realized Gain (Loss) | Change in Unrealized Gain (Loss) | |||||||||||||
Oppenheimer Limited-Term Government Fund, Cl. I | $ | 96,775,030 | $ | 2,235,678 | $ | (114,376 | ) | $ | (1,445,666 | ) | ||||||
Oppenheimer Main Street Mid Cap Fund, Cl. Id | 58,860,946 | 428,171 | 1,426,717 | (699,033 | ) | |||||||||||
Oppenheimer Main Street Small Cap Fund, Cl. Ie | 55,300,555 | 316,533 | 781,299 | 3,635,497 | ||||||||||||
Oppenheimer Master Inflation Protected Securities Fund, LLC | 62,503,700 | 1,615,093 | h | 66,403 | h | (762,020 | )h | |||||||||
Oppenheimer Master Loan Fund, LLC | 47,184,857 | 2,640,371 | i | (257,913 | )i | 109,744 | i | |||||||||
Oppenheimer Real Estate Fund, Cl. If | 23,560,211 | 444,715 | 943,389 | (1,769,369 | ) | |||||||||||
Oppenheimer Total Return Bond Fund, Cl. Ia | 228,306,027 | 7,278,225 | 1,777,869 | (1,010,582 | ) | |||||||||||
Oppenheimer Value Fund, Cl. Ig | 347,559,806 | 4,428,451 | 11,204,632 | 28,208,255 | ||||||||||||
|
|
| ||||||||||||||
Total | $ | 1,724,174,746 | $ | 26,178,427 | $ | 32,590,332 | $ | 149,575,392 | ||||||||
|
|
|
a. Prior to June 1, 2017, this fund was named Oppenheimer Core Bond Fund.
b. The fund distributed realized gains of $25,618,502.
c. The fund distributed realized gains of $758,158.
d. The fund distributed realized gains of $6,547,159.
e. The fund distributed realized gains of $2,727,431.
f. The fund distributed realized gains of $851,950.
g. The fund distributed realized gains of $13,888,921.
h. Represents the amount allocated to the Fund from Oppenheimer Master Inflation Protected Securities Fund, LLC.
i. Represents the amount allocated to the Fund from Oppenheimer Master Loan Fund, LLC.
2. Rate shown is the 7-day yield at period end.
See accompanying Notes to Financial Statements.
13 OPPENHEIMER PORTFOLIO SERIES MODERATE INVESTOR FUND
STATEMENT OF ASSETS AND LIABILITIES January 31, 2018
| ||||
Assets | ||||
Investments, at value—see accompanying statement of investments—affiliated companies (cost $1,362,474,158) | $ | 1,724,174,746 | ||
| ||||
Cash | 1,369,876 | |||
| ||||
Receivables and other assets: | ||||
Dividends | 1,197,580 | |||
Shares of beneficial interest sold | 1,187,363 | |||
Investments sold | 1,165,365 | |||
Other | 77,755 | |||
|
| |||
Total assets | 1,729,172,685 | |||
| ||||
Liabilities | ||||
Payables and other liabilities: | ||||
Investments purchased | 1,207,401 | |||
Shares of beneficial interest redeemed | 1,127,584 | |||
Distribution and service plan fees | 360,365 | |||
Trustees’ compensation | 92,984 | |||
Shareholder communications | 8,706 | |||
Other | 35,161 | |||
|
| |||
Total liabilities
|
| 2,832,201
|
| |
| ||||
Net Assets | $ | 1,726,340,484 | ||
|
| |||
| ||||
Composition of Net Assets | ||||
Par value of shares of beneficial interest | $ | 137,026 | ||
| ||||
Additional paid-in capital | 1,384,789,055 | |||
| ||||
Accumulated net investment income | 11,569,929 | |||
| ||||
Accumulated net realized loss on investments | (31,856,114) | |||
| ||||
Net unrealized appreciation on investments | 361,700,588 | |||
|
| |||
Net Assets | $ | 1,726,340,484 | ||
|
|
14 OPPENHEIMER PORTFOLIO SERIES MODERATE INVESTOR FUND
| ||||
Net Asset Value Per Share | ||||
Class A Shares: | ||||
Net asset value and redemption price per share (based on net assets of $1,169,055,434 and 92,318,179 shares of beneficial interest outstanding) | $ | 12.66 | ||
Maximum offering price per share (net asset value plus sales charge of 5.75% of offering price) | $ | 13.43 | ||
| ||||
Class B Shares: | ||||
Net asset value, redemption price (excludes applicable contingent deferred sales charge) and offering price per share (based on net assets of $6,365,374 and 500,395 shares of beneficial interest outstanding) | $ | 12.72 | ||
| ||||
Class C Shares: | ||||
Net asset value, redemption price (excludes applicable contingent deferred sales charge) and offering price per share (based on net assets of $409,417,776 and 32,981,620 shares of beneficial interest outstanding) | $ | 12.41 | ||
| ||||
Class R Shares: | ||||
Net asset value, redemption price (excludes applicable contingent deferred sales charge) and offering price per share (based on net assets of $123,884,398 and 9,842,388 shares of beneficial interest outstanding) | $ | 12.59 | ||
| ||||
Class Y Shares: | ||||
Net asset value, redemption price and offering price per share (based on net assets of $17,617,502 and 1,383,737 shares of beneficial interest outstanding) | $ | 12.73 |
See accompanying Notes to Financial Statements.
15 OPPENHEIMER PORTFOLIO SERIES MODERATE INVESTOR FUND
OPERATIONS For the Year Ended January 31, 2018
| ||||
Allocation of Income and Expenses from Master Funds1 | ||||
Net investment income allocated from Oppenheimer Master Inflation Protected Securities Fund, LLC: | ||||
Interest | $ | 1,611,017 | ||
Dividends | 4,076 | |||
Net expenses | (277,508) | |||
|
| |||
Net investment income allocated from Oppenheimer Master Inflation Protected Securities Fund, LLC
|
| 1,337,585
|
| |
| ||||
Net investment income allocated from Oppenheimer Master Loan Fund, LLC: | ||||
Interest | 2,572,335 | |||
Dividends | 68,036 | |||
Net expenses | (153,381) | |||
|
| |||
Net investment income allocated from Oppenheimer Master Loan Fund, LLC |
| 2,486,990
|
| |
|
| |||
Total allocation of net investment income from master funds | 3,824,575 | |||
| ||||
Investment Income | ||||
Dividends from affiliated companies | 21,922,963 | |||
| ||||
Interest | 16,958 | |||
|
| |||
Total investment income | 21,939,921 | |||
| ||||
Expenses | ||||
Distribution and service plan fees: | ||||
Class A | 2,646,396 | |||
Class B | 137,608 | |||
Class C | 3,892,996 | |||
Class R | 556,316 | |||
| ||||
Transfer and shareholder servicing agent fees: | ||||
Class A | 2,399,821 | |||
Class B | 30,197 | |||
Class C | 853,482 | |||
Class R | 246,324 | |||
Class Y | 30,303 | |||
| ||||
Shareholder communications: | ||||
Class A | 20,818 | |||
Class B | 1,143 | |||
Class C | 6,630 | |||
Class R | 1,587 | |||
Class Y | 154 | |||
| ||||
Trustees’ compensation | 22,156 | |||
| ||||
Custodian fees and expenses | 9,249 | |||
| ||||
Other | 72,010 | |||
|
| |||
Total expenses | 10,927,190 | |||
Less waivers and reimbursements of expenses | (1,387,722) | |||
|
| |||
Net expenses | 9,539,468 | |||
| ||||
Net Investment Income | 16,225,028 |
16 OPPENHEIMER PORTFOLIO SERIES MODERATE INVESTOR FUND
| ||||
Realized and Unrealized Gain (Loss) | ||||
Net realized gain on: | ||||
Investment transactions in affiliated companies | $ | 32,781,842 | ||
Distributions received from affiliate companies | 50,392,121 | |||
Increase from payment by affiliate | 9,256 | |||
| ||||
Net realized gain (loss) allocated from: | ||||
Oppenheimer Master Inflation Protected Securities Fund, LLC | 66,403 | |||
Oppenheimer Master Loan Fund, LLC | (257,913) | |||
|
| |||
Net realized gain | 82,991,709 | |||
| ||||
Net change in unrealized appreciation/depreciation on investment transactions | 150,227,668 | |||
| ||||
Net change in unrealized appreciation/depreciation allocated from: | ||||
Oppenheimer Master Inflation Protected Securities Fund, LLC | (762,020) | |||
Oppenheimer Master Loan Fund, LLC | 109,744 | |||
|
| |||
Net change in unrealized appreciation/depreciation | 149,575,392 | |||
| ||||
Net Increase in Net Assets Resulting from Operations | $ | 248,792,129 | ||
|
|
1. The Fund invests in certain affiliated mutual funds that expect to be treated as partnerships for tax purposes. See Note 4 of the accompanying Notes.
See accompanying Notes to Financial Statements.
17 OPPENHEIMER PORTFOLIO SERIES MODERATE INVESTOR FUND
STATEMENTS OF CHANGES IN NET ASSETS
Year Ended | Year Ended | |||||||
January 31, 2018 | January 31, 2017 | |||||||
| ||||||||
Operations | ||||||||
Net investment income | $ | 16,225,028 | $ | 21,749,327 | ||||
| ||||||||
Net realized gain | 82,991,709 | 34,986,302 | ||||||
| ||||||||
Net change in unrealized appreciation/depreciation | 149,575,392 | 99,274,912 | ||||||
|
| |||||||
Net increase in net assets resulting from operations | 248,792,129 | 156,010,541 | ||||||
| ||||||||
Dividends and/or Distributions to Shareholders | ||||||||
Dividends from net investment income: | ||||||||
Class A | (20,616,889) | (16,442,640) | ||||||
Class B | — | (98,635) | ||||||
Class C | (4,479,933) | (3,351,722) | ||||||
Class R | (1,913,694) | (1,411,075) | ||||||
Class Y | (348,945) | (157,749) | ||||||
|
| |||||||
(27,359,461) | (21,461,821) | |||||||
| ||||||||
Beneficial Interest Transactions | ||||||||
Net increase (decrease) in net assets resulting from beneficial interest transactions: | ||||||||
Class A | (30,489,140) | (3,929,948) | ||||||
Class B | (19,057,811) | (22,375,205) | ||||||
Class C | (27,410,543) | (20,465,196) | ||||||
Class R | 2,568,594 | 4,836,032 | ||||||
Class Y | 6,410,566 | (702,551) | ||||||
|
| |||||||
(67,978,334) | (42,636,868) | |||||||
| ||||||||
Net Assets | ||||||||
Total increase | 153,454,334 | 91,911,852 | ||||||
| ||||||||
Beginning of period | 1,572,886,150 | 1,480,974,298 | ||||||
|
| |||||||
End of period (including accumulated net investment income of $11,569,929 and $11,175,858, respectively) | $ | 1,726,340,484 | $ | 1,572,886,150 | ||||
|
|
See accompanying Notes to Financial Statements.
18 OPPENHEIMER PORTFOLIO SERIES MODERATE INVESTOR FUND
Class A | Year Ended January 31, 2018 | Year Ended January 31, 2017 | Year Ended January 29, 20161 | Year Ended January 30, 20151 | Year Ended January 31, 2014 | |||||||||||||||
| ||||||||||||||||||||
Per Share Operating Data | ||||||||||||||||||||
Net asset value, beginning of period | $11.06 | $10.13 | $10.66 | $10.23 | $9.42 | |||||||||||||||
| ||||||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||
Net investment income2 | 0.14 | 0.18 | 0.12 | 0.14 | 0.15 | |||||||||||||||
Net realized and unrealized gain (loss) | 1.69 | 0.93 | (0.57) | 0.54 | 0.80 | |||||||||||||||
|
| |||||||||||||||||||
Total from investment operations | 1.83 | 1.11 | (0.45) | 0.68 | 0.95 | |||||||||||||||
| ||||||||||||||||||||
Dividends and/or distributions to shareholders: | ||||||||||||||||||||
Dividends from net investment income | (0.23) | (0.18) | (0.08) | (0.25) | (0.14) | |||||||||||||||
| ||||||||||||||||||||
Net asset value, end of period | $12.66 | $11.06 | $10.13 | $10.66 | $10.23 | |||||||||||||||
|
| |||||||||||||||||||
| ||||||||||||||||||||
Total Return, at Net Asset Value3 | 16.59% | 10.95% | (4.24)% | 6.67% | 10.00% | |||||||||||||||
| ||||||||||||||||||||
Ratios/Supplemental Data | ||||||||||||||||||||
Net assets, end of period (in thousands) | $1,169,055 | $1,050,230 | $965,539 | $989,811 | $888,533 | |||||||||||||||
| ||||||||||||||||||||
Average net assets (in thousands) | $1,102,710 | $1,019,024 | $1,016,035 | $962,358 | $830,952 | |||||||||||||||
| ||||||||||||||||||||
Ratios to average net assets:4,5 | ||||||||||||||||||||
Net investment income | 1.20% | 1.63% | 1.15% | 1.34% | 1.56% | |||||||||||||||
Expenses excluding specific expenses listed below | 0.49% | 0.51% | 0.50% | 0.50% | 0.49% | |||||||||||||||
Interest and fees from borrowings | 0.00% | 0.00%6 | 0.00%6 | 0.00% | 0.00% | |||||||||||||||
|
| |||||||||||||||||||
Total expenses7 | 0.49% | 0.51% | 0.50% | 0.50% | 0.49% | |||||||||||||||
Expenses after payments, waivers and/or reimbursements and reduction to custodian expenses | 0.41% | 0.44% | 0.43% | 0.43% | 0.41% | |||||||||||||||
| ||||||||||||||||||||
Portfolio turnover rate | 6% | 7% | 5% | 14% | 6% |
1. Represents the last business day of the Fund’s reporting period.
2. Per share amounts calculated based on the average shares outstanding during the period.
3. Assumes an 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 less than one full year. Returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares.
4. Annualized for periods less than one full year.
5. Includes the Fund’s share of the allocated expenses and/or net investment income from the master funds.
6. Less than 0.005%.
7. Total expenses including indirect expenses from affiliated fund fees and expenses were as follows:
Year Ended January 31, 2018 | 1.07 | % | ||||
Year Ended January 31, 2017 | 1.10 | % | ||||
Year Ended January 29, 2016 | 1.07 | % | ||||
Year Ended January 30, 2015 | 1.08 | % | ||||
Year Ended January 31, 2014 | 1.11 | % |
See accompanying Notes to Financial Statements.
19 OPPENHEIMER PORTFOLIO SERIES MODERATE INVESTOR FUND
FINANCIAL HIGHLIGHTS Continued
Class B | Year Ended January 31, 2018 | Year Ended January 31, 2017 | Year Ended January 29, 20161 | Year Ended January 30, 20151 | Year Ended January 31, 2014 | |||||||||||||||
| ||||||||||||||||||||
Per Share Operating Data | ||||||||||||||||||||
Net asset value, beginning of period | $10.99 | $10.03 | $10.54 | $10.10 | $9.30 | |||||||||||||||
| ||||||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||
Net investment income (loss)2 | (0.00)3 | 0.08 | 0.08 | 0.04 | 0.06 | |||||||||||||||
Net realized and unrealized gain (loss) | 1.73 | 0.92 | (0.59) | 0.55 | 0.78 | |||||||||||||||
|
| |||||||||||||||||||
Total from investment operations | 1.73 | 1.00 | (0.51) | 0.59 | 0.84 | |||||||||||||||
| ||||||||||||||||||||
Dividends and/or distributions to shareholders: | ||||||||||||||||||||
Dividends from net investment income | 0.00 | (0.04) | 0.00 | (0.15) | (0.04) | |||||||||||||||
| ||||||||||||||||||||
Net asset value, end of period | $12.72 | $10.99 | $10.03 | $10.54 | $10.10 | |||||||||||||||
|
| |||||||||||||||||||
| ||||||||||||||||||||
Total Return, at Net Asset Value4 | 15.74% | 10.01% | (4.93)% | 5.94% | 9.07% | |||||||||||||||
| ||||||||||||||||||||
Ratios/Supplemental Data | ||||||||||||||||||||
Net assets, end of period (in thousands) | $6,365 | $23,489 | $42,689 | $70,936 | $95,620 | |||||||||||||||
| ||||||||||||||||||||
Average net assets (in thousands) | $13,736 | $32,210 | $56,585 | $84,071 | $102,915 | |||||||||||||||
| ||||||||||||||||||||
Ratios to average net assets:5,6 | ||||||||||||||||||||
Net investment income (loss) | (0.02)% | 0.78% | 0.77% | 0.37% | 0.62% | |||||||||||||||
Expenses excluding specific expenses listed below | 1.26% | 1.27% | 1.26% | 1.25% | 1.27% | |||||||||||||||
Interest and fees from borrowings | 0.00% | 0.00%7 | 0.00%7 | 0.00% | 0.00% | |||||||||||||||
|
| |||||||||||||||||||
Total expenses8 | 1.26% | 1.27% | 1.26% | 1.25% | 1.27% | |||||||||||||||
Expenses after payments, waivers and/or reimbursements and reduction to custodian expenses | 1.18% | 1.20% | 1.19% | 1.18% | 1.19% | |||||||||||||||
| ||||||||||||||||||||
Portfolio turnover rate | 6% | 7% | 5% | 14% | 6% |
1. Represents the last business day of the Fund’s reporting period.
2. Per share amounts calculated based on the average shares outstanding during the period.
3. Less than $0.005 per share.
4. Assumes an 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 less than one full year. Returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares.
5. Annualized for periods less than one full year.
6. Includes the Fund’s share of the allocated expenses and/or net investment income from the master funds.
7. Less than 0.005%.
8. Total expenses including indirect expenses from affiliated fund fees and expenses were as follows:
Year Ended January 31, 2018 | 1.84 | % | ||||
Year Ended January 31, 2017 | 1.86 | % | ||||
Year Ended January 29, 2016 | 1.83 | % | ||||
Year Ended January 30, 2015 | 1.83 | % | ||||
Year Ended January 31, 2014 | 1.89 | % |
See accompanying Notes to Financial Statements.
20 OPPENHEIMER PORTFOLIO SERIES MODERATE INVESTOR FUND
Class C | Year Ended January 31, 2018 | Year Ended January 31, 2017 | Year Ended January 29, 20161 | Year Ended January 30, 20151 | Year Ended January 31, 2014 | |||||||||||||||
| ||||||||||||||||||||
Per Share Operating Data | ||||||||||||||||||||
Net asset value, beginning of period | $10.85 | $9.94 | $10.46 | $10.04 | $9.26 | |||||||||||||||
| ||||||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||
Net investment income2 | 0.05 | 0.09 | 0.04 | 0.06 | 0.08 | |||||||||||||||
Net realized and unrealized gain (loss) | 1.65 | 0.91 | (0.56) | 0.54 | 0.76 | |||||||||||||||
|
| |||||||||||||||||||
Total from investment operations | 1.70 | 1.00 | (0.52) | 0.60 | 0.84 | |||||||||||||||
| ||||||||||||||||||||
Dividends and/or distributions to shareholders: | ||||||||||||||||||||
Dividends from net investment income | (0.14) | (0.09) | (0.00)3 | (0.18) | (0.06) | |||||||||||||||
| ||||||||||||||||||||
Net asset value, end of period | $12.41 | $10.85 | $9.94 | $10.46 | $10.04 | |||||||||||||||
|
| |||||||||||||||||||
| ||||||||||||||||||||
Total Return, at Net Asset Value4 | 15.69% | 10.12% | (4.96)% | 5.93% | 9.11% | |||||||||||||||
| ||||||||||||||||||||
Ratios/Supplemental Data | ||||||||||||||||||||
Net assets, end of period (in thousands) | $409,418 | $383,848 | $370,818 | $388,409 | $359,725 | |||||||||||||||
| ||||||||||||||||||||
Average net assets (in thousands) | $392,056 | $384,610 | $393,916 | $383,852 | $336,609 | |||||||||||||||
| ||||||||||||||||||||
Ratios to average net assets:5,6 | ||||||||||||||||||||
Net investment income | 0.43% | 0.87% | 0.42% | 0.57% | 0.79% | |||||||||||||||
Expenses excluding specific expenses listed below | 1.25% | 1.26% | 1.25% | 1.25% | 1.25% | |||||||||||||||
Interest and fees from borrowings | 0.00% | 0.00%7 | 0.00%7 | 0.00% | 0.00% | |||||||||||||||
|
| |||||||||||||||||||
Total expenses8 | 1.25% | 1.26% | 1.25% | 1.25% | 1.25% | |||||||||||||||
Expenses after payments, waivers and/or reimbursements and reduction to custodian expenses | 1.16% | 1.19% | 1.18% | 1.18% | 1.17% | |||||||||||||||
| ||||||||||||||||||||
Portfolio turnover rate | 6% | 7% | 5% | 14% | 6% |
1. Represents the last business day of the Fund’s reporting period.
2. Per share amounts calculated based on the average shares outstanding during the period.
3. Less than $0.005 per share.
4. Assumes an 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 less than one full year. Returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares.
5. Annualized for periods less than one full year.
6. Includes the Fund’s share of the allocated expenses and/or net investment income from the master funds.
7. Less than 0.005%.
8. Total expenses including indirect expenses from affiliated fund fees and expenses were as follows:
Year Ended January 31, 2018 | 1.83 | % | ||||
Year Ended January 31, 2017 | 1.85 | % | ||||
Year Ended January 29, 2016 | 1.82 | % | ||||
Year Ended January 30, 2015 | 1.83 | % | ||||
Year Ended January 31, 2014 | 1.87 | % |
See accompanying Notes to Financial Statements.
21 OPPENHEIMER PORTFOLIO SERIES MODERATE INVESTOR FUND
FINANCIAL HIGHLIGHTS Continued
Class R | Year Ended January 31, 2018 | Year Ended January 31, 2017 | Year Ended January 29, 20161 | Year Ended January 30, 20151 | Year Ended January 31, 2014 | |||||||||||||||
| ||||||||||||||||||||
Per Share Operating Data | ||||||||||||||||||||
Net asset value, beginning of period | $11.00 | $10.08 | $10.60 | $10.17 | $9.36 | |||||||||||||||
| ||||||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||
Net investment income2 | 0.11 | 0.15 | 0.10 | 0.11 | 0.12 | |||||||||||||||
Net realized and unrealized gain (loss) | 1.68 | 0.92 | (0.57) | 0.54 | 0.80 | |||||||||||||||
|
| |||||||||||||||||||
Total from investment operations | 1.79 | 1.07 | (0.47) | 0.65 | 0.92 | |||||||||||||||
| ||||||||||||||||||||
Dividends and/or distributions to shareholders: | ||||||||||||||||||||
Dividends from net investment income | (0.20) | (0.15) | (0.05) | (0.22) | (0.11) | |||||||||||||||
| ||||||||||||||||||||
Net asset value, end of period | $12.59 | $11.00 | $10.08 | $10.60 | $10.17 | |||||||||||||||
|
| |||||||||||||||||||
| ||||||||||||||||||||
Total Return, at Net Asset Value3 | 16.33% | 10.64% | (4.45)% | 6.40% | 9.76% | |||||||||||||||
| ||||||||||||||||||||
Ratios/Supplemental Data | ||||||||||||||||||||
Net assets, end of period (in thousands) | $123,884 | $105,976 | $92,429 | $106,271 | $110,232 | |||||||||||||||
| ||||||||||||||||||||
Average net assets (in thousands) | $113,239 | $100,425 | $103,861 | $109,830 | $111,927 | |||||||||||||||
| ||||||||||||||||||||
Ratios to average net assets:4,5 | ||||||||||||||||||||
Net investment income | 0.96% | 1.38% | 0.97% | 1.02% | 1.21% | |||||||||||||||
Expenses excluding specific expenses listed below | 0.74% | 0.76% | 0.76% | 0.75% | 0.74% | |||||||||||||||
Interest and fees from borrowings | 0.00% | 0.00%6 | 0.00%6 | 0.00% | 0.00% | |||||||||||||||
|
| |||||||||||||||||||
Total expenses7 | 0.74% | 0.76% | 0.76% | 0.75% | 0.74% | |||||||||||||||
Expenses after payments, waivers and/or reimbursements and reduction to custodian expenses | 0.66% | 0.69% | 0.69% | 0.68% | 0.66% | |||||||||||||||
| ||||||||||||||||||||
Portfolio turnover rate | 6% | 7% | 5% | 14% | 6% |
1. Represents the last business day of the Fund’s reporting period.
2. Per share amounts calculated based on the average shares outstanding during the period.
3. Assumes an 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 less than one full year. Returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares.
4. Annualized for periods less than one full year.
5. Includes the Fund’s share of the allocated expenses and/or net investment income from the master funds.
6. Less than 0.005%.
7. Total expenses including indirect expenses from affiliated fund fees and expenses were as follows:
Year Ended January 31, 2018 | 1.32 | % | ||||
Year Ended January 31, 2017 | 1.35 | % | ||||
Year Ended January 29, 2016 | 1.33 | % | ||||
Year Ended January 30, 2015 | 1.33 | % | ||||
Year Ended January 31, 2014 | 1.36 | % |
See accompanying Notes to Financial Statements.
22 OPPENHEIMER PORTFOLIO SERIES MODERATE INVESTOR FUND
Class Y | Year Ended January 31, 2018 | Year Ended January 31, 2017 | Year Ended January 29, 20161 | Year Ended January 30, 20151 | Year Ended January 31, 2014 | |||||||||||||||
| ||||||||||||||||||||
Per Share Operating Data | ||||||||||||||||||||
Net asset value, beginning of period | $11.12 | $10.19 | $10.72 | $10.28 | $9.47 | |||||||||||||||
| ||||||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||
Net investment income2 | 0.20 | 0.21 | 0.17 | 0.15 | 0.19 | |||||||||||||||
Net realized and unrealized gain (loss) | 1.67 | 0.92 | (0.59) | 0.57 | 0.79 | |||||||||||||||
|
| |||||||||||||||||||
Total from investment operations | 1.87 | 1.13 | (0.42) | 0.72 | 0.98 | |||||||||||||||
| ||||||||||||||||||||
Dividends and/or distributions to shareholders: | ||||||||||||||||||||
Dividends from net investment income | (0.26) | (0.20) | (0.11) | (0.28) | (0.17) | |||||||||||||||
| ||||||||||||||||||||
Net asset value, end of period | $12.73 | $11.12 | $10.19 | $10.72 | $10.28 | |||||||||||||||
|
| |||||||||||||||||||
| ||||||||||||||||||||
Total Return, at Net Asset Value3 | 16.91% | 11.16% | (3.97)% | 6.95% | 10.29% | |||||||||||||||
| ||||||||||||||||||||
Ratios/Supplemental Data | ||||||||||||||||||||
Net assets, end of period (in thousands) | $17,618 | $9,343 | $9,499 | $9,678 | $10,023 | |||||||||||||||
| ||||||||||||||||||||
Average net assets (in thousands) | $13,977 | $7,850 | $9,416 | $10,303 | $9,064 | |||||||||||||||
| ||||||||||||||||||||
Ratios to average net assets:4,5 | ||||||||||||||||||||
Net investment income | 1.63% | 1.94% | 1.61% | 1.41% | 1.93% | |||||||||||||||
Expenses excluding specific expenses listed below | 0.25% | 0.26% | 0.26% | 0.25% | 0.15% | |||||||||||||||
Interest and fees from borrowings | 0.00% | 0.00%6 | 0.00%6 | 0.00% | 0.00% | |||||||||||||||
|
| |||||||||||||||||||
Total expenses7 | 0.25% | 0.26% | 0.26% | 0.25% | 0.15% | |||||||||||||||
Expenses after payments, waivers and/or reimbursements and reduction to custodian expenses | 0.17% | 0.19% | 0.19% | 0.19% | 0.07% | |||||||||||||||
| ||||||||||||||||||||
Portfolio turnover rate | 6% | 7% | 5% | 14% | 6% |
1. Represents the last business day of the Fund’s reporting period.
2. Per share amounts calculated based on the average shares outstanding during the period.
3. Assumes an 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 less than one full year. Returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares.
4. Annualized for periods less than one full year.
5. Includes the Fund’s share of the allocated expenses and/or net investment income from the master funds.
6. Less than 0.005%.
7. Total expenses including indirect expenses from affiliated fund fees and expenses were as follows:
Year Ended January 31, 2018 | 0.83 | % | ||||
Year Ended January 31, 2017 | 0.85 | % | ||||
Year Ended January 29, 2016 | 0.83 | % | ||||
Year Ended January 30, 2015 | 0.83 | % | ||||
Year Ended January 31, 2014 | 0.77 | % |
See accompanying Notes to Financial Statements.
23 OPPENHEIMER PORTFOLIO SERIES MODERATE INVESTOR FUND
NOTES TO FINANCIAL STATEMENTS January 31, 2018
1. Organization
Oppenheimer Portfolio Series (the “Trust”) is registered under the Investment Company Act of 1940 (“1940 Act”), as amended, as a diversified open-end management investment company. Moderate Investor Fund (the “Fund”) is a series of the Trust whose investment objective is to seek total return. The Fund normally invests in a diversified portfolio of Oppenheimer mutual funds (individually, an “Underlying Fund” and collectively, the “Underlying Funds”). The Fund’s investment adviser is OFI Global Asset Management, Inc. (“OFI Global” or the “Manager”), a wholly-owned subsidiary of OppenheimerFunds, Inc. (“OFI” or the “Sub-Adviser”). The Manager has entered into a sub-advisory agreement with OFI.
The Fund offers Class A, Class C, Class R and Class Y shares, and previously offered Class B shares for new purchase through June 29, 2012. Subsequent to that date, no new purchases of Class B shares are permitted, however reinvestment of dividend and/or capital gain distributions and exchanges of Class B shares into and from other Oppenheimer funds are allowed. Class A shares are sold at their offering price, which is normally net asset value plus a front-end sales charge. Class C shares are sold, and Class B shares were sold, without a front-end sales charge but may be subject to a contingent deferred sales charge (“CDSC”). Class R shares are sold only through retirement plans. Retirement plans that offer Class R shares may impose charges on those accounts. Class Y shares are sold to certain institutional investors or intermediaries without either a front-end sales charge or a CDSC, however, the intermediaries may impose charges on their accountholders who beneficially own Class Y shares. All classes of shares have identical rights and voting privileges with respect to the Fund in general and exclusive voting rights on matters that affect that class alone. Earnings, net assets and net asset value per share may differ due to each class having its own expenses, such as transfer and shareholder servicing agent fees and shareholder communications, directly attributable to that class. Class A, B, C and R shares have separate distribution and/or service plans under which they pay fees. Class Y shares do not pay such fees. Class B shares will automatically convert to Class A shares 72 months after the date of purchase.
The following is a summary of significant accounting policies followed in the Fund’s preparation of financial statements in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”).
2. Significant Accounting Policies
Security Valuation. All investments in securities are recorded at their estimated fair value, as described in Note 3.
Allocation of Income, Expenses, Gains and Losses. Income, expenses (other than those attributable to a specific class), gains and losses are allocated on a daily basis 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.
Dividends and Distributions to Shareholders. Dividends and distributions to
24 OPPENHEIMER PORTFOLIO SERIES MODERATE INVESTOR FUND
2. Significant Accounting Policies (Continued)
shareholders, which are determined in accordance with income tax regulations and may differ from U.S. GAAP, are recorded on the ex-dividend date. Income and capital gain distributions, if any, are declared and paid annually or at other times as determined necessary by the Manager.
Investment Income. Dividend distributions received from the Underlying Funds are recorded on the ex-dividend date. Upon receipt of notification from an Underlying Fund, and subsequent to the ex-dividend date, some of the dividend income originally recorded by the Fund may be reclassified as a tax return of capital by reducing the cost basis of the Underlying Fund and/or increasing the realized gain on sales of investments in the Underlying Fund.
Custodian Fees. “Custodian fees and expenses” in the Statement of Operations may include interest expense incurred by the Fund on any cash overdrafts of its custodian account during the period. Such cash overdrafts may result from the effects of failed trades in portfolio securities and from cash outflows resulting from unanticipated shareholder redemption activity. The Fund pays interest to its custodian on such cash overdraft at a rate equal to the Prime Rate plus 0.35%. The “Reduction to custodian expenses” line item, if applicable, represents earnings on cash balances maintained by the Fund during the period. Such interest expense and other custodian fees may be paid with these earnings.
Security Transactions. Security transactions are recorded on the trade date. Realized gains and losses on securities sold are determined on the basis of identified cost.
Indemnifications. The Fund’s organizational documents provide current and former Trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund’s maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.
Federal Taxes. The Fund intends to comply with provisions of the Internal Revenue Code applicable to regulated investment companies and to distribute substantially all of its investment company taxable income, including any net realized gain on investments not offset by capital loss carryforwards, if any, to shareholders. Therefore, no federal income or excise tax provision is required. The Fund files income tax returns in U.S. federal and applicable state jurisdictions. The statute of limitations on the Fund’s tax return filings generally remains open for the three preceding fiscal reporting period ends. The Fund has analyzed its tax positions for the fiscal year ended January 31, 2018, including open tax years, and does not believe there are any uncertain tax positions requiring recognition in the Fund’s financial statements.
The tax components of capital shown in the following table represent distribution requirements the Fund must satisfy under the income tax regulations, losses the Fund may be
25 OPPENHEIMER PORTFOLIO SERIES MODERATE INVESTOR FUND
NOTES TO FINANCIAL STATEMENTS Continued
2. Significant Accounting Policies (Continued)
able to offset against income and gains realized in future years and unrealized appreciation or depreciation of securities and other investments for federal income tax purposes.
Undistributed Net Investment Income | Undistributed Long-Term Gain | Accumulated Loss Carryforward1,2 | Net Unrealized Appreciation Based on cost of Securities and Other Investments for Federal Income Tax Purposes | |||||||||
| ||||||||||||
$10,651,438 | $16,613,793 | $— | $314,239,748 |
1. During the reporting period, the Fund utilized $51,978,404 of capital loss carryforward to offset capital gains realized in that fiscal year.
2. During the previous reporting period, the Fund utilized $22,628,117 of capital loss carryforward to offset capital gains realized in that fiscal year.
Net investment income (loss) and net realized gain (loss) may differ for financial statement and tax purposes. The character of dividends and distributions made during the fiscal year from net investment income or net realized gains are determined in accordance with federal income tax requirements, which may differ from the character of net investment income or net realized gains presented in those financial statements in accordance with U.S. GAAP. Also, due to timing of dividends and distributions, the fiscal year in which amounts are distributed may differ from the fiscal year in which the income or net realized gain was recorded by the Fund.
Accordingly, the following amounts have been reclassified for the reporting period. Net assets of the Fund were unaffected by the reclassifications.
Increase to Paid-in Capital | Increase to Accumulated Net Investment Income | Increase on Investments3 | ||||||
| ||||||||
$1,579,881 | $11,528,504 | $13,108,385 |
3. $1,570,625, all of which was long-term capital gain, was distributed in connection with Fund share redemptions.
The tax character of distributions paid during the reporting periods:
Year Ended January 31, 2018 | Year Ended January 31, 2017 | |||||||
| ||||||||
Distributions paid from: | ||||||||
Ordinary income | $ | 27,359,461 | $ | 21,461,821 |
The aggregate cost of securities and other investments and the composition of unrealized appreciation and depreciation of securities and other investments for federal income tax purposes at period end are noted in the following table. The primary difference between book and tax appreciation or depreciation of securities and other investments, if applicable, is attributable to the tax deferral of losses or tax realization of financial statement unrealized gain or loss.
26 OPPENHEIMER PORTFOLIO SERIES MODERATE INVESTOR FUND
2. Significant Accounting Policies (Continued)
Federal tax cost of securities | $ | 1,409,934,998 | ||
|
| |||
Gross unrealized appreciation | $ | 340,358,090 | ||
Gross unrealized depreciation | (26,118,342) | |||
|
| |||
Net unrealized appreciation | $ | 314,239,748 | ||
|
|
Use of Estimates. The preparation of financial statements in conformity with U.S. GAAP 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 increases and decreases in net assets from operations during the reporting period. Actual results could differ from those estimates.
3. Securities Valuation
The Fund calculates the net asset value of its shares based upon the net asset value of the applicable investment companies. For each investment company, the net asset value per share for a class of shares is determined as of 4:00 P.M. eastern time, on each day the New York Stock Exchange (the “Exchange”) is open for trading, except in the case of a scheduled early closing of the Exchange, in which case the Fund will calculate net asset value of the shares as of the scheduled early closing time of the Exchange. This is calculated by dividing the value of the investment company’s net assets attributable to that class by the number of outstanding shares of that class on that day.
The Fund’s Board has adopted procedures for the valuation of the Fund’s securities and has delegated the day-to-day responsibility for valuation determinations under those procedures to the Manager. The Manager has established a Valuation Committee which is responsible for determining a fair valuation for any security for which market quotations are not readily available. The Valuation Committee’s fair valuation determinations are subject to review, approval and ratification by the Fund’s Board at least quarterly or more frequently, if necessary.
Valuations Methods and Inputs
To determine their net asset values, the Underlying Funds’ assets are valued primarily on the basis of current market quotations as generally supplied by third party portfolio pricing services or by dealers. Such market quotations are typically based on unadjusted quoted prices in active markets for identical securities or other observable market inputs.
Securities for which market quotations are not readily available, or when a significant event has occurred that would materially affect the value of the security, are fair valued either (i) by a standardized fair valuation methodology applicable to the security type or the significant event as previously approved by the Valuation Committee and the Fund’s Board or (ii) as determined in good faith by the Manager’s Valuation Committee. The Valuation Committee considers all relevant facts that are reasonably available, through either public information or information available to the Manager, when determining the fair value of a security. The methodologies used for valuing securities are not necessarily an indication of the risks
27 OPPENHEIMER PORTFOLIO SERIES MODERATE INVESTOR FUND
NOTES TO FINANCIAL STATEMENTS Continued
3. Securities Valuation (Continued)
associated with investing in those Underlying Funds.
Classifications
Each investment asset or liability of the Fund is assigned a level at measurement date based on the significance and source of the inputs to its valuation. Various data inputs may be used in determining the value of each of the Fund’s investments as of the reporting period end.
These data inputs are categorized in the following hierarchy under applicable financial accounting standards:
1) Level 1-unadjusted quoted prices in active markets for identical assets or liabilities (including securities actively traded on a securities exchange)
2) Level 2-inputs other than unadjusted quoted prices that are observable for the asset or liability (such as unadjusted quoted prices for similar assets and market corroborated inputs such as interest rates, prepayment speeds, credit risks, etc.)
3) Level 3-significant unobservable inputs (including the Manager’s own judgments about assumptions that market participants would use in pricing the asset or liability).
The inputs used for valuing securities are not necessarily an indication of the risks associated with investing in those securities.
The Fund classifies each of its investments in investment companies which are publicly offered as Level 1. Investment companies that are not publicly offered, if any, are measured using net asset value and are classified as Level 2 in the fair value hierarchy.
The table below categorizes amounts that are included in the Fund’s Statement of Assets and Liabilities at period end based on valuation input level:
Level 1— Unadjusted Quoted Prices | Level 2— Other Significant Observable Inputs | Level 3— Significant Unobservable Inputs | Value | |||||||||||||
| ||||||||||||||||
Assets Table | ||||||||||||||||
Investments, at Value: | ||||||||||||||||
Investment Companies | $ | 1,614,486,189 | $ | 109,688,557 | $ | — | $ | 1,724,174,746 | ||||||||
|
| |||||||||||||||
Total Assets | $ | 1,614,486,189 | $ | 109,688,557 | $ | — | $ | 1,724,174,746 | ||||||||
|
|
Forward currency exchange contracts and futures contracts, if any, are reported at their unrealized appreciation/depreciation at measurement date, which represents the change in the contract’s value from trade date. All additional assets and liabilities included in the above table are reported at their market value at measurement date.
4. Investments and Risks
Risks of Investing in the Underlying Funds. The Fund invests in other mutual funds advised by the Manager. The Underlying Funds are registered open-end management investment companies under the 1940 Act, as amended. The Manager is the investment adviser of, and the Sub-Adviser provides investment and related advisory services to, the Underlying Funds. The Fund’s Investments in Underlying Funds are included in the Statement
28 OPPENHEIMER PORTFOLIO SERIES MODERATE INVESTOR FUND
4. Investments and Risks (Continued)
of Investments. Shares of Underlying Funds are valued at their net asset value per share. As a shareholder, the Fund is subject to its proportional share of the Underlying Funds’ expenses, including their management fee.
Each of the Underlying Funds in which the Fund invests has its own investment risks, and those risks can affect the value of the Fund’s investments and therefore the value of the Fund’s shares. To the extent that the Fund invests more of its assets in one Underlying Fund than in another, the Fund will have greater exposure to the risks of that Underlying Fund.
Investment in Oppenheimer Institutional Government Money Market Fund.
The Fund is permitted to invest daily available cash balances in an affiliated money market fund. The Fund may invest the available cash in Class E shares of Oppenheimer Institutional Government Money Market Fund (“IGMMF”) to seek current income while preserving liquidity or for defensive purposes. IGMMF is a registered open-end management investment company, regulated as a money market fund under the 1940 Act, as amended. The Manager is the investment adviser of IGMMF, and the Sub-Adviser provides investment and related advisory services to IGMMF. When applicable, the Fund’s investment in IGMMF is included in the Statement of Investments. Shares of IGMMF are valued at their net asset value per share. As a shareholder, the Fund is subject to its proportional share of IGMMF’s Class E expenses, including its management fee.
Investment in Oppenheimer Master Funds. Certain Underlying Funds in which the Fund invests are mutual funds registered under the 1940 Act, as amended, that expect to be treated as partnerships for tax purposes, specifically Oppenheimer Master Loan Fund, LLC (“Master Loan”) and Oppenheimer Master Inflation Protected Securities Fund, LLC (“Master Inflation Protected Securities”) (the “Master Funds”). Each Master Fund has its own investment risks, and those risks can affect the value of the Fund’s investments and therefore the value of the Fund’s shares. To the extent that the Fund invests more of its assets in one Master Fund than in another, the Fund will have greater exposure to the risks of that Master Fund.
The investment objective of Master Loan is to seek income. The investment objective of Master Inflation Protected Securities is to seek total return. The Fund’s investments in the Master Funds are included in the Statement of Investments. The Fund recognizes income and gain/(loss) on its investments in each Master Fund according to its allocated pro-rata share, based on its relative proportion of total outstanding Master Fund shares held, of the total net income earned and the net gain/(loss) realized on investments sold by the Master Funds. As a shareholder, the Fund is subject to its proportional share of the Master Funds’ expenses, including their management fee. The Fund owns 3.23% of Master Loan and 41.91% of Master Inflation Protected Securities at period end.
5. Market Risk Factors
The Fund’s investments in securities and/or financial derivatives may expose the Fund to various market risk factors:
29 OPPENHEIMER PORTFOLIO SERIES MODERATE INVESTOR FUND
NOTES TO FINANCIAL STATEMENTS Continued
5. Market Risk Factors (Continued)
Commodity Risk. Commodity risk relates to the change in value of commodities or commodity indexes as they relate to increases or decreases in the commodities market. Commodities are physical assets that have tangible properties. Examples of these types of assets are crude oil, heating oil, metals, livestock, and agricultural products.
Credit Risk. Credit risk relates to the ability of the issuer of debt to meet interest and principal payments, or both, as they come due. In general, lower-grade, higher-yield debt securities are subject to credit risk to a greater extent than lower-yield, higher-quality securities.
Equity Risk. Equity risk relates to the change in value of equity securities as they relate to increases or decreases in the general market.
Foreign Exchange Rate Risk. Foreign exchange rate risk relates to the change in the U.S. dollar value of a security held that is denominated in a foreign currency. The U.S. dollar value of a foreign currency denominated security will decrease as the dollar appreciates against the currency, while the U.S. dollar value will increase as the dollar depreciates against the currency.
Interest Rate Risk. Interest rate risk refers to the fluctuations in value of fixed-income securities resulting from the inverse relationship between price and yield. For example, an increase in general interest rates will tend to reduce the market value of already issued fixed-income investments, and a decline in general interest rates will tend to increase their value. In addition, debt securities with longer maturities, which tend to have higher yields, are subject to potentially greater fluctuations in value from changes in interest rates than obligations with shorter maturities.
Volatility Risk. Volatility risk refers to the magnitude of the movement, but not the direction of the movement, in a financial instrument’s price over a defined time period. Large increases or decreases in a financial instrument’s price over a relative time period typically indicate greater volatility risk, while small increases or decreases in its price typically indicate lower volatility risk.
6. Shares of Beneficial Interest
The Fund has authorized an unlimited number of $0.001 par value shares of beneficial interest of each class. Transactions in shares of beneficial interest were as follows:
Year Ended January 31, 2018 | Year Ended January 31, 2017 | |||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||
| ||||||||||||||||
Class A | ||||||||||||||||
Sold | 11,919,071 | $ | 140,647,926 | 15,595,750 | $ | 167,224,228 | ||||||||||
Dividends and/or distributions reinvested | 1,668,411 | 20,337,853 | 1,492,315 | 16,191,621 | ||||||||||||
Redeemed | (16,207,138 | ) | (191,474,919 | ) | (17,419,127 | ) | (187,345,797) | |||||||||
|
| |||||||||||||||
Net decrease | (2,619,656 | ) | $ | (30,489,140 | ) | (331,062 | ) | $ | (3,929,948) | |||||||
|
|
30 OPPENHEIMER PORTFOLIO SERIES MODERATE INVESTOR FUND
6. Shares of Beneficial Interest (Continued)
Year Ended January 31, 2018 | Year Ended January 31, 2017 | |||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||
| ||||||||||||||||
Class B | ||||||||||||||||
Sold | 9,456 | $ | 109,719 | 82,511 | $ | 867,685 | ||||||||||
Dividends and/or distributions reinvested | — | — | 9,085 | 98,026 | ||||||||||||
Redeemed | (1,645,617 | ) | (19,167,530 | ) | (2,211,637 | ) | (23,340,916) | |||||||||
|
| |||||||||||||||
Net decrease | (1,636,161 | ) | $ | (19,057,811 | ) | (2,120,041 | ) | $ | (22,375,205) | |||||||
|
| |||||||||||||||
| ||||||||||||||||
Class C | ||||||||||||||||
Sold | 4,778,797 | $ | 55,312,088 | 6,311,625 | $ | 66,016,887 | ||||||||||
Dividends and/or distributions reinvested | 372,757 | 4,458,180 | 311,293 | 3,315,272 | ||||||||||||
Redeemed | (7,548,908 | ) | (87,180,811 | ) | (8,538,147 | ) | (89,797,355) | |||||||||
|
| |||||||||||||||
Net decrease | (2,397,354 | ) | $ | (27,410,543 | ) | (1,915,229 | ) | $ | (20,465,196) | |||||||
|
| |||||||||||||||
| ||||||||||||||||
Class R | ||||||||||||||||
Sold | 2,562,059 | $ | 30,159,064 | 2,549,789 | $ | 27,220,994 | ||||||||||
Dividends and/or distributions reinvested | 150,933 | 1,829,302 | 125,071 | 1,349,519 | ||||||||||||
Redeemed | (2,504,989 | ) | (29,419,772 | ) | (2,209,563 | ) | (23,734,481) | |||||||||
|
| |||||||||||||||
Net increase | 208,003 | $ | 2,568,594 | 465,297 | $ | 4,836,032 | ||||||||||
|
| |||||||||||||||
| ||||||||||||||||
Class Y | ||||||||||||||||
Sold | 998,810 | $ | 11,809,579 | 536,258 | $ | 5,826,101 | ||||||||||
Dividends and/or distributions reinvested | 27,637 | 338,547 | 14,064 | 153,438 | ||||||||||||
Redeemed | (482,715 | ) | (5,737,560 | ) | (642,301 | ) | (6,682,090) | |||||||||
|
| |||||||||||||||
Net increase (decrease) | 543,732 | $ | 6,410,566 | (91,979 | ) | $ | (702,551) | |||||||||
|
|
7. Purchases and Sales of Securities
The aggregate cost of purchases and proceeds from sales of securities, other than short-term obligations and investments in IGMMF, for the reporting period were as follows:
Purchases | Sales | |||||||
| ||||||||
Investment securities | $ | 99,801,020 | $ | 129,518,133 |
8. Fees and Other Transactions with Affiliates
Management Fees. Under the investment advisory agreement, the Manager does not charge a management fee, but rather collects indirect management fees from the Fund’s investments in the Underlying Funds. The weighted indirect management fees collected from the Fund’s investment in the Underlying Funds, as a percent of average daily net assets of the Fund for the reporting period was 0.53%. This amount is gross of any waivers or reimbursements of management fees implemented at the Underlying Fund level.
Sub-Adviser Fees. The Manager has retained the Sub-Adviser to provide the day-to-day portfolio management of the Fund. Under the Sub-Advisory Agreement, the Manager pays the Sub-Adviser an annual fee in monthly installments, equal to a percentage of the indirect
31 OPPENHEIMER PORTFOLIO SERIES MODERATE INVESTOR FUND
NOTES TO FINANCIAL STATEMENTS Continued
8. Fees and Other Transactions with Affiliates (Continued)
investment management fee collected by the Manager, which shall be calculated after any investment management fee waivers. The fee paid to the Sub-Adviser is paid by the Manager, not by the Fund.
Transfer Agent Fees. OFI Global (the “Transfer Agent”) serves as the transfer and shareholder servicing agent for the Fund. The Fund pays the Transfer Agent a fee based on annual net assets, which shall be calculated after any applicable fee waivers. Fees incurred and average net assets for each class with respect to these services are detailed in the Statement of Operations and Financial Highlights, respectively.
Sub-Transfer Agent Fees. The Transfer Agent has retained Shareholder Services, Inc., a wholly-owned subsidiary of OFI (the “Sub-Transfer Agent”), to provide the day-to-day transfer agent and shareholder servicing of the Fund. Under the Sub-Transfer Agency Agreement, the Transfer Agent pays the Sub-Transfer Agent an annual fee in monthly installments, equal to a percentage of the transfer agent fee collected by the Transfer Agent from the Fund, which shall be calculated after any applicable fee waivers. The fee paid to the Sub-Transfer Agent is paid by the Transfer Agent, not by the Fund.
Trustees’ Compensation. The Fund has adopted an unfunded retirement plan (the “Plan”) for the Fund’s Independent Trustees. Benefits are based on years of service and fees paid to each Trustee during their period of service. The Plan was frozen with respect to adding new participants effective December 31, 2006 (the “Freeze Date”) and existing Plan Participants as of the Freeze Date will continue to receive accrued benefits under the Plan. Active Independent Trustees as of the Freeze Date have each elected a distribution method with respect to their benefits under the Plan.
During the reporting period, the Fund’s projected benefit obligations, payments to retired Trustees and accumulated liability were as follows:
Projected Benefit Obligations Increased | $ | — | ||
Payments Made to Retired Trustees | 2,688 | |||
Accumulated Liability as of January 31, 2018 | 22,792 |
The Fund’s Board of Trustees (“Board”) has adopted a compensation deferral plan for Independent Trustees that enables Trustees to elect to defer receipt of all or a portion of the annual compensation they are entitled to receive from the Fund. For purposes of determining the amount owed to the Trustee under the plan, deferred amounts are treated as though equal dollar amounts had been invested in shares of the Fund or in other Oppenheimer funds selected by the Trustee. The Fund purchases shares of the funds selected for deferral by the Trustee in amounts equal to his or her deemed investment, resulting in a Fund asset equal to the deferred compensation liability. Such assets are included as a component of “Other” within the asset section of the Statement of Assets and Liabilities. Deferral of Trustees’ fees under the plan will not affect the net assets of the Fund and will not materially affect the
32 OPPENHEIMER PORTFOLIO SERIES MODERATE INVESTOR FUND
8. Fees and Other Transactions with Affiliates (Continued)
Fund’s assets, liabilities or net investment income per share. Amounts will be deferred until distributed in accordance with the compensation deferral plan.
Distribution and Service Plan (12b-1) Fees. Under its General Distributor’s Agreement with the Fund, OppenheimerFunds Distributor, Inc. (the “Distributor”) acts as the Fund’s principal underwriter in the continuous public offering of the Fund’s classes of shares.
Service Plan for Class A Shares. The Fund has adopted a Service Plan (the “Plan”) for Class A shares pursuant to Rule 12b-1 under the 1940 Act. Under the Plan, the Fund reimburses the Distributor for a portion of its costs incurred for services provided to accounts that hold Class A shares. Reimbursement is made periodically at an annual rate of up to 0.25% of the daily net assets of Class A shares of the Fund. The Distributor currently uses all of those fees to pay dealers, brokers, banks and other financial institutions periodically for providing personal service and maintenance of accounts of their customers that hold Class A shares. Any unreimbursed expenses the Distributor incurs with respect to Class A shares in any fiscal year cannot be recovered in subsequent periods. Fees incurred by the Fund under the Plan are detailed in the Statement of Operations.
Distribution and Service Plans for Class B, Class C and Class R Shares. The Fund has adopted Distribution and Service Plans (the “Plans”) for Class B, Class C and Class R shares pursuant to Rule 12b-1 under the 1940 Act to compensate the Distributor for distributing those share classes, maintaining accounts and providing shareholder services. Under the Plans, the Fund pays the Distributor an annual asset-based sales charge of 0.75% on Class B and Class C shares’ daily net assets and 0.25% on Class R shares’ daily net assets. The Fund also pays a service fee under the Plans at an annual rate of 0.25% of daily net assets. The Plans continue in effect from year to year only if the Fund’s Board of Trustees votes annually to approve their continuance at an in person meeting called for that purpose. Fees incurred by the Fund under the Plans are detailed in the Statement of Operations.
Sales Charges. Front-end sales charges and CDSC do not represent expenses of the Fund. They are deducted from the proceeds of sales of Fund shares prior to investment or from redemption proceeds prior to remittance, as applicable. The sales charges retained by the Distributor from the sale of shares and the CDSC retained by the Distributor on the redemption of shares is shown in the following table for the period indicated.
Year Ended | Class A Front-End Sales Charges Retained by Distributor | Class A Contingent Deferred Sales Charges Retained by Distributor | Class B Contingent Deferred Sales Charges Retained by Distributor | Class C Contingent Deferred Sales Charges Retained by Distributor | Class R Contingent Deferred Sales Charges Retained by Distributor | |||||||||||||||
| ||||||||||||||||||||
January 31, 2018 | $698,138 | $1,758 | $13,017 | $35,264 | $— |
Waivers and Reimbursements of Expenses. Prior to June 1, 2017, the Manager
33 OPPENHEIMER PORTFOLIO SERIES MODERATE INVESTOR FUND
NOTES TO FINANCIAL STATEMENTS Continued
8. Fees and Other Transactions with Affiliates (Continued)
voluntarily waived fees and/or reimbursed the Fund for certain expenses in order to limit “Expenses after payments, waivers and/or reimbursements and reduction to custodian expenses”, (the combined direct (Fund level) and indirect (Underlying Fund level) expenses), to the annual rate of 1.30%, 2.05%, 2.05%, 1.55% and 1.05%, for Class A, Class B, Class C, Class R and Class Y, respectively. Effective June 1, 2017, this expense limitation has been removed.
Effective for the period January 1, 2017 through December 31, 2017, the Transfer Agent voluntarily waived and/or reimbursed Fund expenses in an amount equal to 0.015% of average annual net assets for Classes A, B, C, R and Y.
During the reporting period, the Transfer Agent waived fees and/or reimbursed the Fund for transfer agent and shareholder servicing agent fees as follows:
Class A | $ | 163,846 | ||
Class B | 2,286 | |||
Class C | 58,505 | |||
Class R | 16,747 | |||
Class Y | 1,985 |
The Manager has also contractually agreed to waive fees and/or reimburse certain Fund expenses at an annual rate of 0.07% as calculated on the daily net assets of the Fund. This waiver and/or reimbursement is applied after (and in addition to) any other applicable waiver and/or expense reimbursements that may apply. During the reporting period, the Manager waived fees and/or reimbursed the Fund $1,144,353.
During the reporting period, the Manager voluntarily reimbursed the Fund $9,256 for certain transactions. The payment is reported separately in the Statement of Operations and increased the Fund’s total returns by less than 0.005%.
34 OPPENHEIMER PORTFOLIO SERIES MODERATE INVESTOR FUND
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Shareholders and Board of Trustees
Oppenheimer Portfolio Series:
Opinion on the Financial Statements
We have audited the accompanying statement of assets and liabilities of Moderate Investor Fund, a series of Oppenheimer Portfolio Series, (the “Fund”), including the statement of investments, as of January 31, 2018, the related statement of operations for the year then ended, the statements of changes in net assets for each of the years in the two year period then ended, and the related notes (collectively, the “financial statements”) and the financial highlights for each of the years in the five year period then ended. In our opinion, the financial statements and financial highlights present fairly, in all material respects, the financial position of the Fund as of January 31, 2018, the results of its operations for the year then ended, the changes in its net assets for each of the years in the two year period then ended, and the financial highlights for each of the years in the five year period then ended, in conformity with U.S. generally accepted accounting principles.
Basis for Opinion
These financial statements and financial highlights are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements and financial highlights, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements and financial highlights. Such procedures also included confirmation of securities owned as of January 31, 2018, by correspondence with the transfer agent. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements and financial highlights. We believe that our audits provide a reasonable basis for our opinion.
KPMGLLP
We have not been able to determine the specific year that we began serving as the auditor of one or more Oppenheimer Funds investment companies, however we are aware that we have served as the auditor of one or more Oppenheimer Funds investment companies since at least 1969.
Denver, Colorado
March 23, 2018
35 OPPENHEIMER PORTFOLIO SERIES MODERATE INVESTOR FUND
FEDERAL INCOME TAX INFORMATION Unaudited
In early 2018, if applicable, shareholders of record received information regarding all dividends and distributions paid to them by the Fund during calendar year 2017.
Dividends, if any, paid by the Fund during the reporting period which are not designated as capital gain distributions should be multiplied by the maximum amount allowable but not less than 58.51% to arrive at the amount eligible for the corporate dividend-received deduction.
A portion, if any, of the dividends paid by the Fund during the reporting period which are not designated as capital gain distributions are eligible for lower individual income tax rates to the extent that the Fund has received qualified dividend income as stipulated by recent tax legislation. The maximum amount allowable but not less than $11,706,413 of the Fund’s fiscal year taxable income may be eligible for the lower individual income tax rates. In early 2018, shareholders of record received information regarding the percentage of distributions that are eligible for lower individual income tax rates.
Recent tax legislation allows a regulated investment company to designate distributions not designated as capital gain distributions, as either interest related dividends or short-term capital gain dividends, both of which are exempt from the U.S. withholding tax applicable to non U.S. taxpayers. For the reporting period, the maximum amount allowable but not less than $8,930,375 of the ordinary distributions to be paid by the Fund qualifies as an interest related dividend.
The Fund has elected the application of Section 853 of the Internal Revenue Code to permit shareholders to take a federal income tax credit or deduction, at their option, on a per share basis. The maximum amount allowable but not less than $451,180 of foreign income taxes were paid by the Fund during the reporting period. A separate notice will be mailed to each shareholder, which will reflect the proportionate share of such foreign taxes which must be treated by shareholders as gross income for federal income tax purposes.
Gross income of the maximum amount allowable but not less than $1,829,333 was derived from sources within foreign countries or possessions of the United States.
The foregoing information is presented to assist shareholders in reporting distributions received from the Fund to the Internal Revenue Service. Because of the complexity of the federal regulations which may affect your individual tax return and the many variations in state and local tax regulations, we recommend that you consult your tax advisor for specific guidance.
36 OPPENHEIMER PORTFOLIO SERIES MODERATE INVESTOR FUND
BOARD APPROVAL OF THE FUND’S INVESTMENT ADVISORY
AND SUB-ADVISORY AGREEMENTS Unaudited
The Fund has entered into an investment advisory agreement with OFI Global Asset Management, Inc. (“OFI Global” or the “Adviser”), a wholly-owned subsidiary of OppenheimerFunds, Inc. (“OFI” or the “Sub-Adviser”) (“OFI Global” and “OFI” together the “Managers”) and OFI Global has entered into a sub-advisory agreement with OFI whereby OFI provides investment sub-advisory services to the Fund (collectively, the “Agreements”). Each year, the Board of Trustees (the “Board”), including a majority of the independent Trustees, is required to determine whether to approve the terms of the Agreements and the renewal thereof. The Investment Company Act of 1940, as amended, requires that the Board request and evaluate, and that the Managers provide, such information as may be reasonably necessary to evaluate the terms of the Agreements. The Board employs an independent consultant to prepare a report that provides information, including comparative information that the Board requests for that purpose. In addition to in-person meetings focused on this evaluation, the Board receives information throughout the year regarding Fund services, fees, expenses and performance.
The Managers and the independent consultant provided information to the Board on the following factors: (i) the nature, quality and extent of the Managers’ services, (ii) the comparative investment performance of the Fund and the Managers, (iii) the fees and expenses of the Fund, including comparative fee and expense information, (iv) the profitability of the Managers and their affiliates, including an analysis of the cost of providing services, (v) whether economies of scale are realized as the Fund grows and whether fee levels reflect these economies of scale for Fund investors and (vi) other benefits to the Managers from their relationship with the Fund. The Board was aware that there are alternatives to retaining the Managers.
Outlined below is a summary of the principal information considered by the Board as well as the Board’s conclusions.
Nature, Quality and Extent of Services. The Board considered information about the nature, quality and extent of the services provided to the Fund and information regarding the Managers’ key personnel who provide such services. The Managers’ duties include providing the Fund with the services of the portfolio managers and the Sub-Adviser’s investment team, who provide research, analysis and other advisory services in regard to the Fund’s investments; and securities trading services. OFI Global is responsible for oversight of third-party service providers; monitoring compliance with applicable Fund policies and procedures and adherence to the Fund’s investment restrictions; risk management; and oversight of the Sub-Adviser. OFI Global is also responsible for providing certain administrative services to the Fund. Those services include providing and supervising all administrative and clerical personnel who are necessary in order to provide effective corporate administration for the Fund; compiling and maintaining records with respect to the Fund’s operations; preparing and filing reports required by the U.S. Securities and Exchange Commission; preparing periodic reports regarding the operations of the Fund for its shareholders; preparing proxy materials for shareholder meetings; and preparing the registration statements required by federal and state securities laws for the sale of the Fund’s shares. OFI Global also provides the Fund with office space, facilities and equipment.
37 OPPENHEIMER PORTFOLIO SERIES MODERATE INVESTOR FUND
BOARD APPROVAL OF THE FUND’S INVESTMENT ADVISORY
AND SUB-ADVISORY AGREEMENTS Unaudited / Continued
The Board also considered the quality of the services provided and the quality of the Managers’ resources that are available to the Fund. The Board took account of the fact that the Sub-Adviser has over fifty years of experience as an investment adviser and that its assets under management rank it among the top mutual fund managers in the United States. The Board evaluated the Managers’ advisory, administrative, accounting, legal, compliance and risk management services, among other services, and information the Board has received regarding the experience and professional qualifications of the Managers’ key personnel and the size and functions of its staff. In its evaluation of the quality of the portfolio management services provided, the Board considered the experience of Mark Hamilton and Dokyoung Lee, the portfolio managers for the Fund, and the Sub-Adviser’s investment team and analysts. The Board members also considered the totality of their experiences with the Managers as directors or trustees of the Fund and other funds advised by the Managers. The Board considered information regarding the quality of services provided by affiliates of the Managers, which the Board members have become knowledgeable about through their experiences with the Managers and in connection with the review or renewal of the Fund’s service agreements or service providers. The Board concluded, in light of the Managers’ experience, reputation, personnel, operations and resources that the Fund benefits from the services provided under the Agreements.
Investment Performance of the Managers and the Fund. Throughout the year, the Managers provided information on the investment performance of the Fund, the Adviser and the Sub-Adviser, including comparative performance information. The Board also reviewed information, prepared by the Managers and by the independent consultant, comparing the Fund’s historical performance to relevant benchmarks or market indices and to the performance of other retail funds in the allocation – 50% to 70% equity category. The Board noted that the Fund’s one-year, three-year, five-year and ten-year performance was below its category median.
Fees and Expenses of the Fund. The Board reviewed the fees paid to the Adviser and the other expenses borne by the Fund. The Board also considered the comparability of the fees charged and the services provided to the Fund to the fees and services for other clients or accounts advised by the Adviser. The independent consultant provided comparative data in regard to the fees and expenses of the Fund and other retail front-end load allocation – 50% to 70% equity funds with comparable asset levels and distribution features. After discussions with the Board, the Adviser has agreed to contractually waive fees and/or reimburse certain Fund expenses at an annual rate of 0.07% as calculated on the daily net assets of the Fund. This waiver and/or reimbursement is applied after (and in addition to) any other applicable fee waivers and/or expense reimbursements that apply. This contractual fee waiver and/or expense reimbursement may not be amended or withdrawn until one year from the date of the prospectus, unless approved by the Board. The Board noted that the Fund was charged no actual management fees, exclusive of Underlying Fund management fees, while certain peer group funds did charge direct management fees. The Board also noted that the Fund’s total expenses were lower than its peer group median and category median.
38 OPPENHEIMER PORTFOLIO SERIES MODERATE INVESTOR FUND
Economies of Scale and Profits Realized by the Managers. The Board considered information regarding the Managers’ costs in serving as the Fund’s investment adviser, sub-adviser, including the costs associated with the personnel and systems necessary to manage the Fund, and information regarding the Managers’ profitability from their relationship with the Fund. The Board also considered that the Managers must be able to pay and retain experienced professional personnel at competitive rates to provide quality services to the Fund. The Board reviewed whether the Managers may realize economies of scale in managing and supporting the Fund and whether those economies of scale benefit the Fund’s shareholders at the current level of Fund assets in relation to its management fee. The Fund currently does not charge a management fee.
Other Benefits to the Managers. In addition to considering the profits realized by the Managers, the Board considered information that was provided regarding the direct and indirect benefits the Managers receive as a result of their relationship with the Fund, including compensation paid to the Managers’ affiliates.
Conclusions. These factors were also considered by the independent Trustees meeting separately from the full Board, assisted by experienced counsel to the Fund and to the independent Trustees. Fund counsel and the independent Trustees’ counsel are independent of the Managers within the meaning and intent of the Securities and Exchange Commission Rules.
Based on its review of the information it received and its evaluations described above, the Board, including a majority of the independent Trustees, decided to continue the Agreements through September 30, 2018. In arriving at its decision, the Board did not identify any factor or factors as being more important than others, but considered all of the above information, and considered the terms and conditions of the Agreements, including the management fees, in light of all the surrounding circumstances.
39 OPPENHEIMER PORTFOLIO SERIES MODERATE INVESTOR FUND
PORTFOLIO PROXY VOTING POLICIES AND GUIDELINES;
UPDATES TO STATEMENT OF INVESTMENTS Unaudited
The Fund has adopted Portfolio Proxy Voting Policies and Guidelines under which the Fund votes proxies relating to securities (“portfolio proxies”) held by the Fund. A description of the Fund’s Portfolio Proxy Voting Policies and Guidelines is available (i) without charge, upon request, by calling the Fund toll-free at 1.800.CALL OPP (225.5677), (ii) on the Fund’s website at www.oppenheimerfunds.com, and (iii) on the SEC’s website at www.sec.gov. In addition, the Fund is required to file Form N-PX, with its complete proxy voting record for the 12 months ended June 30th, no later than August 31st of each year. The Fund’s voting record is available (i) without charge, upon request, by calling the Fund toll-free at 1.800.CALL OPP (225.5677), and (ii) in the Form N-PX filing on the SEC’s website at www.sec.gov.
The Fund files its complete schedule of portfolio holdings with the SEC for the first quarter and the third quarter of each fiscal year on Form N-Q. The Fund’s Form N-Q filings are available on the SEC’s website at www.sec.gov. Those forms may be reviewed and copied at the SEC’s Public Reference Room in Washington, D.C. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330.
Householding—Delivery of Shareholder Documents
This is to inform you about OppenheimerFunds’ “householding” policy. If more than one member of your household maintains an account in a particular fund, OppenheimerFunds will mail only one copy of the fund’s prospectus (or, if available, the fund’s summary prospectus), annual and semiannual report and privacy policy. The consolidation of these mailings, called householding, benefits your fund through reduced mailing expense, and benefits you by reducing the volume of mail you receive from OppenheimerFunds. Householding does not affect the delivery of your account statements.
Please note that we will continue to household these mailings for as long as you remain an OppenheimerFunds shareholder, unless you request otherwise. If you prefer to receive multiple copies of these materials, please call us at 1.800.CALL-OPP (225-5677). You may also notify us in writing or via email. We will begin sending you individual copies of the prospectus (or, if available, the summary prospectus), reports and privacy policy within 30 days of receiving your request to stop householding.
40 OPPENHEIMER PORTFOLIO SERIES MODERATE INVESTOR FUND
DISTRIBUTION SOURCES Unaudited
For any distribution that took place over the last six months of the Fund’s reporting period, the table below details on a per-share basis the percentage of the Fund’s total distribution payment amount that was derived from the following sources: net income, net profit from the sale of securities, and other capital sources. Other capital sources represent a return of capital. A return of capital may occur, for example, when some or all of the money that you invested in the Fund is paid back to you. A return of capital distribution does not necessarily reflect the Fund’s investment performance and should not be confused with “yield” or “income.” You should not draw any conclusions about each Fund’s investment performance from the amounts of these distributions. This information is based upon income and capital gains using generally accepted accounting principles as of the date of each distribution. Because the Fund is actively managed, the relative amount of the Fund’s total distributions derived from various sources over the calendar year may change. Please note that this information should not be used for tax reporting purposes as the tax character of distributable income may differ from the amounts used for this notification. You will receive IRS tax forms in the first quarter of each calendar year detailing the actual amount of the taxable and non-taxable portion of distributions paid to you during the tax year.
For the most current information, please go to oppenheimerfunds.com. Select your Fund, and scroll down to the ‘Dividends’ table under ‘Analytics’. The Fund’s latest distribution information will be followed by the sources of any distribution, updated daily.
Fund Name | Pay Date | Net Income | Net Profit from Sale | Other Capital Sources | ||||||||||||
| ||||||||||||||||
Oppenheimer Portfolio Series: Moderate Investor Fund | 12/20/17 | 99.5% | 0.0% | 0.5% | ||||||||||||
|
41 OPPENHEIMER PORTFOLIO SERIES MODERATE INVESTOR FUND
TRUSTEES AND OFFICERS Unaudited
Name, Position(s) Held with the Fund, Length of Service, Year of Birth | Principal Occupation(s) During the Past 5 Years; Other Trusteeships/Directorships Held; Number of Portfolios in the Fund Complex Currently Overseen | |
INDEPENDENT TRUSTEES | The address of each Trustee in the chart below is 6803 S. Tucson Way, Centennial, Colorado 80112-3924. Each Trustee serves for an indefinite term, or until his or her resignation, retirement, death or removal. | |
Brian F. Wruble, Chairman of the Board of Trustees (since 2007) and Trustee (since 2005) Year of Birth: 1943 | Governor of Community Foundation of the Florida Keys (non-profit) (since July 2012); Director of TCP Capital, Inc. (since November 2015); Chairman Emeritus of the Board of Trustees (since August 2011), Chairman of the Board of Trustees (August 2007-August 2011), Trustee of the Board of Trustees (since August 1991) of The Jackson Laboratory (non-profit); Member of Zurich Insurance Group’s Investment Management Advisory Council (insurance) (October 2004-February 2017); Treasurer (since 2007) and Trustee (since May 1992) of the Institute for Advanced Study (non-profit educational institute); Director of Special Value Opportunities Fund, LLC (registered investment company) (affiliate of the Sub- Adviser’s parent company) (September 2004-June 2015); General Partner of Odyssey Partners, L.P. (hedge fund) (September 1995-December 2007); Special Limited Partner of Odyssey Investment Partners, LLC (private equity investment) (January 1999-September 2004). Oversees 56 portfolios in the OppenheimerFunds complex. Mr. Wruble has served on the Boards of certain Oppenheimer funds since April 2001, during which time he has become familiar with the Fund’s (and other Oppenheimer funds’) financial, accounting, regulatory and investment matters and has contributed to the Boards’ deliberations. | |
Beth Ann Brown, Trustee (since 2016) Year of Birth: 1968 | Advisor, Board of Advisors of Caron Engineering Inc. (since December 2014); Independent Consultant (since September 2012); held the following positions at Columbia Management Investment Advisers LLC: Head of Intermediary Distribution (2008-2012), Managing Director, Strategic Relations (2005-2008), Managing Director, Head of National Accounts (2004-2005); Senior Vice President, National Account Manager (2002-2004), Senior Vice President, Key Account Manager (1999-2002) and Vice President, Key Account Manager (1996-1999) of Liberty Funds Distributor, Inc.; President and Director, of Acton Shapleigh Youth Conservation Corps (non-profit) (since 2012); and Vice President and Director of Grahamtastic Connection (non-profit) (since May 2013). Oversees 56 portfolios in the OppenheimerFunds complex. Ms. Brown has served on the Boards of certain Oppenheimer funds since January 2016, during which time she has become familiar with the Fund’s (and other Oppenheimer funds’) financial, accounting, regulatory and investment matters and has contributed to the Board’s deliberations. | |
Edmund P. Giambastiani, Jr., Trustee (since 2013) Year of Birth: 1948 | Advisory Board Member of the Maxwell School of Citizenship and Public Affairs of Syracuse University (since April 2012); Director of Mercury Defense Systems Inc. (information technology) (August 2011-February 2013); Trustee of the U.S. Naval Academy Foundation Athletic & Scholarship Program (since November 2010); Advisory Board Member of the Massachusetts Institute of Technology Lincoln Laboratory (federally-funded research development center) (since May 2010); Director of The Boeing Company (aerospace and defense) (since October 2009); Trustee of MITRE Corporation (federally-funded research development center) (since September 2008); Independent Director of QinetiQ Group Plc (defense technology and security) (February 2008-August 2011); Chairman of Monster Worldwide, Inc. (on-line career services) (March 2015-November 2016), Director of |
42 OPPENHEIMER PORTFOLIO SERIES MODERATE INVESTOR FUND
Edmund P. Giambastiani, Jr., (Continued) | Monster Worldwide, Inc. (on-line career services) (February 2008-June 2011); Lead Director (June 2011-March 2015); Chairman of Alenia North America, Inc. (military and defense products) (January 2008-October 2009); Director of SRA International, Inc. (information technology and services) (January 2008-July 2011); President of Giambastiani Group LLC (national security and energy consulting) (since October 2007); United States Navy, career nuclear submarine officer (June 1970-October 2007), Vice Chairman of the Joint Chiefs of Staff (2005-October 2007), Supreme Allied Commander of NATO Commander Transformation (2003-2005), Commander, U.S. Joint Forces Command (2002-2005). Since his retirement from the U.S. Navy in October 2007, Admiral Giambastiani has also served on numerous U.S. Government advisory boards, investigations and task forces for the Secretaries of Defense, State and Interior and the Central Intelligence Agency. He recently completed serving as a federal commissioner on the Military Compensation and Retirement Modernization Commission. Oversees 56 portfolios in the OppenheimerFunds complex. Admiral Giambastiani has served on the Boards of certain Oppenheimer funds since February 2013, during which time he has become familiar with the Fund’s (and other Oppenheimer funds’) financial, accounting, regulatory and investment matters and has contributed to the Boards’ deliberations. | |
Elizabeth Krentzman, Trustee (since 2014) Year of Birth: 1959 | Member of the University of Florida National Board Foundation (since September 2017); Member of the Cartica Funds Board of Directors (private investment funds) (since January 2017); Member of the University of Florida College of Law Association Board of Trustees and Audit Committee Member (since April 2016); Member of University of Florida Law Advisory Board, Washington, DC Alumni Group (since 2015); Advisory Board Member of the Securities and Exchange Commission Historical Society (since 2007); held the following positions at Deloitte & Touche LLP: Principal and Chief Regulatory Advisor for Asset Management Services (2007 - 2014) and U.S. Mutual Fund Leader (2011 - 2014); General Counsel of the Investment Company Institute (trade association) (June 2004 - April 2007); held the following positions at Deloitte & Touche LLP: National Director of the Investment Management Regulatory Consulting Practice (1997 - 2004), Principal (2003 - 2004), Director (1998 - 2003) and Senior Manager (1997 - 1998); Assistant Director of the Division of Investment Management - Office of Disclosure and Investment Adviser Regulation of the U.S. Securities and Exchange Commission (1996 - 1997) and various positions with the Division of Investment Management – Office of Regulatory Policy (1991 - 1996) of the U.S. Securities and Exchange Commission; Associate at Ropes & Gray LLP (1987 – 1991). Oversees 56 portfolios in the OppenheimerFunds complex. Ms. Krentzman has served on the Boards of certain Oppenheimer funds since August 2014, during which time she has become familiar with the Fund’s (and other Oppenheimer funds’) financial, accounting, regulatory and investment matters and has contributed to the Boards’ deliberations. | |
Mary F. Miller, Trustee (since 2005) Year of Birth: 1942 | Trustee of International House (not-for-profit) (since June 2007); Trustee of the American Symphony Orchestra (not-for-profit) (October 1998-November 2011); and Senior Vice President and General Auditor of American Express Company (financial services company) (July 1998-February 2003). Oversees 56 portfolios in the OppenheimerFunds complex. Ms. Miller has served on the Boards of certain Oppenheimer funds since August 2004, during which time she has become familiar with the Fund’s (and other Oppenheimer funds’) financial, accounting, regulatory and investment matters and has contributed to the Boards’ deliberations. |
43 OPPENHEIMER PORTFOLIO SERIES MODERATE INVESTOR FUND
TRUSTEES AND OFFICERS Unaudited / Continued
Joel W. Motley, Trustee (since 2005) Year of Birth: 1952 | Director of Office of Finance Federal Home Loan Bank (since September 2016); Director of Greenwall Foundation (since October 2013); Member of Board and Investment Committee of The Greenwall Foundation (since April 2013); Member of the Vestry of Trinity Wall Street (since April 2012); Director of Southern Africa Legal Services Foundation (since March 2012); Board Member of Pulitzer Center for Crisis Reporting (non-profit journalism) (since March 2011); Managing Director of Public Capital Advisors, LLC (privately-held financial advisor) (since January 2006); Managing Director of Carmona Motley, Inc. (privately-held financial advisor) (since January 2002); Director of Columbia Equity Financial Corp. (privately-held financial advisor) (2002-2007); Managing Director of Carmona Motley Hoffman Inc. (privately-held financial advisor) (January 1998-December 2001); Member of the Finance and Budget Committee of the Council on Foreign Relations, Member of the Investment Committee and Board of Human Rights Watch (since July 2000) and Member of the Investment Committee and Board of Historic Hudson Valley (since February 2010). Oversees 56 portfolios in the OppenheimerFunds complex. Mr. Motley has served on the Boards of certain Oppenheimer funds since October 2002, during which time he has become familiar with the Fund’s (and other Oppenheimer funds’) financial, accounting, regulatory and investment matters and has contributed to the Boards’ deliberations. | |
Joanne Pace, Trustee (since 2012) Year of Birth: 1958 | Advisory Board Director of Massey Quick and Company, LLC (since October 2014); Board Director of Horizon Blue Cross Blue Shield of New Jersey (since November 2012); Advisory Board Director of The Alberleen Group LLC (since March, 2012); Board Member (since January 2015), Board Member of 100 Women in Hedge Funds (non-profit) (since January 2015); Advisory Council Member of Morgan Stanley Children’s Hospital (non-profit) (since May, 2012); Senior Advisor of SECOR Asset Management, LP (2010-2011); Managing Director and Chief Operating Officer of Morgan Stanley Investment Management (2006-2010); Partner and Chief Operating Officer of FrontPoint Partners, LLC (hedge fund) (2005-2006); held the following positions at Credit Suisse: Managing Director (2003-2005); Global Head of Human Resources and member of Executive Board and Operating Committee (2004-2005), Global Head of Operations and Product Control (2003- 2004); held the following positions at Morgan Stanley: Managing Director (1997- 2003), Controller and Principal Accounting Officer (1999-2003); Chief Financial Officer (temporary assignment) for the Oversight Committee, Long Term Capital Management (1998-1999). Lead Independent Director and Chair of the Audit and Nominating Committee of The Global Chartist Fund, LLC of Oppenheimer Asset Management (2011-2012); Board Director of Managed Funds Association (2008- 2010); Board Director of Morgan Stanley Foundation (2007-2010) and Investment Committee Chair (2008-2010). Oversees 56 portfolios in the OppenheimerFunds complex. Ms. Pace has served on the Boards of certain Oppenheimer funds since November 2012, during which time she has become familiar with the Fund’s (and other Oppenheimer funds’) financial, accounting, regulatory and investment matters and has contributed to the Board’s deliberations. |
44 OPPENHEIMER PORTFOLIO SERIES MODERATE INVESTOR FUND
Daniel Vandivort, Trustee (since 2014) Year of Birth: 1954 | Chairman and Lead Independent Director/Trustee (March 2010-September 2014), Chairman of the Audit Committee (March 2009-September 2014) and Director/ Trustee (December 2008-September 2014) of the Board of Directors/Trustees of Value Line Funds; Trustee, Board of Trustees of Huntington Disease Foundation of America (since January 2015 and June 2007-December 2013) and Treasurer, Chairman of the Audit and Finance Committee (since January 2016); Trustee, Board of Trustees, RIM Retirement Savings Plan (2005-2007); President and Chief Investment Officer, Robeco Investment Management, formerly known as Weiss Peck and Greer (January 2005-June 2007); Member, Management Committee of Robeco Investment Management (2001-2007); Chairman and Trustee of the Board of Trustees of Weiss, Peck and Greer Funds (2004-2005); Managing Director and Head of Fixed Income, Weiss, Peck and Greer (November 1994-January 2005); Managing Director and Head of Fixed Income, CS First Boston Investment Management (January 1992-November 1994); Director, Global Product Development, First Boston Asset Management (November 1989 to January 1992); Vice President, Fixed Income Sales, First Boston Corp. (May 1984-November 1989). Oversees 56 portfolios in the OppenheimerFunds complex. Mr. Vandivort has served on the Boards of certain Oppenheimer funds since 2014, during which time he has become familiar with the Fund’s (and other Oppenheimer funds’) financial, accounting, regulatory and investment matters and has contributed to the Boards’ deliberations.
| |
INTERESTED TRUSTEE AND OFFICER |
Mr. Steinmetz is an “Interested Trustee” because he is affiliated with the Manager and the Sub-Adviser by virtue of his positions as Chairman of the Sub-Adviser and officer and director of the Manager. Both as a Trustee and as an officer, Mr. Steinmetz serves for an indefinite term, or until his resignation, retirement, death or removal. Mr. Steinmetz’s address is 225 Liberty Street, New York, New York 10281-1008. | |
Arthur P. Steinmetz, Trustee (since 2015), President and Principal Executive Officer (since 2014) Year of Birth: 1958 | Chairman of the Sub-Adviser (since January 2015); CEO and Chairman of the Manager (since July 2014), President of the Manager (since May 2013), a Director of the Manager (since January 2013), Director of the Sub-Adviser (since July 2014), President, Management Director and CEO of Oppenheimer Acquisition Corp. (the Sub-Adviser’s parent holding company) (since July 2014), and President and Director of OFI SteelPath, Inc. (since January 2013). Chief Investment Officer of the OppenheimerFunds advisory entities from (January 2013-December 2013); Executive Vice President of the Manager (January 2013-May 2013); Chief Investment Officer of the Sub-Adviser (October 2010-December 2012); Chief Investment Officer, Fixed-Income, of the Sub-Adviser (April 2009-October 2010); Executive Vice President of the Sub-Adviser (October 2009-December 2012); Director of Fixed Income of the Sub-Adviser (January 2009-April 2009); and a Senior Vice President of the Sub-Adviser (March 1993-September 2009). An officer of 110 portfolios in the OppenheimerFunds complex.
| |
OTHER OFFICERS OF THE FUND |
The addresses of the Officers in the chart below are as follows: for Messrs. Hamilton, Lee, Mss. Lo Bessette, Foxson and Picciotto, 225 Liberty Street, New York, New York 10281-1008, for Mr. Petersen, 6803 S. Tucson Way, Centennial, Colorado 80112-3924. Each Officer serves for an indefinite term or until his or her resignation, retirement, death or removal. | |
Mark Hamilton,1 Vice President (since 2013) Year of Birth: 1965 | Chief Investment Officer, Asset Allocation and Senior Vice President of the Sub-Adviser (since April 2013). Mr. Hamilton served at AllianceBernstein L.P. (from 1994-2013) as an Investment Director of Dynamic Asset Allocation (from 2010-2013), Head of North American Blend Team (from 2009-2010), and Senior Portfolio Manager of Blend Strategies (from 2006-2010). A portfolio manager and officer of other portfolios in the OppenheimerFunds complex. |
45 OPPENHEIMER PORTFOLIO SERIES MODERATE INVESTOR FUND
TRUSTEES AND OFFICERS Unaudited / Continued
Dokyoung Lee,1 Vice President (since 2014) Year of Birth: 1965 | Director of Research, Global Multi-Asset Group and a Senior Vice President of the Sub-Adviser (since October 2013). Mr. Lee served at Alliance Bernstein L.P. (1994- 2013): Director of Research for Strategic Asset Allocation (2011-2013), Director of Research for Blend Strategies (2008-2011), Head of Asia Pacific Blend Strategies (2005-2008), Head of Quantitative Research and Senior Portfolio Manager for Japan Value Equities (2001-2005), Portfolio Manager for Emerging Markets Value Equities (1997-2001), and Quantitative Analyst for US Value Equities (1994-1997). A portfolio manager and officer of other portfolios in the OppenheimerFunds complex. | |
Cynthia Lo Bessette, Secretary and Chief Legal Officer (since 2016) Year of Birth: 1969 | Executive Vice President, General Counsel and Secretary of the Manager (since February 2016); Senior Vice President and Deputy General Counsel of the Manager (March 2015-February 2016); Chief Legal Officer of the Sub-Adviser and the Distributor (since February 2016); Vice President, General Counsel and Secretary of Oppenheimer Acquisition Corp. (since February 2016); General Counsel of OFI SteelPath, Inc., OFI Advisors and Index Management Solutions, LLC (since February 2016); Chief Legal Officer of OFI Global Institutional, Inc., HarbourView Asset Management Corporation, OFI Global Trust Company, Oppenheimer Real Asset Management, Inc., OFI Private Investments Inc., Shareholder Services, Inc. and Trinity Investment Management Corporation (since February 2016); Corporate Counsel (February 2012-March 2015) and Deputy Chief Legal Officer (April 2013-March 2015) of Jennison Associates LLC; Assistant General Counsel (April 2008-September 2009) and Deputy General Counsel (October 2009-February 2012) of Lord Abbett & Co. LLC. An officer of 110 portfolios in the OppenheimerFunds complex. | |
Jennifer Foxson, Vice President and Chief Business Officer (since 2014) Year of Birth: 1969 | Senior Vice President of OppenheimerFunds Distributor, Inc. (since June 2014); Vice President of OppenheimerFunds Distributor, Inc. (April 2006-June 2014); Vice President of the Sub-Adviser (January 1998-March 2006); Assistant Vice President of the Sub-Adviser (October 1991-December 1998). An officer of 110 portfolios in the OppenheimerFunds complex. | |
Mary Ann Picciotto, Chief Compliance Officer and Chief Anti-Money Laundering Officer (since 2014) Year of Birth: 1973 | Senior Vice President and Chief Compliance Officer of the Manager (since March 2014); Chief Compliance Officer of the Sub-Adviser, OFI SteelPath, Inc., OFI Global Trust Company, OFI Global Institutional, Inc., Oppenheimer Real Asset Management, Inc., OFI Private Investments, Inc., Harborview Asset Management Corporation, Trinity Investment Management Corporation, and Shareholder Services, Inc. (since March 2014); Managing Director of Morgan Stanley Investment Management Inc. and certain of its various affiliated entities; Chief Compliance Officer of various Morgan Stanley Funds (May 2010-January 2014); Chief Compliance Officer of Morgan Stanley Investment Management Inc. (April 2007-January 2014). An officer of 110 portfolios in the OppenheimerFunds complex. | |
Brian S. Petersen, Treasurer and Principal Financial & Accounting Officer (since 2016) Year of Birth: 1970 | Senior Vice President of the Manager (since January 2017); Vice President of the Manager (January 2013-January 2017); Vice President of the Sub-Adviser (February 2007-December 2012); Assistant Vice President of the Sub-Adviser (August 2002- 2007). An officer of 110 portfolios in the OppenheimerFunds complex. |
1. Effective February 27, 2018 Mark Hamilton and Dokyoung Lee are no longer officers of the Fund.
The Fund’s Statement of Additional Information contains additional information about the Fund’s Trustees and Officers and is available without charge upon request by calling 1.800.CALL OPP (225.5677).
46 OPPENHEIMER PORTFOLIO SERIES MODERATE INVESTOR FUND
OPPENHEIMER PORTFOLIO SERIES MODERATE INVESTOR FUND
Manager | OFI Global Asset Management, Inc. | |
Sub-Adviser | OppenheimerFunds, Inc. | |
Distributor | OppenheimerFunds Distributor, Inc. | |
Transfer and Shareholder Servicing Agent | OFI Global Asset Management, Inc. | |
Sub-Transfer Agent | Shareholder Services, Inc. | |
DBA OppenheimerFunds Services | ||
Independent Registered Public Accounting Firm | KPMG LLP | |
Legal Counsel | Kramer Levin Naftalis & Frankel LLP |
© 2018 OppenheimerFunds, Inc. All rights reserved.
47 OPPENHEIMER PORTFOLIO SERIES MODERATE INVESTOR FUND
As an Oppenheimer fund shareholder, you are entitled to know how we protect your personal information and how we limit its disclosure.
Information Sources
We obtain non-public personal information about our shareholders from the following sources:
● Applications or other forms.
● When you create a user ID and password for online account access.
● When you enroll in eDocs Direct,SM our electronic document delivery service.
● Your transactions with us, our affiliates or others.
● Technologies on our website, including: “cookies” and web beacons, which are used to collect data on the pages you visit and the features you use.
If you visit oppenheimerfunds.com and do not log on to the secure account information areas, we do not obtain any personal information about you. When you do log on to a secure area, we do obtain your user ID and password to identify you. We also use this information to provide you with products and services you have requested, to inform you about products and services that you may be interested in and assist you in other ways.
We do not collect personal information through our website unless you willingly provide it to us, either directly by email or in those areas of the website that request information. In order to update your personal information (including your mailing address, email address and phone number) you must first log on and visit your user profile.
If you have set your browser to warn you before accepting cookies, you will receive the warning message with each cookie. You can refuse cookies by turning them off in your browser. However, doing so may limit your access to certain sections of our website.
We use cookies to help us improve and manage our website. For example, cookies help us recognize new versus repeat visitors to the site, track the pages visited, and enable some special features on the website. This data helps us provide better service for our website visitors.
Protection of Information
We do not disclose any non-public personal information (such as names on a customer list) about current or former customers to anyone, except as permitted by law.
Disclosure of Information
Copies of confirmations, account statements and other documents reporting activity in your fund accounts are made available to your financial advisor (as designated by you). We may also use details about you and your investments to help us, our financial service affiliates, or firms that jointly market their financial products and services with ours, to better serve your investment needs or suggest educational material that may be of interest to you. If this requires us to provide you with an opportunity to “opt in” or “opt out” of such information sharing with a firm not affiliated with us, you will receive notification on how to do so, before any such sharing takes place.
Right of Refusal
We will not disclose your personal information to unaffiliated third parties (except as permitted by law), unless we first offer you a reasonable opportunity to refuse or “opt out” of such disclosure.
48 OPPENHEIMER PORTFOLIO SERIES MODERATE INVESTOR FUND
Internet Security and Encryption
In general, the email services provided by our website are encrypted and provide a secure and private means of communication with us. To protect your own privacy, confidential and/ or personal information should only be communicated via email when you are advised that you are using a secure website.
As a security measure, we do not include personal or account information in non-secure emails, and we advise you not to send such information to us in non-secure emails. Instead, you may take advantage of the secure features of our website to encrypt your email correspondence. To do this, you will need to use a browser that supports Secure Sockets Layer (SSL) protocol.
● | All transactions conducted via our websites, including redemptions, exchanges and purchases, are secured by the highest encryption standards available. SSL is used to establish a secure connection between your PC and OppenheimerFunds’ server. It transmits information in an encrypted and scrambled format. |
● | Encryption is achieved through an electronic scrambling technology that uses a “key” to code and then decode the data. Encryption acts like the cable converter box you may have on your television set. It scrambles data with a secret code so that no one can make sense of it while it is being transmitted. When the data reaches its destination, the same software unscrambles the data. |
● | You can exit the secure area by closing your browser or, for added security, you can use the Log Out button before you close your browser. |
Other Security Measures
We maintain physical, electronic and procedural safeguards to protect your personal account information. Our employees and agents have access to that information only so that they may offer you products or provide services, for example, when responding to your account questions.
How You Can Help
You can also do your part to keep your account information private and to prevent unauthorized transactions. If you obtain a user ID and password for your account, safeguard that information. Strengthening your online credentials–your online security profile–typically your user name, password, and security questions and answers, can be one of your most important lines of defense on the Internet. For additional information on how you can help prevent identity theft, visit https://www. oppenheimerfunds.com/security.
Who We Are
This joint notice describes the privacy policies of the Oppenheimer funds, OppenheimerFunds, Inc., each of its investment adviser subsidiaries, OppenheimerFunds Distributor, Inc. and OFI Global Trust Co. It applies to all Oppenheimer fund accounts you presently have, or may open in the future, using your Social Security number—whether or not you remain a shareholder of our funds. This notice was last updated as of November 2017. In the event it is updated or changed, we will post an updated notice on our website at oppenheimerfunds.com. If you have any questions about this privacy policy, email us by clicking on the Contact Us section of our website at oppenheimerfunds.com, write to us at P.O. Box 5270, Denver, CO 80217-5270, or call us at 800 CALL OPP (225 5677).
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Visit us at oppenheimerfunds.com for 24-hr access to account information and transactions or call us at 800.CALL OPP (800.225.5677) for 24-hr automated information and automated transactions. Representatives also available Mon–Fri 8am-8pm ET.
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![]() | Oppenheimer funds are distributed by OppenheimerFunds Distributor, Inc. 225 Liberty Street, New York, NY 10281-1008 © 2018 OppenheimerFunds Distributor, Inc. All rights reserved.
RA0545.001.0118 March 23, 2018 |
Class A Shares
AVERAGE ANNUAL TOTAL RETURNS AT 1/31/18
Class A Shares of the Fund
| ||||||||
Without Sales Charge | With Sales Charge | S&P 500 Index | Bloomberg Barclays U.S. Aggregate Bond Index | |||||
1-Year | 21.62% | 14.63% | 26.41% | 2.15% | ||||
5-Year | 9.53 | 8.24 | 15.91 | 2.01 | ||||
10-Year | 4.82 | 4.20 | 9.78 | 3.71 |
Performance data quoted represents past performance, which does not guarantee future results. The 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 their original cost. Fund returns include changes in share price, reinvested distributions, and a 5.75% maximum applicable sales charge except where “without sales charge” is indicated. Current performance may be lower or higher than the performance quoted. Returns do not consider capital gains or income taxes on an individual’s investment. Returns for periods of less than one year are cumulative and not annualized. For performance data current to the most recent month-end, visit oppenheimerfunds.com or call 1.800.CALL OPP (225.5677). See Fund prospectuses and summary prospectuses for more information on share classes and sales charges.
2 OPPENHEIMER PORTFOLIO SERIES ACTIVE ALLOCATION FUND |
MARKET OVERVIEW
Markets continued their general risk-on mode throughout 2017 and into January 2018. The U.S. economy outperformed expectations in the second half of 2017, with gross domestic product (GDP) growth exceeding the 2% trend growth rate witnessed so far during the expansion. With the economy’s continued expansion, the Federal Reserve (“Fed”) is nearing its dual mandate of full employment and price stability. While inflation has surprised to the downside for a number of months recently, the Fed believes this to be temporary and continues down its prescribed course of gradual tightening. The Fed began normalizing its balance sheet during the reporting period by discontinuing its interest reinvestment program and raised rates in
December for the third time in 2017. Despite these tightening measures, by many measures financial conditions eased in 2017.
As alluded to above, market performance was positive for most risk assets during the reporting period. Equities in the U.S. and globally performed well with the S&P 500 Index and the MSCI World Index returning 26.41% and 25.83%, respectively. Emerging market equities outperformed their developed market peers, as the MSCI Emerging Markets Index produced a return of 41.01%. U.S. Treasuries (as represented by the Bloomberg Barclays U.S. Treasury Index) generated a positive total return of 2.15%. Credit outperformed U.S. Treasuries for the year,
1. The Fund is invested in Class I shares of all underlying funds discussed in this Fund Performance Discussion, except for Oppenheimer Master Event-Linked Bond Fund, LLC, which does not offer Class I shares.
3 OPPENHEIMER PORTFOLIO SERIES ACTIVE ALLOCATION FUND |
with the Bloomberg Barclays U.S. Credit Index rising 4.84%.
FUND REVIEW
Against this market backdrop, the Fund’s Class A shares (without sales charge) produced a total return of 21.62%. In comparison, the Bloomberg Barclays U.S. Aggregate Bond Index returned of 2.15% and the S&P 500 Index returned 26.41%. The Fund employs a combination of sophisticated quantitative tools and qualitative analysis to seek to construct a well-diversified, globally allocated portfolio. The portfolio is allocated among OppenheimerFunds’ actively managed funds according to risk and strategically rebalanced based on market conditions. The Fund has roughly 20% of its assets invested in an “active component” that seeks to take advantage of short-term market conditions, and 80% invested in a “static component.” Both components performed positively during the one-year period, with the active component outperforming the static component. The active component favored equity-oriented underlying funds over interest-rate sensitive fixed-income funds, which benefited its performance during this reporting period.
UNDERLYING INVESTMENTS REVIEW
Equity funds produced the strongest contribution to the Fund’s total return for both the active and static components. All of the Fund’s domestic and foreign equity holdings provided positive returns, including its top two holdings: Oppenheimer Capital
Appreciation Fund and Oppenheimer Value Fund. Oppenheimer Capital Appreciation Fund typically invests in large-cap U.S. growth stocks. In an environment where growth outperformed value, the underlying fund benefited. That said, value also produced positive returns this period and Oppenheimer Value Fund generated strong results. All of the underlying foreign equity funds produced positive results for the Fund this period as well, led by Oppenheimer International Growth Fund and Oppenheimer International Equity Fund. European markets continued to outperform U.S. markets during this reporting period. This benefited both of these underlying funds, which have large allocations to Europe. Oppenheimer International Equity Fund also benefited from its exposure to Japan.
Although fixed income underperformed equities this reporting period, both the active and static components did receive positive contributions from each of its fixed-income holdings. The Fund’s exposure to Oppenheimer International Bond Fund, which typically invests in international fixed income securities in both developed and emerging market countries, was a top performer. This underlying fund invests in three major risk categories, or “levers” – interest rates (typically government bonds), currencies, and credit (corporate bonds and other fixed-income instruments containing credit risk). All three areas produced positive absolute results. Oppenheimer Total Return Bond Fund also performed well. This underlying fund benefited from an underweight to U.S.
4 OPPENHEIMER PORTFOLIO SERIES ACTIVE ALLOCATION FUND |
Treasuries relative to the Bloomberg Barclays U.S. Aggregate Bond Index, along with its exposure to both investment grade credit, high yield credit, and non-agency mortgage-backed securities (“MBS”).
In alternatives, Oppenheimer Global Multi Strategies Fund and Oppenheimer Fundamental Alternatives Fund produced muted positive returns. Oppenheimer Gold & Special Minerals Fund and Oppenheimer Master Event-Linked Bond Fund, LLC detracted from performance. Both components had allocations to Oppenheimer Gold & Special Minerals Fund, while Oppenheimer Master Event-Linked Bond Fund, LLC was held by the active component. In a risk-on market environment, the stocks of gold and special minerals companies underperformed, resulting in declines for Oppenheimer Gold & Special Minerals Fund. Event-linked bonds were impacted negatively as global insurance and reinsurance markets endured an extremely challenging environment amid an unprecedented number of large and impactful natural disaster events that occurred in late August through September. Losses from Hurricanes Harvey,
Irma, and Maria, along with a major earthquake in Mexico have contributed to what is expected to be at least the third largest level for insured losses in the market’s history.
FUND UPDATE
After the reporting period ended, effective February 27, 2018, Jeffrey Bennett, CFA, was named a co-Portfolio Manager of the Fund with Caleb Wong. Jeff joined OppenheimerFunds in 2016 from AllianceBernstein, where he was a Managing Director on the Alternative Investment Management team, focusing on asset allocation and portfolio construction as well as manager identification and due diligence. Previously, Jeff was director of research for Fischer & Co., a multi-family office, before which Jeff was the primary analyst at Summit Private Investments, a fund-of-hedge funds that focuses on long/short and event-driven strategies. Jeff is a CFA® charter holder and holds a BS in chemical engineering from the University of California, Los Angeles, as well as an MBA in analytic finance and econometrics from the University of Chicago.
5 OPPENHEIMER PORTFOLIO SERIES ACTIVE ALLOCATION FUND |
ASSET CLASS ALLOCATION
Domestic Equity Funds | 53.0 | % | ||
Foreign Equity Funds | 29.6 | |||
Domestic Fixed Income Funds | 9.9 | |||
Alternative Funds | 4.4 | |||
Foreign Fixed Income Fund | 2.9 | |||
Money Market Fund | 0.2 |
Portfolio holdings and allocations are subject to change. Percentages are as of January 31, 2018, and are based on the total market value of investments.
TOP TEN HOLDINGS
Oppenheimer Capital Appreciation Fund, Cl. I | 22.7 | % | ||
Oppenheimer Value Fund, Cl. I | 22.3 | |||
Oppenheimer International Growth Fund, Cl. I | 10.6 | |||
Oppenheimer International Equity Fund, Cl. I | 10.1 | |||
Oppenheimer Total Return Bond Fund, Cl. I | 5.8 | |||
Oppenheimer Developing Markets Fund, Cl. I | 4.9 | |||
Oppenheimer Main Street Mid Cap Fund, Cl. I | 4.3 | |||
Oppenheimer International Small- Mid Company Fund, Cl.I | 4.0 | |||
Oppenheimer Main Street Small Cap Fund, Cl. I | 3.6 | |||
Oppenheimer International Bond Fund, Cl. I | 2.9 |
Portfolio holdings and allocations are subject to change. Percentages are as of January 31, 2018, and are based on net assets. For more current Top 10 Fund holdings, please visit oppenheimerfunds.com.
6 OPPENHEIMER PORTFOLIO SERIES ACTIVE ALLOCATION FUND |
Share Class Performance
AVERAGE ANNUAL TOTAL RETURNS WITHOUT SALES CHARGE AS OF 1/31/18
Inception Date | 1-Year | 5-Year | 10-Year | |||||||||||||
Class A (OAAAX) | 4/5/05 | 21.62% | 9.53% | 4.82% | ||||||||||||
Class B (OAABX) | 4/5/05 | 20.67 | 8.70 | 4.30 | ||||||||||||
Class C (OAACX) | 4/5/05 | 20.72 | 8.73 | 4.03 | ||||||||||||
Class R (OAANX) | 4/5/05 | 21.28 | 9.26 | 4.60 | ||||||||||||
Class Y (OAAYX) | 4/5/05 | 21.98 | 9.82 | 5.16 |
AVERAGE ANNUAL TOTAL RETURNS WITH SALES CHARGE AS OF 1/31/18
Inception Date | 1-Year | 5-Year | 10-Year | |||||||||||||
Class A (OAAAX) | 4/5/05 | 14.63% | 8.24% | 4.20% | ||||||||||||
Class B (OAABX) | 4/5/05 | 15.67 | 8.41 | 4.30 | ||||||||||||
Class C (OAACX) | 4/5/05 | 19.72 | 8.73 | 4.03 | ||||||||||||
Class R (OAANX) | 4/5/05 | 21.28 | 9.26 | 4.60 | ||||||||||||
Class Y (OAAYX) | 4/5/05 | 21.98 | 9.82 | 5.16 |
Performance data quoted represents past performance, which does not guarantee future results. The 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 their original cost. Current performance may be lower or higher than the performance quoted. Returns do not consider capital gains or income taxes on an individual’s investment. For performance data current to the most recent month-end, visit oppenheimerfunds.com or call 1.800. CALL OPP (225.5677). Fund returns include changes in share price, reinvested distributions, and the applicable sales charge: for Class A shares, the current maximum initial sales charge of 5.75%; for Class B shares, the contingent deferred sales charge of 5% (1-year) and 2% (5-year); and for Class C shares, the contingent deferred sales charge of 1% for the 1-year period. There is no sales charge for Class R and Class Y shares. Because Class B shares convert to Class A shares 72 months after purchase, the 10-year return for Class B shares uses Class A performance for the period after conversion. Returns for periods of less than one year are cumulative and not annualized. See Fund prospectuses and summary prospectuses for more information on share classes and sales charges.
The Fund’s performance is compared to the performance of the S&P 500 Index and the Bloomberg Barclays U.S. Aggregate Bond Index. The S&P 500 Index is a capitalization-weighted index of 500 stocks intended to be a representative sample of leading companies in leading industries within the U.S. economy. The Bloomberg Barclays U.S. Aggregate Bond Index is an index of U.S.-dollar-denominated, investment-grade U.S. corporate government and mortgage-backed securities. The indices are unmanaged and cannot be purchased directly by investors. While index comparisons may be useful to provide a benchmark for the Fund’s performance, it must be noted that the Fund’s investments are not limited to the investments comprising the indices. Index performance includes reinvestment of income, but does not reflect transaction costs, fees, expenses or taxes. Index performance is shown for illustrative purposes only as a benchmark for the Fund’s performance, and does not predict or depict
7 OPPENHEIMER PORTFOLIO SERIES ACTIVE ALLOCATION FUND |
performance of the Fund. The Fund’s performance reflects the effects of the Fund’s business and operating expenses.
The views in the Fund Performance Discussion represent the opinions of this Fund’s portfolio managers and are not intended as investment advice or to predict or depict the performance of any investment. These views are as of the close of business on January 31, 2018, and are subject to change based on subsequent developments. The Fund’s portfolio and strategies are subject to change.
Before investing in any of the Oppenheimer funds, investors should carefully consider a fund’s investment objectives, risks, charges and expenses. Fund prospectuses and summary prospectuses contain this and other information about the funds, and may be obtained by asking your financial advisor, visiting oppenheimerfunds.com, or calling 1.800.CALL OPP (225.5677). Read prospectuses and summary prospectuses carefully before investing.
Shares of Oppenheimer funds are not deposits or obligations of any bank, are not guaranteed by any bank, are not insured by the FDIC or any other agency, and involve investment risks, including the possible loss of the principal amount invested.
8 OPPENHEIMER PORTFOLIO SERIES ACTIVE ALLOCATION FUND |
Fund Expenses. As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, which may include sales charges (loads) on purchase payments and/or contingent deferred sales charges on redemptions; and (2) ongoing costs, including management fees; distribution and service fees; and other Fund expenses. These examples are intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
The examples are based on an investment of $1,000.00 invested at the beginning of the period and held for the entire 6-month period ended January 31, 2018.
Actual Expenses. The first section of the table provides information about actual account values and actual expenses. You may use the information in this section for the class of shares you hold, together with the amount you invested, to estimate the expense that you paid over the period. Simply divide your account value by $1,000.00 (for example, an $8,600.00 account value divided by $1,000.00 = 8.60), then multiply the result by the number in the first section under the heading entitled “Expenses Paid During 6 Months Ended January 31, 2018” to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes. The second section of the table provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio for each class of shares, and an assumed rate of return of 5% per year for each class before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example for the class of shares you hold with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as front-end or contingent deferred sales charges (loads). Therefore, the “hypothetical” section of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
9 OPPENHEIMER PORTFOLIO SERIES ACTIVE ALLOCATION FUND |
Actual | Beginning Account Value August 1, 2017 | Ending Account Value January 31, 2018 | Expenses Paid During 6 Months Ended January 31, 2018 | |||||
Class A | $ 1,000.00 | $ 1,108.70 | $ 2.87 | |||||
Class B | 1,000.00 | 1,104.80 | 6.97 | |||||
Class C | 1,000.00 | 1,104.00 | 6.86 | |||||
Class R | 1,000.00 | 1,107.50 | 4.15 | |||||
Class Y | 1,000.00 | 1,110.50 | 1.54 | |||||
Hypothetical (5% return before expenses) | ||||||||
Class A | 1,000.00 | 1,022.48 | 2.76 | |||||
Class B | 1,000.00 | 1,018.60 | 6.69 | |||||
Class C | 1,000.00 | 1,018.70 | 6.58 | |||||
Class R | 1,000.00 | 1,021.27 | 3.98 | |||||
Class Y | 1,000.00 | 1,023.74 | 1.48 |
Expenses are equal to the Fund’s annualized expense ratio for that class, multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period). Those annualized expense ratios, excluding indirect expenses from affiliated funds, based on the 6-month period ended January 31, 2018 are as follows:
Class | Expense Ratios | |||||||
Class A | 0.54 | % | ||||||
Class B | 1.31 | |||||||
Class C | 1.29 | |||||||
Class R | 0.78 | |||||||
Class Y | 0.29 |
The expense ratios reflect voluntary and/or contractual waivers and/or reimbursements of expenses by the Fund’s Manager and Transfer Agent. Some of these undertakings may be modified or terminated at any time, as indicated in the Fund’s prospectus. The “Financial Highlights” tables in the Fund’s financial statements, included in this report, also show the gross expense ratios, without such waivers or reimbursements and reduction to custodian expenses, if applicable.
10 OPPENHEIMER PORTFOLIO SERIES ACTIVE ALLOCATION FUND |
STATEMENT OF INVESTMENTS January 31, 2018
Shares | Value | |||||||
Investment Companies—99.9%1 | ||||||||
Alternative Funds—4.4% | ||||||||
Oppenheimer Fundamental Alternatives Fund, Cl. I | 363,572 | $ | 10,187,295 | |||||
Oppenheimer Global Multi Strategies Fund, Cl. I | 870,291 | 20,025,401 | ||||||
Oppenheimer Gold & Special Minerals Fund, Cl. I | 469,836 | 7,686,517 | ||||||
Oppenheimer Master Event-Linked Bond Fund, LLC | 1,493,604 | 23,287,710 | ||||||
Oppenheimer Master Inflation Protected Securities Fund, LLC | 3,653,830 | 44,091,474 | ||||||
Oppenheimer Real Estate Fund, Cl. I | 547,627 | 13,208,757 | ||||||
118,487,154 | ||||||||
Domestic Equity Funds—52.9% | ||||||||
Oppenheimer Capital Appreciation Fund, Cl. I | 9,005,104 | 609,915,675 | ||||||
Oppenheimer Main Street Mid Cap Fund, Cl. I | 3,854,798 | 114,371,867 | ||||||
Oppenheimer Main Street Small Cap Fund, Cl. I | 6,199,301 | 96,213,155 | ||||||
Oppenheimer Value Fund, Cl. I | 15,013,184 | 598,125,242 | ||||||
1,418,625,939 | ||||||||
Domestic Fixed Income Funds—9.9% | ||||||||
Oppenheimer Limited-Term Government Fund, Cl. I | 14,292,458 | 62,172,194 | ||||||
Oppenheimer Master Loan Fund, LLC | 2,806,582 | 47,813,137 | ||||||
Oppenheimer Total Return Bond Fund, Cl. I | 22,710,820 | 153,979,360 | ||||||
263,964,691 | ||||||||
Foreign Equity Funds—29.6% | ||||||||
Oppenheimer Developing Markets Fund, Cl. I | 2,805,883 | 130,277,161 | ||||||
Oppenheimer International Equity Fund, Cl. I | 11,557,153 | 270,668,529 | ||||||
Oppenheimer International Growth Fund, Cl. I | 6,211,070 | 285,150,222 | ||||||
Oppenheimer International Small-Mid Company Fund, Cl. I | 2,049,178 | 107,581,839 | ||||||
793,677,751 | ||||||||
Foreign Fixed Income Fund—2.9% | ||||||||
Oppenheimer International Bond Fund, Cl. I | 12,724,854 | 77,621,608 | ||||||
Money Market Fund—0.2% | ||||||||
Oppenheimer Institutional Government Money Market Fund, Cl. E, 1.26%2 | 5,206,535 | 5,206,535 | ||||||
Total Investments, at Value (Cost $1,919,185,372) | 99.9% | 2,677,583,678 | ||||||
Net Other Assets (Liabilities) | 0.1 | 1,686,897 | ||||||
Net Assets | 100.0% | $ | 2,679,270,575 | |||||
Footnotes to Statement of Investments
1. Is or was an affiliate, as defined in the Investment Company Act of 1940, as amended, at or during the reporting period, by virtue of the Fund owning at least 5% of the voting securities of the issuer or as a result of the Fund and the issuer having the same investment adviser. Transactions during the reporting period in which the issuer was an affiliate are as follows:
Shares January 31, 2017 | Gross Additions | Gross Reductions | Shares January 31, 2018 | |||||||||||||
Oppenheimer Capital Appreciation Fund, Cl. I | 8,365,070 | 1,489,321 | 849,287 | 9,005,104 | ||||||||||||
Oppenheimer Developing Markets Fund, Cl. I | 3,205,285 | 87,331 | 486,733 | 2,805,883 | ||||||||||||
Oppenheimer Fundamental Alternatives Fund, Cl. I | 469,210 | 16,023 | 121,661 | 363,572 | ||||||||||||
Oppenheimer Global Multi Strategies Fund, Cl. I | 902,596 | 82,842 | 115,147 | 870,291 |
11 OPPENHEIMER PORTFOLIO SERIES ACTIVE ALLOCATION FUND |
STATEMENT OF INVESTMENTS Continued
Footnotes to Statement of Investments (Continued)
Shares January 31, 2017 | Gross Additions | Gross Reductions | Shares January 31, 2018 | |||||||||||||
Oppenheimer Gold & Special Minerals Fund, Cl. I | 516,254 | 28,316 | 74,734 | 469,836 | ||||||||||||
Oppenheimer Institutional Government Money Market Fund, Cl. E | 5,954,028 | 167,521 | 915,014 | 5,206,535 | ||||||||||||
Oppenheimer International Bond Fund, Cl. I | 14,703,828 | 893,551 | 2,872,525 | 12,724,854 | ||||||||||||
Oppenheimer International Equity Fund, Cl. I | 13,027,700 | 301,409 | 1,771,956 | 11,557,153 | ||||||||||||
Oppenheimer International Growth Fund, Cl. I | 7,535,304 | 210,185 | 1,534,419 | 6,211,070 | ||||||||||||
Oppenheimer International Small- Mid Company Fund, Cl. I | 2,337,625 | 107,961 | 396,408 | 2,049,178 | ||||||||||||
Oppenheimer Limited-Term Government Fund, Cl. I | 15,566,232 | 693,326 | 1,967,100 | 14,292,458 | ||||||||||||
Oppenheimer Main Street Mid Cap Fund, Cl. I | 3,203,148 | 1,027,185 | 375,535 | 3,854,798 | ||||||||||||
Oppenheimer Main Street Small Cap Fund, Cl. I | 7,253,252 | 472,790 | 1,526,741 | 6,199,301 | ||||||||||||
Oppenheimer Master Event-Linked Bond Fund, LLC | 1,747,468 | 35,393 | 289,257 | 1,493,604 | ||||||||||||
Oppenheimer Master Inflation Protected Securities Fund, LLC | 4,049,833 | 99,428 | 495,431 | 3,653,830 | ||||||||||||
Oppenheimer Master Loan Fund, LLC | 2,527,665 | 624,337 | 345,420 | 2,806,582 | ||||||||||||
Oppenheimer Real Estate Fund, Cl. I | 565,092 | 39,626 | 57,091 | 547,627 | ||||||||||||
Oppenheimer Total Return Bond Fund, Cl. Ia | 24,296,326 | 1,267,684 | 2,853,190 | 22,710,820 | ||||||||||||
Oppenheimer Value Fund, Cl. I | 15,149,620 | 1,448,703 | 1,585,139 | 15,013,184 | ||||||||||||
Value | Income | Realized Gain (Loss) | Change in Unrealized Gain (Loss) | |||||||||||||
Oppenheimer Capital Appreciation Fund, Cl. Ib | $ | 609,915,675 | $ | 2,083,952 | $ | 21,063,142 | $ | 77,997,897 | ||||||||
Oppenheimer Developing Markets Fund, Cl. I | 130,277,161 | 878,796 | 9,678,648 | 28,025,711 | ||||||||||||
Oppenheimer Fundamental Alternatives Fund, Cl. I | 10,187,295 | 199,054 | 39,818 | 221,072 | ||||||||||||
Oppenheimer Global Multi Strategies Fund, Cl. I | 20,025,401 | 773,141 | (7,694) | (45,925) | ||||||||||||
Oppenheimer Gold & Special Minerals Fund, Cl. I | 7,686,517 | 245,248 | 100,748 | (438,699) | ||||||||||||
Oppenheimer Institutional Government Money Market Fund, Cl. E | 5,206,535 | 48,497 | — | — | ||||||||||||
Oppenheimer International Bond Fund, Cl. I | 77,621,608 | 1,035,480 | 263,972 | 7,981,636 | ||||||||||||
Oppenheimer International Equity Fund, Cl. I | 270,668,529 | 991,392 | 9,586,674 | 60,553,548 |
12 OPPENHEIMER PORTFOLIO SERIES ACTIVE ALLOCATION FUND |
Footnotes to Statement of Investments (Continued)
Value | Income | Realized Gain (Loss) | Change in Unrealized Gain (Loss) | |||||||||||||
Oppenheimer International Growth Fund, Cl. I | $ | 285,150,222 | $ | 2,856,401 | $ | 31,357,725 | $ | 36,052,128 | ||||||||
Oppenheimer International Small- Mid Company Fund, Cl. Ic | 107,581,839 | 1,203,345 | 8,403,628 | 21,236,439 | ||||||||||||
Oppenheimer Limited-Term Government Fund, Cl. I | 62,172,194 | 1,465,116 | (191,870) | (813,927) | ||||||||||||
Oppenheimer Main Street Mid Cap Fund, Cl. Id | 114,371,867 | 834,080 | 3,688,312 | (2,331,448) | ||||||||||||
Oppenheimer Main Street Small Cap Fund, Cl. Ie | 96,213,155 | 552,029 | 3,694,858 | 4,362,785 | ||||||||||||
Oppenheimer Master Event-Linked Bond Fund, LLC | 23,287,710 | 1,686,910f | (456,777)f | (1,917,062)f | ||||||||||||
Oppenheimer Master Inflation Protected Securities Fund, LLC | 44,091,474 | 1,181,502g | 48,444g | (549,824)g | ||||||||||||
Oppenheimer Master Loan Fund, LLC | 47,813,137 | 2,909,589h | (181,761)h | (169,702)h | ||||||||||||
Oppenheimer Real Estate Fund, Cl. Ii | 13,208,757 | 252,720 | 852,650 | (1,311,433) | ||||||||||||
Oppenheimer Total Return Bond Fund, Cl. Ia | 153,979,360 | 5,013,289 | 3,162,604 | (2,575,589) | ||||||||||||
Oppenheimer Value Fund, Cl. Ij | 598,125,242 | 7,708,842 | 29,700,597 | 38,843,984 | ||||||||||||
Total | $ | 2,677,583,678 | $ | 31,919,383 | $ | 120,803,718 | $ | 265,121,591 | ||||||||
a. Prior to June 1, 2017, this fund was named Oppenheimer Core Bond Fund.
b. This fund distributed realized gains of $45,308,565.
c. This fund distributed realized gains of $2,177,233.
d. This fund distributed realized gains of $12,753,920.
e. This fund distributed realized gains of $4,756,603.
f. Represents the amount allocated to the Fund from Oppenheimer Master Event-Linked Bond Fund, LLC.
g. Represents the amount allocated to the Fund from Oppenheimer Master Inflation Protected Securities Fund, LLC.
h. Represents the amount allocated to the Fund from Oppenheimer Master Loan Fund, LLC.
i. This fund distributed realized gains of $478,885.
j. This fund distributed realized gains of $23,975,882.
2. Rate shown is the 7-day yield at period end.
See accompanying Notes to Financial Statements.
13 OPPENHEIMER PORTFOLIO SERIES ACTIVE ALLOCATION FUND |
STATEMENT OF ASSETS AND LIABILITIES January 31, 2018
Assets | ||||
Investments, at value—see accompanying statement of investments—affiliated companies (cost $1,919,185,372) | $ | 2,677,583,678 | ||
Cash | 2,315,544 | |||
Receivables and other assets: | ||||
Investments sold | 933,346 | |||
Dividends | 837,559 | |||
Shares of beneficial interest sold | 515,172 | |||
Other | 144,802 | |||
Total assets | 2,682,330,101 | |||
Liabilities | ||||
Payables and other liabilities: | ||||
Shares of beneficial interest redeemed | 1,416,118 | |||
Investments purchased | 840,703 | |||
Distribution and service plan fees | 550,758 | |||
Trustees’ compensation | 200,225 | |||
Shareholder communications | 11,783 | |||
Other | 39,939 | |||
Total liabilities | 3,059,526 | |||
Net Assets | $ | 2,679,270,575 | ||
|
| |||
Composition of Net Assets | ||||
Par value of shares of beneficial interest | $ | 176,517 | ||
Additional paid-in capital | 2,086,470,975 | |||
Accumulated net investment income | 33,945,075 | |||
Accumulated net realized loss on investments | (199,720,298 | ) | ||
Net unrealized appreciation on investments | 758,398,306 | |||
|
| |||
Net Assets | $ | 2,679,270,575 | ||
|
|
14 OPPENHEIMER PORTFOLIO SERIES ACTIVE ALLOCATION FUND |
Net Asset Value Per Share | ||||
Class A Shares:
| ||||
Net asset value and redemption price per share (based on net assets of $1,888,595,729 and 123,824,442 shares of beneficial interest outstanding)
| $
| 15.25
|
| |
Maximum offering price per share (net asset value plus sales charge of 5.75% of offering price) | $ | 16.18 | ||
Class B Shares:
| ||||
Net asset value, redemption price (excludes applicable contingent deferred sales charge) and offering price per share (based on net assets of $12,695,586 and 836,534 shares of beneficial interest outstanding) | $ | 15.18 | ||
Class C Shares:
| ||||
Net asset value, redemption price (excludes applicable contingent deferred sales charge) and offering price per share (based on net assets of $579,999,334 and 38,870,934 shares of beneficial interest outstanding) | $ | 14.92 | ||
Class R Shares:
| ||||
Net asset value, redemption price (excludes applicable contingent deferred sales charge)and offering price per share (based on net assets of $134,456,781 and 8,864,631 shares of beneficial interest outstanding) | $ | 15.17 | ||
Class Y Shares:
| ||||
Net asset value, redemption price and offering price per share (based on net assets of $63,523,145 and 4,120,666 shares of beneficial interest outstanding) | $ | 15.42 |
See accompanying Notes to Financial Statements.
15 OPPENHEIMER PORTFOLIO SERIES ACTIVE ALLOCATION FUND |
OF OPERATIONS For the Year Ended January 31, 2018
Allocation of Income and Expenses from Master Funds1 | ||||
Net investment income allocated from Oppenheimer Master Event-Linked Bond Fund, LLC: | ||||
Interest | $ | 1,680,785 | ||
Dividends | 6,125 | |||
Net expenses | (114,136) | |||
|
| |||
Net investment income allocated from Oppenheimer Master Event-Linked Bond Fund, LLC |
| 1,572,774
|
| |
Net investment income allocated from Oppenheimer Master Inflation Protected Securities Fund, LLC: | ||||
Interest | 1,178,415 | |||
Dividends | 3,087 | |||
Net expenses | (217,946) | |||
|
| |||
Net investment income allocated from Oppenheimer Master Inflation Protected Securities Fund, LLC |
| 963,556
|
| |
Net investment income allocated from Oppenheimer Master Loan Fund, LLC: | ||||
Interest | 2,836,552 | |||
Dividends | 73,037 | |||
Net expenses | (173,408) | |||
|
| |||
Net investment income allocated from Oppenheimer Master Loan Fund, LLC | 2,736,181 | |||
|
| |||
Total allocation of net investment income from master funds | 5,272,511 | |||
| ||||
Investment Income | ||||
Dividends—affiliated companies | 26,141,382 | |||
Interest | 23,895 | |||
|
| |||
Total investment income | 26,165,277 | |||
| ||||
Expenses | ||||
Distribution and service plan fees: | ||||
Class A | 4,265,198 | |||
Class B | 258,190 | |||
Class C | 5,498,007 | |||
Class R | 607,915 | |||
Transfer and shareholder servicing agent fees: | ||||
Class A | 3,806,961 | |||
Class B | 56,695 | |||
Class C | 1,203,479 | |||
Class R | 267,904 | |||
Class Y | 133,432 | |||
Shareholder communications: | ||||
Class A | 27,977 | |||
Class B | 1,808 | |||
Class C | 7,980 | |||
Class R | 1,424 | |||
Class Y | 436 | |||
Asset allocation fees | 2,511,310 | |||
Trustees’ compensation | 34,053 | |||
Custodian fees and expenses | 17,602 | |||
Other | 87,663 | |||
|
| |||
Total expenses | 18,788,034 |
16 OPPENHEIMER PORTFOLIO SERIES ACTIVE ALLOCATION FUND |
Expenses (Continued) | ||||
Less waivers and reimbursements of expenses | $ | (1,377,867) | ||
|
| |||
Net expenses | 17,410,167 | |||
Net Investment Income | 14,027,621 | |||
Realized and Unrealized Gain (Loss) | ||||
Net realized gain on: | ||||
Investment transactions in affiliated companies | 121,393,812 | |||
Distributions received from affiliate companies | 89,451,088 | |||
Increase from payment by affiliate | 10,924 | |||
Net realized gain (loss) allocated from: | ||||
Oppenheimer Master Event-Linked Bond Fund, LLC | (456,777) | |||
Oppenheimer Master Inflation Protected Securities Fund, LLC | 48,444 | |||
Oppenheimer Master Loan Fund, LLC | (181,761) | |||
|
| |||
Net realized gain | 210,265,730 | |||
Net change in unrealized appreciation/depreciation on: | ||||
Investment transactions in affiliated companies | 267,758,179 | |||
Net change in unrealized appreciation/depreciation allocated from: | ||||
Oppenheimer Master Event-Linked Bond Fund, LLC | (1,917,062) | |||
Oppenheimer Master Inflation Protected Securities Fund, LLC | (549,824) | |||
Oppenheimer Master Loan Fund, LLC | (169,702) | |||
|
| |||
Net change in unrealized appreciation/depreciation | 265,121,591 | |||
Net Increase in Net Assets Resulting from Operations | $ | 489,414,942 | ||
|
|
1. The Fund invests in certain affiliated mutual funds that expect to be treated as partnerships for tax purposes. See Note 4 of the accompanying Notes.
See accompanying Notes to Financial Statements.
17 OPPENHEIMER PORTFOLIO SERIES ACTIVE ALLOCATION FUND |
STATEMENTS OF CHANGES IN NET ASSETS
Year Ended January 31, 2018 | Year Ended January 31, 2017 | |||||||
Operations | ||||||||
Net investment income | $ | 14,027,621 | $ | 23,567,406 | ||||
Net realized gain | 210,265,730 | 83,039,353 | ||||||
Net change in unrealized appreciation/depreciation | 265,121,591 | 165,315,369 | ||||||
|
| |||||||
Net increase in net assets resulting from operations | 489,414,942 | 271,922,128 | ||||||
Dividends and/or Distributions to Shareholders | ||||||||
Dividends from net investment income: | ||||||||
Class A | (20,135,054 | ) | (15,571,834) | |||||
Class B | — | — | ||||||
Class C | (2,258,627 | ) | (1,236,925) | |||||
Class R | (1,116,655 | ) | (817,761) | |||||
Class Y | (772,087 | ) | (668,587) | |||||
|
| |||||||
(24,282,423 | ) | (18,295,107) | ||||||
Beneficial Interest Transactions | ||||||||
Net increase (decrease) in net assets resulting from beneficial interest transactions: | ||||||||
Class A | (80,802,213 | ) | (57,983,628) | |||||
Class B | (35,083,644 | ) | (42,745,371) | |||||
Class C | (57,650,166 | ) | (44,157,244) | |||||
Class R | (5,783,509 | ) | (3,558,847) | |||||
Class Y | (4,424,578 | ) | 13,332,099 | |||||
|
| |||||||
(183,744,110 | ) | (135,112,991) | ||||||
Net Assets | ||||||||
Total increase | 281,388,409 | 118,514,030 | ||||||
Beginning of period | 2,397,882,166 | 2,279,368,136 | ||||||
|
| |||||||
End of period (including accumulated net investment income of $33,945,075 and $23,221,709, respectively) | $ | 2,679,270,575 | $ | 2,397,882,166 | ||||
|
|
See accompanying Notes to Financial Statements.
18 OPPENHEIMER PORTFOLIO SERIES ACTIVE ALLOCATION FUND |
Class A | Year Ended 2018 | Year Ended 2017 | Year Ended 20161 | Year Ended 20151 | Year Ended 2014 | |||||||||||||||
| ||||||||||||||||||||
Per Share Operating Data | ||||||||||||||||||||
Net asset value, beginning of period | $12.68 | $11.38 | $12.12 | $11.52 | $10.27 | |||||||||||||||
| ||||||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||
Net investment income2 | 0.10 | 0.15 | 0.09 | 0.11 | 0.13 | |||||||||||||||
Net realized and unrealized gain (loss) | 2.63 | 1.27 | (0.65) | 0.61 | 1.28 | |||||||||||||||
|
| |||||||||||||||||||
Total from investment operations | 2.73 | 1.42 | (0.56) | 0.72 | 1.41 | |||||||||||||||
| ||||||||||||||||||||
Dividends and/or distributions to shareholders: | ||||||||||||||||||||
Dividends from net investment income | (0.16) | (0.12) | (0.18) | (0.12) | (0.16) | |||||||||||||||
| ||||||||||||||||||||
Net asset value, end of period | $15.25 | $12.68 | $11.38 | $12.12 | $11.52 | |||||||||||||||
|
| |||||||||||||||||||
| ||||||||||||||||||||
Total Return, at Net Asset Value3 | 21.62% | 12.50% | (4.67)% | 6.26% | 13.73% | |||||||||||||||
| ||||||||||||||||||||
Ratios/Supplemental Data | ||||||||||||||||||||
Net assets, end of period (in thousands) | $1,888,596 | $1,645,373 | $1,530,527 | $1,599,618 | $1,496,909 | |||||||||||||||
| ||||||||||||||||||||
Average net assets (in thousands) | $1,749,924 | $1,606,586 | $1,646,634 | $1,591,772 | $1,416,982 | |||||||||||||||
| ||||||||||||||||||||
Ratios to average net assets:4,5 | ||||||||||||||||||||
Net investment income | 0.75% | 1.20% | 0.74% | 0.93% | 1.14% | |||||||||||||||
Expenses excluding specific expenses listed below | 0.59% | 0.60% | 0.59% | 0.59% | 0.59% | |||||||||||||||
Interest and fees from borrowings | 0.00% | 0.00%6 | 0.00%6 | 0.00% | 0.00% | |||||||||||||||
|
| |||||||||||||||||||
Total expenses7 | 0.59% | 0.60% | 0.59% | 0.59% | 0.59% | |||||||||||||||
Expenses after payments, waivers and/or reimbursements and reduction to custodian expenses | 0.53% | 0.56% | 0.55% | 0.55% | 0.54% | |||||||||||||||
| ||||||||||||||||||||
Portfolio turnover rate | 9% | 5% | 8% | 15% | 9% |
1. Represents the last business day of the Fund’s reporting period.
2. Per share amounts calculated based on the average shares outstanding during the period.
3. Assumes an 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 less than one full year. Returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares.
4. Annualized for periods less than one full year.
5. Includes the Fund’s share of the allocated expenses and/or net investment income from the master funds.
6. Less than 0.005%.
7. Total expenses including indirect expenses from affiliated fund fees and expenses were as follows:
Year Ended January 31, 2018 | 1.22 | % | ||||||
Year Ended January 31, 2017 | 1.23 | % | ||||||
Year Ended January 29, 2016 | 1.21 | % | ||||||
Year Ended January 30, 2015 | 1.21 | % | ||||||
Year Ended January 31, 2014 | 1.26 | % |
See accompanying Notes to Financial Statements.
19 OPPENHEIMER PORTFOLIO SERIES ACTIVE ALLOCATION FUND |
FINANCIAL HIGHLIGHTS Continued
Class B | Year Ended January 31, 2018 | Year Ended January 31, 2017 | Year Ended January 29, 20161 | Year Ended January 30, 20151 | Year Ended January 31, 2014 | |||||||||||||||
| ||||||||||||||||||||
Per Share Operating Data | ||||||||||||||||||||
Net asset value, beginning of period | $12.58 | $11.27 | $11.96 | $11.34 | $10.10 | |||||||||||||||
| ||||||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||
Net investment income (loss)2 | (0.08) | 0.04 | (0.01) | 0.01 | 0.01 | |||||||||||||||
Net realized and unrealized gain (loss) | 2.68 | 1.27 | (0.62) | 0.61 | 1.29 | |||||||||||||||
|
| |||||||||||||||||||
Total from investment operations | 2.60 | 1.31 | (0.63) | 0.62 | 1.30 | |||||||||||||||
| ||||||||||||||||||||
Dividends and/or distributions to shareholders: | ||||||||||||||||||||
Dividends from net investment income | 0.00 | 0.00 | (0.06) | 0.00 | (0.06) | |||||||||||||||
| ||||||||||||||||||||
Net asset value, end of period | $15.18 | $12.58 | $11.27 | $11.96 | $11.34 | |||||||||||||||
|
| |||||||||||||||||||
| ||||||||||||||||||||
Total Return, at Net Asset Value3 | 20.67% | 11.62% | (5.33)% | 5.48% | 12.83% | |||||||||||||||
| ||||||||||||||||||||
Ratios/Supplemental Data | ||||||||||||||||||||
Net assets, end of period (in thousands) | $12,696 | $43,089 | $79,042 | $134,496 | $197,214 | |||||||||||||||
Average net assets (in thousands) | $25,803 | $58,930 | $106,583 | $166,076 | $220,028 | |||||||||||||||
Ratios to average net assets:4,5 | ||||||||||||||||||||
Net investment income (loss) | (0.57)% | 0.30% | (0.08)% | 0.11% | 0.14% | |||||||||||||||
Expenses excluding specific expenses listed below | 1.35% | 1.35% | 1.35% | 1.34% | 1.37% | |||||||||||||||
Interest and fees from borrowings | 0.00% | 0.00%6 | 0.00%6 | 0.00% | 0.00% | |||||||||||||||
|
| |||||||||||||||||||
Total expenses7 | 1.35% | 1.35% | 1.35% | 1.34% | 1.37% | |||||||||||||||
Expenses after payments, waivers and/or reimbursements and reduction to custodian expenses | 1.29% | 1.31% | 1.31% | 1.30% | 1.32% | |||||||||||||||
| ||||||||||||||||||||
Portfolio turnover rate | 9% | 5% | 8% | 15% | 9% |
1. Represents the last business day of the Fund’s reporting period.
2. Per share amounts calculated based on the average shares outstanding during the period.
3. Assumes an 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 less than one full year. Returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares.
4. Annualized for periods less than one full year.
5. Includes the Fund’s share of the allocated expenses and/or net investment income from the master funds.
6. Less than 0.005%.
7. Total expenses including indirect expenses from affiliated fund fees and expenses were as follows:
Year Ended January 31, 2018 | 1.98 | % | ||||||
Year Ended January 31, 2017 | 1.98 | % | ||||||
Year Ended January 29, 2016 | 1.97 | % | ||||||
Year Ended January 30, 2015 | 1.96 | % | ||||||
Year Ended January 31, 2014 | 2.04 | % |
See accompanying Notes to Financial Statements.
20 OPPENHEIMER PORTFOLIO SERIES ACTIVE ALLOCATION FUND |
Class C | Year Ended January 31, 2018 | Year Ended January 31, 2017 | Year Ended January 29, 20161 | Year Ended January 30, 20151 | Year Ended January 31, 2014 | |||||||||||||||
| ||||||||||||||||||||
Per Share Operating Data | ||||||||||||||||||||
Net asset value, beginning of period | $12.41 | $11.14 | $11.87 | $11.28 | $10.06 | |||||||||||||||
| ||||||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||
Net investment income2 | 0.003 | 0.05 | 0.003 | 0.02 | 0.04 | |||||||||||||||
Net realized and unrealized gain (loss) | 2.57 | 1.25 | (0.64) | 0.60 | 1.26 | |||||||||||||||
|
| |||||||||||||||||||
Total from investment operations | 2.57 | 1.30 | (0.64) | 0.62 | 1.30 | |||||||||||||||
| ||||||||||||||||||||
Dividends and/or distributions to shareholders: | ||||||||||||||||||||
Dividends from net investment income | (0.06) | (0.03) | (0.09) | (0.03) | (0.08) | |||||||||||||||
| ||||||||||||||||||||
Net asset value, end of period | $14.92 | $12.41 | $11.14 | $11.87 | $11.28 | |||||||||||||||
|
| |||||||||||||||||||
| ||||||||||||||||||||
Total Return, at Net Asset Value4 | 20.72% | 11.66% | (5.41)% | 5.53% | 12.93% | |||||||||||||||
| ||||||||||||||||||||
Ratios/Supplemental Data | ||||||||||||||||||||
Net assets, end of period (in thousands) | $579,999 | $535,568 | $522,227 | $557,576 | $535,716 | |||||||||||||||
| ||||||||||||||||||||
Average net assets (in thousands) | $552,895 | $533,800 | $564,178 | $562,221 | $518,457 | |||||||||||||||
| ||||||||||||||||||||
Ratios to average net assets:5,6 | ||||||||||||||||||||
Net investment income (loss) | (0.03)% | 0.44% | (0.01)% | 0.18% | 0.35% | |||||||||||||||
Expenses excluding specific expenses listed below | 1.34% | 1.35% | 1.34% | 1.34% | 1.33% | |||||||||||||||
Interest and fees from borrowings | 0.00% | 0.00%7 | 0.00%7 | 0.00% | 0.00% | |||||||||||||||
|
| |||||||||||||||||||
Total expenses8 | 1.34% | 1.35% | 1.34% | 1.34% | 1.33% | |||||||||||||||
Expenses after payments, waivers and/or reimbursements and reduction to custodian expenses | 1.28% | 1.31% | 1.30% | 1.30% | 1.28% | |||||||||||||||
| ||||||||||||||||||||
Portfolio turnover rate | 9% | 5% | 8% | 15% | 9% |
1. Represents the last business day of the Fund’s reporting period.
2. Per share amounts calculated based on the average shares outstanding during the period.
3. Less than $0.005 per share.
4. Assumes an 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 less than one full year. Returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares.
5. Annualized for periods less than one full year.
6. Includes the Fund’s share of the allocated expenses and/or net investment income from the master funds.
7. Less than 0.005%.
8. Total expenses including indirect expenses from affiliated fund fees and expenses were as follows:
Year Ended January 31, 2018 | 1.97 | % | ||||||
Year Ended January 31, 2017 | 1.98 | % | ||||||
Year Ended January 29, 2016 | 1.96 | % | ||||||
Year Ended January 30, 2015 | 1.96 | % | ||||||
Year Ended January 31, 2014 | 2.00 | % |
See accompanying Notes to Financial Statements.
21 OPPENHEIMER PORTFOLIO SERIES ACTIVE ALLOCATION FUND |
FINANCIAL HIGHLIGHTS Continued
Class R | Year Ended January 31, 2018 | Year Ended January 31, 2017 | Year Ended January 29, 20161 | Year Ended January 30, 20151 | Year Ended January 31, 2014 | |||||||||||||||
| ||||||||||||||||||||
Per Share Operating Data | ||||||||||||||||||||
Net asset value, beginning of period | $12.62 | $11.32 | $12.05 | $11.45 | $10.21 | |||||||||||||||
| ||||||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||
Net investment income2 | 0.07 | 0.11 | 0.06 | 0.08 | 0.09 | |||||||||||||||
Net realized and unrealized gain (loss) | 2.61 | 1.28 | (0.64) | 0.61 | 1.28 | |||||||||||||||
|
| |||||||||||||||||||
Total from investment operations | 2.68 | 1.39 | (0.58) | 0.69 | 1.37 | |||||||||||||||
| ||||||||||||||||||||
Dividends and/or distributions to shareholders: | ||||||||||||||||||||
Dividends from net investment income | (0.13) | (0.09) | (0.15) | (0.09) | (0.13) | |||||||||||||||
| ||||||||||||||||||||
Net asset value, end of period | $15.17 | $12.62 | $11.32 | $12.05 | $11.45 | |||||||||||||||
|
| |||||||||||||||||||
| ||||||||||||||||||||
Total Return, at Net Asset Value3 | 21.28% | 12.29% | (4.88)% | 5.99% | 13.42% | |||||||||||||||
| ||||||||||||||||||||
Ratios/Supplemental Data | ||||||||||||||||||||
Net assets, end of period (in thousands) | $134,457 | $117,356 | $108,810 | $119,953 | $128,012 | |||||||||||||||
| ||||||||||||||||||||
Average net assets (in thousands) | $123,173 | $112,804 | $120,320 | $127,487 | $133,527 | |||||||||||||||
| ||||||||||||||||||||
Ratios to average net assets:4,5 | ||||||||||||||||||||
Net investment income | 0.49% | 0.94% | 0.50% | 0.66% | 0.78% | |||||||||||||||
Expenses excluding specific expenses listed below | 0.84% | 0.85% | 0.84% | 0.84% | 0.81% | |||||||||||||||
Interest and fees from borrowings | 0.00% | 0.00%6 | 0.00%6 | 0.00% | 0.00% | |||||||||||||||
|
| |||||||||||||||||||
Total expenses7 | 0.84% | 0.85% | 0.84% | 0.84% | 0.81% | |||||||||||||||
Expenses after payments, waivers and/or reimbursements and reduction to custodian expenses | 0.78% | 0.81% | 0.80% | 0.80% | 0.76% | |||||||||||||||
| ||||||||||||||||||||
Portfolio turnover rate | 9% | 5% | 8% | 15% | 9% |
1. Represents the last business day of the Fund’s reporting period.
2. Per share amounts calculated based on the average shares outstanding during the period.
3. Assumes an 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 less than one full year. Returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares.
4. Annualized for periods less than one full year.
5. Includes the Fund’s share of the allocated expenses and/or net investment income from the master funds.
6. Less than 0.005%.
7. Total expenses including indirect expenses from affiliated fund fees and expenses were as follows:
Year Ended January 31, 2018 | 1.47 | % | ||||||
Year Ended January 31, 2017 | 1.48 | % | ||||||
Year Ended January 29, 2016 | 1.46 | % | ||||||
Year Ended January 30, 2015 | 1.46 | % | ||||||
Year Ended January 31, 2014 | 1.48 | % |
See accompanying Notes to Financial Statements.
22 OPPENHEIMER PORTFOLIO SERIES ACTIVE ALLOCATION FUND |
Class Y | Year Ended January 31, 2018 | Year Ended January 31, 2017 | Year Ended January 29, 20161 | Year Ended January 30, 20151 | Year Ended January 31, 2014 | |||||||||||||||
| ||||||||||||||||||||
Per Share Operating Data | ||||||||||||||||||||
Net asset value, beginning of period | $12.81 | $11.51 | $12.25 | $11.65 | $10.38 | |||||||||||||||
| ||||||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||
Net investment income2 | 0.13 | 0.20 | 0.14 | 0.17 | 0.17 | |||||||||||||||
Net realized and unrealized gain (loss) | 2.68 | 1.26 | (0.66) | 0.59 | 1.30 | |||||||||||||||
|
| |||||||||||||||||||
Total from investment operations | 2.81 | 1.46 | (0.52) | 0.76 | 1.47 | |||||||||||||||
| ||||||||||||||||||||
Dividends and/or distributions to shareholders: | ||||||||||||||||||||
Dividends from net investment income | (0.20) | (0.16) | (0.22) | (0.16) | (0.20) | |||||||||||||||
| ||||||||||||||||||||
Net asset value, end of period | $15.42 | $12.81 | $11.51 | $12.25 | $11.65 | |||||||||||||||
|
| |||||||||||||||||||
| ||||||||||||||||||||
Total Return, at Net Asset Value3 | 21.98% | 12.69% | (4.34)% | 6.52% | 14.07% | |||||||||||||||
| ||||||||||||||||||||
Ratios/Supplemental Data | ||||||||||||||||||||
Net assets, end of period (in thousands) | $63,523 | $56,496 | $38,762 | $30,551 | $9,416 | |||||||||||||||
| ||||||||||||||||||||
Average net assets (in thousands) | $61,326 | $41,675 | $33,137 | $17,424 | $8,437 | |||||||||||||||
| ||||||||||||||||||||
Ratios to average net assets:4,5 | ||||||||||||||||||||
Net investment income | 0.90% | 1.65% | 1.14% | 1.35% | 1.48% | |||||||||||||||
Expenses excluding specific expenses listed below | 0.34% | 0.35% | 0.35% | 0.35% | 0.30% | |||||||||||||||
Interest and fees from borrowings | 0.00% | 0.00%6 | 0.00%6 | 0.00% | 0.00% | |||||||||||||||
|
| |||||||||||||||||||
Total expenses7 | 0.34% | 0.35% | 0.35% | 0.35% | 0.30% | |||||||||||||||
Expenses after payments, waivers and/or reimbursements and reduction to custodian expenses | 0.28% | 0.31% | 0.31% | 0.31% | 0.25% | |||||||||||||||
| ||||||||||||||||||||
Portfolio turnover rate | 9% | 5% | 8% | 15% | 9% |
1. Represents the last business day of the Fund’s reporting period.
2. Per share amounts calculated based on the average shares outstanding during the period.
3. Assumes an 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 less than one full year. Returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares.
4. Annualized for periods less than one full year.
5. Includes the Fund’s share of the allocated expenses and/or net investment income from the master funds.
6. Less than 0.005%.
7. Total expenses including indirect expenses from affiliated fund fees and expenses were as follows:
Year Ended January 31, 2018 | 0.97 | % | ||||||
Year Ended January 31, 2017 | 0.98 | % | ||||||
Year Ended January 29, 2016 | 0.97 | % | ||||||
Year Ended January 30, 2015 | 0.97 | % | ||||||
Year Ended January 31, 2014 | 0.97 | % |
See accompanying Notes to Financial Statements.
23 OPPENHEIMER PORTFOLIO SERIES ACTIVE ALLOCATION FUND |
NOTES TO FINANCIAL STATEMENTS January 31, 2018
1. Organization
Oppenheimer Portfolio Series (the “Trust”) is registered under the Investment Company Act of 1940 (“1940 Act”), as amended, as a diversified open-end management investment company. Active Allocation Fund (the “Fund”) is a series of the Trust whose investment objective is to seek total return. The Fund normally invests in a diversified portfolio of Oppenheimer mutual funds (individually, an “Underlying Fund” and collectively, the “Underlying Funds”). The Fund’s investment adviser is OFI Global Asset Management, Inc. (“OFI Global” or the “Manager”), a wholly-owned subsidiary of OppenheimerFunds, Inc. (“OFI” or the “Sub-Adviser”). The Manager has entered into a sub-advisory agreement with OFI.
The Fund offers Class A, Class C, Class R and Class Y shares, and previously offered Class B shares for new purchase through June 29, 2012. Subsequent to that date, no new purchases of Class B shares are permitted, however reinvestment of dividend and/or capital gain distributions and exchanges of Class B shares into and from other Oppenheimer funds are allowed. Class A shares are sold at their offering price, which is normally net asset value plus a front-end sales charge. Class C shares are sold, and Class B shares were sold, without a front-end sales charge but may be subject to a contingent deferred sales charge (“CDSC”). Class R shares are sold only through retirement plans. Retirement plans that offer Class R shares may impose charges on those accounts. Class Y shares are sold to certain institutional investors or intermediaries without either a front-end sales charge or a CDSC, however, the intermediaries may impose charges on their accountholders who beneficially own Class Y shares. All classes of shares have identical rights and voting privileges with respect to the Fund in general and exclusive voting rights on matters that affect that class alone. Earnings, net assets and net asset value per share may differ due to each class having its own expenses, such as transfer and shareholder servicing agent fees and shareholder communications, directly attributable to that class. Class A, B, C and R shares have separate distribution and/or service plans under which they pay fees. Class Y shares do not pay such fees. Class B shares will automatically convert to Class A shares 72 months after the date of purchase.
The following is a summary of significant accounting policies followed in the Fund’s preparation of financial statements in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”).
2. Significant Accounting Policies
Security Valuation. All investments in securities are recorded at their estimated fair value, as described in Note 3.
Allocation of Income, Expenses, Gains and Losses. Income, expenses (other than those attributable to a specific class), gains and losses are allocated on a daily basis 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.
Dividends and Distributions to Shareholders. Dividends and distributions to
24 OPPENHEIMER PORTFOLIO SERIES ACTIVE ALLOCATION FUND |
2. Significant Accounting Policies (Continued)
shareholders, which are determined in accordance with income tax regulations and may differ from U.S. GAAP, are recorded on the ex-dividend date. Income and capital gain distributions, if any, are declared and paid annually or at other times as determined necessary by the Manager.
Investment Income. Dividend distributions received from the Underlying Funds are recorded on the ex-dividend date. Upon receipt of notification from an Underlying Fund, and subsequent to the ex-dividend date, some of the dividend income originally recorded by the Fund may be reclassified as a tax return of capital by reducing the cost basis of the Underlying Fund and/or increasing the realized gain on sales of investments in the Underlying Fund.
Custodian Fees. “Custodian fees and expenses” in the Statement of Operations may include interest expense incurred by the Fund on any cash overdrafts of its custodian account during the period. Such cash overdrafts may result from the effects of failed trades in portfolio securities and from cash outflows resulting from unanticipated shareholder redemption activity. The Fund pays interest to its custodian on such cash overdraft at a rate equal to the Prime Rate plus 0.35%. The “Reduction to custodian expenses” line item, if applicable, represents earnings on cash balances maintained by the Fund during the period. Such interest expense and other custodian fees may be paid with these earnings.
Security Transactions. Security transactions are recorded on the trade date. Realized gains and losses on securities sold are determined on the basis of identified cost.
Indemnifications. The Fund’s organizational documents provide current and former Trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund’s maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.
Federal Taxes. The Fund intends to comply with provisions of the Internal Revenue Code applicable to regulated investment companies and to distribute substantially all of its investment company taxable income, including any net realized gain on investments not offset by capital loss carryforwards, if any, to shareholders. Therefore, no federal income or excise tax provision is required. The Fund files income tax returns in U.S. federal and applicable state jurisdictions. The statute of limitations on the Fund’s tax return filings generally remains open for the three preceding fiscal reporting period ends. The Fund has analyzed its tax positions for the fiscal year ended January 31, 2018, including open tax years, and does not believe there are any uncertain tax positions requiring recognition in the Fund’s financial statements.
The tax components of capital shown in the following table represent distribution requirements the Fund must satisfy under the income tax regulations, losses the Fund may be
25 OPPENHEIMER PORTFOLIO SERIES ACTIVE ALLOCATION FUND |
NOTES TO FINANCIAL STATEMENTS Continued
2. Significant Accounting Policies (Continued)
able to offset against income and gains realized in future years and unrealized appreciation or depreciation of securities and other investments for federal income tax purposes.
Undistributed Net Investment Income | Undistributed Long-Term Gain | Accumulated Loss Carryforward1,2,3 | Net Unrealized Appreciation Based on cost of Securities and Other Investments for Federal Income Tax Purposes | |||||||||
| ||||||||||||
$34,500,687 | $— | $143,139,986 | $701,458,904 |
1. At period end, the Fund had $143,139,986 of net capital loss carryforward available to offset future realized capital gains, if any, and thereby reduce future taxable gain distributions. Details of the capital loss carryforwards are included in the table below. Capital loss carryovers with no expiration, if any, must be utilized prior to those with expiration dates.
Expiring | ||||
| ||||
2019 | $ | 143,139,986 |
2. During the reporting period, the Fund utilized $190,061,560 of capital loss carryforward to offset capital gains realized in that fiscal year.
3. During the previous reporting period, the Fund utilized $75,775,769 of capital loss carryforward to offset capital gains realized in that fiscal year.
Net investment income (loss) and net realized gain (loss) may differ for financial statement and tax purposes. The character of dividends and distributions made during the fiscal year from net investment income or net realized gains are determined in accordance with federal income tax requirements, which may differ from the character of net investment income or net realized gains presented in those financial statements in accordance with U.S. GAAP. Also, due to timing of dividends and distributions, the fiscal year in which amounts are distributed may differ from the fiscal year in which the income or net realized gain was recorded by the Fund.
Accordingly, the following amounts have been reclassified for the reporting period. Net assets of the Fund were unaffected by the reclassifications.
Increase to Paid-in Capital | Increase to Accumulated Net Investment Income | Increase on Investments | ||||||
| ||||||||
$10,924 | $20,978,168 | $20,989,092 |
The tax character of distributions paid during the reporting periods:
Year Ended January 31, 2018 | Year Ended January 31, 2017 | |||||||
| ||||||||
Distributions paid from: | ||||||||
Ordinary income | $ | 24,282,423 | $ | 18,295,107 |
The aggregate cost of securities and other investments and the composition of unrealized appreciation and depreciation of securities and other investments for federal income tax
26 OPPENHEIMER PORTFOLIO SERIES ACTIVE ALLOCATION FUND |
2. Significant Accounting Policies (Continued)
purposes at period end are noted in the following table. The primary difference between book and tax appreciation or depreciation of securities and other investments, if applicable, is attributable to the tax deferral of losses or tax realization of financial statement unrealized gain or loss.
Federal tax cost of securities | $ | 1,976,124,774 | ||
|
| |||
Gross unrealized appreciation | $ | 731,485,908 | ||
Gross unrealized depreciation | (30,027,004) | |||
|
| |||
Net unrealized appreciation | $ | 701,458,904 | ||
|
|
Use of Estimates. The preparation of financial statements in conformity with U.S. GAAP 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 increases and decreases in net assets from operations during the reporting period. Actual results could differ from those estimates.
3. Securities Valuation
The Fund calculates the net asset value of its shares based upon the net asset value of the applicable investment companies. For each investment company, the net asset value per share for a class of shares is determined as of 4:00 P.M. eastern time, on each day the New York Stock Exchange (the “Exchange”) is open for trading, except in the case of a scheduled early closing of the Exchange, in which case the Fund will calculate net asset value of the shares as of the scheduled early closing time of the Exchange. This is calculated by dividing the value of the investment company’s net assets attributable to that class by the number of outstanding shares of that class on that day.
The Fund’s Board has adopted procedures for the valuation of the Fund’s securities and has delegated the day-to-day responsibility for valuation determinations under those procedures to the Manager. The Manager has established a Valuation Committee which is responsible for determining a fair valuation for any security for which market quotations are not readily available. The Valuation Committee’s fair valuation determinations are subject to review, approval and ratification by the Fund’s Board at least quarterly or more frequently, if necessary.
Valuations Methods and Inputs
To determine their net asset values, the Underlying Funds’ assets are valued primarily on the basis of current market quotations as generally supplied by third party portfolio pricing services or by dealers. Such market quotations are typically based on unadjusted quoted prices in active markets for identical securities or other observable market inputs.
Securities for which market quotations are not readily available, or when a significant event has occurred that would materially affect the value of the security, are fair valued either (i) by a standardized fair valuation methodology applicable to the security type or the significant event as previously approved by the Valuation Committee and the Fund’s Board or (ii) as
27 OPPENHEIMER PORTFOLIO SERIES ACTIVE ALLOCATION FUND |
NOTES TO FINANCIAL STATEMENTS Continued
3. Securities Valuation (Continued)
determined in good faith by the Manager’s Valuation Committee. The Valuation Committee considers all relevant facts that are reasonably available, through either public information or information available to the Manager, when determining the fair value of a security. The methodologies used for valuing securities are not necessarily an indication of the risks associated with investing in those Underlying Funds.
Classifications
Each investment asset or liability of the Fund is assigned a level at measurement date based on the significance and source of the inputs to its valuation. Various data inputs may be used in determining the value of each of the Fund’s investments as of the reporting period end.
These data inputs are categorized in the following hierarchy under applicable financial accounting standards:
1) Level 1-unadjusted quoted prices in active markets for identical assets or liabilities (including securities actively traded on a securities exchange)
2) Level 2-inputs other than unadjusted quoted prices that are observable for the asset or liability (such as unadjusted quoted prices for similar assets and market corroborated inputs such as interest rates, prepayment speeds, credit risks, etc.)
3) Level 3-significant unobservable inputs (including the Manager’s own judgments about assumptions that market participants would use in pricing the asset or liability).
The inputs used for valuing securities are not necessarily an indication of the risks associated with investing in those securities.
The Fund classifies each of its investments in investment companies which are publicly offered as Level 1. Investment companies that are not publicly offered, if any, are measured using net asset value and are classified as Level 2 in the fair value hierarchy.
The table below categorizes amounts that are included in the Fund’s Statement of Assets and Liabilities at period end based on valuation input level:
Level 1— Unadjusted Quoted Prices | Level 2— Other Significant | Level 3— Significant Unobservable Inputs | Value | |||||||||||||
| ||||||||||||||||
Assets Table | ||||||||||||||||
Investments, at Value: | ||||||||||||||||
Investment Companies | $ | 2,562,391,357 | $ | 115,192,321 | $ | — | $ | 2,677,583,678 | ||||||||
|
| |||||||||||||||
Total Assets | $ | 2,562,391,357 | $ | 115,192,321 | $ | — | $ | 2,677,583,678 | ||||||||
|
|
Forward currency exchange contracts and futures contracts, if any, are reported at their unrealized appreciation/depreciation at measurement date, which represents the change in the contract’s value from trade date. All additional assets and liabilities included in the above table are reported at their market value at measurement date.
4. Investments and Risks
Risks of Investing in the Underlying Funds. The Fund invests in other mutual funds
28 OPPENHEIMER PORTFOLIO SERIES ACTIVE ALLOCATION FUND |
4. Investments and Risks (Continued)
advised by the Manager. The Underlying Funds are registered open-end management investment companies under the 1940 Act, as amended. The Manager is the investment adviser of, and the Sub-Adviser provides investment and related advisory services to, the Underlying Funds. The Fund’s Investments in Underlying Funds are included in the Statement of Investments. Shares of Underlying Funds are valued at their net asset value per share. As a shareholder, the Fund is subject to its proportional share of the Underlying Funds’ expenses, including their management fee.
Each of the Underlying Funds in which the Fund invests has its own investment risks, and those risks can affect the value of the Fund’s investments and therefore the value of the Fund’s shares. To the extent that the Fund invests more of its assets in one Underlying Fund than in another, the Fund will have greater exposure to the risks of that Underlying Fund.
Investment in Oppenheimer Institutional Government Money Market Fund.
The Fund is permitted to invest daily available cash balances in an affiliated money market fund. The Fund may invest the available cash in Class E shares of Oppenheimer Institutional Government Money Market Fund (“IGMMF”) to seek current income while preserving liquidity or for defensive purposes. IGMMF is a registered open-end management investment company, regulated as a money market fund under the 1940 Act, as amended. The Manager is the investment adviser of IGMMF, and the Sub-Adviser provides investment and related advisory services to IGMMF. When applicable, the Fund’s investment in IGMMF is included in the Statement of Investments. Shares of IGMMF are valued at their net asset value per share. As a shareholder, the Fund is subject to its proportional share of IGMMF’s Class E expenses, including its management fee.
Investment in Oppenheimer Master Funds. Certain Underlying Funds in which the Fund invests are mutual funds registered under the 1940 Act, as amended, that expect to be treated as partnerships for tax purposes, specifically Oppenheimer Master Loan Fund, LLC (“Master Loan”), Oppenheimer Master Event-Linked Bond Fund, LLC (“Master Event-Linked Bond”) and Oppenheimer Master Inflation Protected Securities Fund, LLC (“Master Inflation Protected Securities”) (the “Master Funds”). Each Master Fund has its own investment risks, and those risks can affect the value of the Fund’s investments and therefore the value of the Fund’s shares. To the extent that the Fund invests more of its assets in one Master Fund than in another, the Fund will have greater exposure to the risks of that Master Fund.
The investment objective of Master Loan is to seek income. The investment objective of Master Event-Linked Bond is to seek total return. The investment objective of Master Inflation Protected Securities is to seek total return. The Fund’s investments in the Master Funds are included in the Statement of Investments. The Fund recognizes income and gain/ (loss) on its investments in each Master Fund according to its allocated pro-rata share, based on its relative proportion of total outstanding Master Fund shares held, of the total net income earned and the net gain/(loss) realized on investments sold by the Master Funds. As a shareholder, the Fund is subject to its proportional share of the Master Funds’ expenses, including their management fee. The Manager will waive fees and/or reimburse Fund expenses
29 OPPENHEIMER PORTFOLIO SERIES ACTIVE ALLOCATION FUND |
NOTES TO FINANCIAL STATEMENTS Continued
4. Investments and Risks (Continued)
in an amount equal to the indirect management fees incurred through the Fund’s investment in the Master Funds. The Fund owns 3.27% of Master Loan, 8.49% of Master Event-Linked Bond and 29.55% of Master Inflation Protected Securities at period end.
5. Market Risk Factors
The Fund’s investments in securities and/or financial derivatives may expose the Fund to various market risk factors:
Commodity Risk. Commodity risk relates to the change in value of commodities or commodity indexes as they relate to increases or decreases in the commodities market. Commodities are physical assets that have tangible properties. Examples of these types of assets are crude oil, heating oil, metals, livestock, and agricultural products.
Credit Risk. Credit risk relates to the ability of the issuer of debt to meet interest and principal payments, or both, as they come due. In general, lower-grade, higher-yield debt securities are subject to credit risk to a greater extent than lower-yield, higher-quality securities.
Equity Risk. Equity risk relates to the change in value of equity securities as they relate to increases or decreases in the general market.
Foreign Exchange Rate Risk. Foreign exchange rate risk relates to the change in the U.S. dollar value of a security held that is denominated in a foreign currency. The U.S. dollar value of a foreign currency denominated security will decrease as the dollar appreciates against the currency, while the U.S. dollar value will increase as the dollar depreciates against the currency.
Interest Rate Risk. Interest rate risk refers to the fluctuations in value of fixed-income securities resulting from the inverse relationship between price and yield. For example, an increase in general interest rates will tend to reduce the market value of already issued fixed-income investments, and a decline in general interest rates will tend to increase their value. In addition, debt securities with longer maturities, which tend to have higher yields, are subject to potentially greater fluctuations in value from changes in interest rates than obligations with shorter maturities.
Volatility Risk. Volatility risk refers to the magnitude of the movement, but not the direction of the movement, in a financial instrument’s price over a defined time period. Large increases or decreases in a financial instrument’s price over a relative time period typically indicate greater volatility risk, while small increases or decreases in its price typically indicate lower volatility risk.
6. Shares of Beneficial Interest
The Fund has authorized an unlimited number of $0.001 par value shares of beneficial interest of each class. Transactions in shares of beneficial interest were as follows:
30 OPPENHEIMER PORTFOLIO SERIES ACTIVE ALLOCATION FUND |
6. Shares of Beneficial Interest (Continued)
Year Ended January 31, 2018 | Year Ended January 31, 2017 | |||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||
| ||||||||||||||||
Class A | ||||||||||||||||
Sold | 11,520,154 | $ | 158,595,411 | 15,954,799 | $ | 192,872,344 | ||||||||||
Dividends and/or distributions reinvested | 1,370,124 | 19,894,213 | 1,238,461 | 15,344,460 | ||||||||||||
Redeemed | (18,788,195 | ) | (259,291,837 | ) | (21,910,398 | ) | (266,200,432) | |||||||||
|
| |||||||||||||||
Net decrease | (5,897,917 | ) | $ | (80,802,213 | ) | (4,717,138 | ) | $ | (57,983,628) | |||||||
|
| |||||||||||||||
| ||||||||||||||||
Class B | ||||||||||||||||
Sold | 5,644 | $ | 79,086 | 32,210 | $ | 385,249 | ||||||||||
Dividends and/or distributions reinvested | — | — | — | — | ||||||||||||
Redeemed | (2,595,314 | ) | (35,162,730 | ) | (3,622,324 | ) | (43,130,620) | |||||||||
|
| |||||||||||||||
Net decrease | (2,589,670 | ) | $ | (35,083,644 | ) | (3,590,114 | ) | $ | (42,745,371) | |||||||
|
| |||||||||||||||
| ||||||||||||||||
Class C | ||||||||||||||||
Sold | 4,207,402 | $ | 56,797,604 | 5,564,819 | $ | 65,687,819 | ||||||||||
Dividends and/or distributions reinvested | 157,946 | 2,245,998 | 100,829 | 1,224,076 | ||||||||||||
Redeemed | (8,639,903 | ) | (116,693,768 | ) | (9,382,498 | ) | (111,069,139) | |||||||||
|
| |||||||||||||||
Net decrease | (4,274,555 | ) | $ | (57,650,166 | ) | (3,716,850 | ) | $ | (44,157,244) | |||||||
|
| |||||||||||||||
| ||||||||||||||||
Class R | ||||||||||||||||
Sold | 2,028,899 | $ | 28,004,514 | 1,817,772 | $ | 21,950,453 | ||||||||||
Dividends and/or distributions reinvested | 75,414 | 1,088,982 | 64,142 | 790,866 | ||||||||||||
Redeemed | (2,542,115 | ) | (34,877,005 | ) | (2,187,911 | ) | (26,300,166) | |||||||||
|
| |||||||||||||||
Net decrease | (437,802 | ) | $ | (5,783,509 | ) | (305,997 | ) | $ | (3,558,847) | |||||||
|
| |||||||||||||||
| ||||||||||||||||
Class Y | ||||||||||||||||
Sold | 1,933,793 | $ | 26,855,663 | 1,916,812 | $ | 23,738,704 | ||||||||||
Dividends and/or distributions reinvested | 51,993 | 762,732 | 52,980 | 663,316 | ||||||||||||
Redeemed | (2,273,941 | ) | (32,042,973 | ) | (930,034 | ) | (11,069,921) | |||||||||
|
| |||||||||||||||
Net increase (decrease) | (288,155 | ) | $ | (4,424,578 | ) | 1,039,758 | $ | 13,332,099 | ||||||||
|
|
7. Purchases and Sales of Securities
The aggregate cost of purchases and proceeds from sales of securities, other than short-term obligations and investments in IGMMF, for the reporting period were as follows:
Purchases | Sales | |||||||
| ||||||||
Investment securities | $237,773,557 | $345,678,631 |
8. Fees and Other Transactions with Affiliates
Management Fees. Under the investment advisory agreement, the Manager does not charge a management fee, but rather collects indirect management fees from the Fund’s investments in the Underlying Funds. The weighted indirect management fees collected from the Fund’s investment in the Underlying Funds, as a percent of average daily net assets
31 OPPENHEIMER PORTFOLIO SERIES ACTIVE ALLOCATION FUND |
NOTES TO FINANCIAL STATEMENTS Continued
8. Fees and Other Transactions with Affiliates (Continued)
of the Fund for the reporting period was 0.58%. This amount is gross of any waivers or reimbursements of management fees implemented at the Underlying Fund level.
Asset Allocation Fees. The Fund pays the Manager an asset allocation fee equal to an annual rate of 0.10% of the first $3 billion of the daily net assets of the Fund and 0.08% of the daily net assets in excess of $3 billion.
Sub-Adviser Fees. The Manager has retained the Sub-Adviser to provide the day-to-day portfolio management of the Fund. Under the Sub-Advisory Agreement, the Manager pays the Sub-Adviser an annual fee in monthly installments, equal to a percentage of the indirect investment management fee collected by the Manager, which shall be calculated after any investment management fee waivers. The fee paid to the Sub-Adviser is paid by the Manager, not by the Fund.
Transfer Agent Fees. OFI Global (the “Transfer Agent”) serves as the transfer and shareholder servicing agent for the Fund. The Fund pays the Transfer Agent a fee based on annual net assets, which shall be calculated after any applicable fee waivers. Fees incurred and average net assets for each class with respect to these services are detailed in the Statement of Operations and Financial Highlights, respectively.
Sub-Transfer Agent Fees. The Transfer Agent has retained Shareholder Services, Inc., a wholly-owned subsidiary of OFI (the “Sub-Transfer Agent”), to provide the day-to-day transfer agent and shareholder servicing of the Fund. Under the Sub-Transfer Agency Agreement, the Transfer Agent pays the Sub-Transfer Agent an annual fee in monthly installments, equal to a percentage of the transfer agent fee collected by the Transfer Agent from the Fund, which shall be calculated after any applicable fee waivers. The fee paid to the Sub-Transfer Agent is paid by the Transfer Agent, not by the Fund.
Trustees’ Compensation. The Fund has adopted an unfunded retirement plan (the “Plan”) for the Fund’s Independent Trustees. Benefits are based on years of service and fees paid to each Trustee during their period of service. The Plan was frozen with respect to adding new participants effective December 31, 2006 (the “Freeze Date”) and existing Plan Participants as of the Freeze Date will continue to receive accrued benefits under the Plan. Active Independent Trustees as of the Freeze Date have each elected a distribution method with respect to their benefits under the Plan. During the reporting period, the Fund’s projected benefit obligations, payments to retired Trustees and accumulated liability were as follows:
Projected Benefit Obligations Increased | $ | — | ||
Payments Made to Retired Trustees | 7,632 | |||
Accumulated Liability as of January 31, 2018 | 64,694 |
The Fund’s Board of Trustees (“Board”) has adopted a compensation deferral plan for Independent Trustees that enables Trustees to elect to defer receipt of all or a portion of the
32 OPPENHEIMER PORTFOLIO SERIES ACTIVE ALLOCATION FUND |
8. Fees and Other Transactions with Affiliates (Continued)
annual compensation they are entitled to receive from the Fund. For purposes of determining the amount owed to the Trustee under the plan, deferred amounts are treated as though equal dollar amounts had been invested in shares of the Fund or in other Oppenheimer funds selected by the Trustee. The Fund purchases shares of the funds selected for deferral by the Trustee in amounts equal to his or her deemed investment, resulting in a Fund asset equal to the deferred compensation liability. Such assets are included as a component of “Other” within the asset section of the Statement of Assets and Liabilities. Deferral of Trustees’ fees under the plan will not affect the net assets of the Fund and will not materially affect the Fund’s assets, liabilities or net investment income per share. Amounts will be deferred until distributed in accordance with the compensation deferral plan.
Distribution and Service Plan (12b-1) Fees. Under its General Distributor’s Agreement with the Fund, OppenheimerFunds Distributor, Inc. (the “Distributor”) acts as the Fund’s principal underwriter in the continuous public offering of the Fund’s classes of shares.
Service Plan for Class A Shares. The Fund has adopted a Service Plan (the “Plan”) for Class A shares pursuant to Rule 12b-1 under the 1940 Act. Under the Plan, the Fund reimburses the Distributor for a portion of its costs incurred for services provided to accounts that hold Class A shares. Reimbursement is made periodically at an annual rate of up to 0.25% of the daily net assets of Class A shares of the Fund. The Distributor currently uses all of those fees to pay dealers, brokers, banks and other financial institutions periodically for providing personal service and maintenance of accounts of their customers that hold Class A shares. Any unreimbursed expenses the Distributor incurs with respect to Class A shares in any fiscal year cannot be recovered in subsequent periods. Fees incurred by the Fund under the Plan are detailed in the Statement of Operations.
Distribution and Service Plans for Class B, Class C and Class R Shares. The Fund has adopted Distribution and Service Plans (the “Plans”) for Class B, Class C and Class R shares pursuant to Rule 12b-1 under the 1940 Act to compensate the Distributor for distributing those share classes, maintaining accounts and providing shareholder services. Under the Plans, the Fund pays the Distributor an annual asset-based sales charge of 0.75% on Class B and Class C shares’ daily net assets and 0.25% on Class R shares’ daily net assets. The Fund also pays a service fee under the Plans at an annual rate of 0.25% of daily net assets. The Plans continue in effect from year to year only if the Fund’s Board of Trustees votes annually to approve their continuance at an in person meeting called for that purpose. Fees incurred by the Fund under the Plans are detailed in the Statement of Operations.
Sales Charges. Front-end sales charges and CDSC do not represent expenses of the Fund. They are deducted from the proceeds of sales of Fund shares prior to investment or from redemption proceeds prior to remittance, as applicable. The sales charges retained by the Distributor from the sale of shares and the CDSC retained by the Distributor on the redemption of shares is shown in the following table for the period indicated.
33 OPPENHEIMER PORTFOLIO SERIES ACTIVE ALLOCATION FUND |
NOTES TO FINANCIAL STATEMENTS Continued
8. Fees and Other Transactions with Affiliates (Continued)
Class A | Class B | Class C | Class R | |||||||||||||||||
Class A | Contingent | Contingent | Contingent | Contingent | ||||||||||||||||
Front-End | Deferred | Deferred | Deferred | Deferred | ||||||||||||||||
Sales Charges | Sales Charges | Sales Charges | Sales Charges | Sales Charges | ||||||||||||||||
Retained by | Retained by | Retained by | Retained by | Retained by | ||||||||||||||||
Year Ended | Distributor | Distributor | Distributor | Distributor | Distributor | |||||||||||||||
| ||||||||||||||||||||
January 31, 2018 | $868,629 | $— | $22,127 | $41,069 | $— |
Waivers and Reimbursements of Expenses. Prior to June 1, 2017, the Manager voluntarily waived fees and/or reimbursed the Fund for certain expenses in order to limit “Expenses after payments, waivers and/or reimbursements and reduction to custodian expenses”, (the combined direct (Fund level) and indirect (Underlying Fund level) expenses), to the annual rate of 1.45%, 2.20%, 2.20%, 1.70% and 1.20%, for Class A, Class B, Class C, Class R and Class Y, respectively. Effective June 1, 2017, this expense limitation has been removed.
Effective for the period January 1, 2017 through December 31, 2017, the Transfer Agent voluntarily waived and/or reimbursed Fund expenses in an amount equal to 0.015% of average annual net assets for Classes A, B, C, R and Y.
During the reporting period, the Transfer Agent waived fees and/or reimbursed the Fund for transfer agent and shareholder servicing agent fees as follows:
Class A | $259,343 | |||
Class B | 4,274 | |||
Class C | 82,380 | |||
Class R | 18,247 | |||
Class Y | 9,099 |
The Manager has also contractually agreed to waive fees and/or reimburse certain Fund expenses at an annual rate of 0.04% as calculated on the daily net assets of the Fund. This waiver and/or reimbursement is applied after (and in addition to) any other applicable waiver and/or expense reimbursements that may apply. During the reporting period, the Manager waived fees and/or reimbursed the Fund $1,004,524.
During the reporting period, the Manager voluntarily reimbursed the Fund $10,924 for certain transactions. The payment is reported separately in the Statement of Operations and increased the Fund’s total returns by less than 0.005%.
34 OPPENHEIMER PORTFOLIO SERIES ACTIVE ALLOCATION FUND |
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Shareholders and Board of Trustees
Oppenheimer Portfolio Series:
Opinion on the Financial Statements
We have audited the accompanying statement of assets and liabilities of Active Allocation Fund, a series of Oppenheimer Portfolio Series, (the “Fund”), including the statement of investments, as of January 31, 2018, the related statement of operations for the year then ended, the statements of changes in net assets for each of the years in the two year period then ended, and the related notes (collectively, the “financial statements”) and the financial highlights for each of the years in the five year period then ended. In our opinion, the financial statements and financial highlights present fairly, in all material respects, the financial position of the Fund as of January 31, 2018, the results of its operations for the year then ended, the changes in its net assets for each of the years in the two year period then ended, and the financial highlights for each of the years in the five year period then ended, in conformity with U.S. generally accepted accounting principles.
Basis for Opinion
These financial statements and financial highlights are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements and financial highlights, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements and financial highlights. Such procedures also included confirmation of securities owned as of January 31, 2018, by correspondence with the transfer agent, or by other appropriate auditing procedures. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements and financial highlights. We believe that our audits provide a reasonable basis for our opinion.
KPMGLLP
We have not been able to determine the specific year that we began serving as the auditor of one or more Oppenheimer Funds investment companies, however we are aware that we have served as the auditor of one or more Oppenheimer Funds investment companies since at least 1969.
Denver, Colorado
March 23, 2018
35 OPPENHEIMER PORTFOLIO SERIES ACTIVE ALLOCATION FUND |
FEDERAL INCOME TAX INFORMATION Unaudited
In early 2018, if applicable, shareholders of record received information regarding all dividends and distributions paid to them by the Fund during calendar year 2017.
Dividends, if any, paid by the Fund during the reporting period which are not designated as capital gain distributions should be multiplied by the maximum amount allowable but not less than 80.31% to arrive at the amount eligible for the corporate dividend-received deduction.
A portion, if any, of the dividends paid by the Fund during the reporting period which are not designated as capital gain distributions are eligible for lower individual income tax rates to the extent that the Fund has received qualified dividend income as stipulated by recent tax legislation. The maximum amount allowable but not less than $21,798,688 of the Fund’s fiscal year taxable income may be eligible for the lower individual income tax rates. In early 2018, shareholders of record received information regarding the percentage of distributions that are eligible for lower individual income tax rates.
Recent tax legislation allows a regulated investment company to designate distributions not designated as capital gain distributions, as either interest related dividends or short-term capital gain dividends, both of which are exempt from the U.S. withholding tax applicable to non U.S. taxpayers. For the reporting period, the maximum amount allowable but not less than $6,377,408 of the ordinary distributions to be paid by the Fund qualifies as an interest related dividend.
The Fund has elected the application of Section 853 of the Internal Revenue Code to permit shareholders to take a federal income tax credit or deduction, at their option, on a per share basis. The maximum amount allowable but not less than $1,186,396 of foreign income taxes were paid by the Fund during the reporting period. A separate notice will be mailed to each shareholder, which will reflect the proportionate share of such foreign taxes which must be treated by shareholders as gross income for federal income tax purposes.
Gross income of the maximum amount allowable but not less than $4,443,549 was derived from sources within foreign countries or possessions of the United States.
The foregoing information is presented to assist shareholders in reporting distributions received from the Fund to the Internal Revenue Service. Because of the complexity of the federal regulations which may affect your individual tax return and the many variations in state and local tax regulations, we recommend that you consult your tax advisor for specific guidance.
36 OPPENHEIMER PORTFOLIO SERIES ACTIVE ALLOCATION FUND |
BOARD APPROVAL OF THE FUND’S INVESTMENT ADVISORY
AND SUB-ADVISORY AGREEMENTS Unaudited
The Fund has entered into an investment advisory agreement with OFI Global Asset Management, Inc. (“OFI Global” or the “Adviser”), a wholly-owned subsidiary of OppenheimerFunds, Inc. (“OFI” or the “Sub-Adviser”) (“OFI Global” and “OFI” together the “Managers”) and OFI Global has entered into a sub-advisory agreement with OFI whereby OFI provides investment sub-advisory services to the Fund (collectively, the “Agreements”). Each year, the Board of Trustees (the “Board”), including a majority of the independent Trustees, is required to determine whether to approve the terms of the Agreements and the renewal thereof. The Investment Company Act of 1940, as amended, requires that the Board request and evaluate, and that the Managers provide, such information as may be reasonably necessary to evaluate the terms of the Agreements. The Board employs an independent consultant to prepare a report that provides information, including comparative information that the Board requests for that purpose. In addition to in-person meetings focused on this evaluation, the Board receives information throughout the year regarding Fund services, fees, expenses and performance.
The Managers and the independent consultant provided information to the Board on the following factors: (i) the nature, quality and extent of the Managers’ services, (ii) the comparative investment performance of the Fund and the Managers, (iii) the fees and expenses of the Fund, including comparative fee and expense information, (iv) the profitability of the Managers and their affiliates, including an analysis of the cost of providing services, (v) whether economies of scale are realized as the Fund grows and whether fee levels reflect these economies of scale for Fund investors and (vi) other benefits to the Managers from their relationship with the Fund. The Board was aware that there are alternatives to retaining the Managers.
Outlined below is a summary of the principal information considered by the Board as well as the Board’s conclusions.
Nature, Quality and Extent of Services. The Board considered information about the nature, quality and extent of the services provided to the Fund and information regarding the Managers’ key personnel who provide such services. The Managers’ duties include providing the Fund with the services of the portfolio managers and the Sub-Adviser’s investment team, who provide research, analysis and other advisory services in regard to the Fund’s investments; and securities trading services. OFI Global is responsible for oversight of third-party service providers; monitoring compliance with applicable Fund policies and procedures and adherence to the Fund’s investment restrictions; risk management; and oversight of the Sub-Adviser. OFI Global is also responsible for providing certain administrative services to the Fund. Those services include providing and supervising all administrative and clerical personnel who are necessary in order to provide effective corporate administration for the Fund; compiling and maintaining records with respect to the Fund’s operations; preparing and filing reports required by the U.S. Securities and Exchange Commission; preparing periodic reports regarding the operations of the Fund for its shareholders; preparing proxy materials for shareholder meetings; and preparing the registration statements required by federal and state securities laws for the sale of the Fund’s shares. OFI Global also provides the Fund with office space, facilities and equipment.
37 OPPENHEIMER PORTFOLIO SERIES ACTIVE ALLOCATION FUND |
BOARD APPROVAL OF THE FUND’S INVESTMENT ADVISORY
AND SUB-ADVISORY AGREEMENTS Unaudited / Continued
The Board also considered the quality of the services provided and the quality of the Managers’ resources that are available to the Fund. The Board took account of the fact that the Sub-Adviser has over fifty years of experience as an investment adviser and that its assets under management rank it among the top mutual fund managers in the United States. The Board evaluated the Managers’ advisory, administrative, accounting, legal, compliance and risk management services, among other services, and information the Board has received regarding the experience and professional qualifications of the Managers’ key personnel and the size and functions of its staff. In its evaluation of the quality of the portfolio management services provided, the Board considered the experience of Mark Hamilton, Caleb Wong and Dokyoung Lee, the portfolio managers for the Fund, and the Sub-Adviser’s investment team and analysts. The Board members also considered the totality of their experiences with the Managers as directors or trustees of the Fund and other funds advised by the Managers. The Board considered information regarding the quality of services provided by affiliates of the Managers, which the Board members have become knowledgeable about through their experiences with the Managers and in connection with the review or renewal of the Fund’s service agreements or service providers. The Board concluded, in light of the Managers’ experience, reputation, personnel, operations and resources that the Fund benefits from the services provided under the Agreements.
Investment Performance of the Managers and the Fund. Throughout the year, the Managers provided information on the investment performance of the Fund, the Adviser and the Sub-Adviser, including comparative performance information. The Board also reviewed information, prepared by the Managers and by the independent consultant, comparing the Fund’s historical performance to relevant benchmarks or market indices and to the performance of other retail funds in the allocation – 70% to 85% equity category. The Board noted that the Fund’s one-year, three-year, five-year and ten-year performance was below its category median.
Fees and Expenses of the Fund. The Board reviewed the fees paid to the Adviser and the other expenses borne by the Fund. The Board also considered the comparability of the fees charged and the services provided to the Fund to the fees and services for other clients or accounts advised by the Adviser. The independent consultant provided comparative data in regard to the fees and expenses of the Fund and other retail front-end load allocation – 70% to 85% equity funds with comparable asset levels and distribution features. After discussions with the Board, the Adviser has agreed to contractually waive fees and/or reimburse certain Fund expenses at an annual rate of 0.04% as calculated on the daily net assets of the Fund. This waiver and/or reimbursement is applied after (and in addition to) any other applicable fee waivers and/or expense reimbursements that apply. This fee waiver and/or expense reimbursement may not be amended or withdrawn until one year from the date of the prospectus, unless approved by the Board. The Board noted that the Fund was charged no direct traditional management fees, exclusive of Underlying Fund management fees, while certain peer group funds did charge direct traditional management fees. The Board also noted that the Fund’s total expenses, net of waivers, were higher than its peer group median and lower than its category median.
38 OPPENHEIMER PORTFOLIO SERIES ACTIVE ALLOCATION FUND |
Economies of Scale and Profits Realized by the Adviser and Sub-Adviser. The Board considered information regarding the Managers’ costs in serving as the Fund’s investment adviser and sub-adviser, including the costs associated with the personnel and systems necessary to manage the Fund, and information regarding the Managers’ profitability from their relationship with the Fund. The Board also considered that the Managers must be able to pay and retain experienced professional personnel at competitive rates to provide quality services to the Fund. The Board reviewed whether the Managers may realize economies of scale in managing and supporting the Fund and whether those economies of scale benefit the Fund’s shareholders at the current level of Fund assets in relation to its management fee. The Board noted that the Fund currently has asset allocation fee breakpoints, which are intended to share with Fund shareholders economies of scale that may exist as the Fund’s assets grow.
Other Benefits to the Managers. In addition to considering the profits realized by the Managers, the Board considered information that was provided regarding the direct and indirect benefits the Managers receive as a result of their relationship with the Fund, including compensation paid to the Managers’ affiliates.
Conclusions. These factors were also considered by the independent Trustees meeting separately from the full Board, assisted by experienced counsel to the Fund and to the independent Trustees. Fund counsel and the independent Trustees’ counsel are independent of the Managers within the meaning and intent of the Securities and Exchange Commission Rules.
Based on its review of the information it received and its evaluations described above, the Board, including a majority of the independent Trustees, decided to continue the Agreements through September 30, 2018. In arriving at its decision, the Board did not identify any factor or factors as being more important than others, but considered all of the above information, and considered the terms and conditions of the Agreements, including the management fees, in light of all the surrounding circumstances.
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PORTFOLIO PROXY VOTING POLICIES AND GUIDELINES;
UPDATES TO STATEMENT OF INVESTMENTS Unaudited
The Fund has adopted Portfolio Proxy Voting Policies and Guidelines under which the Fund votes proxies relating to securities (“portfolio proxies”) held by the Fund. A description of the Fund’s Portfolio Proxy Voting Policies and Guidelines is available (i) without charge, upon request, by calling the Fund toll-free at 1.800.CALL OPP (225.5677), (ii) on the Fund’s website at www.oppenheimerfunds.com, and (iii) on the SEC’s website at www.sec.gov. In addition, the Fund is required to file Form N-PX, with its complete proxy voting record for the 12 months ended June 30th, no later than August 31st of each year. The Fund’s voting record is available (i) without charge, upon request, by calling the Fund toll-free at 1.800.CALL OPP (225.5677), and (ii) in the Form N-PX filing on the SEC’s website at www.sec.gov.
The Fund files its complete schedule of portfolio holdings with the SEC for the first quarter and the third quarter of each fiscal year on Form N-Q. The Fund’s Form N-Q filings are available on the SEC’s website at www.sec.gov. Those forms may be reviewed and copied at the SEC’s Public Reference Room in Washington, D.C. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330.
Householding—Delivery of Shareholder Documents
This is to inform you about OppenheimerFunds’ “householding” policy. If more than one member of your household maintains an account in a particular fund, OppenheimerFunds will mail only one copy of the fund’s prospectus (or, if available, the fund’s summary prospectus), annual and semiannual report and privacy policy. The consolidation of these mailings, called householding, benefits your fund through reduced mailing expense, and benefits you by reducing the volume of mail you receive from OppenheimerFunds. Householding does not affect the delivery of your account statements.
Please note that we will continue to household these mailings for as long as you remain an OppenheimerFunds shareholder, unless you request otherwise. If you prefer to receive multiple copies of these materials, please call us at 1.800.CALL-OPP (225-5677). You may also notify us in writing or via email. We will begin sending you individual copies of the prospectus (or, if available, the summary prospectus), reports and privacy policy within 30 days of receiving your request to stop householding.
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TRUSTEES AND OFFICERS Unaudited
Name, Position(s) Held with the Fund, Length of Service, Year of Birth | Principal Occupation(s) During the Past 5 Years; Other Trusteeships/Directorships Held; Number of Portfolios in the Fund Complex Currently Overseen | |
INDEPENDENT TRUSTEES | The address of each Trustee in the chart below is 6803 S. Tucson Way, Centennial, Colorado 80112-3924. Each Trustee serves for an indefinite term, or until his or her resignation, retirement, death or removal. | |
Brian F. Wruble, Chairman of the Board of Trustees (since 2007), and Trustee (since 2005) Year of Birth: 1943 | Governor of Community Foundation of the Florida Keys (non-profit) (since July 2012); Director of TCP Capital, Inc. (since November 2015); Chairman Emeritus of the Board of Trustees (since August 2011), Chairman of the Board of Trustees (August 2007-August 2011), Trustee of the Board of Trustees (since August 1991) of The Jackson Laboratory (non-profit); Member of Zurich Insurance Group’s Investment Management Advisory Council (insurance) (October 2004-February 2017); Treasurer (since 2007) and Trustee (since May 1992) of the Institute for Advanced Study (non-profit educational institute); Director of Special Value Opportunities Fund, LLC (registered investment company) (affiliate of the Sub- Adviser’s parent company) (September 2004-June 2015); General Partner of Odyssey Partners, L.P. (hedge fund) (September 1995-December 2007); Special Limited Partner of Odyssey Investment Partners, LLC (private equity investment) (January 1999-September 2004). Oversees 56 portfolios in the OppenheimerFunds complex. Mr. Wruble has served on the Boards of certain Oppenheimer funds since April 2001, during which time he has become familiar with the Fund’s (and other Oppenheimer funds’) financial, accounting, regulatory and investment matters and has contributed to the Boards’ deliberations. | |
Beth Ann Brown, Trustee (since 2016) Year of Birth: 1968 | Advisor, Board of Advisors of Caron Engineering Inc. (since December 2014); Independent Consultant (since September 2012); held the following positions at Columbia Management Investment Advisers LLC: Head of Intermediary Distribution (2008-2012), Managing Director, Strategic Relations (2005-2008), Managing Director, Head of National Accounts (2004-2005); Senior Vice President, National Account Manager (2002-2004), Senior Vice President, Key Account Manager (1999-2002) and Vice President, Key Account Manager (1996-1999) of Liberty Funds Distributor, Inc.; President and Director, of Acton Shapleigh Youth Conservation Corps (non-profit) (since 2012); and Vice President and Director of Grahamtastic Connection (non-profit) (since May 2013). Oversees 56 portfolios in the OppenheimerFunds complex. Ms. Brown has served on the Boards of certain Oppenheimer funds since January 2016, during which time she has become familiar with the Fund’s (and other Oppenheimer funds’) financial, accounting, regulatory and investment matters and has contributed to the Board’s deliberations. | |
Edmund P. Giambastiani, Jr., Trustee (since 2013) Year of Birth: 1948 | Advisory Board Member of the Maxwell School of Citizenship and Public Affairs of Syracuse University (since April 2012); Director of Mercury Defense Systems Inc. (information technology) (August 2011-February 2013); Trustee of the U.S. Naval Academy Foundation Athletic & Scholarship Program (since November 2010); Advisory Board Member of the Massachusetts Institute of Technology Lincoln Laboratory (federally-funded research development center) (since May 2010); Director of The Boeing Company (aerospace and defense) (since October 2009); Trustee of MITRE Corporation (federally-funded research development center) (since September 2008); Independent Director of QinetiQ Group Plc (defense technology and security) (February 2008-August 2011); Chairman of Monster Worldwide, Inc. (on-line career services) (March 2015-November 2016), Director of |
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TRUSTEES AND OFFICERS Unaudited / Continued
Edmund P. Giambastiani, Jr., Continued | Monster Worldwide, Inc. (on-line career services) (February 2008-June 2011); Lead Director (June 2011-March 2015); Chairman of Alenia North America, Inc. (military and defense products) (January 2008-October 2009); Director of SRA International, Inc. (information technology and services) (January 2008-July 2011); President of Giambastiani Group LLC (national security and energy consulting) (since October 2007); United States Navy, career nuclear submarine officer (June 1970-October 2007), Vice Chairman of the Joint Chiefs of Staff (2005-October 2007), Supreme Allied Commander of NATO Commander Transformation (2003-2005), Commander, U.S. Joint Forces Command (2002-2005). Since his retirement from the U.S. Navy in October 2007, Admiral Giambastiani has also served on numerous U.S. Government advisory boards, investigations and task forces for the Secretaries of Defense, State and Interior and the Central Intelligence Agency. He recently completed serving as a federal commissioner on the Military Compensation and Retirement Modernization Commission. Oversees 56 portfolios in the OppenheimerFunds complex. Admiral Giambastiani has served on the Boards of certain Oppenheimer funds since February 2013, during which time he has become familiar with the Fund’s (and other Oppenheimer funds’) financial, accounting, regulatory and investment matters and has contributed to the Boards’ deliberations. | |
Elizabeth Krentzman, Trustee (since 2014) Year of Birth: 1959 | Member of the University of Florida National Board Foundation (since September 2017); Member of the Cartica Funds Board of Directors (private investment funds) (since January 2017); Member of the University of Florida College of Law Association Board of Trustees and Audit Committee Member (since April 2016); Member of University of Florida Law Advisory Board, Washington, DC Alumni Group (since 2015); Advisory Board Member of the Securities and Exchange Commission Historical Society (since 2007); held the following positions at Deloitte & Touche LLP: Principal and Chief Regulatory Advisor for Asset Management Services (2007 - 2014) and U.S. Mutual Fund Leader (2011 - 2014); General Counsel of the Investment Company Institute (trade association) (June 2004 - April 2007); held the following positions at Deloitte & Touche LLP: National Director of the Investment Management Regulatory Consulting Practice (1997 - 2004), Principal (2003 - 2004), Director (1998 - 2003) and Senior Manager (1997 - 1998); Assistant Director of the Division of Investment Management - Office of Disclosure and Investment Adviser Regulation of the U.S. Securities and Exchange Commission (1996 - 1997) and various positions with the Division of Investment Management – Office of Regulatory Policy (1991 - 1996) of the U.S. Securities and Exchange Commission; Associate at Ropes & Gray LLP (1987 – 1991). Oversees 56 portfolios in the OppenheimerFunds complex. Ms. Krentzman has served on the Boards of certain Oppenheimer funds since August 2014, during which time she has become familiar with the Fund’s (and other Oppenheimer funds’) financial, accounting, regulatory and investment matters and has contributed to the Boards’ deliberations. | |
Mary F. Miller, Trustee (since 2005) Year of Birth: 1942 | Trustee of International House (not-for-profit) (since June 2007); Trustee of the American Symphony Orchestra (not-for-profit) (October 1998-November 2011); and Senior Vice President and General Auditor of American Express Company (financial services company) (July 1998-February 2003). Oversees 56 portfolios in the OppenheimerFunds complex. Ms. Miller has served on the Boards of certain Oppenheimer funds since August 2004, during which time she has become familiar with the Fund’s (and other Oppenheimer funds’) financial, accounting, regulatory and investment matters and has contributed to the Boards’ deliberations. |
42 OPPENHEIMER PORTFOLIO SERIES ACTIVE ALLOCATION FUND |
Joel W. Motley, Trustee (since 2005) Year of Birth: 1952 | Director of Office of Finance Federal Home Loan Bank (since September 2016); Director of Greenwall Foundation (since October 2013); Member of Board and Investment Committee of The Greenwall Foundation (since April 2013); Member of the Vestry of Trinity Wall Street (since April 2012); Director of Southern Africa Legal Services Foundation (since March 2012); Board Member of Pulitzer Center for Crisis Reporting (non-profit journalism) (since March 2011); Managing Director of Public Capital Advisors, LLC (privately-held financial advisor) (since January 2006); Managing Director of Carmona Motley, Inc. (privately-held financial advisor) (since January 2002); Director of Columbia Equity Financial Corp. (privately-held financial advisor) (2002-2007); Managing Director of Carmona Motley Hoffman Inc. (privately-held financial advisor) (January 1998-December 2001); Member of the Finance and Budget Committee of the Council on Foreign Relations, Member of the Investment Committee and Board of Human Rights Watch (since July 2000) and Member of the Investment Committee and Board of Historic Hudson Valley (since February 2010). Oversees 56 portfolios in the OppenheimerFunds complex. Mr. Motley has served on the Boards of certain Oppenheimer funds since October 2002, during which time he has become familiar with the Fund’s (and other Oppenheimer funds’) financial, accounting, regulatory and investment matters and has contributed to the Boards’ deliberations. | |
Joanne Pace, Trustee (since 2012) Year of Birth: 1958 | Advisory Board Director of Massey Quick and Company, LLC (since October 2014); Board Director of Horizon Blue Cross Blue Shield of New Jersey (since November 2012); Advisory Board Director of The Alberleen Group LLC (since March, 2012); Board Member (since January 2015), Board Member of 100 Women in Hedge Funds (non-profit) (since January 2015); Advisory Council Member of Morgan Stanley Children’s Hospital (non-profit) (since May, 2012); Senior Advisor of SECOR Asset Management, LP (2010-2011); Managing Director and Chief Operating Officer of Morgan Stanley Investment Management (2006-2010); Partner and Chief Operating Officer of FrontPoint Partners, LLC (hedge fund) (2005-2006); held the following positions at Credit Suisse: Managing Director (2003-2005); Global Head of Human Resources and member of Executive Board and Operating Committee (2004-2005), Global Head of Operations and Product Control (2003- 2004); held the following positions at Morgan Stanley: Managing Director (1997- 2003), Controller and Principal Accounting Officer (1999-2003); Chief Financial Officer (temporary assignment) for the Oversight Committee, Long Term Capital Management (1998-1999). Lead Independent Director and Chair of the Audit and Nominating Committee of The Global Chartist Fund, LLC of Oppenheimer Asset Management (2011-2012); Board Director of Managed Funds Association (2008- 2010); Board Director of Morgan Stanley Foundation (2007-2010) and Investment Committee Chair (2008-2010). Oversees 56 portfolios in the OppenheimerFunds complex. Ms. Pace has served on the Boards of certain Oppenheimer funds since November 2012, during which time she has become familiar with the Fund’s (and other Oppenheimer funds’) financial, accounting, regulatory and investment matters and has contributed to the Board’s deliberations. |
43 OPPENHEIMER PORTFOLIO SERIES ACTIVE ALLOCATION FUND |
TRUSTEES AND OFFICERS Unaudited / Continued
Daniel Vandivort, Trustee (since 2014) Year of Birth: 1954 | Chairman and Lead Independent Director/Trustee (March 2010-September 2014), Chairman of the Audit Committee (March 2009-September 2014) and Director/ Trustee (December 2008-September 2014) of the Board of Directors/Trustees of Value Line Funds; Trustee, Board of Trustees of Huntington Disease Foundation of America (since January 2015 and June 2007-December 2013) and Treasurer, Chairman of the Audit and Finance Committee (since January 2016); Trustee, Board of Trustees, RIM Retirement Savings Plan (2005-2007); President and Chief Investment Officer, Robeco Investment Management, formerly known as Weiss Peck and Greer (January 2005-June 2007); Member, Management Committee of Robeco Investment Management (2001-2007); Chairman and Trustee of the Board of Trustees of Weiss, Peck and Greer Funds (2004-2005); Managing Director and Head of Fixed Income, Weiss, Peck and Greer (November 1994-January 2005); Managing Director and Head of Fixed Income, CS First Boston Investment Management (January 1992-November 1994); Director, Global Product Development, First Boston Asset Management (November 1989 to January 1992); Vice President, Fixed Income Sales, First Boston Corp. (May 1984-November 1989). Oversees 56 portfolios in the OppenheimerFunds complex. Mr. Vandivort has served on the Boards of certain Oppenheimer funds since 2014, during which time he has become familiar with the Fund’s (and other Oppenheimer funds’) financial, accounting, regulatory and investment matters and has contributed to the Boards’ deliberations.
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INTERESTED TRUSTEE AND OFFICER | Mr. Steinmetz is an “Interested Trustee” because he is affiliated with the Manager and the Sub-Adviser by virtue of his positions as Chairman of the Sub-Adviser and officer and director of the Manager. Both as a Trustee and as an officer, Mr. Steinmetz serves for an indefinite term, or until his resignation, retirement, death or removal. Mr. Steinmetz’s address is 225 Liberty Street, New York, New York 10281-1008. | |
Arthur P. Steinmetz, Trustee (since 2015), President and Principal Executive Officer (since 2014) Year of Birth: 1958 | Chairman of the Sub-Adviser (since January 2015); CEO and Chairman of the Manager (since July 2014), President of the Manager (since May 2013), a Director of the Manager (since January 2013), Director of the Sub-Adviser (since July 2014), President, Management Director and CEO of Oppenheimer Acquisition Corp. (the Sub-Adviser’s parent holding company) (since July 2014), and President and Director of OFI SteelPath, Inc. (since January 2013). Chief Investment Officer of the OppenheimerFunds advisory entities from (January 2013-December 2013); Executive Vice President of the Manager (January 2013-May 2013); Chief Investment Officer of the Sub-Adviser (October 2010-December 2012); Chief Investment Officer, Fixed-Income, of the Sub-Adviser (April 2009-October 2010); Executive Vice President of the Sub-Adviser (October 2009-December 2012); Director of Fixed Income of the Sub-Adviser (January 2009-April 2009); and a Senior Vice President of the Sub-Adviser (March 1993-September 2009). An officer of 110 portfolios in the OppenheimerFunds complex.
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OTHER OFFICERS OF THE FUND | The addresses of the Officers in the chart below are as follows: for Messrs. Hamilton, Lee, Wong, Mss. Lo Bessette, Foxson and Picciotto, 225 Liberty Street, New York, New York 10281-1008, for Mr. Petersen, 6803 S. Tucson Way, Centennial, Colorado 80112-3924. Each Officer serves for an indefinite term or until his or her resignation, retirement, death or removal. | |
Mark Hamilton1 , Vice President (since 2013) Year of Birth: 1965 | Chief Investment Officer, Asset Allocation and Senior Vice President of the Sub-Adviser (since April 2013). Mr. Hamilton served at AllianceBernstein L.P. (from 1994-2013) as an Investment Director of Dynamic Asset Allocation (from 2010-2013), Head of North American Blend Team (from 2009-2010), and Senior Portfolio Manager of Blend Strategies (from 2006-2010). A portfolio manager and officer of other portfolios in the OppenheimerFunds complex. |
44 OPPENHEIMER PORTFOLIO SERIES ACTIVE ALLOCATION FUND |
Dokyoung Lee1 , Vice President (since 2014) Year of Birth: 1965 | Director of Research, Global Multi-Asset Group and a Senior Vice President of the Sub-Adviser (since October 2013). Mr. Lee served at Alliance Bernstein L.P. (1994- 2013): Director of Research for Strategic Asset Allocation (2011-2013), Director of Research for Blend Strategies (2008-2011), Head of Asia Pacific Blend Strategies (2005-2008), Head of Quantitative Research and Senior Portfolio Manager for Japan Value Equities (2001-2005), Portfolio Manager for Emerging Markets Value Equities (1997-2001), and Quantitative Analyst for US Value Equities (1994-1997). A portfolio manager and officer of other portfolios in the OppenheimerFunds complex. | |
Caleb Wong, Vice President (since 2005) Year of Birth: 1965 | Vice President of the Sub-Adviser (since June 1999); Senior Portfolio Manager of the Sub-Adviser (since January 2005); Head of fixed income quantitative research and risk management of the Sub-Adviser (1997-1999) and worked in fixed-income quantitative research and risk management for the Sub-Adviser (since July 1996). A portfolio manager and officer of other portfolios in the OppenheimerFunds complex. | |
Cynthia Lo Bessette, Secretary and Chief Legal Officer (since 2016) Year of Birth: 1969 | Executive Vice President, General Counsel and Secretary of the Manager (since February 2016); Senior Vice President and Deputy General Counsel of the Manager (March 2015-February 2016); Chief Legal Officer of the Sub-Adviser and the Distributor (since February 2016); Vice President, General Counsel and Secretary of Oppenheimer Acquisition Corp. (since February 2016); General Counsel of OFI SteelPath, Inc., OFI Advisors and Index Management Solutions, LLC (since February 2016); Chief Legal Officer of OFI Global Institutional, Inc., HarbourView Asset Management Corporation, OFI Global Trust Company, Oppenheimer Real Asset Management, Inc., OFI Private Investments Inc., Shareholder Services, Inc. and Trinity Investment Management Corporation (since February 2016); Corporate Counsel (February 2012-March 2015) and Deputy Chief Legal Officer (April 2013-March 2015) of Jennison Associates LLC; Assistant General Counsel (April 2008-September 2009) and Deputy General Counsel (October 2009-February 2012) of Lord Abbett & Co. LLC. An officer of 110 portfolios in the OppenheimerFunds complex. | |
Jennifer Foxson, Vice President and Chief Business Officer (since 2014) Year of Birth: 1969 | Senior Vice President of OppenheimerFunds Distributor, Inc. (since June 2014); Vice President of OppenheimerFunds Distributor, Inc. (April 2006-June 2014); Vice President of the Sub-Adviser (January 1998-March 2006); Assistant Vice President of the Sub-Adviser (October 1991-December 1998). An officer of 110 portfolios in the OppenheimerFunds complex. | |
Mary Ann Picciotto, Vice President and Chief Business Officer (since 2014) Year of Birth: 1969 | Senior Vice President and Chief Compliance Officer of the Manager (since March 2014); Chief Compliance Officer of the Sub-Adviser, OFI SteelPath, Inc., OFI Global Trust Company, OFI Global Institutional, Inc., Oppenheimer Real Asset Management, Inc., OFI Private Investments, Inc., Harborview Asset Management Corporation, Trinity Investment Management Corporation, and Shareholder Services, Inc. (since March 2014); Managing Director of Morgan Stanley Investment Management Inc. and certain of its various affiliated entities; Chief Compliance Officer of various Morgan Stanley Funds (May 2010-January 2014); Chief Compliance Officer of Morgan Stanley Investment Management Inc. (April 2007-January 2014). An officer of 110 portfolios in the OppenheimerFunds complex. |
45 OPPENHEIMER PORTFOLIO SERIES ACTIVE ALLOCATION FUND |
TRUSTEES AND OFFICERS Unaudited / Continued
Brian S. Petersen, Treasurer and Principal Financial & Accounting Officer (since 2016) Year of Birth: 1970 | Senior Vice President of the Manager (since January 2017); Vice President of the Manager (January 2013-January 2017); Vice President of the Sub-Adviser (February 2007-December 2012); Assistant Vice President of the Sub-Adviser (August 2002- 2007). An officer of 110 portfolios in the OppenheimerFunds complex. |
1. Effective February 27, 2018, Mark Hamilton and Dokyoung Lee are no longer officers of the Fund.
The Fund’s Statement of Additional Information contains additional information about the Fund’s Trustees and Officers is available without charge upon request, by calling 1.800.CALL OPP (225.5677).
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OPPENHEIMER PORTFOLIO SERIES ACTIVE ALLOCATION FUND
Manager | OFI Global Asset Management, Inc. | |
Sub-Adviser | OppenheimerFunds, Inc. | |
Distributor | OppenheimerFunds Distributor, Inc. | |
Transfer and Shareholder | OFI Global Asset Management, Inc. | |
Servicing Agent | ||
Sub-Transfer Agent | Shareholder Services, Inc. | |
DBA OppenheimerFunds Services | ||
Independent Registered | KPMG LLP | |
Public Accounting Firm | ||
Legal Counsel | Kramer Levin Naftalis & Frankel LLP |
© 2018 OppenheimerFunds, Inc. All rights reserved.
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In general, the email services provided by our website are encrypted and provide a secure and private means of communication with us. To protect your own privacy, confidential and/ or personal information should only be communicated via email when you are advised that you are using a secure website.
As a security measure, we do not include personal or account information in non-secure emails, and we advise you not to send such information to us in non-secure emails. Instead, you may take advantage of the secure features of our website to encrypt your email correspondence. To do this, you will need to use a browser that supports Secure Sockets Layer (SSL) protocol.
● | All transactions conducted via our websites, including redemptions, exchanges and purchases, are secured by the highest encryption standards available. SSL is used to establish a secure connection between your PC and OppenheimerFunds’ server. It transmits information in an encrypted and scrambled format. |
● | Encryption is achieved through an electronic scrambling technology that uses a “key” to code and then decode the data. Encryption acts like the cable converter box you may have on your television set. It scrambles data with a secret code so that no one can make sense of it while it is being transmitted. When the data reaches its destination, the same software unscrambles the data. |
● | You can exit the secure area by closing your browser or, for added security, you can use the Log Out button before you close your browser. |
Other Security Measures
We maintain physical, electronic and procedural safeguards to protect your personal account information. Our employees and agents have access to that information only so that they may offer you products or provide services, for example, when responding to your account questions.
How You Can Help
You can also do your part to keep your account information private and to prevent unauthorized transactions. If you obtain a user ID and password for your account, safeguard that information. Strengthening your online credentials–your online security profile–typically your user name, password, and security questions and answers, can be one of your most important lines of defense on the Internet. For additional information on how you can help prevent identity theft, visit https://www. oppenheimerfunds.com/security.
Who We Are
This joint notice describes the privacy policies of the Oppenheimer funds, OppenheimerFunds, Inc., each of its investment adviser subsidiaries, OppenheimerFunds Distributor, Inc. and OFI Global Trust Co. It applies to all Oppenheimer fund accounts you presently have, or may open in the future, using your Social Security number—whether or not you remain a shareholder of our funds. This notice was last updated as of November 2017. In the event it is updated or changed, we will post an updated notice on our website at oppenheimerfunds.com. If you have any questions about this privacy policy, email us by clicking on the Contact Us section of our website at oppenheimerfunds.com, write to us at P.O. Box 5270, Denver, CO 80217-5270, or call us at 800 CALL OPP (225 5677).
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Visit us at oppenheimerfunds.com for 24-hr access to account information and transactions or call us at 800.CALL OPP (800.225.5677) for 24-hr automated information and automated transactions. Representatives also available Mon–Fri 8am-8pm ET. | ||||
Visit Us | ||||
oppenheimerfunds.com | ||||
Call Us | ||||
800 225 5677 | ||||
Follow Us | ||||
![]() | Oppenheimer funds are distributed by OppenheimerFunds Distributor, Inc. 225 Liberty Street, New York, NY 10281-1008 © 2018 OppenheimerFunds Distributor, Inc. All rights reserved.
RA0550.001.0118 March 23, 2018 |
Class A Shares
AVERAGE ANNUAL TOTAL RETURNS AT 1/31/18
Class A Shares of the Fund | ||||||||||||||
Without Sales Charge | With Sales Charge | S&P 500 Index | MSCI World Index | |||||||||||
1-Year | 27.83% | 20.47% | 26.41% | 25.83% | ||||||||||
5-Year | 11.15 | 9.84 | 15.91 | 11.68 | ||||||||||
10-Year | 7.07 | 6.44 | 9.78 | 6.42 |
Performance data quoted represents past performance, which does not guarantee future results. The 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 their original cost. Fund returns include changes in share price, reinvested distributions, and a 5.75% maximum applicable sales charge except where “without sales charge” is indicated. Current performance may be lower or higher than the performance quoted. Returns do not consider capital gains or income taxes on an individual’s investment. Returns for periods of less than one year are cumulative and not annualized. For performance data current to the most recent month-end, visit oppenheimerfunds.com or call 1.800.CALL OPP (225.5677). See Fund prospectuses and summary prospectuses for more information on share classes and sales charges.
2 OPPENHEIMER PORTFOLIO SERIES EQUITY INVESTOR FUND
MARKET OVERVIEW
Markets continued their general risk-on mode throughout 2017 and into January 2018. The U.S. economy outperformed expectations in the second half of 2017, with gross domestic product (GDP) growth exceeding the 2% trend growth rate witnessed so far during the expansion. With the economy’s continued expansion, the Federal Reserve (“Fed”) is nearing its dual mandate of full employment and price stability. While inflation has surprised to the downside for a number of months recently, the Fed believes this to be temporary and continues down its prescribed course of gradual tightening. The Fed began normalizing its balance sheet during the reporting period by discontinuing its interest
reinvestment program and raised rates in December for the third time in 2017. Despite these tightening measures, by many measures financial conditions eased in 2017.
As alluded to above, market performance was positive for most risk assets during the reporting period. Equities in the U.S. and globally performed well with the S&P 500 Index and the MSCI All Country World Index returning 26.41% and 27.48%, respectively. Emerging market equities outperformed their developed market peers, as the MSCI Emerging Markets Index produced a return of 41.01%. U.S. Treasuries (as represented by the Bloomberg Barclays U.S. Treasury Index)
1. The Fund is invested in Class I shares of all underlying funds discussed in this Fund Performance Discussion.
3 OPPENHEIMER PORTFOLIO SERIES EQUITY INVESTOR FUND |
generated a positive total return of 2.15%. Credit outperformed U.S. Treasuries for the year, with the Bloomberg Barclays U.S. Credit Index rising 4.84%.
FUND REVIEW
Against this market backdrop, the Fund’s Class A shares (without sales charge) produced a total return of 27.83% and outperformed its benchmarks, the S&P 500 Index and the MSCI World Index, which returned 26.41% and 25.83%, respectively.
The Fund received its strongest results from foreign equity funds this reporting period. All of the underlying foreign equity funds produced positive contributions to return for the Fund this period. Oppenheimer International Growth Fund and Oppenheimer International Equity Fund, the Fund’s largest underlying foreign equity holdings, provided the strongest contributions to return. European markets continued to outperform U.S. markets during this reporting period. This benefited both of these underlying funds, which have large allocations to Europe. Oppenheimer International Equity Fund also benefited from its exposure to Japan. Oppenheimer Developing Markets Fund and Oppenheimer International Small-Mid Company Fund also provided strong results. Oppenheimer Developing Markets Fund benefited from an environment where emerging market equities outperformed developed markets. Oppenheimer International Small-Mid Company Fund, which invests primarily in small- and mid-cap
companies domiciled outside the U.S. that offer opportunities for growth, had strong performance this period.
All of the Fund’s domestic equity holdings provided positive returns as well, including its top two holdings: Oppenheimer Capital Appreciation Fund and Oppenheimer Value Fund. Oppenheimer Capital Appreciation Fund typically invests in large-cap U.S. growth stocks. In an environment where growth outperformed value, the underlying fund benefited. That said, value also produced positive returns this period and Oppenheimer Value Fund generated strong results. The Fund’s exposure to Oppenheimer Main Street Mid Cap Fund and Oppenheimer Main Street Small Cap Fund also benefited absolute performance.
FUND UPDATE
After the reporting period ended, Jeffrey Bennett, CFA, was named the Portfolio Manager of the Fund, effective February 27, 2018. Jeff joined OppenheimerFunds in 2016 from AllianceBernstein, where he was a Managing Director on the Alternative Investment Management team, focusing on asset allocation and portfolio construction as well as manager identification and due diligence. Previously, Jeff was director of research for Fischer & Co., a multi-family office, before which Jeff was the primary analyst at Summit Private Investments, a fund-of-hedge funds that focuses on long/ short and event-driven strategies. Jeff is a CFA® charter holder and holds a BS in
4 OPPENHEIMER PORTFOLIO SERIES EQUITY INVESTOR FUND |
chemical engineering from the University of California, Los Angeles, as well as an MBA in analytic finance and econometrics from the University of Chicago.
5 OPPENHEIMER PORTFOLIO SERIES EQUITY INVESTOR FUND |
ASSET CLASS ALLOCATION
Domestic Equity Funds | 50.1% | |||
Foreign Equity Funds | 49.9 |
Portfolio holdings and allocations are subject to change. Percentages are as of January 31, 2018, and are based on the total market value of investments.
TOP HOLDINGS
Oppenheimer Value Fund, Cl. I | 22.0% | |||
Oppenheimer Capital Appreciation Fund, Cl. I | 20.7 | |||
Oppenheimer International Growth Fund, Cl. I | 19.1 | |||
Oppenheimer International Equity Fund, Cl. I | 16.8 | |||
Oppenheimer International Small- Mid Company Fund, Cl. I | 7.6 | |||
Oppenheimer Developing Markets Fund, Cl. I | 6.4 | |||
Oppenheimer Main Street Mid Cap Fund, Cl. I | 4.0 | |||
Oppenheimer Main Street Small Cap Fund, Cl. I | 3.3 |
Portfolio holdings and allocations are subject to change. Percentages are as of January 31, 2018, and are based on net assets. For current Top Fund holdings, please visit oppenheimerfunds.com.
6 OPPENHEIMER PORTFOLIO SERIES EQUITY INVESTOR FUND |
Share Class Performance
AVERAGE ANNUAL TOTAL RETURNS WITHOUT SALES CHARGE AS OF 1/31/18
Inception Date | 1-Year | 5-Year | 10-Year | |||||
Class A (OAAIX) | 4/5/05 | 27.83% | 11.15% | 7.07% | ||||
Class B (OBAIX) | 4/5/05 | 26.78 | 10.30 | 6.55 | ||||
Class C (OCAIX) | 4/5/05 | 26.83 | 10.33 | 6.26 | ||||
Class R (ONAIX) | 4/5/05 | 27.44 | 10.89 | 6.83 | ||||
Class Y (OYAIX) | 4/5/05 | 28.04 | 11.43 | 7.44 | ||||
AVERAGE ANNUAL TOTAL RETURNS WITH SALES CHARGE AS OF 1/31/18
| ||||||||
Inception Date | 1-Year | 5-Year | 10-Year | |||||
Class A (OAAIX) | 4/5/05 | 20.47% | 9.84% | 6.44% | ||||
Class B (OBAIX) | 4/5/05 | 21.78 | 10.03 | 6.55 | ||||
Class C (OCAIX) | 4/5/05 | 25.83 | 10.33 | 6.26 | ||||
Class R (ONAIX) | 4/5/05 | 27.44 | 10.89 | 6.83 | ||||
Class Y (OYAIX) | 4/5/05 | 28.04 | 11.43 | 7.44 |
Performance data quoted represents past performance, which does not guarantee future results. The 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 their original cost. Current performance may be lower or higher than the performance quoted. Returns do not consider capital gains or income taxes on an individual’s investment. For performance data current to the most recent month-end, visit oppenheimerfunds.com or call 1.800. CALL OPP (225.5677). Fund returns include changes in share price, reinvested distributions, and the applicable sales charge: for Class A shares, the current maximum initial sales charge of 5.75%; for Class B shares, the contingent deferred sales charge of 5% (1-year) and 2% (5-year); and for Class C shares, the contingent deferred sales charge of 1% for the 1-year period. There is no sales charge for Class R and Class Y shares. Because Class B shares convert to Class A shares 72 months after purchase, the 10-year return for Class B shares uses Class A performance for the period after conversion. Returns for periods of less than one year are cumulative and not annualized. See Fund prospectuses and summary prospectuses for more information on share classes and sales charges.
The Fund’s performance is compared to the performance of the S&P 500® Index and the MSCI® World Index. The S&P 500® Index is a capitalization-weighted index of 500 stocks intended to be a representative sample of leading companies in leading industries within the U.S. economy. The MSCI® World Index is an index of issuers listed on the stock exchanges of foreign countries and the United States. It is widely recognized as a measure of global stock market performance. The indices are unmanaged and cannot be purchased directly by investors. While index comparisons may be useful to provide a benchmark for the Fund’s performance, it must be noted that the Fund’s investments are not limited to the investments comprising the indices. Index performance includes reinvestment of income, but does not reflect transaction costs, fees, expenses or taxes. Index performance is shown for illustrative purposes only as a benchmark for the Fund’s performance, and does not predict or depict
7 OPPENHEIMER PORTFOLIO SERIES EQUITY INVESTOR FUND |
performance of the Fund. The Fund’s performance reflects the effects of the Fund’s business and operating expenses.
The views in the Fund Performance Discussion represent the opinions of this Fund’s portfolio managers and are not intended as investment advice or to predict or depict the performance of any investment. These views are as of the close of business on January 31, 2018, and are subject to change based on subsequent developments. The Fund’s portfolio and strategies are subject to change.
Before investing in any of the Oppenheimer funds, investors should carefully consider a fund’s investment objectives, risks, charges and expenses. Fund prospectuses and summary prospectuses contain this and other information about the funds, and may be obtained by asking your financial advisor, visiting oppenheimerfunds.com, or calling 1.800.CALL OPP (225.5677). Read prospectuses and summary prospectuses carefully before investing.
Shares of Oppenheimer funds are not deposits or obligations of any bank, are not guaranteed by any bank, are not insured by the FDIC or any other agency, and involve investment risks, including the possible loss of the principal amount invested.
8 OPPENHEIMER PORTFOLIO SERIES EQUITY INVESTOR FUND |
Fund Expenses. As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, which may include sales charges (loads) on purchase payments and/or contingent deferred sales charges on redemptions; and (2) ongoing costs, including management fees; distribution and service fees; and other Fund expenses. These examples are intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
The examples are based on an investment of $1,000.00 invested at the beginning of the period and held for the entire 6-month period ended January 31, 2018.
Actual Expenses. The first section of the table provides information about actual account values and actual expenses. You may use the information in this section for the class of shares you hold, together with the amount you invested, to estimate the expense that you paid over the period. Simply divide your account value by $1,000.00 (for example, an $8,600.00 account value divided by $1,000.00 = 8.60), then multiply the result by the number in the first section under the heading entitled “Expenses Paid During 6 Months Ended January 31, 2018�� to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes. The second section of the table provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio for each class of shares, and an assumed rate of return of 5% per year for each class before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example for the class of shares you hold with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as front-end or contingent deferred sales charges (loads). Therefore, the “hypothetical” section of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
9 OPPENHEIMER PORTFOLIO SERIES EQUITY INVESTOR FUND |
Actual | Beginning Account Value August 1, 2017 | Ending Account Value January 31, 2018 | Expenses Paid During 6 Months Ended January 31, 2018 | |||
Class A | $ 1,000.00 | $ 1,132.90 | $ 2.48 | |||
Class B | 1,000.00 | 1,128.50 | 6.56 | |||
Class C | 1,000.00 | 1,128.10 | 6.51 | |||
Class R | 1,000.00 | 1,131.40 | 3.82 | |||
Class Y | 1,000.00 | 1,134.20 | 1.13 | |||
Hypothetical (5% return before expenses) | ||||||
Class A | 1,000.00 | 1,022.89 | 2.35 | |||
Class B | 1,000.00 | 1,019.06 | 6.23 | |||
Class C | 1,000.00 | 1,019.11 | 6.18 | |||
Class R | 1,000.00 | 1,021.63 | 3.62 | |||
Class Y | 1,000.00 | 1,024.15 | 1.07 |
Expenses are equal to the Fund’s annualized expense ratio for that class, multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period). Those annualized expense ratios, excluding indirect expenses from affiliated funds, based on the 6-month period ended January 31, 2018 are as follows:
Class | Expense Ratios | |||
Class A | 0.46% | |||
Class B | 1.22 | |||
Class C | 1.21 | |||
Class R | 0.71 | |||
Class Y | 0.21 |
The expense ratios reflect voluntary and/or contractual waivers and/or reimbursements of expenses by the Fund’s Manager and Transfer Agent. Some of these undertakings may be modified or terminated at any time, as indicated in the Fund’s prospectus. The “Financial Highlights” tables in the Fund’s financial statements, included in this report, also show the gross expense ratios, without such waivers or reimbursements and reduction to custodian expenses, if applicable.
10 OPPENHEIMER PORTFOLIO SERIES EQUITY INVESTOR FUND |
STATEMENT OF INVESTMENTS January 31, 2018
Shares | Value | |||||||
Investment Companies—99.9%1 | ||||||||
Domestic Equity Funds—50.0% | ||||||||
Oppenheimer Capital Appreciation Fund, Cl. I | 2,981,202 | $ | 201,916,796 | |||||
Oppenheimer Main Street Mid Cap Fund, Cl. I | 1,318,341 | 39,115,178 | ||||||
Oppenheimer Main Street Small Cap Fund, Cl. I | 2,096,673 | 32,540,365 | ||||||
Oppenheimer Value Fund, Cl. I | 5,409,855 | 215,528,606 | ||||||
489,100,945 | ||||||||
Foreign Equity Funds—49.9% | ||||||||
Oppenheimer Developing Markets Fund, Cl. I | 1,337,978 | 62,122,333 | ||||||
Oppenheimer International Equity Fund, Cl. I | 7,009,190 | 164,155,218 | ||||||
Oppenheimer International Growth Fund, Cl. I | 4,059,673 | 186,379,576 | ||||||
Oppenheimer International Small-Mid Company Fund, Cl. I | 1,424,623 | 74,792,688 | ||||||
487,449,815 | ||||||||
Total Investments, at Value (Cost $566,492,436) | 99.9% | 976,550,760 | ||||||
Net Other Assets (Liabilities) | 0.1 | 848,473 | ||||||
Net Assets | 100.0% | $ | 977,399,233 | |||||
Footnotes to Statement of Investments
1. Is or was an affiliate, as defined in the Investment Company Act of 1940, as amended, at or during the reporting period, by virtue of the Fund owning at least 5% of the voting securities of the issuer or as a result of the Fund and the issuer having the same investment adviser. Transactions during the reporting period in which the issuer was an affiliate are as follows:
Shares January 31, 2017 | Gross Additions | Gross Reductions | Shares January 31, 2018 | |||||||||||||
Oppenheimer Capital Appreciation Fund, Cl. I | 2,848,778 | 323,678 | 191,254 | 2,981,202 | ||||||||||||
Oppenheimer Developing Markets Fund, Cl. I | 1,419,854 | 70,243 | 152,119 | 1,337,978 | ||||||||||||
Oppenheimer International Equity Fund, Cl. I | 7,355,865 | 272,277 | 618,952 | 7,009,190 | ||||||||||||
Oppenheimer International Growth Fund, Cl. I | 4,236,807 | 188,671 | 365,805 | 4,059,673 | ||||||||||||
Oppenheimer International Small- Mid Company Fund, Cl. I | 1,425,838 | 81,274 | 82,489 | 1,424,623 | ||||||||||||
Oppenheimer Main Street Mid Cap Fund, Cl. I | 1,199,448 | 193,957 | 75,064 | 1,318,341 | ||||||||||||
Oppenheimer Main Street Small Cap Fund, Cl. I | 2,068,309 | 178,598 | 150,234 | 2,096,673 | ||||||||||||
Oppenheimer Value Fund, Cl. I | 5,326,813 | 448,297 | 365,255 | 5,409,855 | ||||||||||||
Value | Income | Realized Gain (Loss) | Change in Unrealized Gain (Loss) | |||||||||||||
Oppenheimer Capital Appreciation Fund, Cl. Ia | $ | 201,916,796 | $ | 686,053 | $ | 34,918 | $ | 32,096,855 | ||||||||
Oppenheimer Developing Markets Fund, Cl. I | 62,122,333 | 414,637 | 312,708 | 17,251,160 | ||||||||||||
Oppenheimer International Equity Fund, Cl. I | 164,155,218 | 597,178 | 1,221,149 | 40,147,625 | ||||||||||||
Oppenheimer International Growth Fund, Cl. I | 186,379,576 | 1,853,466 | 2,933,839 | 39,789,178 |
11 OPPENHEIMER PORTFOLIO SERIES EQUITY INVESTOR FUND |
STATEMENT OF INVESTMENTS Continued
Footnotes to Statement of Investments (Continued)
Value | Income | Realized Gain (Loss) | Change in Unrealized Gain (Loss) | |||||||||||||
| ||||||||||||||||
Oppenheimer International Small- Mid Company Fund, Cl. Ib | $ | 74,792,688 | $ | 831,155 | $ | 958,700 | $ | 19,043,569 | ||||||||
Oppenheimer Main Street Mid Cap Fund, Cl. Ic | 39,115,178 | 283,141 | (17,431) | 477,596 | ||||||||||||
Oppenheimer Main Street Small Cap Fund, Cl. Id | 32,540,365 | 185,344 | 216,535 | 2,343,383 | ||||||||||||
Oppenheimer Value Fund, Cl. Ie | 215,528,606 | 2,715,787 | 1,253,194 | 22,927,561 | ||||||||||||
|
| |||||||||||||||
Total | $ | 976,550,760 | $ | 7,566,761 | $ | 6,913,612 | $ | 174,076,927 | ||||||||
|
|
a. This Fund distributed realized gains of $14,915,948.
b. This Fund distributed realized gains of $1,503,823.
c. This Fund distributed realized gains of $4,329,493.
d. This Fund distributed realized gains of $1,597,029.
e. This Fund distributed realized gains of $8,578,485.
See accompanying Notes to Financial Statements.
12 OPPENHEIMER PORTFOLIO SERIES EQUITY INVESTOR FUND |
STATEMENT OF ASSETS AND LIABILITIES January 31, 2018
| ||||
Assets | ||||
Investments, at value—affiliated companies (cost $ 566,492,436)—see accompanying statement of investments | $ | 976,550,760 | ||
| ||||
Cash | 1,230,004 | |||
| ||||
Receivables and other assets: | ||||
Shares of beneficial interest sold | 381,415 | |||
Other | 42,510 | |||
|
| |||
Total assets | 978,204,689 | |||
| ||||
Liabilities | ||||
Payables and other liabilities: | ||||
Shares of beneficial interest redeemed | 482,198 | |||
Distribution and service plan fees | 199,044 | |||
Trustees’ compensation | 50,117 | |||
Investments purchased | 38,370 | |||
Shareholder communications | 6,384 | |||
Other | 29,343 | |||
|
| |||
Total liabilities | 805,456 | |||
| ||||
Net Assets | $ | 977,399,233 | ||
|
| |||
| ||||
Composition of Net Assets | ||||
Par value of shares of beneficial interest | $ | 50,514 | ||
| ||||
Additional paid-in capital | 559,809,455 | |||
| ||||
Accumulated net investment loss | (48,778) | |||
| ||||
Accumulated net realized gain on investments | 7,529,718 | |||
| ||||
Net unrealized appreciation on investments | 410,058,324 | |||
|
| |||
Net Assets | $ | 977,399,233 | ||
|
|
13 OPPENHEIMER PORTFOLIO SERIES EQUITY INVESTOR FUND |
STATEMENT OF ASSETS AND LIABILITIES Continued
| ||||
Net Asset Value Per Share | ||||
Class A Shares:
| ||||
Net asset value and redemption price per share (based on net assets of $674,844,525 and 34,680,558 shares of beneficial interest outstanding) | $ | 19.46 | ||
Maximum offering price per share (net asset value plus sales charge of 5.75% of offering price) | $ | 20.65 | ||
| ||||
Class B Shares:
Net asset value, redemption price (excludes applicable contingent deferred sales charge) and offering price per share (based on net assets of $4,226,496 and 219,737 shares of beneficial interest outstanding) | $ | 19.23 | ||
| ||||
Class C Shares:
| ||||
Net asset value, redemption price (excludes applicable contingent deferred sales charge) and offering price per share (based on net assets of $212,996,255 and 11,231,959 shares of beneficial interest outstanding) | $ | 18.96 | ||
| ||||
Class R Shares:
| ||||
Net asset value, redemption price (excludes applicable contingent deferred sales charge) and offering price per share (based on net assets of $59,559,226 and 3,063,732 shares of beneficial interest outstanding) | $ | 19.44 | ||
| ||||
Class Y Shares:
| ||||
Net asset value, redemption price and offering price per share (based on net assets of $25,772,731 and 1,318,009 shares of beneficial interest outstanding) | $ | 19.55 |
See accompanying Notes to Financial Statements.
14 OPPENHEIMER PORTFOLIO SERIES EQUITY INVESTOR FUND |
STATEMENT OF OPERATIONS For the Year Ended January 31, 2018
| ||||
Investment Income | ||||
Dividends—affiliated companies | $ | 7,566,761 | ||
| ||||
Interest | 7,279 | |||
|
| |||
Total investment income | 7,574,040 | |||
| ||||
Expenses | ||||
| ||||
Distribution and service plan fees: | ||||
Class A | 1,460,710 | |||
Class B | 86,945 | |||
Class C | 1,925,708 | |||
Class R | 246,914 | |||
| ||||
Transfer and shareholder servicing agent fees: | ||||
Class A | 1,301,983 | |||
Class B | 19,095 | |||
Class C | 421,095 | |||
Class R | 108,629 | |||
Class Y | 49,029 | |||
| ||||
Shareholder communications: | ||||
Class A | 13,998 | |||
Class B | 898 | |||
Class C | 3,964 | |||
Class R | 1,056 | |||
Class Y | 144 | |||
| ||||
Trustees’ compensation | 11,872 | |||
| ||||
Custodian fees and expenses | 5,000 | |||
| ||||
Other | 55,736 | |||
|
| |||
Total expenses | 5,712,776 | |||
Less waivers and reimbursements of expenses | (128,793) | |||
|
| |||
Net expenses
|
| 5,583,983
|
| |
| ||||
Net Investment Income | 1,990,057 | |||
| ||||
Realized and Unrealized Gain | ||||
Net realized gain on: | ||||
Investment transactions in affiliated companies | 6,913,612 | |||
Distributions received from affiliated companies | 30,924,778 | |||
Increase from payment by affiliate | 5,978 | |||
|
| |||
Net realized gain | 37,844,368 | |||
| ||||
Net change in unrealized appreciation/depreciation on investment transactions | 174,076,927 | |||
| ||||
Net Increase in Net Assets Resulting from Operations | $ | 213,911,352 | ||
|
|
See accompanying Notes to Financial Statements.
15 OPPENHEIMER PORTFOLIO SERIES EQUITY INVESTOR FUND |
STATEMENTS OF CHANGES IN NET ASSETS
Year Ended January 31, 2018 | Year Ended January 31, 2017 | |||||||
| ||||||||
Operations | ||||||||
Net investment income | $ | 1,990,057 | $ | 5,672,401 | ||||
| ||||||||
Net realized gain | 37,844,368 | 3,704,401 | ||||||
| ||||||||
Net change in unrealized appreciation/depreciation | 174,076,927 | 88,342,576 | ||||||
|
| |||||||
Net increase in net assets resulting from operations
|
| 213,911,352
|
|
| 97,719,378
|
| ||
| ||||||||
Dividends and/or Distributions to Shareholders | ||||||||
Dividends from net investment income: | ||||||||
Class A | (9,188,357) | (5,575,647) | ||||||
Class B | — | — | ||||||
Class C | (1,569,453) | (591,489) | ||||||
Class R | (685,005) | (349,363) | ||||||
Class Y | (417,376) | (245,471) | ||||||
|
| |||||||
(11,860,191) | (6,761,970) | |||||||
| ||||||||
Distributions from net realized gain: | ||||||||
Class A | (5,750,651) | (4,099,293) | ||||||
Class B | (46,784) | (119,006) | ||||||
Class C | (1,877,407) | (1,418,042) | ||||||
Class R | (498,952) | (339,397) | ||||||
Class Y | (224,705) | (146,998) | ||||||
|
| |||||||
(8,398,499) | (6,122,736) | |||||||
| ||||||||
Beneficial Interest Transactions | ||||||||
Net increase (decrease) in net assets resulting from beneficial interest transactions: | ||||||||
Class A | 4,113,274 | (11,235,256) | ||||||
Class B | (11,826,177) | (14,060,658) | ||||||
Class C | (10,175,540) | (11,593,850) | ||||||
Class R | 3,238,839 | (658,299) | ||||||
Class Y | 1,278,604 | (3,119,990) | ||||||
|
| |||||||
(13,371,000) | (40,668,053) | |||||||
| ||||||||
Net Assets | ||||||||
Total increase | 180,281,662 | 44,166,619 | ||||||
Beginning of period | 797,117,571 | 752,950,952 | ||||||
|
| |||||||
End of period (including accumulated net investment income (loss) of $(48,778) and $2,059,221, respectively) | $ | 977,399,233 | $ | 797,117,571 | ||||
|
|
See accompanying Notes to Financial Statements.
16 OPPENHEIMER PORTFOLIO SERIES EQUITY INVESTOR FUND |
Class A | Year Ended January 31, 2018 | Year Ended January 31, 2017 | Year Ended January 29, 20161 | Year Ended January 30, 20151 | Year Ended January 31, 2014 | |||||||||||||||
| ||||||||||||||||||||
Per Share Operating Data | ||||||||||||||||||||
Net asset value, beginning of period | $15.59 | $13.99 | $14.87 | $14.28 | $12.30 | |||||||||||||||
| ||||||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||
Net investment income2 | 0.07 | 0.14 | 0.07 | 0.11 | 0.12 | |||||||||||||||
Net realized and unrealized gain (loss) | 4.24 | 1.74 | (0.76) | 0.60 | 1.97 | |||||||||||||||
|
| |||||||||||||||||||
Total from investment operations | 4.31 | 1.88 | (0.69) | 0.71 | 2.09 | |||||||||||||||
| ||||||||||||||||||||
Dividends and/or distributions to shareholders: | ||||||||||||||||||||
Dividends from net investment income | (0.27) | (0.16) | (0.19) | (0.12) | (0.11) | |||||||||||||||
Distributions from net realized gain | (0.17) | (0.12) | 0.00 | 0.00 | 0.00 | |||||||||||||||
|
| |||||||||||||||||||
Total dividends and/or distributions to shareholders | (0.44) | (0.28) | (0.19) | (0.12) | (0.11) | |||||||||||||||
| ||||||||||||||||||||
Net asset value, end of period | $19.46 | $15.59 | $13.99 | $14.87 | $14.28 | |||||||||||||||
|
| |||||||||||||||||||
|
| |||||||||||||||||||
| ||||||||||||||||||||
Total Return, at Net Asset Value3 | 27.83% | 13.52% | (4.78)% | 4.99% | 16.95% | |||||||||||||||
| ||||||||||||||||||||
Ratios/Supplemental Data | ||||||||||||||||||||
Net assets, end of period (in thousands) | $674,845 | $537,926 | $492,539 | $513,521 | $482,285 | |||||||||||||||
| ||||||||||||||||||||
Average net assets (in thousands) | $598,934 | $522,301 | $533,833 | $519,483 | $442,886 | |||||||||||||||
| ||||||||||||||||||||
Ratios to average net assets:4 | ||||||||||||||||||||
Net investment income | 0.42% | 0.93% | 0.45% | 0.72% | 0.88% | |||||||||||||||
Expenses excluding specific expenses listed below | 0.47% | 0.48% | 0.48% | 0.48% | 0.48% | |||||||||||||||
Interest and fees from borrowings | 0.00% | 0.00%5 | 0.00%5 | 0.00% | 0.00% | |||||||||||||||
|
| |||||||||||||||||||
Total expenses6 | 0.47% | 0.48% | 0.48% | 0.48% | 0.48% | |||||||||||||||
Expenses after payments, waivers and/or reimbursements and reduction to custodian expenses | 0.46% | 0.48% | 0.48% | 0.48% | 0.47% | |||||||||||||||
| ||||||||||||||||||||
Portfolio turnover rate | 8% | 6% | 8% | 10% | 6% |
1. Represents the last business day of the Fund’s reporting period.
2. Per share amounts calculated based on the average shares outstanding during the period.
3. Assumes an 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 less than one full year. Returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares.
4. Annualized for periods less than one full year.
5. Less than 0.005%.
6. Total expenses including indirect expenses from affiliated fund fees and expenses were as follows:
Year Ended January 31, 2018 | 1.17% | |||||||
Year Ended January 31, 2017 | 1.18% | |||||||
Year Ended January 29, 2016 | 1.16% | |||||||
Year Ended January 30, 2015 | 1.17% | |||||||
Year Ended January 31, 2014 | 1.23% |
See accompanying Notes to Financial Statements.
17 OPPENHEIMER PORTFOLIO SERIES EQUITY INVESTOR FUND |
FINANCIAL HIGHLIGHTS Continued
Class B | Year Ended January 31, 2018 | Year Ended January 31, 2017 | Year Ended January 29, 20161 | Year Ended January 30, 20151 | Year Ended January 31, 2014 | |||||||||||||||
| ||||||||||||||||||||
Per Share Operating Data | ||||||||||||||||||||
Net asset value, beginning of period | $15.31 | $13.69 | $14.52 | $13.93 | $12.01 | |||||||||||||||
| ||||||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||
Net investment loss2 | (0.17) | (0.01) | (0.07) | (0.02) | (0.02) | |||||||||||||||
Net realized and unrealized gain (loss) | 4.26 | 1.75 | (0.73) | 0.61 | 1.94 | |||||||||||||||
|
| |||||||||||||||||||
Total from investment operations | 4.09 | 1.74 | (0.80) | 0.59 | 1.92 | |||||||||||||||
| ||||||||||||||||||||
Dividends and/or distributions to shareholders: | ||||||||||||||||||||
Dividends from net investment income | 0.00 | 0.00 | (0.03) | 0.00 | 0.00 | |||||||||||||||
Distributions from net realized gain | (0.17) | (0.12) | 0.00 | 0.00 | 0.00 | |||||||||||||||
|
| |||||||||||||||||||
Total dividends and/or distributions to shareholders | (0.17) | (0.12) | (0.03) | 0.00 | 0.00 | |||||||||||||||
| ||||||||||||||||||||
Net asset value, end of period | $19.23 | $15.31 | $13.69 | $14.52 | $13.93 | |||||||||||||||
|
| |||||||||||||||||||
|
| |||||||||||||||||||
| ||||||||||||||||||||
Total Return, at Net Asset Value3 | 26.78% | 12.73% | (5.52)% | 4.24% | 15.99% | |||||||||||||||
| ||||||||||||||||||||
Ratios/Supplemental Data | ||||||||||||||||||||
Net assets, end of period (in thousands) | $4,226 | $14,088 | $25,864 | $44,518 | $63,602 | |||||||||||||||
| ||||||||||||||||||||
Average net assets (in thousands) | $8,692 | $19,291 | $35,961 | $55,111 | $68,259 | |||||||||||||||
| ||||||||||||||||||||
Ratios to average net assets:4 | ||||||||||||||||||||
Net investment loss | (1.01)% | (0.07)% | (0.44)% | (0.14)% | (0.12)% | |||||||||||||||
Expenses excluding specific expenses listed below | 1.24% | 1.24% | 1.23% | 1.23% | 1.25% | |||||||||||||||
Interest and fees from borrowings | 0.00% | 0.00%5 | 0.00%5 | 0.00% | 0.00% | |||||||||||||||
|
| |||||||||||||||||||
Total expenses6 | 1.24% | 1.24% | 1.23% | 1.23% | 1.25% | |||||||||||||||
Expenses after payments, waivers and/or reimbursements and reduction to custodian expenses | 1.23% | 1.24% | 1.23% | 1.23% | 1.24% | |||||||||||||||
| ||||||||||||||||||||
Portfolio turnover rate | 8% | 6% | 8% | 10% | 6% |
1. Represents the last business day of the Fund’s reporting period.
2. Per share amounts calculated based on the average shares outstanding during the period.
3. Assumes an 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 less than one full year. Returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares.
4. Annualized for periods less than one full year.
5. Less than 0.005%.
6. Total expenses including indirect expenses from affiliated fund fees and expenses were as follows:
Year Ended January 31, 2018 | 1.94% | |||||||
Year Ended January 31, 2017 | 1.94% | |||||||
Year Ended January 29, 2016 | 1.91% | |||||||
Year Ended January 30, 2015 | 1.92% | |||||||
Year Ended January 31, 2014 | 2.00% |
See accompanying Notes to Financial Statements.
18 OPPENHEIMER PORTFOLIO SERIES EQUITY INVESTOR FUND |
Class C | Year Ended January 31, 2018 | Year Ended January 31, 2017 | Year Ended January 29, 20161 | Year Ended January 30, 20151 | Year Ended January 31, 2014 | |||||||||||||||
| ||||||||||||||||||||
Per Share Operating Data | ||||||||||||||||||||
Net asset value, beginning of period | $15.21 | $13.65 | $14.52 | $13.94 | $12.02 | |||||||||||||||
| ||||||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||
Net investment income (loss)2 | (0.06) | 0.02 | (0.05) | 0.00 | 0.02 | |||||||||||||||
Net realized and unrealized gain (loss) | 4.12 | 1.71 | (0.75) | 0.59 | 1.92 | |||||||||||||||
|
| |||||||||||||||||||
Total from investment operations | 4.06 | 1.73 | (0.80) | 0.59 | 1.94 | |||||||||||||||
| ||||||||||||||||||||
Dividends and/or distributions to shareholders: | ||||||||||||||||||||
Dividends from net investment income | (0.14) | (0.05) | (0.07) | (0.01) | (0.02) | |||||||||||||||
Distributions from net realized gain | (0.17) | (0.12) | 0.00 | 0.00 | 0.00 | |||||||||||||||
|
| |||||||||||||||||||
Total dividends and/or distributions to shareholders | (0.31) | (0.17) | (0.07) | (0.01) | (0.02) | |||||||||||||||
| ||||||||||||||||||||
Net asset value, end of period | $18.96 | $15.21 | $13.65 | $14.52 | $13.94 | |||||||||||||||
|
| |||||||||||||||||||
|
| |||||||||||||||||||
| ||||||||||||||||||||
Total Return, at Net Asset Value3 | 26.83% | 12.71% | (5.51)% | 4.22% | 16.11% | |||||||||||||||
| ||||||||||||||||||||
Ratios/Supplemental Data | ||||||||||||||||||||
Net assets, end of period (in thousands) | $212,996 | $180,365 | $172,605 | $186,923 | $177,813 | |||||||||||||||
| ||||||||||||||||||||
Average net assets (in thousands) | $193,616 | $179,171 | $189,362 | $189,422 | $164,340 | |||||||||||||||
| ||||||||||||||||||||
Ratios to average net assets:4 | ||||||||||||||||||||
Net investment income (loss) | (0.36)% | 0.16% | (0.31)% | (0.02)% | 0.12% | |||||||||||||||
Expenses excluding specific expenses listed below | 1.22% | 1.23% | 1.23% | 1.22% | 1.23% | |||||||||||||||
Interest and fees from borrowings | 0.00% | 0.00%5 | 0.00%5 | 0.00% | 0.00% | |||||||||||||||
|
| |||||||||||||||||||
Total expenses6 | 1.22% | 1.23% | 1.23% | 1.22% | 1.23% | |||||||||||||||
Expenses after payments, waivers and/or reimbursements and reduction to custodian expenses | 1.21% | 1.23% | 1.23% | 1.22% | 1.22% | |||||||||||||||
| ||||||||||||||||||||
Portfolio turnover rate | 8% | 6% | 8% | 10% | 6% |
1. Represents the last business day of the Fund’s reporting period.
2. Per share amounts calculated based on the average shares outstanding during the period.
3. Assumes an 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 less than one full year. Returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares.
4. Annualized for periods less than one full year.
5. Less than 0.005%.
6. Total expenses including indirect expenses from affiliated fund fees and expenses were as follows:
Year Ended January 31, 2018 | 1.92% | |||||||
Year Ended January 31, 2017 | 1.93% | |||||||
Year Ended January 29, 2016 | 1.91% | |||||||
Year Ended January 30, 2015 | 1.91% | |||||||
Year Ended January 31, 2014 | 1.98% |
See accompanying Notes to Financial Statements.
19 OPPENHEIMER PORTFOLIO SERIES EQUITY INVESTOR FUND |
FINANCIAL HIGHLIGHTS Continued
Class R | Year Ended January 31, 2018 | Year Ended January 31, 2017 | Year Ended January 29, 20161 | Year Ended January 30, 20151 | Year Ended January 31, 2014 | |||||||||||||||
| ||||||||||||||||||||
Per Share Operating Data | ||||||||||||||||||||
Net asset value, beginning of period | $15.59 | $13.98 | $14.86 | $14.25 | $12.27 | |||||||||||||||
| ||||||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||
Net investment income2 | 0.04 | 0.10 | 0.03 | 0.06 | 0.06 | |||||||||||||||
Net realized and unrealized gain (loss) | 4.21 | 1.75 | (0.77) | 0.62 | 1.99 | |||||||||||||||
|
| |||||||||||||||||||
Total from investment operations | 4.25 | 1.85 | (0.74) | 0.68 | 2.05 | |||||||||||||||
| ||||||||||||||||||||
Dividends and/or distributions to shareholders: | ||||||||||||||||||||
Dividends from net investment income | (0.23) | (0.12) | (0.14) | (0.07) | (0.07) | |||||||||||||||
Distributions from net realized gain | (0.17) | (0.12) | 0.00 | 0.00 | 0.00 | |||||||||||||||
|
| |||||||||||||||||||
Total dividends and/or distributions to shareholders | (0.40) | (0.24) | (0.14) | (0.07) | (0.07) | |||||||||||||||
| ||||||||||||||||||||
Net asset value, end of period | $19.44 | $15.59 | $13.98 | $14.86 | $14.25 | |||||||||||||||
|
| |||||||||||||||||||
|
| |||||||||||||||||||
| ||||||||||||||||||||
Total Return, at Net Asset Value3 | 27.44% | 13.31% | (5.02)% | 4.77% | 16.68% | |||||||||||||||
| ||||||||||||||||||||
Ratios/Supplemental Data | ||||||||||||||||||||
Net assets, end of period (in thousands) | $59,559 | $45,222 | $41,159 | $49,122 | $52,433 | |||||||||||||||
| ||||||||||||||||||||
Average net assets (in thousands) | $50,000 | $43,838 | $48,259 | $52,717 | $54,751 | |||||||||||||||
| ||||||||||||||||||||
Ratios to average net assets:4 | ||||||||||||||||||||
Net investment income | 0.22% | 0.68% | 0.19% | 0.43% | 0.46% | |||||||||||||||
Expenses excluding specific expenses listed below | 0.72% | 0.73% | 0.73% | 0.73% | 0.71% | |||||||||||||||
Interest and fees from borrowings | 0.00% | 0.00%5 | 0.00%5 | 0.00% | 0.00% | |||||||||||||||
|
| |||||||||||||||||||
Total expenses6 | 0.72% | 0.73% | 0.73% | 0.73% | 0.71% | |||||||||||||||
Expenses after payments, waivers and/or reimbursements and reduction to custodian expenses | 0.71% | 0.73% | 0.73% | 0.73% | 0.70% | |||||||||||||||
| ||||||||||||||||||||
Portfolio turnover rate | 8% | 6% | 8% | 10% | 6% |
1. Represents the last business day of the Fund’s reporting period.
2. Per share amounts calculated based on the average shares outstanding during the period.
3. Assumes an 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 less than one full year. Returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares.
4. Annualized for periods less than one full year.
5. Less than 0.005%.
6. Total expenses including indirect expenses from affiliated fund fees and expenses were as follows:
Year Ended January 31, 2018 | 1.42% | |||||||
Year Ended January 31, 2017 | 1.43% | |||||||
Year Ended January 29, 2016 | 1.41% | |||||||
Year Ended January 30, 2015 | 1.42% | |||||||
Year Ended January 31, 2014 | 1.46% |
See accompanying Notes to Financial Statements.
20 OPPENHEIMER PORTFOLIO SERIES EQUITY INVESTOR FUND |
Class Y | Year Ended January 31, 2018 | Year Ended January 31, 2017 | Year Ended January 29, 20161 | Year Ended January 30, 20151 | Year Ended January 31, 2014 | |||||||||||||||
| ||||||||||||||||||||
Per Share Operating Data | ||||||||||||||||||||
Net asset value, beginning of period | $15.67 | $14.05 | $14.94 | $14.34 | $12.35 | |||||||||||||||
| ||||||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||
Net investment income2 | 0.13 | 0.18 | 0.11 | 0.15 | 0.16 | |||||||||||||||
Net realized and unrealized gain (loss) | 4.23 | 1.76 | (0.77) | 0.60 | 1.98 | |||||||||||||||
|
| |||||||||||||||||||
Total from investment operations | 4.36 | 1.94 | (0.66) | 0.75 | 2.14 | |||||||||||||||
| ||||||||||||||||||||
Dividends and/or distributions to shareholders: | ||||||||||||||||||||
Dividends from net investment income | (0.31) | (0.20) | (0.23) | (0.15) | (0.15) | |||||||||||||||
Distributions from net realized gain | (0.17) | (0.12) | 0.00 | 0.00 | 0.00 | |||||||||||||||
|
| |||||||||||||||||||
Total dividends and/or distributions to shareholders | (0.48) | (0.32) | (0.23) | (0.15) | (0.15) | |||||||||||||||
| ||||||||||||||||||||
Net asset value, end of period | $19.55 | $15.67 | $14.05 | $14.94 | $14.34 | |||||||||||||||
|
| |||||||||||||||||||
|
| |||||||||||||||||||
| ||||||||||||||||||||
Total Return, at Net Asset Value3 | 28.04% | 13.88% | (4.53)% | 5.24% | 17.27% | |||||||||||||||
| ||||||||||||||||||||
Ratios/Supplemental Data | ||||||||||||||||||||
Net assets, end of period (in thousands) | $25,773 | $19,517 | $20,784 | $20,573 | $20,263 | |||||||||||||||
| ||||||||||||||||||||
Average net assets (in thousands) | $22,559 | $18,820 | $22,268 | $20,881 | $17,842 | |||||||||||||||
| ||||||||||||||||||||
Ratios to average net assets:4 | ||||||||||||||||||||
Net investment income | 0.72% | 1.18% | 0.71% | 1.00% | 1.21% | |||||||||||||||
Expenses excluding specific expenses listed below | 0.23% | 0.23% | 0.23% | 0.23% | 0.18% | |||||||||||||||
Interest and fees from borrowings | 0.00% | 0.00%5 | 0.00%5 | 0.00% | 0.00% | |||||||||||||||
|
| |||||||||||||||||||
Total expenses6 | 0.23% | 0.23% | 0.23% | 0.23% | 0.18% | |||||||||||||||
Expenses after payments, waivers and/or reimbursements and reduction to custodian expenses | 0.22% | 0.23% | 0.23% | 0.23% | 0.17% | |||||||||||||||
| ||||||||||||||||||||
Portfolio turnover rate | 8% | 6% | 8% | 10% | 6% |
1. Represents the last business day of the Fund’s reporting period.
2. Per share amounts calculated based on the average shares outstanding during the period.
3. Assumes an 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 less than one full year. Returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares.
4. Annualized for periods less than one full year.
5. Less than 0.005%.
6. Total expenses including indirect expenses from affiliated fund fees and expenses were as follows:
Year Ended January 31, 2018 | 0.93% | |||||||
Year Ended January 31, 2017 | 0.93% | |||||||
Year Ended January 29, 2016 | 0.91% | |||||||
Year Ended January 30, 2015 | 0.92% | |||||||
Year Ended January 31, 2014 | 0.93% |
See accompanying Notes to Financial Statements.
21 OPPENHEIMER PORTFOLIO SERIES EQUITY INVESTOR FUND |
NOTES TO FINANCIAL STATEMENTS January 31, 2018
1. Organization
Oppenheimer Portfolio Series (the “Trust”) is registered under the Investment Company Act of 1940 (“1940 Act”), as amended, as a diversified open-end management investment company. Equity Investor Fund (the “Fund”) is a series of the Trust whose investment objective is to seek capital appreciation. The Fund normally invests in a diversified portfolio of Oppenheimer mutual funds (individually, an “Underlying Fund” and collectively, the “Underlying Funds”). The Fund’s investment adviser is OFI Global Asset Management, Inc. (“OFI Global” or the “Manager”), a wholly-owned subsidiary of OppenheimerFunds, Inc. (“OFI” or the “Sub-Adviser”). The Manager has entered into a sub-advisory agreement with OFI.
The Fund offers Class A, Class C, Class R and Class Y shares, and previously offered Class B shares for new purchase through June 29, 2012. Subsequent to that date, no new purchases of Class B shares are permitted, however reinvestment of dividend and/or capital gain distributions and exchanges of Class B shares into and from other Oppenheimer funds are allowed. Class A shares are sold at their offering price, which is normally net asset value plus a front-end sales charge. Class C shares are sold, and Class B shares were sold, without a front-end sales charge but may be subject to a contingent deferred sales charge (“CDSC”). Class R shares are sold only through retirement plans. Retirement plans that offer Class R shares may impose charges on those accounts. Class Y shares are sold to certain institutional investors or intermediaries without either a front-end sales charge or a CDSC, however, the intermediaries may impose charges on their accountholders who beneficially own Class Y shares. All classes of shares have identical rights and voting privileges with respect to the Fund in general and exclusive voting rights on matters that affect that class alone. Earnings, net assets and net asset value per share may differ due to each class having its own expenses, such as transfer and shareholder servicing agent fees and shareholder communications, directly attributable to that class. Class A, B, C and R shares have separate distribution and/or service plans under which they pay fees. Class Y shares do not pay such fees. Class B shares will automatically convert to Class A shares 72 months after the date of purchase.
The following is a summary of significant accounting policies followed in the Fund’s preparation of financial statements in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”).
2. Significant Accounting Policies
Security Valuation. All investments in securities are recorded at their estimated fair value, as described in Note 3.
Allocation of Income, Expenses, Gains and Losses. Income, expenses (other than those attributable to a specific class), gains and losses are allocated on a daily basis 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.
Dividends and Distributions to Shareholders. Dividends and distributions to
22 OPPENHEIMER PORTFOLIO SERIES EQUITY INVESTOR FUND |
2. Significant Accounting Policies (Continued)
shareholders, which are determined in accordance with income tax regulations and may differ from U.S. GAAP, are recorded on the ex-dividend date. Income and capital gain distributions, if any, are declared and paid annually or at other times as determined necessary by the Manager.
Investment Income. Dividend distributions received from the Underlying Funds are recorded on the ex-dividend date. Upon receipt of notification from an Underlying Fund, and subsequent to the ex-dividend date, some of the dividend income originally recorded by the Fund may be reclassified as a tax return of capital by reducing the cost basis of the Underlying Fund and/or increasing the realized gain on sales of investments in the Underlying Fund.
Custodian Fees. “Custodian fees and expenses” in the Statement of Operations may include interest expense incurred by the Fund on any cash overdrafts of its custodian account during the period. Such cash overdrafts may result from the effects of failed trades in portfolio securities and from cash outflows resulting from unanticipated shareholder redemption activity. The Fund pays interest to its custodian on such cash overdraft at a rate equal to the Prime Rate plus 0.35%. The “Reduction to custodian expenses” line item, if applicable, represents earnings on cash balances maintained by the Fund during the period. Such interest expense and other custodian fees may be paid with these earnings.
Security Transactions. Security transactions are recorded on the trade date. Realized gains and losses on securities sold are determined on the basis of identified cost.
Indemnifications. The Fund’s organizational documents provide current and former Trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund’s maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.
Federal Taxes. The Fund intends to comply with provisions of the Internal Revenue Code applicable to regulated investment companies and to distribute substantially all of its investment company taxable income, including any net realized gain on investments not offset by capital loss carryforwards, if any, to shareholders. Therefore, no federal income or excise tax provision is required. The Fund files income tax returns in U.S. federal and applicable state jurisdictions. The statute of limitations on the Fund’s tax return filings generally remains open for the three preceding fiscal reporting period ends. The Fund has analyzed its tax positions for the fiscal year ended January 31, 2018, including open tax years, and does not believe there are any uncertain tax positions requiring recognition in the Fund’s financial statements.
The tax components of capital shown in the following table represent distribution requirements the Fund must satisfy under the income tax regulations, losses the Fund may be
23 OPPENHEIMER PORTFOLIO SERIES EQUITY INVESTOR FUND |
NOTES TO FINANCIAL STATEMENTS Continued
2. Significant Accounting Policies (Continued)
able to offset against income and gains realized in future years and unrealized appreciation or depreciation of securities and other investments for federal income tax purposes.
Net Unrealized | ||||||||||||
Appreciation | ||||||||||||
Based on cost of | ||||||||||||
Securities and | ||||||||||||
Undistributed | Undistributed | Accumulated | Other Investments | |||||||||
Net Investment | Long-Term | Loss | for Federal Income | |||||||||
Income | Gain | Carryforward1,2 | Tax Purposes | |||||||||
| ||||||||||||
$— | $22,624,119 | $— | $394,963,926 |
1. During the reporting period, the Fund did not utilize any capital loss carryforward.
2. During the previous reporting period, the Fund did not utilize any capital loss carryforward.
Net investment income (loss) and net realized gain (loss) may differ for financial statement and tax purposes. The character of dividends and distributions made during the fiscal year from net investment income or net realized gains are determined in accordance with federal income tax requirements, which may differ from the character of net investment income or net realized gains presented in those financial statements in accordance with U.S. GAAP. Also, due to timing of dividends and distributions, the fiscal year in which amounts are distributed may differ from the fiscal year in which the income or net realized gain was recorded by the Fund.
Accordingly, the following amounts have been reclassified for the reporting period. Net assets of the Fund were unaffected by the reclassifications.
Reduction | Reduction | |||||||
to Accumulated | to Accumulated Net | |||||||
Increase | Net Investment | Realized Gain | ||||||
to Paid-in Capital | Loss | on Investments3 | ||||||
| ||||||||
$1,823,559 | $7,762,135 | $9,585,694 |
3. $1,817,581, all of which was long-term capital gain, was distributed in connection with Fund share redemptions.
The tax character of distributions paid during the reporting periods:
Year Ended | Year Ended | |||||||
January 31, 2018 | January 31, 2017 | |||||||
| ||||||||
Distributions paid from: | ||||||||
Ordinary income | $ | 11,562,317 | $ | 6,761,970 | ||||
Long-term capital gain | 8,696,373 | 6,122,736 | ||||||
|
| |||||||
Total | $ | 20,258,690 | $ | 12,884,706 | ||||
|
|
The aggregate cost of securities and other investments and the composition of unrealized appreciation and depreciation of securities and other investments for federal income tax purposes at period end are noted in the following table. The primary difference between book and tax appreciation or depreciation of securities and other investments, if applicable, is attributable to the tax deferral of losses or tax realization of financial statement unrealized gain or loss.
24 OPPENHEIMER PORTFOLIO SERIES EQUITY INVESTOR FUND |
2. Significant Accounting Policies (Continued)
Federal tax cost of securities | $ | 581,586,835 | ||
|
|
| ||
Gross unrealized appreciation | $ | 394,963,926 | ||
Gross unrealized depreciation | — | |||
|
|
| ||
Net unrealized appreciation | $ | 394,963,926 | ||
|
|
|
Use of Estimates. The preparation of financial statements in conformity with U.S. GAAP 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 increases and decreases in net assets from operations during the reporting period. Actual results could differ from those estimates.
3. Securities Valuation
The Fund calculates the net asset value of its shares based upon the net asset value of the applicable investment companies. For each investment company, the net asset value per share for a class of shares is determined as of 4:00 P.M. eastern time, on each day the New York Stock Exchange (the “Exchange”) is open for trading, except in the case of a scheduled early closing of the Exchange, in which case the Fund will calculate net asset value of the shares as of the scheduled early closing time of the Exchange. This is calculated by dividing the value of the investment company’s net assets attributable to that class by the number of outstanding shares of that class on that day.
The Fund’s Board has adopted procedures for the valuation of the Fund’s securities and has delegated the day-to-day responsibility for valuation determinations under those procedures to the Manager. The Manager has established a Valuation Committee which is responsible for determining a fair valuation for any security for which market quotations are not readily available. The Valuation Committee’s fair valuation determinations are subject to review, approval and ratification by the Fund’s Board at least quarterly or more frequently, if necessary.
Valuations Methods and Inputs
To determine their net asset values, the Underlying Funds’ assets are valued primarily on the basis of current market quotations as generally supplied by third party portfolio pricing services or by dealers. Such market quotations are typically based on unadjusted quoted prices in active markets for identical securities or other observable market inputs.
Securities for which market quotations are not readily available or a significant event has occurred that would materially affect the value of the security, are fair valued either (i) by a standardized fair valuation methodology applicable to the security type or the significant event as previously approved by the Valuation Committee and the Fund’s Board or (ii) as determined in good faith by the Manager’s Valuation Committee. The Valuation Committee considers all relevant facts that are reasonably available, through either public information or information available to the Manager, when determining the fair value of a security. The methodologies used for valuing securities are not necessarily an indication of the risks associated with
25 OPPENHEIMER PORTFOLIO SERIES EQUITY INVESTOR FUND |
NOTES TO FINANCIAL STATEMENTS Continued
3. Securities Valuation (Continued)
investing in those Underlying Funds.
Classifications
Each investment asset or liability of the Fund is assigned a level at measurement date based on the significance and source of the inputs to its valuation. Various data inputs may be used in determining the value of each of the Fund’s investments as of the reporting period end.
These data inputs are categorized in the following hierarchy under applicable financial accounting standards:
1) Level 1-unadjusted quoted prices in active markets for identical assets or liabilities (including securities actively traded on a securities exchange)
2) Level 2-inputs other than unadjusted quoted prices that are observable for the asset or liability (such as unadjusted quoted prices for similar assets and market corroborated inputs such as interest rates, prepayment speeds, credit risks, etc.)
3) Level 3-significant unobservable inputs (including the Manager’s own judgments about assumptions that market participants would use in pricing the asset or liability).
The inputs used for valuing securities are not necessarily an indication of the risks associated with investing in those securities.
The Fund classifies each of its investments in investment companies which are publicly offered as Level 1. Investment companies that are not publicly offered, if any, are measured using net asset value and are classified as Level 2 in the fair value hierarchy.
The table below categorizes amounts that are included in the Fund’s Statement of Assets and Liabilities at period end based on valuation input level:
Level 3— | ||||||||||||||||
Level 1— | Level 2— | Significant | ||||||||||||||
Unadjusted | Other Significant | Unobservable | ||||||||||||||
Quoted Prices | Observable Inputs | Inputs | Value | |||||||||||||
| ||||||||||||||||
Assets Table | ||||||||||||||||
Investments, at Value: | ||||||||||||||||
Investment Companies | $ | 976,550,760 | $ | — | $ | — | $ | 976,550,760 | ||||||||
|
| |||||||||||||||
Total Assets | $ | 976,550,760 | $ | — | $ | — | $ | 976,550,760 | ||||||||
|
|
Forward currency exchange contracts and futures contracts, if any, are reported at their unrealized appreciation/depreciation at measurement date, which represents the change in the contract’s value from trade date. All additional assets and liabilities included in the above table are reported at their market value at measurement date.
4. Investments and Risks
Risks of Investing in the Underlying Funds. The Fund invests in other mutual funds advised by the Manager. The Underlying Funds are registered open-end management investment companies under the 1940 Act, as amended. The Manager is the investment adviser of, and the Sub-Adviser provides investment and related advisory services to, the
26 OPPENHEIMER PORTFOLIO SERIES EQUITY INVESTOR FUND |
4. Investments and Risks (Continued)
Underlying Funds. The Fund’s Investments in Underlying Funds are included in the Statement of Investments. Shares of Underlying Funds are valued at their net asset value per share. As a shareholder, the Fund is subject to its proportional share of the Underlying Funds’ expenses, including their management fee.
Each of the Underlying Funds in which the Fund invests has its own investment risks, and those risks can affect the value of the Fund’s investments and therefore the value of the Fund’s shares. To the extent that the Fund invests more of its assets in one Underlying Fund than in another, the Fund will have greater exposure to the risks of that Underlying Fund.
5. Market Risk Factors
The Fund’s investments in securities and/or financial derivatives may expose the Fund to various market risk factors:
Commodity Risk. Commodity risk relates to the change in value of commodities or commodity indexes as they relate to increases or decreases in the commodities market. Commodities are physical assets that have tangible properties. Examples of these types of assets are crude oil, heating oil, metals, livestock, and agricultural products.
Credit Risk. Credit risk relates to the ability of the issuer of debt to meet interest and principal payments, or both, as they come due. In general, lower-grade, higher-yield debt securities are subject to credit risk to a greater extent than lower-yield, higher-quality securities.
Equity Risk. Equity risk relates to the change in value of equity securities as they relate to increases or decreases in the general market.
Foreign Exchange Rate Risk. Foreign exchange rate risk relates to the change in the U.S. dollar value of a security held that is denominated in a foreign currency. The U.S. dollar value of a foreign currency denominated security will decrease as the dollar appreciates against the currency, while the U.S. dollar value will increase as the dollar depreciates against the currency.
Interest Rate Risk. Interest rate risk refers to the fluctuations in value of fixed-income securities resulting from the inverse relationship between price and yield. For example, an increase in general interest rates will tend to reduce the market value of already issued fixed-income investments, and a decline in general interest rates will tend to increase their value. In addition, debt securities with longer maturities, which tend to have higher yields, are subject to potentially greater fluctuations in value from changes in interest rates than obligations with shorter maturities.
Volatility Risk. Volatility risk refers to the magnitude of the movement, but not the direction of the movement, in a financial instrument’s price over a defined time period. Large increases or decreases in a financial instrument’s price over a relative time period typically indicate greater volatility risk, while small increases or decreases in its price typically indicate lower volatility risk.
27 OPPENHEIMER PORTFOLIO SERIES EQUITY INVESTOR FUND |
NOTES TO FINANCIAL STATEMENTS Continued
6. Shares of Beneficial Interest
The Fund has authorized an unlimited number of $0.001 par value shares of beneficial interest of each class. Transactions in shares of beneficial interest were as follows:
Year Ended January 31, 2018 | Year Ended January 31, 2017 | |||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||
| ||||||||||||||||
Class A | ||||||||||||||||
Sold | 4,255,418 | $ | 73,837,273 | 4,799,969 | $ | 71,456,139 | ||||||||||
Dividends and/or distributions reinvested | 809,186 | 14,824,293 | 631,076 | 9,567,117 | ||||||||||||
Redeemed | (4,878,024 | ) | (84,548,292 | ) | (6,151,717 | ) | (92,258,512) | |||||||||
|
| |||||||||||||||
Net increase (decrease) | 186,580 | $ | 4,113,274 | (720,672 | ) | $ | (11,235,256) | |||||||||
|
| |||||||||||||||
| ||||||||||||||||
Class B | ||||||||||||||||
Sold | 5,494 | $ | 88,315 | 10,617 | $ | 155,045 | ||||||||||
Dividends and/or distributions reinvested | 2,571 | 46,608 | 7,962 | 118,561 | ||||||||||||
Redeemed | (708,480 | ) | (11,961,100 | ) | (987,435 | ) | (14,334,264) | |||||||||
|
| |||||||||||||||
Net decrease | (700,415 | ) | $ | (11,826,177 | ) | (968,856 | ) | $ | (14,060,658) | |||||||
|
| |||||||||||||||
| ||||||||||||||||
Class C | ||||||||||||||||
Sold | 1,466,443 | $ | 24,979,786 | 1,703,640 | $ | 24,708,434 | ||||||||||
Dividends and/or distributions reinvested | 192,073 | 3,432,355 | 134,751 | 1,994,308 | ||||||||||||
Redeemed | (2,282,324 | ) | (38,587,681 | ) | (2,627,276 | ) | (38,296,592) | |||||||||
|
| |||||||||||||||
Net decrease | (623,808 | ) | $ | (10,175,540 | ) | (788,885 | ) | $ | (11,593,850) | |||||||
|
| |||||||||||||||
| ||||||||||||||||
Class R | ||||||||||||||||
Sold | 925,969 | $ | 16,305,280 | 713,032 | $ | 10,693,944 | ||||||||||
Dividends and/or distributions reinvested | 63,134 | 1,155,983 | 44,344 | 671,814 | ||||||||||||
Redeemed | (826,685 | ) | (14,222,424 | ) | (800,317 | ) | (12,024,057) | |||||||||
|
| |||||||||||||||
Net increase (decrease) | 162,418 | $ | 3,238,839 | (42,941 | ) | $ | (658,299) | |||||||||
|
| |||||||||||||||
| ||||||||||||||||
Class Y | ||||||||||||||||
Sold | 485,650 | $ | 8,400,649 | 159,505 | $ | 2,397,131 | ||||||||||
Dividends and/or distributions reinvested | 34,536 | 635,808 | 25,519 | 388,396 | ||||||||||||
Redeemed | (447,862 | ) | (7,757,853 | ) | (418,614 | ) | (5,905,517) | |||||||||
|
| |||||||||||||||
Net increase (decrease) | 72,324 | $ | 1,278,604 | (233,590 | ) | $ | (3,119,990) | |||||||||
|
|
7. Purchases and Sales of Securities
The aggregate cost of purchases and proceeds from sales of securities, other than short-term obligations, for the reporting period were as follows:
Purchases | Sales | |||||||
| ||||||||
Investment securities | $ | 65,887,781 | $ | 67,081,103 |
8. Fees and Other Transactions with Affiliates
Management Fees. Under the investment advisory agreement, the Manager does not charge a management fee, but rather collects indirect management fees from the Fund’s
28 OPPENHEIMER PORTFOLIO SERIES EQUITY INVESTOR FUND |
8. Fees and Other Transactions with Affiliates (Continued)
investments in the Underlying Funds. The weighted indirect management fees collected from the Fund’s investment in the Underlying Funds, as a percent of average daily net assets of the Fund for the reporting period was 0.65%. This amount is gross of any waivers or reimbursements of management fees implemented at the Underlying Fund level.
Sub-Adviser Fees. The Manager has retained the Sub-Adviser to provide the day-to-day portfolio management of the Fund. Under the Sub-Advisory Agreement, the Manager pays the Sub-Adviser an annual fee in monthly installments, equal to a percentage of the indirect investment management fee collected by the Manager, which shall be calculated after any investment management fee waivers. The fee paid to the Sub-Adviser is paid by the Manager, not by the Fund.
Transfer Agent Fees. OFI Global (the “Transfer Agent”) serves as the transfer and shareholder servicing agent for the Fund. The Fund pays the Transfer Agent a fee based on annual net assets, which shall be calculated after any applicable fee waivers. Fees incurred and average net assets for each class with respect to these services are detailed in the Statement of Operations and Financial Highlights, respectively.
Sub-Transfer Agent Fees. The Transfer Agent has retained Shareholder Services, Inc., a wholly-owned subsidiary of OFI (the “Sub-Transfer Agent”), to provide the day-to-day transfer agent and shareholder servicing of the Fund. Under the Sub-Transfer Agency Agreement, the Transfer Agent pays the Sub-Transfer Agent an annual fee in monthly installments, equal to a percentage of the transfer agent fee collected by the Transfer Agent from the Fund, which shall be calculated after any applicable fee waivers. The fee paid to the Sub-Transfer Agent is paid by the Transfer Agent, not by the Fund.
Trustees’ Compensation. The Fund has adopted an unfunded retirement plan (the “Plan”) for the Fund’s Independent Trustees. Benefits are based on years of service and fees paid to each Trustee during their period of service. The Plan was frozen with respect to adding new participants effective December 31, 2006 (the “Freeze Date”) and existing Plan Participants as of the Freeze Date will continue to receive accrued benefits under the Plan. Active Independent Trustees as of the Freeze Date have each elected a distribution method with respect to their benefits under the Plan. During the reporting period, the Fund’s projected benefit obligations, payments to retired Trustees and accumulated liability were as follows:
Projected Benefit Obligations Increased | $ | — | ||
Payments Made to Retired Trustees | 1,530 | |||
Accumulated Liability as of January 31, 2018 | 12,974 |
The Fund’s Board of Trustees (“Board”) has adopted a compensation deferral plan for Independent Trustees that enables Trustees to elect to defer receipt of all or a portion of the annual compensation they are entitled to receive from the Fund. For purposes of determining the amount owed to the Trustee under the plan, deferred amounts are treated as though
29 OPPENHEIMER PORTFOLIO SERIES EQUITY INVESTOR FUND |
NOTES TO FINANCIAL STATEMENTS Continued
8. Fees and Other Transactions with Affiliates (Continued)
equal dollar amounts had been invested in shares of the Fund or in other Oppenheimer funds selected by the Trustee. The Fund purchases shares of the funds selected for deferral by the Trustee in amounts equal to his or her deemed investment, resulting in a Fund asset equal to the deferred compensation liability. Such assets are included as a component of “Other” within the asset section of the Statement of Assets and Liabilities. Deferral of Trustees’ fees under the plan will not affect the net assets of the Fund and will not materially affect the Fund’s assets, liabilities or net investment income per share. Amounts will be deferred until distributed in accordance with the compensation deferral plan.
Distribution and Service Plan (12b-1) Fees. Under its General Distributor’s Agreement with the Fund, OppenheimerFunds Distributor, Inc. (the “Distributor”) acts as the Fund’s principal underwriter in the continuous public offering of the Fund’s classes of shares.
Service Plan for Class A Shares. The Fund has adopted a Service Plan (the “Plan”) for Class A shares pursuant to Rule 12b-1 under the 1940 Act. Under the Plan, the Fund reimburses the Distributor for a portion of its costs incurred for services provided to accounts that hold Class A shares. Reimbursement is made periodically at an annual rate of up to 0.25% of the daily net assets of Class A shares of the Fund. The Distributor currently uses all of those fees to pay dealers, brokers, banks and other financial institutions periodically for providing personal service and maintenance of accounts of their customers that hold Class A shares. Any unreimbursed expenses the Distributor incurs with respect to Class A shares in any fiscal year cannot be recovered in subsequent periods. Fees incurred by the Fund under the Plan are detailed in the Statement of Operations.
Distribution and Service Plans for Class B, Class C and Class R Shares. The Fund has adopted Distribution and Service Plans (the “Plans”) for Class B, Class C and Class R shares pursuant to Rule 12b-1 under the 1940 Act to compensate the Distributor for distributing those share classes, maintaining accounts and providing shareholder services. Under the Plans, the Fund pays the Distributor an annual asset-based sales charge of 0.75% on Class B and Class C shares’ daily net assets and 0.25% on Class R shares’ daily net assets. The Fund also pays a service fee under the Plans at an annual rate of 0.25% of daily net assets. The Plans continue in effect from year to year only if the Fund’s Board of Trustees votes annually to approve their continuance at an in person meeting called for that purpose. Fees incurred by the Fund under the Plans are detailed in the Statement of Operations.
Sales Charges. Front-end sales charges and CDSC do not represent expenses of the Fund. They are deducted from the proceeds of sales of Fund shares prior to investment or from redemption proceeds prior to remittance, as applicable. The sales charges retained by the Distributor from the sale of shares and the CDSC retained by the Distributor on the redemption of shares is shown in the following table for the period indicated.
30 OPPENHEIMER PORTFOLIO SERIES EQUITY INVESTOR FUND |
8. Fees and Other Transactions with Affiliates (Continued)
Class A | Class B | Class C | Class R | |||||||||||||||||
Class A | Contingent | Contingent | Contingent | Contingent | ||||||||||||||||
Front-End | Deferred | Deferred | Deferred | Deferred | ||||||||||||||||
Sales Charges | Sales Charges | Sales Charges | Sales Charges | Sales Charges | ||||||||||||||||
Retained by | Retained by | Retained by | Retained by | Retained by | ||||||||||||||||
Year Ended | Distributor | Distributor | Distributor | Distributor | Distributor | |||||||||||||||
| ||||||||||||||||||||
January 31, 2018 | $485,106 | $65 | $6,837 | $16,396 | $— |
Waivers and Reimbursements of Expenses. Prior to June 1, 2017, the Manager voluntarily waived fees and/or reimbursed the Fund for certain expenses in order to limit “Expenses after payments, waivers and/or reimbursements and reduction to custodian expenses”, (the combined direct (Fund level) and indirect (Underlying Fund level) expenses), will not exceed the annual rate of 1.45%, 2.20%, 2.20%, 1.70% and 1.20%, for Class A, Class B, Class C, Class R and Class Y, respectively. Effective June 1, 2017, this expense limitation has been removed.
Effective for the period January 1, 2017 through December 31, 2017, the Transfer Agent voluntarily waived and/or reimbursed Fund expenses in an amount equal to 0.015% of average annual net assets for Classes A, B, C, R and Y.
During the reporting period, the Transfer Agent waived fees and/or reimbursed the Fund for transfer agent and shareholder servicing agent fees as follows:
Class A | $ | 88,099 | ||
Class B | 1,436 | |||
Class C | 28,636 | |||
Class R | 7,318 | |||
Class Y | 3,304 |
During the reporting period, the Manager voluntarily reimbursed the Fund $5,978 for certain transactions. The payment is reported separately in the Statement of Operations and increased the Fund’s total returns by less than 0.005%.
31 OPPENHEIMER PORTFOLIO SERIES EQUITY INVESTOR FUND |
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Shareholders and Board of Trustees
Oppenheimer Portfolio Series:
Opinion on the Financial Statements
We have audited the accompanying statement of assets and liabilities of Equity Investor Fund, a series of Oppenheimer Portfolio Series, (the “Fund”), including the statement of investments, as of January 31, 2018, the related statement of operations for the year then ended, the statements of changes in net assets for each of the years in the two year period then ended, and the related notes (collectively, the “financial statements”) and the financial highlights for each of the years in the five year period then ended. In our opinion, the financial statements and financial highlights present fairly, in all material respects, the financial position of the Fund as of January 31, 2018, the results of its operations for the year then ended, the changes in its net assets for each of the years in the two year period then ended, and the financial highlights for each of the years in the five year period then ended, in conformity with U.S. generally accepted accounting principles.
Basis for Opinion
These financial statements and financial highlights are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements and financial highlights, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements and financial highlights. Such procedures also included confirmation of securities owned as of January 31, 2018, by correspondence with the transfer agent. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements and financial highlights. We believe that our audits provide a reasonable basis for our opinion.
KPMGLLP
We have not been able to determine the specific year that we began serving as the auditor of one or more Oppenheimer Funds investment companies, however we are aware that we have served as the auditor of one or more Oppenheimer Funds investment companies since at least 1969.
Denver, Colorado
March 23, 2018
32 OPPENHEIMER PORTFOLIO SERIES EQUITY INVESTOR FUND |
FEDERAL INCOME TAX INFORMATION Unaudited
In early 2018, if applicable, shareholders of record received information regarding all dividends and distributions paid to them by the Fund during calendar year 2017.
Capital gain distributions of $0.16753 per share were paid to Class A, Class B, Class C, Class R and Class Y shareholders, respectively, on December 20, 2017. Whether received in stock or in cash, the capital gain distribution should be treated by shareholders as a gain from the sale of the capital assets held for more than one year (long-term capital gains).
Dividends, if any, paid by the Fund during the reporting period which are not designated as capital gain distributions should be multiplied by the maximum amount allowable but not less than 94.30% to arrive at the amount eligible for the corporate dividend-received deduction.
A portion, if any, of the dividends paid by the Fund during the reporting period which are not designated as capital gain distributions are eligible for lower individual income tax rates to the extent that the Fund has received qualified dividend income as stipulated by recent tax legislation. The maximum amount allowable but not less than $8,906,203 of the Fund’s fiscal year taxable income may be eligible for the lower individual income tax rates. In early 2018, shareholders of record received information regarding the percentage of distributions that are eligible for lower individual income tax rates.
Recent tax legislation allows a regulated investment company to designate distributions not designated as capital gain distributions, as either interest related dividends or short-term capital gain dividends, both of which are exempt from the U.S. withholding tax applicable to non U.S. taxpayers. For the reporting period, the maximum amount allowable but not less than $106,395 of the ordinary distributions to be paid by the Fund qualifies as an interest related dividend and the maximum amount allowable but not less than $217,618 of the short-term capital gain distribution to be paid by the Fund qualifies as a short-term capital gain dividend.
The Fund has elected the application of Section 853 of the Internal Revenue Code to permit shareholders to take a federal income tax credit or deduction, at their option, on a per share basis. The maximum amount allowable but not less than $729,879 of foreign income taxes were paid by the Fund during the reporting period. A separate notice will be mailed to each shareholder, which will reflect the proportionate share of such foreign taxes which must be treated by shareholders as gross income for federal income tax purposes.
Gross income of the maximum amount allowable but not less than $2,515,875 was derived from sources within foreign countries or possessions of the United States.
The foregoing information is presented to assist shareholders in reporting distributions received from the Fund to the Internal Revenue Service. Because of the complexity of the federal regulations which may affect your individual tax return and the many variations in state and local tax regulations, we recommend that you consult your tax advisor for specific guidance.
33 OPPENHEIMER PORTFOLIO SERIES EQUITY INVESTOR FUND |
BOARD APPROVAL OF THE FUND’S INVESTMENT ADVISORY
AND SUB-ADVISORY AGREEMENTS Unaudited
The Fund has entered into an investment advisory agreement with OFI Global Asset Management, Inc. (“OFI Global” or the “Adviser”), a wholly-owned subsidiary of OppenheimerFunds, Inc. (“OFI” or the “Sub-Adviser”) (“OFI Global” and “OFI” together the “Managers”) and OFI Global has entered into a sub-advisory agreement with OFI whereby OFI provides investment sub-advisory services to the Fund (collectively, the “Agreements”). Each year, the Board of Trustees (the “Board”), including a majority of the independent Trustees, is required to determine whether to approve the terms of the Agreements and the renewal thereof. The Investment Company Act of 1940, as amended, requires that the Board request and evaluate, and that the Managers provide, such information as may be reasonably necessary to evaluate the terms of the Agreements. The Board employs an independent consultant to prepare a report that provides information, including comparative information that the Board requests for that purpose. In addition to in-person meetings focused on this evaluation, the Board receives information throughout the year regarding Fund services, fees, expenses and performance.
The Managers and the independent consultant provided information to the Board on the following factors: (i) the nature, quality and extent of the Managers’ services, (ii) the comparative investment performance of the Fund and the Managers, (iii) the fees and expenses of the Fund, including comparative fee and expense information, (iv) the profitability of the Managers and their affiliates, including an analysis of the cost of providing services, (v) whether economies of scale are realized as the Fund grows and whether fee levels reflect these economies of scale for Fund investors and (vi) other benefits to the Managers from their relationship with the Fund. The Board was aware that there are alternatives to retaining the Managers.
Outlined below is a summary of the principal information considered by the Board as well as the Board’s conclusions.
Nature, Quality and Extent of Services. The Board considered information about the nature, quality and extent of the services provided to the Fund and information regarding the Managers’ key personnel who provide such services. The Managers’ duties include providing the Fund with the services of the portfolio managers and the Sub-Adviser’s investment team, who provide research, analysis and other advisory services in regard to the Fund’s investments; and securities trading services. OFI Global is responsible for oversight of third-party service providers; monitoring compliance with applicable Fund policies and procedures and adherence to the Fund’s investment restrictions; risk management; and oversight of the Sub-Adviser. OFI Global is also responsible for providing certain administrative services to the Fund. Those services include providing and supervising all administrative and clerical personnel who are necessary in order to provide effective corporate administration for the Fund; compiling and maintaining records with respect to the Fund’s operations; preparing and filing reports required by the U.S. Securities and Exchange Commission; preparing periodic reports regarding the operations of the Fund for its shareholders; preparing proxy materials for shareholder meetings; and preparing the registration statements required by federal and state securities laws for the sale of the Fund’s shares. OFI Global also provides the Fund with office space, facilities and equipment.
34 OPPENHEIMER PORTFOLIO SERIES EQUITY INVESTOR FUND |
The Board also considered the quality of the services provided and the quality of the Managers’ resources that are available to the Fund. The Board took account of the fact that the Sub-Adviser has over fifty years of experience as an investment adviser and that its assets under management rank it among the top mutual fund managers in the United States. The Board evaluated the Managers’ advisory, administrative, accounting, legal, compliance and risk management services, among other services, and information the Board has received regarding the experience and professional qualifications of the Managers’ key personnel and the size and functions of its staff. In its evaluation of the quality of the portfolio management services provided, the Board considered the experience of Mark Hamilton and Dokyoung Lee, the portfolio managers for the Fund, and the Sub-Adviser’s investment team and analysts. The Board members also considered the totality of their experiences with the Managers as directors or trustees of the Fund and other funds advised by the Managers. The Board considered information regarding the quality of services provided by affiliates of the Managers, which the Board members have become knowledgeable about through their experiences with the Managers and in connection with the review or renewal of the Fund’s service agreements or service providers. The Board concluded, in light of the Managers’ experience, reputation, personnel, operations and resources that the Fund benefits from the services provided under the Agreements.
Investment Performance of the Managers and the Fund. Throughout the year, the Managers provided information on the investment performance of the Fund, the Adviser and the Sub-Adviser, including comparative performance information. The Board also reviewed information, prepared by the Managers and by the independent consultant, comparing the Fund’s historical performance to relevant benchmarks or market indices and to the performance of other retail funds in the world stock category. The Board noted that the Fund’s one-year, three-year, and ten-year performance was below its category median although its five-year performance was better than its category median.
Fees and Expenses of the Fund. The Board reviewed the fees paid to the Adviser and the other expenses borne by the Fund. The Board also considered the comparability of the fees charged and the services provided to the Fund to the fees and services for other clients or accounts advised by the Adviser. The independent consultant provided comparative data in regard to the fees and expenses of the Fund and other retail front-end load world stock funds with comparable asset levels and distribution features. The Board noted that the Fund was charged no actual management fees, exclusive of Underlying Fund management fees, while certain peer group funds did charge direct management fees. The Board also noted that the Fund’s total expenses were lower than its peer group median and category median.
Economies of Scale and Profits Realized by the Managers. The Board considered information regarding the Managers’ costs in serving as the Fund’s investment adviser, sub-adviser, including the costs associated with the personnel and systems necessary to manage the Fund, and information regarding the Managers’ profitability from their relationship with the Fund. The Board also considered that the Managers must be able to pay and retain experienced professional personnel at competitive rates to provide quality services to the Fund. The Board reviewed whether the Managers may realize economies of scale in managing and supporting the Fund and whether those economies of scale benefit the Fund’s
35 OPPENHEIMER PORTFOLIO SERIES EQUITY INVESTOR FUND |
BOARD APPROVAL OF THE FUND’S INVESTMENT ADVISORY
AND SUB-ADVISORY AGREEMENTS Unaudited / Continued
shareholders at the current level of Fund assets in relation to its management fee. The Fund currently does not charge a management fee.
Other Benefits to the Managers. In addition to considering the profits realized by the Managers, the Board considered information that was provided regarding the direct and indirect benefits the Managers receive as a result of their relationship with the Fund, including compensation paid to the Managers’ affiliates.
Conclusions. These factors were also considered by the independent Trustees meeting separately from the full Board, assisted by experienced counsel to the Fund and to the independent Trustees. Fund counsel and the independent Trustees’ counsel are independent of the Managers within the meaning and intent of the Securities and Exchange Commission Rules.
Based on its review of the information it received and its evaluations described above, the Board, including a majority of the independent Trustees, decided to continue the Agreements through September 30, 2018. In arriving at its decision, the Board did not identify any factor or factors as being more important than others, but considered all of the above information, and considered the terms and conditions of the Agreements, including the management fees, in light of all the surrounding circumstances.
36 OPPENHEIMER PORTFOLIO SERIES EQUITY INVESTOR FUND |
PORTFOLIO PROXY VOTING POLICIES AND GUIDELINES;
UPDATES TO STATEMENT OF INVESTMENTS Unaudited
The Fund has adopted Portfolio Proxy Voting Policies and Guidelines under which the Fund votes proxies relating to securities (“portfolio proxies”) held by the Fund. A description of the Fund’s Portfolio Proxy Voting Policies and Guidelines is available (i) without charge, upon request, by calling the Fund toll-free at 1.800.CALL OPP (225.5677), (ii) on the Fund’s website at www.oppenheimerfunds.com, and (iii) on the SEC’s website at www.sec.gov. In addition, the Fund is required to file Form N-PX, with its complete proxy voting record for the 12 months ended June 30th, no later than August 31st of each year. The Fund’s voting record is available (i) without charge, upon request, by calling the Fund toll-free at 1.800.CALL OPP (225.5677), and (ii) in the Form N-PX filing on the SEC’s website at www.sec.gov.
The Fund files its complete schedule of portfolio holdings with the SEC for the first quarter and the third quarter of each fiscal year on Form N-Q. The Fund’s Form N-Q filings are available on the SEC’s website at www.sec.gov. Those forms may be reviewed and copied at the SEC’s Public Reference Room in Washington, D.C. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330.
Householding—Delivery of Shareholder Documents
This is to inform you about OppenheimerFunds’ “householding” policy. If more than one member of your household maintains an account in a particular fund, OppenheimerFunds will mail only one copy of the fund’s prospectus (or, if available, the fund’s summary prospectus), annual and semiannual report and privacy policy. The consolidation of these mailings, called householding, benefits your fund through reduced mailing expense, and benefits you by reducing the volume of mail you receive from OppenheimerFunds. Householding does not affect the delivery of your account statements.
Please note that we will continue to household these mailings for as long as you remain an OppenheimerFunds shareholder, unless you request otherwise. If you prefer to receive multiple copies of these materials, please call us at 1.800.CALL-OPP (225-5677). You may also notify us in writing or via email. We will begin sending you individual copies of the prospectus (or, if available, the summary prospectus), reports and privacy policy within 30 days of receiving your request to stop householding.
37 OPPENHEIMER PORTFOLIO SERIES EQUITY INVESTOR FUND |
DISTRIBUTION SOURCES Unaudited
For any distribution that took place over the last six months of the Fund’s reporting period, the table below details on a per-share basis the percentage of the Fund’s total distribution payment amount that was derived from the following sources: net income, net profit from the sale of securities, and other capital sources. Other capital sources represent a return of capital. A return of capital may occur, for example, when some or all of the money that you invested in the Fund is paid back to you. A return of capital distribution does not necessarily reflect the Fund’s investment performance and should not be confused with “yield” or “income.” You should not draw any conclusions about each Fund’s investment performance from the amounts of these distributions. This information is based upon income and capital gains using generally accepted accounting principles as of the date of each distribution. Because the Fund is actively managed, the relative amount of the Fund’s total distributions derived from various sources over the calendar year may change. Please note that this information should not be used for tax reporting purposes as the tax character of distributable income may differ from the amounts used for this notification. You will receive IRS tax forms in the first quarter of each calendar year detailing the actual amount of the taxable and non-taxable portion of distributions paid to you during the tax year.
For the most current information, please go to oppenheimerfunds.com. Select your Fund, and scroll down to the ‘Dividends’ table under ‘Analytics’. The Fund’s latest distribution information will be followed by the sources of any distribution, updated daily.
Other | ||||||||||||||||
Pay | Net Profit | Capital | ||||||||||||||
Fund Name | Date | Net Income | from Sale | Sources | ||||||||||||
| ||||||||||||||||
Oppenheimer Portfolio Series: Equity Investor Fund | 12/20/17 | 46.1% | 41.5% | 12.4% | ||||||||||||
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38 OPPENHEIMER PORTFOLIO SERIES EQUITY INVESTOR FUND |
TRUSTEES AND OFFICERS Unaudited
Name, Position(s) Held with the Fund, Length of Service, Year of Birth | Principal Occupation(s) During the Past 5 Years; Other Trusteeships/ Directorships Held; Number of Portfolios in the Fund Complex Currently Overseen | |
INDEPENDENT TRUSTEES | The address of each Trustee in the chart below is 6803 S. Tucson Way, Centennial, Colorado 80112-3924. Each Trustee serves for an indefinite term, or until his or her resignation, retirement, death or removal. | |
Brian F. Wruble, Chairman of the Board of Trustees (since 2007) and Trustee (since 2005) Year of Birth: 1943 | Governor of Community Foundation of the Florida Keys (non-profit) (since July 2012); Director of TCP Capital, Inc. (since November 2015); Chairman Emeritus of the Board of Trustees (since August 2011), Chairman of the Board of Trustees (August 2007-August 2011), Trustee of the Board of Trustees (since August 1991) of The Jackson Laboratory (non-profit); Member of Zurich Insurance Group’s Investment Management Advisory Council (insurance) (October 2004-February 2017); Treasurer (since 2007) and Trustee (since May 1992) of the Institute for Advanced Study (non-profit educational institute); Director of Special Value Opportunities Fund, LLC (registered investment company) (affiliate of the Sub- Adviser’s parent company) (September 2004-June 2015); General Partner of Odyssey Partners, L.P. (hedge fund) (September 1995-December 2007); Special Limited Partner of Odyssey Investment Partners, LLC (private equity investment) (January 1999-September 2004). Oversees 56 portfolios in the OppenheimerFunds complex. Mr. Wruble has served on the Boards of certain Oppenheimer funds since April 2001, during which time he has become familiar with the Fund’s (and other Oppenheimer funds’) financial, accounting, regulatory and investment matters and has contributed to the Boards’ deliberations. | |
Beth Ann Brown, Trustee (since 2016) Year of Birth: 1968 | Advisor, Board of Advisors of Caron Engineering Inc. (since December 2014); Independent Consultant (since September 2012); held the following positions at Columbia Management Investment Advisers LLC: Head of Intermediary Distribution (2008-2012), Managing Director, Strategic Relations (2005-2008), Managing Director, Head of National Accounts (2004-2005); Senior Vice President, National Account Manager (2002-2004), Senior Vice President, Key Account Manager (1999-2002) and Vice President, Key Account Manager (1996-1999) of Liberty Funds Distributor, Inc.; President and Director, of Acton Shapleigh Youth Conservation Corps (non-profit) (since 2012); and Vice President and Director of Grahamtastic Connection (non-profit) (since May 2013). Oversees 56 portfolios in the OppenheimerFunds complex. Ms. Brown has served on the Boards of certain Oppenheimer funds since January 2016, during which time she has become familiar with the Fund’s (and other Oppenheimer funds’) financial, accounting, regulatory and investment matters and has contributed to the Board’s deliberations. | |
Edmund P. Giambastiani, Jr., Trustee (since 2013) Year of Birth: 1948 | Advisory Board Member of the Maxwell School of Citizenship and Public Affairs of Syracuse University (since April 2012); Director of Mercury Defense Systems Inc. (information technology) (August 2011-February 2013); Trustee of the U.S. Naval Academy Foundation Athletic & Scholarship Program (since November 2010); Advisory Board Member of the Massachusetts Institute of Technology Lincoln Laboratory (federally-funded research development center) (since May 2010); Director of The Boeing Company (aerospace and defense) (since October 2009); Trustee of MITRE Corporation (federally-funded research development center) (since September 2008); Independent Director of QinetiQ Group Plc (defense technology and security) (February 2008-August 2011); Chairman of Monster Worldwide, Inc. (on-line career services) (March 2015-November 2016), Director of |
39 OPPENHEIMER PORTFOLIO SERIES EQUITY INVESTOR FUND |
TRUSTEES AND OFFICERS Unaudited / Continued
Edmund P. Giambastiani, Jr., (Continued) | Monster Worldwide, Inc. (on-line career services) (February 2008-June 2011); Lead Director (June 2011-March 2015); Chairman of Alenia North America, Inc. (military and defense products) (January 2008-October 2009); Director of SRA International, Inc. (information technology and services) (January 2008-July 2011); President of Giambastiani Group LLC (national security and energy consulting) (since October 2007); United States Navy, career nuclear submarine officer (June 1970-October 2007), Vice Chairman of the Joint Chiefs of Staff (2005-October 2007), Supreme Allied Commander of NATO Commander Transformation (2003-2005), Commander, U.S. Joint Forces Command (2002-2005). Since his retirement from the U.S. Navy in October 2007, Admiral Giambastiani has also served on numerous U.S. Government advisory boards, investigations and task forces for the Secretaries of Defense, State and Interior and the Central Intelligence Agency. He recently completed serving as a federal commissioner on the Military Compensation and Retirement Modernization Commission. Oversees 56 portfolios in the OppenheimerFunds complex. Admiral Giambastiani has served on the Boards of certain Oppenheimer funds since February 2013, during which time he has become familiar with the Fund’s (and other Oppenheimer funds’) financial, accounting, regulatory and investment matters and has contributed to the Boards’ deliberations. | |
Elizabeth Krentzman, Trustee (since 2014) Year of Birth: 1959 | Member of the University of Florida National Board Foundation (since September 2017); Member of the Cartica Funds Board of Directors (private investment funds) (since January 2017); Member of the University of Florida College of Law Association Board of Trustees and Audit Committee Member (since April 2016); Member of University of Florida Law Advisory Board, Washington, DC Alumni Group (since 2015); Advisory Board Member of the Securities and Exchange Commission Historical Society (since 2007); held the following positions at Deloitte & Touche LLP: Principal and Chief Regulatory Advisor for Asset Management Services (2007—2014) and U.S. Mutual Fund Leader (2011—2014); General Counsel of the Investment Company Institute (trade association) (June 2004—April 2007); held the following positions at Deloitte & Touche LLP: National Director of the Investment Management Regulatory Consulting Practice (1997—2004), Principal (2003—2004), Director (1998—2003) and Senior Manager (1997 - 1998); Assistant Director of the Division of Investment Management—Office of Disclosure and Investment Adviser Regulation of the U.S. Securities and Exchange Commission (1996—1997) and various positions with the Division of Investment Management – Office of Regulatory Policy (1991—1996) of the U.S. Securities and Exchange Commission; Associate at Ropes & Gray LLP (1987 – 1991). Oversees 56 portfolios in the OppenheimerFunds complex. Ms. Krentzman has served on the Boards of certain Oppenheimer funds since August 2014, during which time she has become familiar with the Fund’s (and other Oppenheimer funds’) financial, accounting, regulatory and investment matters and has contributed to the Boards’ deliberations. | |
Mary F. Miller, Trustee (since 2005) Year of Birth: 1942 | Trustee of International House (not-for-profit) (since June 2007); Trustee of the American Symphony Orchestra (not-for-profit) (October 1998-November 2011); and Senior Vice President and General Auditor of American Express Company (financial services company) (July 1998-February 2003). Oversees 56 portfolios in the OppenheimerFunds complex. Ms. Miller has served on the Boards of certain Oppenheimer funds since August 2004, during which time she has become familiar with the Fund’s (and other Oppenheimer funds’) financial, accounting, regulatory and investment matters and has contributed to the Boards’ deliberations. |
40 OPPENHEIMER PORTFOLIO SERIES EQUITY INVESTOR FUND |
Joel W. Motley, Trustee (since 2005) Year of Birth: 1952 | Director of Office of Finance Federal Home Loan Bank (since September 2016); Director of Greenwall Foundation (since October 2013); Member of Board and Investment Committee of The Greenwall Foundation (since April 2013); Member of the Vestry of Trinity Wall Street (since April 2012); Director of Southern Africa Legal Services Foundation (since March 2012); Board Member of Pulitzer Center for Crisis Reporting (non-profit journalism) (since March 2011); Managing Director of Public Capital Advisors, LLC (privately-held financial advisor) (since January 2006); Managing Director of Carmona Motley, Inc. (privately-held financial advisor) (since January 2002); Director of Columbia Equity Financial Corp. (privately-held financial advisor) (2002-2007); Managing Director of Carmona Motley Hoffman Inc. (privately-held financial advisor) (January 1998-December 2001); Member of the Finance and Budget Committee of the Council on Foreign Relations, Member of the Investment Committee and Board of Human Rights Watch (since July 2000) and Member of the Investment Committee and Board of Historic Hudson Valley (since February 2010). Oversees 56 portfolios in the OppenheimerFunds complex. Mr. Motley has served on the Boards of certain Oppenheimer funds since October 2002, during which time he has become familiar with the Fund’s (and other Oppenheimer funds’) financial, accounting, regulatory and investment matters and has contributed to the Boards’ deliberations. | |
Joanne Pace, Trustee (since 2012) Year of Birth: 1958 | Advisory Board Director of Massey Quick and Company, LLC (since October 2014); Board Director of Horizon Blue Cross Blue Shield of New Jersey (since November 2012); Advisory Board Director of The Alberleen Group LLC (since March, 2012); Board Member (since January 2015), Board Member of 100 Women in Hedge Funds (non-profit) (since January 2015); Advisory Council Member of Morgan Stanley Children’s Hospital (non-profit) (since May, 2012); Senior Advisor of SECOR Asset Management, LP (2010-2011); Managing Director and Chief Operating Officer of Morgan Stanley Investment Management (2006-2010); Partner and Chief Operating Officer of FrontPoint Partners, LLC (hedge fund) (2005-2006); held the following positions at Credit Suisse: Managing Director (2003-2005); Global Head of Human Resources and member of Executive Board and Operating Committee (2004-2005), Global Head of Operations and Product Control (2003- 2004); held the following positions at Morgan Stanley: Managing Director (1997- 2003), Controller and Principal Accounting Officer (1999-2003); Chief Financial Officer (temporary assignment) for the Oversight Committee, Long Term Capital Management (1998-1999). Lead Independent Director and Chair of the Audit and Nominating Committee of The Global Chartist Fund, LLC of Oppenheimer Asset Management (2011-2012); Board Director of Managed Funds Association (2008- 2010); Board Director of Morgan Stanley Foundation (2007-2010) and Investment Committee Chair (2008-2010). Oversees 56 portfolios in the OppenheimerFunds complex. Ms. Pace has served on the Boards of certain Oppenheimer funds since November 2012, during which time she has become familiar with the Fund’s (and other Oppenheimer funds’) financial, accounting, regulatory and investment matters and has contributed to the Board’s deliberations. |
41 OPPENHEIMER PORTFOLIO SERIES EQUITY INVESTOR FUND |
TRUSTEES AND OFFICERS Unaudited / Continued
Daniel Vandivort, Trustee (since 2014) Year of Birth: 1954 | Chairman and Lead Independent Director/Trustee (March 2010-September 2014), Chairman of the Audit Committee (March 2009-September 2014) and Director/ Trustee (December 2008-September 2014) of the Board of Directors/Trustees of Value Line Funds; Trustee, Board of Trustees of Huntington Disease Foundation of America (since January 2015 and June 2007-December 2013) and Treasurer, Chairman of the Audit and Finance Committee (since January 2016); Trustee, Board of Trustees, RIM Retirement Savings Plan (2005-2007); President and Chief Investment Officer, Robeco Investment Management, formerly known as Weiss Peck and Greer (January 2005-June 2007); Member, Management Committee of Robeco Investment Management (2001-2007); Chairman and Trustee of the Board of Trustees of Weiss, Peck and Greer Funds (2004-2005); Managing Director and Head of Fixed Income, Weiss, Peck and Greer (November 1994-January 2005); Managing Director and Head of Fixed Income, CS First Boston Investment Management (January 1992-November 1994); Director, Global Product Development, First Boston Asset Management (November 1989 to January 1992); Vice President, Fixed Income Sales, First Boston Corp. (May 1984-November 1989). Oversees 56 portfolios in the OppenheimerFunds complex. Mr. Vandivort has served on the Boards of certain Oppenheimer funds since 2014, during which time he has become familiar with the Fund’s (and other Oppenheimer funds’) financial, accounting, regulatory and investment matters and has contributed to the Boards’ deliberations.
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INTERESTED TRUSTEE AND OFFICER | Mr. Steinmetz is an “Interested Trustee” because he is affiliated with the Manager and the Sub-Adviser by virtue of his positions as Chairman of the Sub-Adviser and officer and director of the Manager. Both as a Trustee and as an officer, Mr. Steinmetz serves for an indefinite term, or until his resignation, retirement, death or removal. Mr. Steinmetz’s address is 225 Liberty Street, New York, New York 10281-1008. | |
Arthur P. Steinmetz, Trustee (since 2015), President and Principal Executive Officer (since 2014) Year of Birth: 1958 | Chairman of the Sub-Adviser (since January 2015); CEO and Chairman of the Manager (since July 2014), President of the Manager (since May 2013), a Director of the Manager (since January 2013), Director of the Sub-Adviser (since July 2014), President, Management Director and CEO of Oppenheimer Acquisition Corp. (the Sub-Adviser’s parent holding company) (since July 2014), and President and Director of OFI SteelPath, Inc. (since January 2013). Chief Investment Officer of the OppenheimerFunds advisory entities from (January 2013-December 2013); Executive Vice President of the Manager (January 2013-May 2013); Chief Investment Officer of the Sub-Adviser (October 2010-December 2012); Chief Investment Officer, Fixed-Income, of the Sub-Adviser (April 2009-October 2010); Executive Vice President of the Sub-Adviser (October 2009-December 2012); Director of Fixed Income of the Sub-Adviser (January 2009-April 2009); and a Senior Vice President of the Sub-Adviser (March 1993-September 2009). An officer of 110 portfolios in the OppenheimerFunds complex.
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OTHER OFFICERS OF THE FUND | The addresses of the Officers in the chart below are as follows: for Messrs. Hamilton, Lee, Mss. Lo Bessette, Foxson and Picciotto, 225 Liberty Street, New York, New York 10281-1008, for Mr. Petersen, 6803 S. Tucson Way, Centennial, Colorado 80112-3924. Each Officer serves for an indefinite term or until his or her resignation, retirement, death or removal. | |
Mark Hamilton,1 Vice President (since 2013) Year of Birth: 1965 | Chief Investment Officer, Asset Allocation and Senior Vice President of the Sub-Adviser (since April 2013). Mr. Hamilton served at AllianceBernstein L.P. (from 1994-2013) as an Investment Director of Dynamic Asset Allocation (from 2010-2013), Head of North American Blend Team (from 2009-2010), and Senior Portfolio Manager of Blend Strategies (from 2006-2010). A portfolio manager and officer of other portfolios in the OppenheimerFunds complex. |
42 OPPENHEIMER PORTFOLIO SERIES EQUITY INVESTOR FUND |
Dokyoung Lee,1 Vice President (since 2014) Year of Birth: 1965 | Director of Research, Global Multi-Asset Group and a Senior Vice President of the Sub-Adviser (since October 2013). Mr. Lee served at Alliance Bernstein L.P. (1994- 2013): Director of Research for Strategic Asset Allocation (2011-2013), Director of Research for Blend Strategies (2008-2011), Head of Asia Pacific Blend Strategies (2005-2008), Head of Quantitative Research and Senior Portfolio Manager for Japan Value Equities (2001-2005), Portfolio Manager for Emerging Markets Value Equities (1997-2001), and Quantitative Analyst for US Value Equities (1994-1997). A portfolio manager and officer of other portfolios in the OppenheimerFunds complex. | |
Cynthia Lo Bessette, Secretary and Chief Legal Officer (since 2016) Year of Birth: 1969 | Executive Vice President, General Counsel and Secretary of the Manager (since February 2016); Senior Vice President and Deputy General Counsel of the Manager (March 2015-February 2016); Chief Legal Officer of the Sub-Adviser and the Distributor (since February 2016); Vice President, General Counsel and Secretary of Oppenheimer Acquisition Corp. (since February 2016); General Counsel of OFI SteelPath, Inc., OFI Advisors and Index Management Solutions, LLC (since February 2016); Chief Legal Officer of OFI Global Institutional, Inc., HarbourView Asset Management Corporation, OFI Global Trust Company, Oppenheimer Real Asset Management, Inc., OFI Private Investments Inc., Shareholder Services, Inc. and Trinity Investment Management Corporation (since February 2016); Corporate Counsel (February 2012-March 2015) and Deputy Chief Legal Officer (April 2013-March 2015) of Jennison Associates LLC; Assistant General Counsel (April 2008-September 2009) and Deputy General Counsel (October 2009-February 2012) of Lord Abbett & Co. LLC. An officer of 110 portfolios in the OppenheimerFunds complex. | |
Jennifer Foxson, Vice President and Chief Business Officer (since 2014) Year of Birth: 1969 | Senior Vice President of OppenheimerFunds Distributor, Inc. (since June 2014); Vice President of OppenheimerFunds Distributor, Inc. (April 2006-June 2014); Vice President of the Sub-Adviser (January 1998-March 2006); Assistant Vice President of the Sub-Adviser (October 1991-December 1998). An officer of 110 portfolios in the OppenheimerFunds complex. | |
Mary Ann Picciotto, Chief Compliance Officer and Chief Anti-Money Laundering Officer (since 2014) Year of Birth: 1973 | Senior Vice President and Chief Compliance Officer of the Manager (since March 2014); Chief Compliance Officer of the Sub-Adviser, OFI SteelPath, Inc., OFI Global Trust Company, OFI Global Institutional, Inc., Oppenheimer Real Asset Management, Inc., OFI Private Investments, Inc., Harborview Asset Management Corporation, Trinity Investment Management Corporation, and Shareholder Services, Inc. (since March 2014); Managing Director of Morgan Stanley Investment Management Inc. and certain of its various affiliated entities; Chief Compliance Officer of various Morgan Stanley Funds (May 2010-January 2014); Chief Compliance Officer of Morgan Stanley Investment Management Inc. (April 2007-January 2014). An officer of 110 portfolios in the OppenheimerFunds complex. | |
Brian S. Petersen, Treasurer and Principal Financial & Accounting Officer (since 2016) Year of Birth: 1970 | Senior Vice President of the Manager (since January 2017); Vice President of the Manager (January 2013-January 2017); Vice President of the Sub-Adviser (February 2007-December 2012); Assistant Vice President of the Sub-Adviser (August 2002- 2007). An officer of 110 portfolios in the OppenheimerFunds complex. |
1. Effective February 27, 2018, Mark Hamilton and Dokyoung Lee are no longer officers of the Fund.
The Fund’s Statement of Additional Information contains additional information about the Fund’s Trustees and Officers and is available without charge upon request by calling 1.800.CALL OPP (225.5677).
43 OPPENHEIMER PORTFOLIO SERIES EQUITY INVESTOR FUND |
OPPENHEIMER PORTFOLIO SERIES EQUITY INVESTOR FUND
Manager | OFI Global Asset Management, Inc. | |
Sub-Adviser | OppenheimerFunds, Inc. | |
Distributor | OppenheimerFunds Distributor, Inc. | |
Transfer and Shareholder | OFI Global Asset Management, Inc. | |
Servicing Agent | ||
Sub-Transfer Agent | Shareholder Services, Inc. | |
DBA OppenheimerFunds Services | ||
Independent Registered | KPMG LLP | |
Public Accounting Firm | ||
Legal Counsel | Kramer Levin Naftalis & Frankel LLP |
© 2018 OppenheimerFunds, Inc. All rights reserved.
44 OPPENHEIMER PORTFOLIO SERIES EQUITY INVESTOR FUND |
As an Oppenheimer fund shareholder, you are entitled to know how we protect your personal information and how we limit its disclosure.
Information Sources
We obtain non-public personal information about our shareholders from the following sources:
● | Applications or other forms. |
● | When you create a user ID and password for online account access. |
● | When you enroll in eDocs Direct,SM our electronic document delivery service. |
● | Your transactions with us, our affiliates or others. |
● | Technologies on our website, including: “cookies” and web beacons, which are used to collect data on the pages you visit and the features you use. |
If you visit oppenheimerfunds.com and do not log on to the secure account information areas, we do not obtain any personal information about you. When you do log on to a secure area, we do obtain your user ID and password to identify you. We also use this information to provide you with products and services you have requested, to inform you about products and services that you may be interested in and assist you in other ways.
We do not collect personal information through our website unless you willingly provide it to us, either directly by email or in those areas of the website that request information. In order to update your personal information (including your mailing address, email address and phone number) you must first log on and visit your user profile.
If you have set your browser to warn you before accepting cookies, you will receive the warning message with each cookie. You can refuse cookies by turning them off in your browser. However, doing so may limit your access to certain sections of our website.
We use cookies to help us improve and manage our website. For example, cookies help us recognize new versus repeat visitors to the site, track the pages visited, and enable some special features on the website. This data helps us provide better service for our website visitors.
Protection of Information
We do not disclose any non-public personal information (such as names on a customer list) about current or former customers to anyone, except as permitted by law.
Disclosure of Information
Copies of confirmations, account statements and other documents reporting activity in your fund accounts are made available to your financial advisor (as designated by you). We may also use details about you and your investments to help us, our financial service affiliates, or firms that jointly market their financial products and services with ours, to better serve your investment needs or suggest educational material that may be of interest to you. If this requires us to provide you with an opportunity to “opt in” or “opt out” of such information sharing with a firm not affiliated with us, you will receive notification on how to do so, before any such sharing takes place.
Right of Refusal
We will not disclose your personal information to unaffiliated third parties (except as permitted by law), unless we first offer you a reasonable opportunity to refuse or “opt out” of such disclosure.
45 OPPENHEIMER PORTFOLIO SERIES EQUITY INVESTOR FUND |
PRIVACY NOTICE Continued
Internet Security and Encryption
In general, the email services provided by our website are encrypted and provide a secure and private means of communication with us. To protect your own privacy, confidential and/ or personal information should only be communicated via email when you are advised that you are using a secure website.
As a security measure, we do not include personal or account information in non-secure emails, and we advise you not to send such information to us in non-secure emails. Instead, you may take advantage of the secure features of our website to encrypt your email correspondence. To do this, you will need to use a browser that supports Secure Sockets Layer (SSL) protocol.
● | All transactions conducted via our websites, including redemptions, exchanges and purchases, are secured by the highest encryption standards available. SSL is used to establish a secure connection between your PC and OppenheimerFunds’ server. It transmits information in an encrypted and scrambled format. |
● | Encryption is achieved through an electronic scrambling technology that uses a “key” to code and then decode the data. Encryption acts like the cable converter box you may have on your television set. It scrambles data with a secret code so that no one can make sense of it while it is being transmitted. When the data reaches its destination, the same software unscrambles the data. |
● | You can exit the secure area by closing your browser or, for added security, you can use the Log Out button before you close your browser. |
Other Security Measures
We maintain physical, electronic and procedural safeguards to protect your personal account information. Our employees and agents have access to that information only so that they may offer you products or provide services, for example, when responding to your account questions.
How You Can Help
You can also do your part to keep your account information private and to prevent unauthorized transactions. If you obtain a user ID and password for your account, safeguard that information. Strengthening your online credentials–your online security profile–typically your user name, password, and security questions and answers, can be one of your most important lines of defense on the Internet. For additional information on how you can help prevent identity theft, visit https://www.oppenheimerfunds.com/security.
Who We Are
This joint notice describes the privacy policies of the Oppenheimer funds, OppenheimerFunds, Inc., each of its investment adviser subsidiaries, OppenheimerFunds Distributor, Inc. and OFI Global Trust Co. It applies to all Oppenheimer fund accounts you presently have, or may open in the future, using your Social Security number—whether or not you remain a shareholder of our funds. This notice was last updated as of November 2017. In the event it is updated or changed, we will post an updated notice on our website at oppenheimerfunds.com. If you have any questions about this privacy policy, email us by clicking on the Contact Us section of our website at oppenheimerfunds.com, write to us at P.O. Box 5270, Denver, CO 80217-5270, or call us at 800 CALL OPP (225 5677).
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47 OPPENHEIMER PORTFOLIO SERIES EQUITY INVESTOR FUND |
Visit us at oppenheimerfunds.com for 24-hr access to
account information and transactions or call us at 800.CALL
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automated transactions. Representatives also available
Mon–Fri 8am-8pm ET.
Visit Us
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800 225 5677 | ||
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Oppenheimer funds are distributed by OppenheimerFunds Distributor, Inc. 225 Liberty Street, New York, NY 10281-1008 © 2018 OppenheimerFunds Distributor, Inc. All rights reserved.
RA0555.001.0118 March 23, 2018 |
Item 2. Code of Ethics.
The registrant has adopted a code of ethics that applies to the registrant’s principal executive officer, principal financial officer, principal accounting officer or controller or persons performing similar functions.
Item 3. Audit Committee Financial Expert.
The Board of Trustees of the registrant has determined that Joanne Pace, the Board’s Audit Committee Chairwoman, is an audit committee financial expert and that Ms. Pace is “independent” for purposes of this Item 3.
Item 4. Principal Accountant Fees and Services.
(a) | Audit Fees |
The principal accountant for the audit of the registrant’s annual financial statements billed $91,600 in fiscal 2018 and $87,000 in fiscal 2017.
(b) | Audit-Related Fees |
The principal accountant for the audit of the registrant’s annual financial statements billed $24,000 in fiscal 2018 and $28,000 in fiscal 2017.
The principal accountant for the audit of the registrant’s annual financial statements billed $386,986 in fiscal 2018 and $232,185 in fiscal 2017 to the registrant’s investment adviser or any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the registrant.
Such services include: Internal control reviews, GIPS attestation procedures, and additional audit services
(c) | Tax Fees |
The principal accountant for the audit of the registrant’s annual financial statements billed no such fees in fiscal 2018 and no such fees in fiscal 2017.
The principal accountant for the audit of the registrant’s annual financial statements billed $591,136 in fiscal 2018 and $716,713 in fiscal 2017 to the registrant’s investment adviser or any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the registrant.
Such services include: tax compliance, tax planning and tax advice. Tax compliance generally involves preparation of original and amended tax returns, claims for a refund and tax payment-planning services. Tax planning and tax advice includes assistance with tax audits and appeals, tax advice related to mergers and acquisitions and requests for rulings or technical advice from taxing authorities.
(d) | All Other Fees |
The principal accountant for the audit of the registrant’s annual financial statements billed no such fees in fiscal 2018 and no such fees in fiscal 2017.
The principal accountant for the audit of the registrant’s annual financial statements billed no such fees in fiscal 2018 and no such fees in fiscal 2017 to the registrant’s investment adviser or any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the registrant.
Such fees would include the cost to the principal accountant of attending audit committee meetings and consultations regarding the registrant’s retirement plan with respect to its Trustees.
(e) | (1) During its regularly scheduled periodic meetings, the registrant’s audit committee will pre-approve all audit, audit-related, tax and other services to be provided by the principal accountants of the registrant. |
The audit committee has delegated pre-approval authority to its Chairwoman for any subsequent new engagements that arise between regularly scheduled meeting dates provided that any fees such pre-approved are presented to the audit committee at its next regularly scheduled meeting.
Under applicable laws, pre-approval of non-audit services may be waived provided that: 1) the aggregate amount of all such services provided constitutes no more than five percent of the total amount of fees paid by the registrant to its principal accountant during the fiscal year in which services are provided 2) such services were not recognized by the registrant at the time of engagement as non-audit services and 3) such services are promptly brought to the attention of the audit committee of the registrant and approved prior to the completion of the audit.
(2) 0%
(f) | Not applicable as less than 50%. |
(g) | The principal accountant for the audit of the registrant’s annual financial statements billed $1,002,122 in fiscal 2018 and $976,898 in fiscal 2017 to the registrant and the registrant’s investment adviser or any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the registrant related to non-audit fees. Those billings did not include any prohibited non-audit services as defined by the Securities Exchange Act of 1934. |
(h) | The registrant’s audit committee of the board of Trustees has considered whether the provision of non-audit services that were rendered to the registrant’s investment adviser, and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the registrant that were not pre-approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X is compatible with maintaining the principal accountant’s independence. No such services were rendered. |
Item 5. Audit Committee of Listed Registrants
Not applicable.
Item 6. Schedule of Investments.
a) Not applicable. The complete schedule of investments is included in Item 1 of this Form N-CSR.
b) Not applicable.
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.
Not applicable.
Item 8. Portfolio Managers of Closed-End Management Investment Companies.
Not applicable.
Item 9. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.
Not applicable.
Item 10. Submission of Matters to a Vote of Security Holders.
The Fund’s Governance Committee Provisions with Respect to Nominations of Directors/Trustees to the Respective Boards
None
Item 11. Controls and Procedures.
Based on their evaluation of the registrant’s disclosure controls and procedures (as defined in rule 30a-3(c) under the Investment Company Act of 1940 (17 CFR 270.30a-3(c)) as of 1/31/2018, the registrant’s principal executive officer and principal financial officer found the registrant’s disclosure controls and procedures to provide reasonable assurances that information required to be disclosed by the registrant in the reports that it files under the Securities Exchange Act of 1934 (a) is accumulated and communicated to registrant’s management, including its principal executive officer and principal financial officer, to allow timely decisions regarding required disclosure, and (b) is recorded, processed, summarized and reported, within the time periods specified in the rules and forms adopted by the U.S. Securities and Exchange Commission.
There have been no changes in the registrant’s internal controls over financial reporting that occurred during the registrant’s second fiscal quarter of the period covered by this report that
have materially affected, or are reasonably likely to materially affect, the registrant’s internal control over financial reporting.
Item 12. Disclosure of Securities Lending Activities for Closed-End Management Investment Companies.
Not applicable.
Item 13. Exhibits.
(a) | (1) Exhibit attached hereto. |
(2) Exhibits attached hereto.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Oppenheimer Portfolio Series
By: | /s/ Arthur P. Steinmetz | |
Arthur P. Steinmetz | ||
Principal Executive Officer | ||
Date: | 3/16/2018 |
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
By: | /s/ Arthur P. Steinmetz | |
Arthur P. Steinmetz | ||
Principal Executive Officer | ||
Date: | 3/16/2018 |
By: | /s/ Brian S. Petersen | |
Brian S. Petersen | ||
Principal Financial Officer | ||
Date: | 3/16/2018 |