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 811-10257
Oppenheimer Special Value 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
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(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
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Oppenheimer Semiannual
Special Value Fund Report
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SEMIANNUAL REPORT AND FINANCIAL STATEMENTS
Listing of Investments
Financials
[LOGO OMITTED]
OPPENHEIMERFUNDS[R]
The Right Way to Invest
HIGHLIGHTS
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SEMIANNUAL REPORT AND FINANCIAL STATEMENTS
2 Statement of Investments
4 Statement of Assets and Liabilities
5 Statement of Operations
6 Statements of Changes in Net Assets
7 Financial Highlights
8 Notes to Financial Statements
Fund Reminder
This is the Fund's final report. The Board of Trustees for Oppenheimer Special
Value Fund decided to close the Fund to new purchases effective April 17, 2003,
and to redeem the remaining Fund shares on May 15, 2003.
- -----------------------------------------
Cumulative Total Returns*
For the 6-Month Period
Ended 4/30/03
Without With
Sales Chg. Sales Chg.
- -----------------------------------------
Class A 4.45% -1.56%
- -----------------------------------------
Average Annual Total Returns*
For the 1-Year Period
Ended 4/30/03
Without With
Sales Chg. Sales Chg.
- -----------------------------------------
Class A -23.35% -27.75%
- -----------------------------------------
Average Annual Total Returns
with Sales Charge*
For the Periods Ended 3/31/03
Since
1-Year Inception
- -----------------------------------------
Class A -33.45% -9.72%
- -----------------------------------------
*See Notes on page 1 for further details.
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Not part of the semiannual report to Fund shareholders
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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.
Total returns and the ending account values in the graphs include changes in
share price and reinvestment of dividends and capital gains distributions in a
hypothetical investment for the periods shown. 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 or call
OppenheimerFunds Distributor, Inc. at 1.800.CALL OPP (1.800.225.5677). Read the
prospectus carefully before you invest or send money.
Class A shares of the Fund were first publicly offered on 4/2/01. Unless
otherwise noted, Class A returns include the current maximum initial sales
charge of 5.75%. Class A shares were the only class offered during the reporting
period.
An explanation of the calculation of performance is in the Fund's Statement of
Additional Information.
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Not part of the semiannual report to Fund shareholders
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1 | OPPENHEIMER SPECIAL VALUE FUND
STATEMENT OF INVESTMENTS April 30, 2003 / Unaudited
Market Value
Shares See Note 1
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Common Stocks--96.1%
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Consumer Discretionary--12.3%
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Hotels, Restaurants & Leisure--3.4%
Ruby Tuesday, Inc. 4,000 $ 78,800
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Starwood Hotels & Resorts
Worldwide, Inc. 3,000 80,520
----------
159,320
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Household Durables--1.7%
Leggett & Platt, Inc. 4,000 82,600
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Leisure Equipment & Products--1.8%
Mattel, Inc. 4,000 86,960
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Media--1.7%
Omnicom Group, Inc. 1,300 80,470
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Specialty Retail--2.1%
Talbots, Inc. (The) 3,500 100,275
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Textiles & Apparel--1.6%
Nike, Inc., Cl. B 1,400 74,942
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Consumer Staples--5.6%
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Food Products--3.7%
Bunge Ltd. 4,600 128,846
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Hormel Foods Corp. 2,000 46,020
----------
174,866
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Tobacco--1.9%
Loews Corp./Carolina Group 5,000 91,900
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Energy--9.0%
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Energy Equipment & Services--1.9%
Noble Corp. 1 3,000 92,850
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Oil & Gas--7.1%
Devon Energy Corp. 2,070 97,808
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Frontier Oil Corp. 3,500 59,220
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Premcor, Inc. 1 2,000 44,580
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Talisman Energy, Inc. 3,400 135,635
----------
337,243
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Financials--18.7%
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Banks--5.3%
Charter One Financial, Inc. 3,300 95,865
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National Commerce Financial Corp. 2,000 40,680
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New York Community Bancorp, Inc. 1,700 59,024
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Sovereign Bancorp, Inc. 3,500 54,075
----------
249,644
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Diversified Financials--2.4%
CIT Group, Inc. 3,000 61,110
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E*TRADE Group, Inc. 1 10,000 55,000
----------
116,110
Market Value
Shares See Note 1
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Insurance--9.1%
IPC Holdings Ltd. 2,500 $ 85,875
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Lincoln National Corp. 1,200 38,352
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Nationwide Financial Services, Inc.,
Cl. A 2,500 70,375
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Phoenix Cos., Inc. (The) 20,000 158,000
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XL Capital Ltd., Cl. A 1,000 82,300
----------
434,902
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Real Estate--1.9%
Ventas, Inc. 7,000 91,000
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Health Care--8.4%
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Health Care Equipment & Supplies--1.2%
Beckman Coulter, Inc. 1,500 58,305
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Health Care Providers & Services--5.5%
Anthem, Inc. 1 1,300 89,232
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Laboratory Corp. of America Holdings 1 3,600 106,056
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Universal Health Services, Inc., Cl. B 1 1,700 65,739
----------
261,027
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Pharmaceuticals--1.7%
Watson Pharmaceuticals, Inc. 1 2,700 78,489
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Industrials--15.1%
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Aerospace & Defense--6.5%
Alliant Techsystems, Inc. 1 1,800 96,696
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DRS Technologies, Inc. 1 3,600 100,836
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Empresa Brasileira de Aeronautica
SA (Embraer), ADR 8,200 113,734
----------
311,266
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Commercial Services & Supplies--3.8%
Aramark Corp., Cl. B 1 3,500 80,360
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Pittston Brink's Group 7,700 98,175
----------
178,535
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Machinery--1.8%
Navistar International Corp. 1 3,000 83,700
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Road & Rail--3.0%
Canadian Pacific Railway Ltd. 3,800 87,970
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Swift Transportation Co., Inc. 1 3,000 54,360
----------
142,330
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Information Technology--13.0%
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Communications Equipment--2.5%
3Com Corp. 1 15,500 80,600
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JDS Uniphase Corp. 1 11,000 35,530
----------
116,130
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Electronic Equipment & Instruments--4.7%
Celestica, Inc. 1 8,500 98,260
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Thermo Electron Corp. 1 7,000 127,190
----------
225,450
2 | OPPENHEIMER SPECIAL VALUE FUND
Market Value
Shares See Note 1
- ---------------------------------------------------------------
Semiconductor Equipment & Products--3.7%
Cypress Semiconductor Corp. 1 6,000 $ 52,320
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KLA-Tencor Corp. 1 1,200 49,200
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LSI Logic Corp. 1 5,000 26,800
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Novellus Systems, Inc. 1 1,700 47,668
----------
175,988
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Software--2.1%
Activision, Inc. 1 6,500 99,450
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Materials--9.8%
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Chemicals--2.7%
Lyondell Chemical Co. 5,700 82,935
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Monsanto Co. 2,500 43,500
----------
126,435
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Construction Materials--2.1%
Cemex SA de CV, Sponsored ADR 4,400 100,540
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Containers & Packaging--2.9%
Pactiv Corp. 1 2,000 41,040
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Smurfit-Stone Container Corp. 1 7,000 98,490
----------
139,530
Market Value
Shares See Note 1
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Paper & Forest Products--2.1%
Sappi Ltd., Sponsored ADR 8,200 $ 101,270
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Telecommunication Services--2.4%
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Diversified Telecommunication Services--2.4%
CenturyTel, Inc. 3,800 111,910
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Utilities--1.8%
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Electric Utilities--1.8%
PPL Corp. 2,400 86,880
----------
Total Common Stocks (Cost $4,168,256) 4,570,317
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Total Investments, at Value
(Cost $4,168,256) 96.1% 4,570,317
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Other Assets Net of Liabilities 3.9 186,344
--------------------------
Net Assets 100.0% $4,756,661
==========================
Footnotes to Statement of Investments
1. Non-income producing security.
See accompanying Notes to Financial Statements.
3 | OPPENHEIMER SPECIAL VALUE FUND
STATEMENT OF ASSETS AND LIABILITIES Unaudited
April 30, 2003
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Assets
Investments, at value (cost $4,168,256)--see accompanying statement $4,570,317
- --------------------------------------------------------------------------------------------------------
Receivables and other assets:
Investments sold 254,361
Dividends 1,005
Other 1,109
-----------
Total assets 4,826,792
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Liabilities
Bank overdraft 43,455
- --------------------------------------------------------------------------------------------------------
Payables and other liabilities:
Shareholder reports 4,960
Trustees' compensation 78
Custodian fees 48
Transfer and shareholder servicing agent fees 25
Other 21,565
-----------
Total liabilities 70,131
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Net Assets $4,756,661
-----------
- --------------------------------------------------------------------------------------------------------
Composition of Net Assets
Paid-in capital $5,329,023
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Accumulated net investment loss (11,951)
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Accumulated net realized loss on investments and foreign currency transactions (962,472)
- --------------------------------------------------------------------------------------------------------
Net unrealized appreciation on investments and translation of assets and liabilities
denominated in foreign currencies 402,061
-----------
Net Assets $4,756,661
===========
- --------------------------------------------------------------------------------------------------------
Net Asset Value Per Share
Class A Shares:
Net asset value and redemption price per share (based on net assets of $4,756,661
and 519,013 shares of beneficial interest outstanding) $9.16
Maximum offering price per share (net asset value plus sales charge of 5.75% of offering price) $9.72
See accompanying Notes to Financial Statements.
4 | OPPENHEIMER SPECIAL VALUE FUND
STATEMENT OF OPERATIONS Unaudited
For the Six Months Ended April 30, 2003
- -------------------------------------------------------------------------------------------------------------
Investment Income
Dividends (net of foreign withholding taxes of $500) $ 36,091
- -------------------------------------------------------------------------------------------------------------
Interest 479
---------
Total investment income 36,570
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Expenses
Management fees 23,959
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Distribution and service plan fees-Class A 5,990
- -------------------------------------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees-Class A 186
- -------------------------------------------------------------------------------------------------------------
Legal, auditing and other professional fees 8,174
- -------------------------------------------------------------------------------------------------------------
Shareholder reports 6,045
- -------------------------------------------------------------------------------------------------------------
Registration and filing fees 878
- -------------------------------------------------------------------------------------------------------------
Insurance expenses 712
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Custodian fees and expenses 190
- -------------------------------------------------------------------------------------------------------------
Trustees' compensation 158
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Other 8,233
---------
Total expenses 54,525
Less reduction to custodian expenses (18)
Less voluntary waiver of distribution and service plan fees (5,990)
---------
Net expenses 48,517
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Net Investment Loss (11,947)
- -------------------------------------------------------------------------------------------------------------
Realized and Unrealized Gain (Loss)
Net realized gain (loss) on:
Investments (including premiums on options exercised) (8,540)
Closing and expiration of option contracts written 62,928
Foreign currency transactions 223
---------
Net realized gain 54,611
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Net change in unrealized appreciation on:
Investments 157,005
Translation of assets and liabilities denominated in foreign currencies 11,240
---------
Net change 168,245
---------
Net realized and unrealized gain 222,856
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Net Increase in Net Assets Resulting from Operations $210,909
=========
See accompanying Notes to Financial Statements.
5 | OPPENHEIMER SPECIAL VALUE FUND
STATEMENTS OF CHANGES IN NET ASSETS
Six Months Year
Ended Ended
April 30, 2003 Oct. 31,
(Unaudited) 2002
- -----------------------------------------------------------------------------------------------------------------------------
Operations
Net investment loss $ (11,947) $ (25,415)
- -----------------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) 54,611 (930,323)
- -----------------------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation 168,245 205,102
---------------------------
Net increase (decrease) in net assets resulting from operations 210,909 (750,636)
- -----------------------------------------------------------------------------------------------------------------------------
Beneficial Interest Transactions
Net decrease in net assets resulting from beneficial interest transactions--Class A (301,870) (196,733)
- -----------------------------------------------------------------------------------------------------------------------------
Net Assets
Total decrease (90,961) (947,369)
- -----------------------------------------------------------------------------------------------------------------------------
Beginning of period 4,847,622 5,794,991
---------------------------
End of period [including accumulated net investment loss of $11,951 and $4, respectively] $4,756,661 $4,847,622
===========================
See accompanying Notes to Financial Statements.
6 | OPPENHEIMER SPECIAL VALUE FUND
FINANCIAL HIGHLIGHTS
Six Months Year
Ended Ended
April 30, 2003 Oct. 31,
Class A (Unaudited) 2002 2001 1
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Per Share Operating Data
Net asset value, beginning of period $ 8.77 $10.04 $ 10.00
- --------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment loss (.02) (.05) (.01)
Net realized and unrealized gain (loss) .41 (1.22) .05
-----------------------------------
Total from investment operations .39 (1.27) .04
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Net asset value, end of period $9.16 $ 8.77 $10.04
===================================
- --------------------------------------------------------------------------------------------------------
Total Return, at Net Asset Value 2 4.45% (12.65)% 0.40%
- --------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
Net assets, end of period (in thousands) $4,757 $4,848 $5,795
- --------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $4,831 $6,086 $6,034
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Ratios to average net assets: 3
Net investment loss (0.50)% (0.42)% (0.08)%
Expenses, gross 2.28% 1.87% 1.63%
Expenses, net 2.03% 4,5 1.62% 4,5 1.33% 6
- --------------------------------------------------------------------------------------------------------
Portfolio turnover rate 30% 194% 104%
<FN>
1. For the period from April 2, 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 wavier of distribution and service plan fees.
6. Net of reduction to custodian expenses and voluntary waiver of distribution
and service plan fees.
See accompanying Notes to Financial Statements.
</FN>
7 | OPPENHEIMER SPECIAL VALUE FUND
NOTES TO FINANCIAL STATEMENTS Unaudited
- --------------------------------------------------------------------------------
1. Significant Accounting Policies
Oppenheimer Special Value Fund (the Fund), is an open-end management investment
company registered under the Investment Company Act of 1940, as amended. The
Fund's investment objective is to seek long-term capital appreciation. The
Fund's investment advisor is OppenheimerFunds, Inc. (the Manager). As of April
30, 2003, the majority of Class A shares were owned by the Manager.
The Fund offers Class A shares. Class A shares are sold at their offering
price, which is normally net asset value plus a front-end sales charge.
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.
- --------------------------------------------------------------------------------
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 $946,912. 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 used $54,611 of 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
-------------------------
2009 $ 50,614
2010 950,909
----------
Total $1,001,523
==========
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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 increased by $38
and payments of $5 were made to retired trustees, resulting in an accumulated
liability of $37 as of April 30, 2003.
8 | OPPENHEIMER SPECIAL VALUE FUND
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.
- --------------------------------------------------------------------------------
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 primarily because of the recognition of certain foreign
currency gains (losses) as ordinary income (loss) for 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. 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 2,850 $ 25,549 12,210 $ 138,302
Redeemed (36,830) (327,419) (36,167) (335,035)
-----------------------------------------------------------------
Net decrease (33,980) $(301,870) (23,957) $(196,733)
=================================================================
- --------------------------------------------------------------------------------
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
$1,415,777 and $1,602,727, respectively.
9 | OPPENHEIMER SPECIAL VALUE FUND
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
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 which provides for a fee at an
annual rate of 1.00% of the average annual net assets of the Fund.
- --------------------------------------------------------------------------------
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.
OFS has voluntarily agreed to limit transfer and shareholder servicing agent
fees, up to an annual rate of 0.35% of average net assets of Class A shares.
This undertaking may be amended or withdrawn at any time.
- --------------------------------------------------------------------------------
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 Class A shares of the Fund.
- --------------------------------------------------------------------------------
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 $5,990 prior to the voluntary waiver of all such
current period fees by the Manager, all of which were paid by the Distributor to
recipients, none of which was 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.
- --------------------------------------------------------------------------------
5. Foreign Currency Contracts
A foreign currency contract is a commitment to purchase or sell a foreign
currency at a future date, at a negotiated rate. The Fund may enter into foreign
currency contracts for operational purposes and to seek to protect against
adverse exchange rate fluctuations. Risks to the Fund include the potential
inability of the counterparty to meet the terms of the contract.
The net U.S. dollar value of foreign currency underlying all contractual
commitments held by the Fund and the resulting unrealized appreciation or
depreciation are determined using foreign currency exchange rates as provided by
a reliable bank, dealer or pricing service. Unrealized appreciation and
depreciation on foreign currency contracts are reported in the Statement of
Assets and Liabilities as a receivable or payable and in the Statement of
Operations with the change in unrealized appreciation or depreciation.
The Fund may realize a gain or loss upon the closing or settlement of the
foreign currency transactions. Such realized gains and losses are reported with
all other foreign currency gains and losses in the Statement of Operations.
- --------------------------------------------------------------------------------
6. 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.
10 | OPPENHEIMER SPECIAL VALUE FUND
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 Put Options
------------------------- --------------------------
Number of Amount of Number of Amount of
Contracts Premiums Contracts Premiums
- -------------------------------------------------------------------------------------------------------------
Options outstanding as of October 31, 2002 98 $ 28,117 141 $31,967
Options written 164 21,674 24 7,228
Options closed or expired (167) (39,336) (125) (26,315)
Options exercised (95) (10,455) (40) (12,880)
-----------------------------------------------------
Options outstanding as of April 30, 2003 -- $ -- -- $ --
=====================================================
- --------------------------------------------------------------------------------
7. Borrowing and Lending Arrangements
Bank Borrowings. The Fund has 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.
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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.
- --------------------------------------------------------------------------------
8. Subsequent Event
The Fund will be liquidated in May, 2003.
11 | OPPENHEIMER SPECIAL VALUE FUND
PRIVACY POLICY NOTICE
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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
- ------------------------------------------------------
12 | OPPENHEIMER SPECIAL VALUE 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
- ------------------------------------------------------
13 | OPPENHEIMER SPECIAL VALUE FUND
INFORMATION AND SERVICES
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
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
- --------------------------------------------------------------------------------
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
- ------------------------------------------------------
(C)Copyright 2003 OppenheimerFunds, Inc. All rights reserved.
[LOGO OMITTED]
OPPENHEIMERFUNDS[R]
The Right Way to Invest
RS0595.001.0403 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)