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 811-08297
Oppenheimer MidCap Fund
(Exact name of registrant as specified in charter)
6803 SOUTH TUCSON WAY, CENTENNIAL, COLORADO 80112-3924
(Address of principal executive offices)
(Zip code)
Robert G. Zack, Esq.
OppenheimerFunds, Inc.
498 Seventh Avenue, New York, New York 10018
- --------------------------------------------------------------------------------
(Name and address of agent for service)
Registrant's telephone number, including area code: (303) 768-3200
--------------
Date of fiscal year end: October 31
Date of reporting period: October 31, 2002 - April 30, 2003
ITEM 1. REPORTS TO STOCKHOLDERS.
April 30, 2003
Oppenheimer
MidCap Fund
Management
Commentaries
and
Semiannual
Report
MANAGEMENT COMMENTARIES
Performance Update
Investment Strategy Discussion
Listing of Top Holdings
SEMIANNUAL REPORT AND FINANCIAL STATEMENTS
Listing of Investments
Financials
"We believe the Fund's long-term record of performance demonstrates the enduring
value of our disciplined approach to growth investing, which focuses on a
company's ability to sustain true internal revenue growth."
[LOGO]
OppenheimerFunds[R]
The Right Way to Invest
HIGHLIGHTS
Fund Objective
Oppenheimer MidCap Fund seeks capital appreciation.
MANAGEMENT COMMENTARIES AND ADDITIONAL DISCLOSURES
1 Letter to Shareholders
2 An Interview
with Your Fund's
Manager
26 Trustees and Officers Listing
28 Privacy Policy Notice
SEMIANNUAL
REPORT AND
FINANCIAL
STATEMENTS
7 Statement of
Investments
9 Statement of Assets
and Liabilities
11 Statement of
Operations
12 Statements
of Changes
in Net Assets
13 Financial Highlights
18 Notes to Financial
Statements
Cumulative Total Returns*
For the 6-Month Period
Ended 4/30/03
Without With
Sales Chg. Sales Chg.
- ---------------------------------
Class A 0.79% -5.01%
- ---------------------------------
Class B 0.45 -4.55
- ---------------------------------
Class C 0.45 -0.55
- ---------------------------------
Class N 0.70 -0.30
- ---------------------------------
Class Y 1.03
- ---------------------------------
Average Annual Total Returns*
For the 1-Year Period
Ended 4/30/03
Without With
Sales Chg. Sales Chg.
- ---------------------------------
Class A -18.99% -23.65%
- ---------------------------------
Class B -19.61 -23.63
- ---------------------------------
Class C -19.61 -20.41
- ---------------------------------
Class N -19.18 -19.99
- ---------------------------------
Class Y -18.53
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.
*See Notes on page 6 for further details.
- --------------------------------------------------------
Not part of the semiannual report to Fund shareholders
- --------------------------------------------------------
LETTER TO SHAREHOLDERS
Dear Shareholder,
It is nearly impossible to reflect on the past six months without thinking about
the war with Iraq. We experienced a range of emotions in the days leading up to
the war and especially as the media brought the war into our homes, as never
before.
At OppenheimerFunds, we face the difficult task of looking beyond the war to
see its long-term impact, together with other factors, on the global economy,
the financial markets and, in the end, your investment with us. It's a
responsibility that we take very seriously and becomes our primary focus during
uncertain times like these.
It is our strong belief that investors can be well served by this
professional insight and by the guidance provided by a financial advisor. In
partnership with OppenheimerFunds, your financial advisor can help you navigate
through this volatile and sometimes unpredictable environment. We encourage you
to continue to work closely with your advisor to develop and implement an
investment plan that fits your goals and risk tolerance.
On our end, we continue to be the home to some of the most experienced and
talented investment professionals in the industry. They remain focused on proven
methods that drive informed, intelligent investment decisions. It is an approach
we are proud of and one that has served investors well in a variety of market
conditions.
We've found that in good times and bad, the fundamental principles of
investing remain key for financial success. These principles-- investing
according to your goals, diversifying your portfolio and benefiting from the
value of professional investment advice--are simple ideas that have proven
themselves over time, and, we believe, will prove themselves again.
We thank you for your continued confidence in OppenheimerFunds and encourage
you to visit our website, www.oppenheimerfunds.com, or speak with your advisor
for up to date information on your investments and the markets.
Sincerely,
/S/ SIGNATURE
John V. Murphy
May 21, 2003
These general market views represent opinions of OppenheimerFunds, Inc. and are
not intended to predict performance of the securities markets or any particular
fund. Specific information that applies to your Fund is contained in the pages
that follow.
PHOTO OF JOHN V. MURPHY
President
Oppenheimer
MidCap Fund
- --------------------------------------------------------
Not part of the semiannual report to Fund shareholders
- --------------------------------------------------------
1 | OPPENHEIMER MIDCAP FUND
AN INTERVIEW WITH YOUR FUND'S MANAGER
Q
How would you characterize the Fund's performance during the six-month period
that ended April 30, 2003?
A. The Fund delivered slightly below average performance during a difficult
period. 1 Returns were undermined by high levels of market volatility generated
by unpredictable geopolitical events and a shaky transition from recession to
gradual growth. We believe these results generally reflect short-term market
fluctuations rather than the broader trends responsible for the Fund's
longer-term performance. We believe our long-term record of performance
demonstrates the enduring value of our disciplined approach to growth investing,
which focuses on a company's ability to sustain true internal revenue growth.
What made this such a challenging period for stocks?
Conflicting economic and political forces battered markets during the past six
months. On the positive side, the U.S. economy showed signs of modest growth,
while interest rates remained low and inflation remained in check. On the
negative side, corporate capital spending remained weak, consumer sentiment
declined and geopolitical uncertainties sapped investor confidence. These
conditions created high levels of volatility, with stock prices rising and
falling in response to international political developments as well as
company-specific business results.
The market's volatility was also reflected in abrupt shifts in sentiment with
regard to various industries and sectors. For example, technology and health
care stocks tended to move in opposite directions at any one moment, depending
on whether the news of the day encouraged growth investors to hold a more
strongly positive or negative economic outlook. As optimism rose, investors
shifted assets into technology stocks they believed were more likely to benefit
from economic gains. As prospects for growth dimmed, growth investors sought
shelter
Portfolio Manager
Bruce Bartlett
1. The Fund's performance is compared to the S&P MidCap 400 Index, an unmanaged
index of midcap equity securities, which had a six-month return of 3.98% for the
period ended 4/30/03.
- --------------------------------------------------------
Not part of the semiannual report to Fund shareholders
- --------------------------------------------------------
2 | OPPENHEIMER MIDCAP FUND
in the traditionally defensive health care area. These shifts drove individual
stock prices sharply higher and lower, often without any reference to a
company's underlying fundamentals.
How did you manage the Fund under these conditions? We focused on stocks of
companies with strong earnings growth generated by increasing sales. We believe
that sales-driven earnings growth is intrinsically more sustainable than growth
that is driven primarily by acquisitions or accounting gimmicks. Among stocks
that met our investment criteria, we emphasized those we believed could maintain
revenue growth during this difficult economic period. By focusing on the quality
rather than the magnitude of a company's growth, we cushioned the impact of
market volatility on the Fund, while avoiding many of the market's sharpest
losses. We also maintained the Fund's concentration on mid-cap stocks. Mid-cap
companies generally provide greater growth potential than larger companies and
lower risks of failure than smaller companies, thereby offering the best of both
worlds.
Our company-by-company stock selection approach led us to concentrate a
relatively high percentage of assets in the areas of health care, consumer and
technology, each of which resulted in positive contributions to the Fund's
relative performance in the last six months. Health care proved to be the Fund's
largest single area of investment, because that's where we found the largest
number of companies generating the kind of sustainable, internal revenue growth
we target. Key holdings included equipment suppliers, such as Varian Medical
Systems, Inc., and biotechnology companies, such as Gilead Sciences, Inc. While
we sold some positions in drug distribution companies that experienced a
slowdown in revenue growth, we added to other positions, such as Biomet, Inc.,
that were generating above-average, sales-driven earnings growth. In the
consumer area, we succeeded in identifying several strong-performers despite
weakness in consumer sentiment and seasonally
- --------------------------------------------------------
Not part of the semiannual report to Fund shareholders
- --------------------------------------------------------
3 | OPPENHEIMER MIDCAP FUND
AN INTERVIEW WITH YOUR FUND'S MANAGER
disappointing sales experienced by many leading companies. Above-average
holdings ranged from natural foods retailers, such as Whole Foods Market, Inc.,
to upscale apparel and accessories companies, such as Coach, Inc. Among
technology stocks, we emphasized companies that stand at a favorable point in
their product cycle, such as wireless equipment manufacturers (e.g., UTStarcom,
Inc.), semiconductor makers (Marvell Technology Group Ltd.), and software
security developers (Symantec Corp.).
On the other hand, the Fund sustained steeper-than-average losses in the
areas of industrials and financials. Both of these areas were adversely affected
by the market volatility and sector rotation trends mentioned earlier, as well
as weakening fundamentals among some of the Fund's individual holdings. We
responded by reducing the Fund's exposure to companies that showed disappointing
levels of growth.
What is your outlook for the future?
While short-term growth prospects are likely to face continuing geopolitical and
economic pressures, longer-term prospects appear favorable. Many of the
inventory excesses that inhibited technology growth in the past two years have
run their course, while low interest rates are likely to encourage companies to
reinvest in their business infrastructure. On the health care front, positive
regulatory developments have opened the door to new drug approvals.
As always, we remain sharply focused on the underlying fundamentals that we
believe are the most reliable indicators of a company's long-term growth
prospects. Our disciplined strategy of building the portfolio one company and
one investment at a time has earned Oppenheimer MidCap Fund its exceptional
record of performance, and makes the Fund a continuing part of The Right Way to
Invest.
Average Annual
Total Returns with
Sales Charge
For the Periods Ended 3/31/03 2
Class A Since
1-Year 5-Year Inception
- ---------------------------
- -30.41% -3.77% 0.56%
Class B Since
1-Year 5-Year Inception
- ---------------------------
- -30.37% -3.71% -0.78%
Class C Since
1-Year 5-Year Inception
- ---------------------------
- -27.46% -3.36% 0.94%
Class N Since
1-Year 5-Year Inception
- ---------------------------
- -27.16% N/A - 24.57%
Class Y Since
1-Year 5-Year Inception
- ---------------------------
- -25.76% -2.15% 2.19%
2. See Notes on page 6 for further details.
- --------------------------------------------------------
Not part of the semiannual report to Fund shareholders
- --------------------------------------------------------
4 | OPPENHEIMER MIDCAP FUND
Top Ten Common Stock Holdings 4
- -------------------------------------------------------------
Bed Bath & Beyond, Inc. 7.2%
- -------------------------------------------------------------
Varian Medical Systems, Inc. 6.7
- -------------------------------------------------------------
Gilead Sciences, Inc. 5.8
- -------------------------------------------------------------
Lincare Holdings, Inc. 5.3
- -------------------------------------------------------------
Stryker Corp. 4.9
- -------------------------------------------------------------
Coach, Inc. 4.4
- -------------------------------------------------------------
Radian Group, Inc. 4.4
- -------------------------------------------------------------
UTStarcom, Inc. 4.1
- -------------------------------------------------------------
Apollo Group, Inc., Cl. A 3.6
- -------------------------------------------------------------
Biomet, Inc. 3.5
For up-to-date Top 10 Fund holdings, please visit www.oppenheimerfunds.com.
Top Five Stock Industries 4
- -------------------------------------------------------------
Health Care Equipment & Supplies 15.0%
- -------------------------------------------------------------
Specialty Retail 9.8
- -------------------------------------------------------------
Biotechnology 8.7
- -------------------------------------------------------------
Insurance 7.7
- -------------------------------------------------------------
Software 6.6
- -------------------------------------
Sector Allocation 3
[PIE CHART]
o Health Care 32.5%
Health Care Equipment
& Supplies 16.8
Bio-
technology 9.7
Health Care
Providers &
Services 6.0
o Consumer
Discretionary 23.6
o Information
Technology 20.3
o Financials 13.4
o Industrials 6.9
o Consumer
Staples 3.3
- -------------------------------------
3. Portfolio's holdings and allocations are subject to change. Percentages are
as of April 30, 2003, and are based on total market value of common stock
investments.
4. Portfolio's holdings and allocations are subject to change. Percentages are
as of April 30, 2003, and are based on net assets.
- --------------------------------------------------------
Not part of the semiannual report to Fund shareholders
- --------------------------------------------------------
5 | OPPENHEIMER MIDCAP FUND
NOTES
In reviewing performance, please remember that past performance cannot guarantee
future results. Investment return and principal value of an investment in the
Fund will fluctuate so that an investor's shares, when redeemed, may be worth
more or less than the original cost. Because of ongoing market volatility, the
Fund's performance may be subject to substantial fluctuations, and current
performance may be more or less than the results shown. For updates on the
Fund's performance, visit our website at www.oppenheimerfunds.com.
Total returns include changes in share price and reinvestment of dividends and
capital gains distributions in a hypothetical investment for the periods shown.
Cumulative total returns are not annualized. The Fund's total returns shown do
not reflect the deduction of income taxes on an individual's investment. Taxes
may reduce your actual investment returns on income or gains paid by the Fund or
any gains you may realize if you sell your shares. For more complete information
about the Fund, including charges, expenses and risks, please refer to the
prospectus. To obtain a copy, call your financial advisor, call OppenheimerFunds
Distributor, Inc. at 1.800.CALL OPP (1.800.225.5677) or visit the
OppenheimerFunds website at www.oppenheimerfunds.com. Read the prospectus
carefully before you invest or send money.
Class A shares of the Fund were first publicly offered on 12/1/97. Unless
otherwise noted, Class A returns include the current maximum initial sales
charge of 5.75%.
Class B shares of the Fund were first publicly offered on 12/1/97. Unless
otherwise noted, Class B returns include the applicable contingent deferred
sales charge of 5% (1-year), 2% (5-year) and 1% (since inception). Class B
shares are subject to an annual 0.75% asset-based sales charge.
Class C shares of the Fund were first publicly offered on 12/1/97. Unless
otherwise noted, Class C returns include the contingent deferred sales charge of
1% for the one-year period. Class C shares are subject to an annual 0.75%
asset-based sales charge.
Class N shares of the Fund were first publicly offered on 3/1/01. Class N shares
are offered only through retirement plans. Unless otherwise noted, Class N
returns include the contingent deferred sales charge of 1% for the one-year
period. Class N shares are subject to an annual 0.25% asset-based sales charge.
Class Y shares of the Fund were first publicly offered on 12/1/97. Class Y
shares are offered only to certain institutional investors under special
agreement with the Distributor.
An explanation of the calculation of performance is in the Fund's Statement of
Additional Information.
- --------------------------------------------------------
Not part of the semiannual report to Fund shareholders
- --------------------------------------------------------
6 | OPPENHEIMER MIDCAP FUND
STATEMENT OF INVESTMENTS April 30, 2003 / Unaudited
Market Value
Shares See Note 1
- ------------------------------------------------------
Common Stocks--89.5%
- ------------------------------------------------------
Consumer Discretionary--21.1%
- ------------------------------------------------------
Hotels, Restaurants & Leisure--1.7%
Outback
Steakhouse, Inc. 166,500 $ 5,950,710
- ------------------------------------------------------
Wendy's
International, Inc. 222,500 6,461,400
------------
12,412,110
- ------------------------------------------------------
Media--2.6%
Univision
Communications,
Inc., Cl. A 1 620,000 18,773,600
- ------------------------------------------------------
Multiline Retail--2.6%
Family Dollar
Stores, Inc. 550,000 18,804,500
- ------------------------------------------------------
Specialty Retail--9.8%
Abercrombie &
Fitch Co., Cl. A 1 224,000 7,365,120
- ------------------------------------------------------
Bed Bath &
Beyond, Inc. 1 1,320,000 52,153,200
- ------------------------------------------------------
CarMax, Inc. 1 360,000 7,614,000
- ------------------------------------------------------
Weight Watchers
International, Inc. 1 77,100 3,622,158
-------------
70,754,478
- ------------------------------------------------------
Textiles & Apparel--4.4%
Coach, Inc. 1 739,000 32,153,890
- ------------------------------------------------------
Consumer Staples--3.0%
- ------------------------------------------------------
Food & Drug Retailing--3.0%
Whole Foods
Market, Inc. 1 360,000 21,369,600
- ------------------------------------------------------
Financials--12.0%
- ------------------------------------------------------
Banks--2.1%
Commerce
Bancorp, Inc. 368,000 14,966,560
- ------------------------------------------------------
Diversified Financials--2.2%
Doral Financial Corp. 404,200 16,172,042
- ------------------------------------------------------
Insurance--7.7%
AMBAC Financial
Group, Inc. 131,600 7,678,860
- ------------------------------------------------------
MBIA, Inc. 358,700 16,033,890
- ------------------------------------------------------
Radian Group, Inc. 801,100 31,803,670
------------
55,516,420
Market Value
Shares See Note 1
- ------------------------------------------------------
Health Care--29.0%
- ------------------------------------------------------
Biotechnology--8.7%
Gilead Sciences, Inc. 1 914,300 $ 42,185,802
- ------------------------------------------------------
IDEC Pharmaceuticals
Corp. 1 301,000 9,857,750
- ------------------------------------------------------
Medimmune, Inc. 1 300,000 10,581,000
------------
62,624,552
- ------------------------------------------------------
Health Care Equipment & Supplies--15.0%
Biomet, Inc. 832,500 25,357,950
- ---------------------------------------- -------------
Stryker Corp. 525,000 35,180,250
- ------------------------------------------------------
Varian Medical
Systems, Inc. 1 898,000 48,366,280
------------
108,904,480
- ------------------------------------------------------
Health Care Providers & Services--5.3%
Lincare
Holdings, Inc. 1 1,268,400 38,521,308
- ------------------------------------------------------
Industrials--6.2%
- ------------------------------------------------------
Commercial Services & Supplies--4.1%
Apollo Group,
Inc., Cl. A 1 475,000 25,744,525
- ------------------------------------------------------
Career Education
Corp. 1 60,000 3,607,800
------------
29,352,325
- ------------------------------------------------------
Machinery--2.1%
SPX Corp. 1 450,000 15,210,000
- ------------------------------------------------------
Information Technology--18.2%
- ------------------------------------------------------
Communications Equipment--4.1%
UTStarcom, Inc. 1 1,362,900 29,671,696
- ------------------------------------------------------
Computers & Peripherals--0.4%
Network
Appliance, Inc. 1 250,000 3,320,000
- ------------------------------------------------------
Electronic Equipment & Instruments--1.1%
Garmin Ltd. 1 186,200 7,891,156
- ------------------------------------------------------
Internet Software & Services--1.0%
Expedia, Inc., Cl. A 1 125,000 7,223,750
- ------------------------------------------------------
Semiconductor Equipment & Products--5.0%
Marvell Technology
Group Ltd. 1 800,000 18,463,200
- ------------------------------------------------------
QLogic Corp. 1 400,000 17,596,000
------------
36,059,200
- ------------------------------------------------------
Software--6.6%
Mercury
Interactive Corp. 1 700,000 23,758,000
7 | OPPENHEIMER MIDCAP FUND
STATEMENT OF INVESTMENTS Unaudited / Continued
Market Value
Shares See Note 1
- ------------------------------------------------------
Software Continued
Symantec Corp. 1 539,300 $ 23,702,235
------------
47,460,235
------------
Total Common Stocks
(Cost $594,974,075) 647,161,902
- ------------------------------------------------------
Preferred Stocks--0.1%
Axsun Technologies, Inc.,
Cv., Series C 1,2,3 771,208 363,933
- ------------------------------------------------------
Centerpoint Broadband
Technologies, Inc., Cv.,
Series D 1,2 556,586 --
- ------------------------------------------------------
fusionOne, Inc., 8%
Non-Cum. Cv.,
Series D 1,2,3 1,675,894 63,181
- ------------------------------------------------------
ITF Optical
Technologies, Inc.,
Cv., Series A 1,2,3 200,000 116,760
------------
Total Preferred Stocks
(Cost $29,100,099) 543,874
Principal Market Value
Amount See Note 1
- ------------------------------------------------------
Joint Repurchase Agreements--13.3% 4
Undivided interest of 11.64% in joint
repurchase agreement (Market Value
$827,630,000) with PaineWebber, Inc.,
1.31%, dated 4/30/03, to be repurchased
at $96,366,507 on 5/1/03, collateralized
by Federal Home Loan Mortgage Corp.,
5.50%, 4/1/33--5/1/33, with a value
of $844,859,664
(Cost $96,363,000) $96,363,000 $ 96,363,000
- ------------------------------------------------------
Total Investments,
at Value
(Cost $720,437,174) 102.9% 744,068,776
- ------------------------------------------------------
Liabilities
in Excess of
Other Assets (2.9) (20,677,626)
----------------------
Net Assets 100.0% $723,391,150
======================
Footnotes to Statement of Investments
1. Non-income producing security.
2. Identifies issues considered to be illiquid or restricted--See Note 6 of
Notes to Financial Statements.
3. Affiliated company. Represents ownership of at least 5% of the voting
securities of the issuer, and is or was an affiliate, as defined in the
Investment Company Act of 1940, at or during the period ended April 30, 2003.
The aggregate fair value of securities of affiliated companies held by the Fund
as of April 30, 2003 amounts to $543,874. Transactions during the period in
which the issuer was an affiliate are as follows:
Shares Gross Gross Shares Unrealized
October 31, 2002 Additions Reductions April 30, 2003 Depreciation
- ----------------------------------------------------------------------------------------------------------------
Stocks and/or Warrants
Axsun Technologies, Inc., Cv., Series C 771,208 -- -- 771,208 $8,636,064
fusionOne, Inc., 8% Non-Cum. Cv., Series D 1,675,894 -- -- 1,675,894 9,036,923
ITF Optical Technologies, Inc., Cv., Series A 200,000 -- -- 200,000 4,883,240
4. The Fund may have elements of risk due to concentrated investments. Such
concentrations may subject the Fund to additional risks.
See accompanying Notes to Financial Statements.
8 | OPPENHEIMER MIDCAP FUND
STATEMENT OF ASSETS AND LIABILITIES Unaudited
April 30, 2003
- -------------------------------------------------------------------------------
Assets
Investments, at value (including $96,363,000
in repurchase agreements)--
see accompanying statement:
Unaffiliated companies (cost $697,337,073) $ 743,524,902
Affiliated companies (cost $23,100,101) 543,874
---------------
744,068,776
- --------------------------------------------------------------------------------
Cash 497,785
- --------------------------------------------------------------------------------
Receivables and other assets:
Shares of beneficial interest sold 599,019
Interest and dividends 5,695
Other 7,829
---------------
Total assets 745,179,104
- --------------------------------------------------------------------------------
Liabilities
Payables and other liabilities:
Investments purchased 19,829,193
Shares of beneficial interest redeemed 949,289
Shareholder reports 484,859
Transfer and shareholder servicing agent fees 200,173
Distribution and service plan fees 139,397
Trustees' compensation 137,988
Other 47,055
---------------
Total liabilities 21,787,954
- --------------------------------------------------------------------------------
Net Assets $ 723,391,150
===============
- --------------------------------------------------------------------------------
Composition of Net Assets
Paid-in capital $1,941,983,592
- --------------------------------------------------------------------------------
Accumulated net investment loss (4,709,776)
- --------------------------------------------------------------------------------
Accumulated net realized loss on investment transactions (1,237,514,268)
- --------------------------------------------------------------------------------
Net unrealized appreciation on investments 23,631,602
---------------
Net Assets $ 723,391,150
===============
9 | OPPENHEIMER MIDCAP FUND
STATEMENT OF ASSETS AND LIABILITIES Unaudited / Continued
- --------------------------------------------------------------------------------
Net Asset Value Per Share
- --------------------------------------------------------------------------------
Class A Shares:
Net asset value and redemption price per share
(based on net assets of $342,327,016 and 29,715,999
shares of beneficial interest outstanding) $11.52
Maximum offering price per share (net asset
value plus sales charge of 5.75% of offering price) $12.22
- --------------------------------------------------------------------------------
Class B Shares:
Net asset value, redemption price (excludes
applicable contingent deferred sales charge)
and offering price per share (based on net
assets of $275,545,400 and 24,883,938 shares
of beneficial interest outstanding) $11.07
- --------------------------------------------------------------------------------
Class C Shares:
Net asset value, redemption price (excludes
applicable contingent deferred sales charge)
and offering price per share (based on net
assets of $82,405,478 and 7,444,604 shares of
beneficial interest outstanding) $11.07
- --------------------------------------------------------------------------------
Class N Shares:
Net asset value, redemption price (excludes
applicable contingent deferred sales charge)
and offering price per share (based on net
assets of $11,161,814 and 974,260 shares of
beneficial interest outstanding) $11.46
- --------------------------------------------------------------------------------
Class Y Shares:
Net asset value, redemption price and offering
price per share (based on net assets of $11,951,442
and 1,010,626 shares of beneficial interest outstanding) $11.83
See accompanying Notes to Financial Statements.
10 | OPPENHEIMER MIDCAP FUND
STATEMENT OF OPERATIONS Unaudited
For the Six Months Ended April 30, 2003
- ------------------------------------------------------------------------------
Investment Income
Dividends $ 820,214
- ------------------------------------------------------------------------------
Interest 554,560
------------
Total investment income 1,374,774
- ------------------------------------------------------------------------------
Expenses
Management fees 2,488,059
- ------------------------------------------------------------------------------
Distribution and service plan fees:
Class A 348,167
Class B 1,353,875
Class C 395,076
Class N 23,922
- ------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees:
Class A 1,119,328
Class B 1,066,497
Class C 304,224
Class N 24,662
Class Y 13,996
- ------------------------------------------------------------------------------
Shareholder reports 353,845
- ------------------------------------------------------------------------------
Trustees' compensation 7,266
- ------------------------------------------------------------------------------
Custodian fees and expenses 5,051
- ------------------------------------------------------------------------------
Other 73,624
------------
Total expenses 7,577,592
Less reduction to custodian expenses (120)
Less voluntary waiver of transfer and shareholder
servicing agent fees--Class A (665,872)
Less voluntary waiver of transfer and shareholder
servicing agent fees--Class B (758,160)
Less voluntary waiver of transfer and shareholder
servicing agent fees--Class C (210,195)
Less voluntary waiver of transfer and shareholder
servicing agent fees--Class N (6,768)
------------
Net expenses 5,936,477
- ------------------------------------------------------------------------------
Net Investment Loss (4,561,703)
- ------------------------------------------------------------------------------
Realized and Unrealized Gain (Loss)
Net realized gain (loss) on:
Investments (85,769,503)
Closing and expiration of option contracts written 191,097
------------
Net realized loss (85,578,406)
- ------------------------------------------------------------------------------
Net change in unrealized appreciation on investments 93,448,645
------------
Net realized and unrealized gain 7,870,239
- ------------------------------------------------------------------------------
Net Increase in Net Assets Resulting from Operations $ 3,308,536
============
See accompanying Notes to Financial Statements.
11 | OPPENHEIMER MIDCAP FUND
STATEMENTS OF CHANGES IN NET ASSETS
Six Months Year
Ended Ended
April 30, 2003 October 31,
(Unaudited) 2002
- --------------------------------------------------------------------------------
Operations
Net investment loss $(4,561,703) $ (14,191,329)
- --------------------------------------------------------------------------------
Net realized loss (85,578,406) (235,256,189)
- --------------------------------------------------------------------------------
Net change in unrealized appreciation 93,448,645 31,615,304
----------------------------
Net increase (decrease) in net assets
resulting from operations 3,308,536 (217,832,214)
- --------------------------------------------------------------------------------
Beneficial Interest Transactions
Net increase (decrease) in net assets
resulting from beneficial interest
transactions:
Class A (11,714,381) (79,503,847)
Class B (16,352,042) (59,860,957)
Class C (1,203,299) (19,236,764)
Class N 2,178,678 8,462,388
Class Y 4,178,724 4,409,028
- --------------------------------------------------------------------------------
Net Assets
Total decrease (19,603,784) (363,562,366)
- --------------------------------------------------------------------------------
Beginning of period 742,994,934 1,106,557,300
----------------------------
End of period [including accumulated net
investment loss of $4,709,776 and
$148,073, respectively] $723,391,150 $742,994,934
============================
See accompanying Notes to Financial Statements.
12 | OPPENHEIMER MIDCAP FUND
FINANCIAL HIGHLIGHTS
Six Months Year
Ended Ended
April 30, 2003 Oct. 31,
Class A (Unaudited) 2002 2001 2000 1999 1998 1
- -------------------------------------------------------------------------------------------------------------------------
Per Share Operating Data
Net asset value, beginning of period $ 11.43 $ 14.42 $ 30.41 $ 19.88 $ 10.83 $ 10.00
- -------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss) (.04) (.13) (.02) .04 (.04) (.02)
Net realized and unrealized gain (loss) .13 (2.86) (15.97) 10.49 9.11 .85
---------------------------------------------------------------------------
Total from investment operations .09 (2.99) (15.99) 10.53 9.07 .83
- -------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Distributions in excess of net realized gain -- -- -- -- (.02) --
- -------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $11.52 $11.43 $14.42 $30.41 $19.88 $10.83
===========================================================================
- -------------------------------------------------------------------------------------------------------------------------
Total Return, at Net Asset Value 2 0.79% (20.74)% (52.58)% 52.97% 83.79% 8.30%
- -------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
Net assets, end of period (in thousands) $342,327 $351,983 $532,338 $1,055,967 $167,879 $14,607
- -------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $334,180 $460,797 $718,814 $ 728,168 $ 60,644 $ 7,185
- -------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income (loss) (0.93)% (1.06)% (0.09)% 0.28% (0.49)% (0.33)%
Expenses, gross 1.73% 1.68% 1.33% 1.16% 1.40% 1.59% 4
Expenses, net 1.33% 5,6 1.47% 5,6 1.32% 5,6 1.16% 5 1.40% 5 1.59%
- -------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 36% 51% 84% 23% 61% 117%
1. For the period from December 1, 1997 (inception of offering) to October 31,
1998.
2. Assumes an investment on the business day before the first day of the fiscal
period (or inception of offering), with all dividends and distributions
reinvested in additional shares on the reinvestment date, and redemption at the
net asset value calculated on the last business day of the fiscal period. Sales
charges are not reflected in the total returns. Total returns are not annualized
for periods of less than one full year.
3. Annualized for periods of less than one full year.
4. Expense ratio has been calculated without adjustment for the reduction to
custodian expenses.
5. Reduction to custodian expenses less than 0.01%.
6. Net of voluntary waiver of transfer agent fees.
See accompanying Notes to Financial Statements.
13 | OPPENHEIMER MIDCAP FUND
FINANCIAL HIGHLIGHTS Continued
Six Months Year
Ended Ended
April 30, 2003 Oct. 31,
Class B (Unaudited) 2002 2001 2000 1999 1998 1
- -------------------------------------------------------------------------------------------------------------------------
Per Share Operating Data
Net asset value, beginning of period $ 11.02 $ 14.02 $ 29.79 $ 19.62 $ 10.77 $ 10.00
- -------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment loss (.11) (.30) (.15) (.07) (.07) (.05)
Net realized and unrealized gain (loss) .16 (2.70) (15.62) 10.24 8.94 .82
---------------------------------------------------------------------------
Total from investment operations .05 (3.00) (15.77) 10.17 8.87 .77
- -------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Distributions in excess of net realized gain -- -- -- -- (.02) --
- -------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $11.07 $11.02 $14.02 $29.79 $19.62 $10.77
===========================================================================
- -------------------------------------------------------------------------------------------------------------------------
Total Return, at Net Asset Value 2 0.45% (21.40)% (52.94)% 51.83% 82.40% 7.70%
- -------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
Net assets, end of period (in thousands) $275,545 $291,397 $438,962 $874,830 $118,611 $7,654
- -------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $272,931 $385,917 $592,096 $594,390 $ 40,455 $3,521
- -------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment loss (1.67)% (1.85)% (0.84)% (0.48)% (1.25)% (1.06)%
Expenses, gross 2.63% 2.48% 2.08% 1.91% 2.16% 2.35% 4
Expenses, net 2.07% 5,6 2.27% 5,6 2.07% 5,6 1.91% 5 2.16% 5 2.35%
- -------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 36% 51% 84% 23% 61% 117%
1. For the period from December 1, 1997 (inception of offering) to October 31,
1998.
2. Assumes an investment on the business day before the first day of the fiscal
period (or inception of offering), with all dividends and distributions
reinvested in additional shares on the reinvestment date, and redemption at the
net asset value calculated on the last business day of the fiscal period. Sales
charges are not reflected in the total returns. Total returns are not annualized
for periods of less than one full year.
3. Annualized for periods of less than one full year.
4. Expense ratio has been calculated without adjustment for the reduction to
custodian expenses.
5. Reduction to custodian expenses less than 0.01%.
6. Net of voluntary waiver of transfer agent fees.
See accompanying Notes to Financial Statements.
14 | OPPENHEIMER MIDCAP FUND
Six Months Year
Ended Ended
April 30, 2003 Oct. 31,
Class C (Unaudited) 2002 2001 2000 1999 1998 1
- -------------------------------------------------------------------------------------------------------------------------
Per Share Operating Data
Net asset value, beginning of period $ 11.02 $ 14.02 $ 29.78 $ 19.60 $ 10.76 $ 10.00
- ---------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment loss (.09) (.30) (.15) (.07) (.06) (.05)
Net realized and unrealized gain (loss) .14 (2.70) (15.61) 10.25 8.92 .81
-------------------------------------------------------------------------------
Total from investment operations .05 (3.00) (15.76) 10.18 8.86 .76
- ---------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions
to shareholders:
Distributions in excess of net
realized gain -- -- -- -- (.02) --
- ---------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $11.07 $11.02 $14.02 $29.78 $19.60 $10.76
===============================================================================
- ---------------------------------------------------------------------------------------------------------------------------
Total Return, at Net Asset Value 2 0.45% (21.40)% (52.92)% 51.94% 82.38% 7.60%
- ---------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
Net assets, end of period (in thousands) $82,405 $ 83,351 $128,230 $247,566 $26,482 $2,587
- ---------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $79,665 $112,436 $170,129 $161,221 $ 9,066 $1,271
- ---------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment loss (1.68)% (1.84)% (0.85)% (0.48)% (1.26)% (1.07)%
Expenses, gross 2.61% 2.47% 2.08% 1.91% 2.16% 2.35% 4
Expenses, net 2.08% 5,6 2.26% 5,6 2.07% 5,6 1.91% 5 2.16% 5 2.35%
- ---------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 36% 51% 84% 23% 61% 117%
1. For the period from December 1, 1997 (inception of offering) to October 31,
1998.
2. Assumes an investment on the business day before the first day of the fiscal
period (or inception of offering), with all dividends and distributions
reinvested in additional shares on the reinvestment date, and redemption at the
net asset value calculated on the last business day of the fiscal period. Sales
charges are not reflected in the total returns. Total returns are not annualized
for periods of less than one full year.
3. Annualized for periods of less than one full year.
4. Expense ratio has been calculated without adjustment for the reduction to
custodian expenses.
5. Reduction to custodian expenses less than 0.01%.
6. Net of voluntary waiver of transfer agent fees.
See accompanying Notes to Financial Statements.
15 | OPPENHEIMER MIDCAP FUND
FINANCIAL HIGHLIGHTS Continued
Six Months Year
Ended Ended
April 30, 2003 Oct. 31,
Class N (Unaudited) 2002 2001 1
- --------------------------------------------------------------------------------------------------
Per Share Operating Data
Net asset value, beginning of period $ 11.38 $ 14.40 $ 19.54
- --------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment loss (.09) (.14) (.05)
Net realized and unrealized gain (loss) .17 (2.88) (5.09)
----------------------------------------
Total from investment operations .08 (3.02) (5.14)
- --------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Distributions in excess of net realized gain -- -- --
- --------------------------------------------------------------------------------------------------
Net asset value, end of period $11.46 $11.38 $14.40
========================================
- --------------------------------------------------------------------------------------------------
Total Return, at Net Asset Value 2 0.70% (20.97)% (26.31)%
- --------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
Net assets, end of period (in thousands) $11,162 $8,846 $2,268
- --------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 9,661 $6,576 $1,250
- --------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment loss (1.32)% (1.28)% (0.94)%
Expenses, gross 1.85% 1.87% 1.73%
Expenses, net 1.71% 4,5 1.66% 4,5 1.72% 4,5
- --------------------------------------------------------------------------------------------------
Portfolio turnover rate 36% 51% 84%
1. For the period from March 1, 2001 (inception of offering) to October 31,
2001.
2. Assumes an investment on the business day before the first day of the fiscal
period (or inception of offering), with all dividends and distributions
reinvested in additional shares on the reinvestment date, and redemption at the
net asset value calculated on the last business day of the fiscal period. Sales
charges are not reflected in the total returns. Total returns are not annualized
for periods of less than one full year.
3. Annualized for periods of less than one full year.
4. Reduction to custodian expenses less than 0.01%.
5. Net of voluntary waiver of transfer agent fees.
See accompanying Notes to Financial Statements.
16 | OPPENHEIMER MIDCAP FUND
Six Months Year
Ended Ended
April 30, 2003 Oct. 31,
Class Y (Unaudited) 2002 2001 2000 1999 1998 1
- -------------------------------------------------------------------------------------------------------------------------
Per Share Operating Data
Net asset value, beginning of period $ 11.71 $ 14.69 $ 30.86 $ 20.07 $ 10.88 $ 10.00
- -------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss) (.12) (.08) (.08) (.02) (.01) .01
Net realized and unrealized gain (loss) .24 (2.90) (16.09) 10.81 9.22 .87
----------------------------------------------------------------------------
Total from investment operations .12 (2.98) (16.17) 10.79 9.21 .88
- -------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Distributions in excess of net realized gain -- -- -- -- (.02) --
- -------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $11.83 $11.71 $14.69 $30.86 $20.07 $10.88
===========================================================================
- -------------------------------------------------------------------------------------------------------------------------
Total Return, at Net Asset Value 2 1.03% (20.29)% (52.40)% 53.76% 84.69% 8.80%
- -------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
Net assets, end of period (in thousands) $11,951 $7,419 $4,759 $115 $2 $1
- -------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 9,115 $6,449 $2,720 $ 33 $2 $1
- -------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income (loss) (0.75)% (0.39)% (0.12)% 0.60% (0.06)% 0.05%
Expenses, gross 1.15% 0.83% 1.07% 0.74% 1.03% 1.09% 4
Expenses, net 1.15% 5 0.83% 5 1.02% 5,6 0.74% 5 1.03% 5 1.09%
- -------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 36% 51% 84% 23% 61% 117%
1. For the period from December 1, 1997 (inception of offering) to October 31,
1998.
2. Assumes an investment on the business day before the first day of the fiscal
period (or inception of offering), with all dividends and distributions
reinvested in additional shares on the reinvestment date, and redemption at the
net asset value calculated on the last business day of the fiscal period. Sales
charges are not reflected in the total returns. Total returns are not annualized
for periods of less than one full year.
3. Annualized for periods of less than one full year.
4. Expense ratio has been calculated without adjustment for the reduction to
custodian expenses.
5. Reduction to custodian expenses less than 0.01%.
6. Net of voluntary waiver of transfer agent fees.
See accompanying Notes to Financial Statements.
17 | OPPENHEIMER MIDCAP FUND
NOTES TO FINANCIAL STATEMENTS Unaudited
- --------------------------------------------------------------------------------
1. Significant Accounting Policies
Oppenheimer MidCap Fund (the Fund) is registered under the Investment Company
Act of 1940, as amended, as an open-end management investment company. The
Fund's investment objective is to seek capital appreciation. The Fund's
investment advisor is OppenheimerFunds, Inc. (the Manager).
The Fund offers Class A, Class B, Class C, Class N and Class Y shares. Class
A shares are sold at their offering price, which is normally net asset value
plus a front-end sales charge. Class B, Class C and Class N shares are sold
without a front-end sales charge but may be subject to a contingent deferred
sales charge (CDSC). Class N shares are sold only through retirement plans.
Retirement plans that offer Class N shares may impose charges on those
accounts. Class Y shares are sold to certain institutional investors without
either a front-end sales charge or a CDSC. All classes of shares have identical
rights and voting privileges. Earnings, net assets and net asset value per
share may differ by minor amounts due to each class having its own expenses
directly attributable to that class. Classes A, B, C and N have separate
distribution and/or service plans. No such plan has been adopted for Class Y
shares. Class B shares will automatically convert to Class A shares six years
after the date of purchase.
The following is a summary of significant accounting policies consistently
followed by the Fund.
- --------------------------------------------------------------------------------
Securities Valuation. Securities listed or traded on National Stock Exchanges
or other domestic or foreign exchanges are valued based on the last sale price
of the security traded on that exchange prior to the time when the Fund's
assets are valued. In the absence of a sale, the security is valued at the last
sale price on the prior trading day, if it is within the spread of the closing
bid and asked prices, and if not, at the closing bid price. Securities
(including restricted securities) for which quotations are not readily
available are valued primarily using dealer-supplied valuations, a portfolio
pricing service authorized by the Board of Trustees, or at their fair value.
Fair value is determined in good faith under consistently applied procedures
under the supervision of the Board of Trustees. Short-term "money market type"
debt securities with remaining maturities of sixty days or less are valued at
amortized cost (which approximates market value).
- --------------------------------------------------------------------------------
Joint Repurchase Agreements. The Fund, along with other affiliated funds of the
Manager, may transfer uninvested cash balances into one or more joint
repurchase agreement accounts. These balances are invested in one or more
repurchase agreements, secured by U.S. government securities. Securities
pledged as collateral for repurchase agreements are held by a custodian bank
until the agreements mature. Each agreement requires that the market value of
the collateral be sufficient to cover payments of interest and principal;
however, in the event of default by the other party to the agreement, retention
of the collateral may be subject to legal proceedings.
18 | OPPENHEIMER MIDCAP FUND
- --------------------------------------------------------------------------------
Allocation of Income, Expenses, Gains and Losses. Income, expenses (other than
those attributable to a specific class), gains and losses are allocated daily
to each class of shares based upon the relative proportion of net assets
represented by such class. Operating expenses directly attributable to a
specific class are charged against the operations of that class.
- --------------------------------------------------------------------------------
Federal Taxes. The Fund intends to continue to comply with provisions of the
Internal Revenue Code applicable to regulated investment companies and to
distribute all of its taxable income, including any net realized gain on
investments not offset by capital loss carryforwards, if any, to shareholders.
Therefore, no federal income or excise tax provision is required.
As of April 30, 2003, the Fund had available for federal income tax purposes
an estimated unused capital loss carryforward of $1,236,791,274. This estimated
capital loss carryforward represents the carryforward as of the end of the last
fiscal year, increased for losses deferred under tax accounting rules for the
current fiscal year and is increased or decreased by capital losses or gains
realized in the first six months of the current fiscal year. During the six
months ended April 30, 2003, the Fund did not use carryforward to offset
capital gains realized. During the year ended October 31, 2002, the Fund did
not use carryforward to offset capital gains realized.
As of October 31, 2002, the Fund had available for federal income tax purposes
unused capital loss carryforwards as follows:
Expiring
----------------------
2006 $ 2,792,572
2007 3,516,822
2008 142,020,390
2009 764,990,986
2010 237,892,098
--------------
Total $1,151,212,868
==============
- --------------------------------------------------------------------------------
Trustees' Compensation. The Fund has adopted an unfunded retirement plan for
the Fund's independent trustees. Benefits are based on years of service and
fees paid to each trustee during the years of service. During the six months
ended April 30, 2003, the Fund's projected benefit obligations were decreased
by $4,304 and payments of $3,871 were made to retired trustees, resulting in an
accumulated liability of $139,896 as of April 30, 2003.
The Board of Trustees has adopted a deferred compensation 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. Under the plan, the compensation deferred is invested by the Fund in the
fund(s) selected by the trustee. 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.
19 | OPPENHEIMER MIDCAP FUND
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
1. Significant Accounting Policies Continued
Dividends and Distributions to Shareholders. Dividends and distributions to
shareholders, which are determined in accordance with income tax regulations,
are recorded on the ex-dividend date.
- --------------------------------------------------------------------------------
Classification of Dividends and Distributions to Shareholders. 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 may differ from
their ultimate characterization for federal income tax purposes. 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.
No distributions were paid during the six months ended April 30, 2003 and
the year ended October 31, 2002.
- --------------------------------------------------------------------------------
Investment Income. Dividend income is recorded on the ex-dividend date or upon
ex-dividend notification in the case of certain foreign dividends where the
ex-dividend date may have passed. Non-cash dividends included in dividend
income, if any, are recorded at the fair market value of the securities
received. Interest income, which includes accretion of discount and
amortization of premium, is accrued as earned.
- --------------------------------------------------------------------------------
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.
- --------------------------------------------------------------------------------
Other. The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported amounts
of assets and liabilities and disclosure of contingent assets and liabilities
at the date of the financial statements and the reported amounts of income and
expenses during the reporting period. Actual results could differ from those
estimates.
- --------------------------------------------------------------------------------
2. Shares of Beneficial Interest
The Fund has authorized an unlimited number of no par value shares of
beneficial interest of each class. Transactions in shares of beneficial
interest were as follows:
Six Months Ended April 30, 2003 Year Ended October 31, 2002
Shares Amount Shares Amount
- --------------------------------------------------------------------------------
Class A
Sold 4,114,279 $ 45,766,376 10,246,014 $ 140,041,291
Redeemed (5,206,092) (57,480,757) (16,353,774) (219,545,138)
---------------------------------------------------------------
Net decrease (1,091,813) $(11,714,381) (6,107,760) $ (79,503,847)
===============================================================
- --------------------------------------------------------------------------------
Class B
Sold 1,990,184 $ 21,198,964 5,434,402 $ 72,796,103
Redeemed (3,542,899) (37,551,006) (10,300,242) (132,657,060)
---------------------------------------------------------------
Net decrease (1,552,715) $(16,352,042) (4,865,840) $ (59,860,957)
===============================================================
20 | OPPENHEIMER MIDCAP FUND
Six Months Ended April 30, 2003 Year Ended October 31, 2002
Shares Amount Shares Amount
- --------------------------------------------------------------------------------
Class C
Sold 1,044,223 $ 11,096,891 2,545,426 $ 33,944,222
Redeemed (1,163,927) (12,300,190) (4,128,477) (53,180,986)
---------------------------------------------------------------
Net decrease (119,704) $ (1,203,299) (1,583,051) $(19,236,764)
===============================================================
- --------------------------------------------------------------------------------
Class N
Sold 315,808 $ 3,475,070 900,502 $ 11,916,305
Redeemed (118,536) (1,296,392) (281,019) (3,453,917)
---------------------------------------------------------------
Net increase 197,272 $ 2,178,678 619,483 $ 8,462,388
===============================================================
- --------------------------------------------------------------------------------
Class Y
Sold 479,549 $ 5,330,470 505,761 $ 7,112,046
Redeemed (102,216) (1,151,746) (196,412) (2,703,018)
---------------------------------------------------------------
Net increase 377,333 $ 4,178,724 309,349 $ 4,409,028
===============================================================
- --------------------------------------------------------------------------------
3. Purchases and Sales of Securities
The aggregate cost of purchases and proceeds from sales of securities, other
than short-term obligations, for the six months ended April 30, 2003, were
$223,348,398 and $235,990,244, respectively.
- --------------------------------------------------------------------------------
4. Fees and Other Transactions with Affiliates
Management Fees. Management fees paid to the Manager were in accordance with
the investment advisory agreement with the Fund provides for an annual fee of
0.75% of the first $200 million of average annual net assets of the Fund; 0.72%
of the next $200 million; 0.69% of the next $200 million; 0.66% of the next
$200 million; 0.60% of the next $700 million; 0.58% of the next $1 billion and
0.56% of average annual net assets in excess of $2.5 billion.
- --------------------------------------------------------------------------------
Transfer Agent Fees. OppenheimerFunds Services (OFS), a division of the
Manager, acts as the transfer and shareholder servicing agent for the Fund. The
Fund pays OFS a $19.75 per account fee.
Additionally, Class Y shares are subject to minimum fees of $5,000 for
assets of less than $10 million and $10,000 for assets of $10 million or more.
The Class Y shares are subject to the minimum fees in the event that the per
account fee does not equal or exceed the applicable minimum fees. OFS may
voluntarily waive the minimum fees.
OFS has voluntarily agreed to limit transfer and shareholder servicing agent
fees up to an annual rate of 0.35% of average annual net assets for all
classes. This undertaking may be amended or withdrawn at any time.
21 | OPPENHEIMER MIDCAP FUND
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
4. Fees and Other Transactions with Affiliates Continued
Distribution and Service Plan (12b-1) Fees. Under its General Distributor's
Agreement with the Manager, OppenheimerFunds Distributor, Inc. (the
Distributor) acts as the Fund's principal underwriter in the continuous public
offering of the different classes of shares of the Fund.
The compensation paid to (or retained by) the Distributor from the sale of
shares or on the redemption of shares is shown in the table below for the
period indicated.
Aggregate Class A Concessions Concessions Concessions Concessions
Front-End Front-End on Class A on Class B on Class C on Class N
Sales Charges Sales Charges Shares Shares Shares Shares
on Class A Retained by Advanced by Advanced by Advanced by Advanced by
Six Months Ended Shares Distributor Distributor 1 Distributor 1 Distributor 1 Distributor 1
- --------------------------------------------------------------------------------------------------------
April 30, 2003 $542,027 $164,525 $53,999 $703,547 $85,401 $22,453
1. The Distributor advances concession payments to dealers for certain sales of
Class A shares and for sales of Class B, Class C and Class N shares from its
own resources at the time of sale.
Class A Class B Class C Class N
Contingent Contingent Contingent Contingent
Deferred Deferred Deferred Deferred
Sales Charges Sales Charges Sales Charges Sales Charges
Retained by Retained by Retained by Retained by
Six Months Ended Distributor Distributor Distributor Distributor
- --------------------------------------------------------------------------------
April 30, 2003 $4,962 $509,161 $10,477 $6,903
- --------------------------------------------------------------------------------
Service Plan for Class A Shares. The Fund has adopted a Service Plan for Class
A Shares. It reimburses the Distributor for a portion of its costs incurred for
services provided to accounts that hold Class A shares. Reimbursement is made
quarterly at an annual rate of up to 0.25% of the average annual net assets of
Class A shares of the Fund. For the six months ended April 30, 2003, payments
under the Class A Plan totaled $348,167, all of which were paid by the
Distributor to recipients, and included $32,564 paid to an affiliate of the
Manager. Any unreimbursed expenses the Distributor incurs with respect to Class
A shares in any fiscal year cannot be recovered in subsequent years.
- --------------------------------------------------------------------------------
Distribution and Service Plans for Class B, Class C and Class N Shares. The
Fund has adopted Distribution and Service Plans for Class B, Class C and Class
N shares. Under the plans, the Fund pays the Distributor an annual asset-based
sales charge of 0.75% per year on Class B shares and on Class C shares and the
Fund pays the Distributor an annual asset-based sales charge of 0.25% per year
on Class N shares. The Distributor also receives a service fee of 0.25% per
year under each plan.
22 | OPPENHEIMER MIDCAP FUND
Distribution fees paid to the Distributor for the six months ended April 30,
2003, were as follows:
Distributor's
Distributor's Aggregate
Aggregate Unreimbursed
Unreimbursed Expenses as %
Total Payments Amount Retained Expenses of Net Assets
Under Plan by Distributor Under Plan of Class
- --------------------------------------------------------------------------------
Class B Plan $1,353,875 $1,061,684 $18,995,716 6.89%
Class C Plan 395,076 93,886 3,186,207 3.87
Class N Plan 23,922 20,255 233,329 2.09
- --------------------------------------------------------------------------------
5. Option Activity
The Fund may buy and sell put and call options, or write put and covered call
options on portfolio securities in order to produce incremental earnings or
protect against changes in the value of portfolio securities.
The Fund generally purchases put options or writes covered call options to
hedge against adverse movements in the value of portfolio holdings. When an
option is written, the Fund receives a premium and becomes obligated to sell or
purchase the underlying security at a fixed price, upon exercise of the option.
Options are valued daily based upon the last sale price on the principal
exchange on which the option is traded and unrealized appreciation or
depreciation is recorded. The Fund will realize a gain or loss upon the
expiration or closing of the option transaction. When an option is exercised,
the proceeds on sales for a written call option, the purchase cost for a
written put option, or the cost of the security for a purchased put or call
option is adjusted by the amount of premium received or paid.
Securities designated to cover outstanding call options are noted in the
Statement of Investments where applicable. Shares subject to call, expiration
date, exercise price, premium received and market value are detailed in a note
to the Statement of Investments. Options written are reported as a liability in
the Statement of Assets and Liabilities. Realized gains and losses are reported
in the Statement of Operations.
The risk in writing a call option is that the Fund gives up the opportunity
for profit if the market price of the security increases and the option is
exercised. The risk in writing a put option is that the Fund may incur a loss
if the market price of the security decreases and the option is exercised. The
risk in buying an option is that the Fund pays a premium whether or not the
option is exercised. The Fund also has the additional risk of not being able to
enter into a closing transaction if a liquid secondary market does not exist.
Written option activity for the six months ended April 30, 2003 was as follows:
Call Options
-------------------------
Number of Amount of
Contracts Premiums
----------------------------------------------------------------
Options outstanding as of October 31, 2002 -- $ --
Options written 1,300 191,097
Options closed or expired (1,300) (191,097)
----------------------
Options outstanding as of April 30, 2003 -- $ --
======================
23 | OPPENHEIMER MIDCAP FUND
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
6. Illiquid or Restricted Securities
As of April 30, 2003, investments in securities included issues that are
illiquid or restricted. Restricted securities are often purchased in private
placement transactions, are not registered under the Securities Act of 1933,
may have contractual restrictions on resale, and are valued under methods
approved by the Board of Trustees as reflecting fair value. A security may also
be considered illiquid if it lacks a readily available market or if its
valuation has not changed for a certain period of time. The Fund intends to
invest no more than 15% of its net assets (determined at the time of purchase
and reviewed periodically) in illiquid or restricted securities. Certain
restricted securities, eligible for resale to qualified institutional
investors, are not subject to that limitation. The aggregate value of illiquid
or restricted securities subject to this limitation as of April 30, 2003 was
$543,874, which represents 0.08% of the Fund's net assets, all of which is
considered restricted. Information concerning restricted securities is as
follows:
Acquisition Valuation as of Unrealized
Security Dates Cost April 30, 2003 Depreciation
- -------------------------------------------------------------------------------------------------------
Stocks and/or Warrants
Axsun Technologies, Inc., Cv., Series C 12/13/00 $8,999,997 $363,933 $8,636,064
- -------------------------------------------------------------------------------------------------------
Centerpoint Broadband Technologies,
Inc., Cv., Series D 10/23/00 5,999,997 -- 5,999,997
- -------------------------------------------------------------------------------------------------------
fusionOne, Inc., 8% Non-Cum.
Cv., Series D 9/6/00 9,100,104 63,181 9,036,923
- -------------------------------------------------------------------------------------------------------
ITF Optical Technologies, Inc.,
Cv., Series A 4/7/00 5,000,000 116,760 4,883,240
- --------------------------------------------------------------------------------
7. Borrowing and Lending Arrangements
Bank Borrowings. The Fund had the ability to borrow from banks for temporary or
emergency purposes. Asset coverage for borrowings must be at least 300%. The
Fund and other Oppenheimer funds participated in a $400 million unsecured line
of credit from a bank, for liquidity purposes. Under that line of credit, each
fund was charged interest on its borrowings at a rate equal to the Federal
Funds rate plus 0.45%. The Fund paid a commitment fee on its pro rata share of
the average unutilized amount of the credit facility at a rate of 0.08% per
annum. The credit facility was terminated on November 12, 2002, when the Fund
entered into the interfund borrowing and lending arrangements described below.
The Fund had no outstanding borrowings under the credit facility through
November 12, 2002.
24 | OPPENHEIMER MIDCAP FUND
- --------------------------------------------------------------------------------
Interfund Borrowing and Lending Arrangements. Commencing November 12, 2002, the
Fund entered into an "interfund borrowing and lending arrangement" with other
funds in the Oppenheimer funds complex, to allow funds to borrow for liquidity
purposes. The arrangement was initiated pursuant to exemptive relief granted by
the Securities and Exchange Commission to allow these affiliated funds to lend
money to, and borrow money from, each other, in an attempt to reduce borrowing
costs below those of bank loan facilities. Under the arrangement the Fund may
lend money to other Oppenheimer funds and may borrow from other Oppenheimer
funds at a rate set by the Fund's Board of Trustees, based upon a
recommendation by the investment manager. The Fund's borrowings, if any, are
subject to asset coverage requirements under the Investment Company Act and the
provisions of the SEC order and other applicable regulations. If the Fund
borrows money, there is a risk that the loan could be called on one day's
notice, in which case the Fund might have to borrow from a bank at higher rates
if a loan were not available from another Oppenheimer fund. If the Fund lends
money to another fund, it will be subject to the risk that the other fund might
not repay the loan in a timely manner, or at all.
The Fund had no interfund borrowings or loans outstanding during the six
months ended or at April 30, 2003.
25 | OPPENHEIMER MIDCAP FUND
OPPENHEIMER MIDCAP FUND
- --------------------------------------------------------------------------------
Trustees and Officers Thomas W. Courtney, Chairman
John V. Murphy, President
Paul Y. Clinton, Trustee
Robert G. Galli, Trustee
Lacy B. Herrmann, Trustee
Brian Wruble, Trustee
Bruce Bartlett, Vice President
Robert G. Zack, Secretary
Brian W. Wixted, Treasurer
- --------------------------------------------------------------------------------
Investment Advisor OppenheimerFunds, Inc.
- -------------------------------------------------------------------------------
Distributor OppenheimerFunds Distributor, Inc.
- --------------------------------------------------------------------------------
Transfer and Shareholder OppenheimerFunds Services
Servicing Agent
- --------------------------------------------------------------------------------
Independent Auditors KPMG LLP
- --------------------------------------------------------------------------------
Legal Counsel Mayer Brown Rowe & Maw
The financial statements included herein have been
taken from the records of the Fund without
examination of those records by the independent
auditors.
(C)Copyright 2003 OppenheimerFunds, Inc. All rights reserved.
- --------------------------------------------------------
Not part of the semiannual report to Fund shareholders
- --------------------------------------------------------
26 | OPPENHEIMER MIDCAP FUND
OPPENHEIMERFUNDS FAMILY
- -------------------------------------------------------------------------------------------------------
Global Equity Developing Markets Fund Global Fund
International Small Company Fund Quest Global Value Fund, Inc.
International Growth Fund Global Opportunities Fund 1
- -------------------------------------------------------------------------------------------------------
Equity Stock Stock & Bond
Emerging Technologies Fund Quest Opportunity Value Fund
Emerging Growth Fund Total Return Fund, Inc.
Enterprise Fund Quest Balanced Value Fund
Discovery Fund Capital Income Fund
Main Street Small Cap Fund(R) Multiple Strategies Fund
Small Cap Value Fund Disciplined Allocation Fund
MidCap Fund Convertible Securities Fund
Main Street Opportunity Fund(R) Specialty
Growth Fund Real Asset Fund(R)
Capital Appreciation Fund Gold & Special Minerals Fund
Main Street Fund(R)2 Tremont Market Neutral Fund, LLC 3
Value Fund Tremont Opportunity Fund, LLC 3
Quest Capital Value Fund, Inc.
Quest Value Fund, Inc.
Trinity Large Cap Growth Fund
Trinity Core Fund
Trinity Value Fund
- -------------------------------------------------------------------------------------------------------
Income Taxable Rochester Division
International Bond Fund California Municipal Fund 5
High Yield Fund New Jersey Municipal Fund 5
Champion Income Fund AMT-Free New York Municipals 5,6
Strategic Income Fund Municipal Bond Fund
Bond Fund Limited Term Municipal Fund
Total Return Bond Fund Rochester National Municipals
Senior Floating Rate Fund Rochester Fund Municipals
U.S. Government Trust Limited Term New York Municipal Fund
Limited-Term Government Fund Pennsylvania Municipal Fund 5
Capital Preservation Fund 4
- -------------------------------------------------------------------------------------------------------
Select Managers Stock Stock & Bond
Mercury Advisors Focus Growth Fund QM Active Balanced Fund 4
Gartmore Millennium Growth Fund II
Jennison Growth Fund
Salomon Brothers All Cap Fund
Mercury Advisors S&P 500(R) Index Fund 4
- -------------------------------------------------------------------------------------------------------
Money Market 7 Money Market Fund, Inc. Cash Reserves
1. The Fund's name changed from Oppenheimer Global Growth & Income Fund on
6/1/03.
2. The Fund's name changed from Oppenheimer Main Street Growth & Income Fund(R)
on 4/30/03.
3. Special investor qualification and minimum investment requirements apply.
See the prospectus for details.
4. Available only through qualified retirement plans.
5. Available to investors only in certain states.
6. The Fund's name changed from Oppenheimer New York Municipal Fund on 1/22/03.
7. An investment in money market funds is neither insured nor guaranteed by the
Federal Deposit Insurance Corporation or any other government agency. Although
these funds may seek to preserve the value of your investment at $1.00 per
share, it is possible to lose money by investing in these funds.
- --------------------------------------------------------
Not part of the semiannual report to Fund shareholders
- --------------------------------------------------------
27 | OPPENHEIMER MIDCAP FUND
PRIVACY POLICY NOTICE
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 nonpublic personal information about our shareholders from the
following sources:
o Applications or other forms
o When you create a user ID and password for online account access
o When you enroll in eDocs Direct, our electronic document delivery service
o Your transactions with us, our affiliates or others
o A software program on our website, often referred to as a "cookie," which
indicates which parts of our site you've visited
If you visit www.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 to assist you in other ways.
Protection of Information
We do not disclose any nonpublic personal information (such as names on a
customer list) about current or former customers to anyone, except as permitted
by law.
Disclosure of Information
We send your financial advisor (as designated by you) copies of confirmations,
account statements and other documents reporting activity in your fund accounts.
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 financial
services or educational material that may be of interest to you.
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.
Security
In the coming months, an Internet browser that supports 128-bit encryption will
be required to view the secure pages of www.oppenheimerfunds.com. These areas
include:
o Account access
o Create a user ID and profile
o User profile
o eDocs Direct, our electronic document delivery service
- --------------------------------------------------------
Not part of the semiannual report to Fund shareholders
- --------------------------------------------------------
28 | OPPENHEIMER MIDCAP FUND
To find out if your Internet browser supports 128-bit encryption, or for
instructions on how to upgrade your browser, visit the Help section of
www.oppenheimerfunds.com.
Emails and Encryption
As a security measure, we do not include personal or account information in
nonsecure emails, and we advise you not to send such information to us in
nonsecure 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
an Internet browser that supports 128-bit encryption. If you are not sure if
your Internet browser supports 128-bit encryption, or need instructions on how
to upgrade your browser, visit the Help section of www.oppenheimerfunds.com for
assistance.
o All transactions, including redemptions, exchanges and purchases are secured
by Secure Socket Layers (SSL) and encryption. SSL is used to establish a
secure connection between your PC and OppenheimerFunds' server. It transmits
information in an encrypted and scrambled format.
o 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
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.
o You can exit the secure area by either closing your browser, or for added
security, you can use the Log Out of Account Area 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 to you,
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, do not allow it to be used by anyone else. Also, take special
precautions when accessing your account on a computer used by others.
- --------------------------------------------------------------------------------
This joint notice describes the privacy policies of Oppenheimer funds,
OppenheimerFunds Distributor, Inc., the trustee of OppenheimerFunds Individual
Retirement Accounts (IRAs) and the custodian of the OppenheimerFunds 403(b)(7)
tax-sheltered custodial accounts. 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. If you have any
questions about these privacy policies, write to us at P.O. Box 5270, Denver, CO
80217-5270, email us by clicking on the Contact Us section of our website at
www.oppenheimerfunds.com or call us at 1.800.CALL OPP (1.800.225.5677).
- --------------------------------------------------------
Not part of the semiannual report to Fund shareholders
- --------------------------------------------------------
29 | OPPENHEIMER MIDCAP FUND
INFORMATION AND SERVICES
Get This Report Online!
You can quickly view, download and print this report at your convenience. It's
EASY, FAST, CONVENIENT, and FREE! With OppenheimerFunds eDocs Direct, you'll
receive email notification when shareholder reports, prospectuses or prospectus
supplements for your fund(s) become available online, instead of receiving them
through the mail. You'll cut down on paper mail and help reduce fund expenses!
Sign up for eDocs Direct today at
www.oppenheimerfunds.com
GRAPHIC OMITTED
eDocs Direct
Internet
24-hr access to account information and transactions 1
www.oppenheimerfunds.com
- -------------------------------------------------------------------------------
PhoneLink 1 and General Information
24-hr automated information and automated transactions
Representatives also available Mon-Fri 8am-9pm ET
Sat (January-April) 10am-4pm ET
1.800.CALL OPP (1.800.225.5677)
- --------------------------------------------------------------------------------
Written Correspondence and Transaction Requests
OppenheimerFunds Services
P.O. Box 5270, Denver, CO 80217-5270
For Overnight Delivery
OppenheimerFunds Services
10200 East Girard Avenue, Building D
Denver, CO 80231
- -------------------------------------------------------------------------------
Ticker Symbols
Class A: OMDAX Class B: OMDBX Class C: OMDCX Class N: OMDNX Class Y: OMDYX
1. At times the website or PhoneLink may be inaccessible or their transaction
features may be unavailable.
- --------------------------------------------------------
Not part of the semiannual report to Fund shareholders
- --------------------------------------------------------
[GRAPHIC]
OppenheimerFunds[R]
Distributor, Inc.
RS0745.001.0403 June 27, 2003
ITEM 2. CODE OF ETHICS - NOT REQUIRED
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT - NOT REQUIRED
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES - NOT REQUIRED
ITEM 5. RESERVED
ITEM 6. RESERVED
ITEM 7. NOT APPLICABLE
ITEM 8. RESERVED
ITEM 9. CONTROLS AND PROCEDURES
(a) Based on their evaluation of registrant's disclosure controls and
procedures (as defined in rule 30a-2(c) under the Investment Company
Act of 1940 (17 CFR 270.30a-2(c)) as of April 30, 2003, registrant's
principal executive officer and principal financial officer found
registrant's disclosure controls and procedures to be appropriately
designed to ensure that information required to be disclosed by
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.
(b) There have been no significant changes in registrant's internal
controls or in other factors that could significantly affect
registrant's internal controls subsequent to the date of the most
recent evaluation as indicated, including no significant deficiencies
or material weaknesses that required corrective action.
ITEM 10. EXHIBITS ATTACHED HERETO. (ATTACH CERTIFICATIONS AS EXHIBITS)