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 811-3346
OPPENHEIMER DISCIPLINED ALLOCATION 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.
STATEMENT OF INVESTMENTS April 30, 2003 / Unaudited
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Market Value
Shares See Note 1
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Common Stocks--58.1%
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Consumer Discretionary--12.9%
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Automobiles--0.9%
Harley-Davidson, Inc. 22,400 $ 995,456
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Hotels, Restaurants & Leisure--0.3%
McDonald's Corp. 19,000 324,900
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Internet & Catalog Retail--0.3%
USA Interactive1 11,000 329,450
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Leisure Equipment & Products--0.2%
Mattel, Inc. 7,700 167,398
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Media--5.9%
EchoStar Communications Corp., Cl. A 1 79,400 2,378,824
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Fox Entertainment Group, Inc., A Shares 1 41,200 1,046,480
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General Motors Corp., Cl. H 1 107,200 1,264,960
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Liberty Media Corp., Cl. A 1 158,300 1,741,300
-----------
6,431,564
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Multiline Retail--1.8%
Costco Wholesale Corp. 1 22,000 761,860
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Kohl's Corp. 1 20,500 1,164,400
------------
1,926,260
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Specialty Retail--2.2%
Bed Bath & Beyond, Inc. 1 51,126 2,019,988
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OfficeMax, Inc. 1 63,100 356,515
------------
2,376,503
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Textiles & Apparel--1.3%
Nike, Inc., Cl. B 25,900 1,386,427
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Consumer Staples--1.5%
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Food & Drug Retailing--0.6%
Walgreen Co. 20,000 617,200
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Personal Products--0.6%
Avon Products, Inc. 11,600 674,772
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Tobacco--0.3%
Altria Group, Inc. 10,800 332,208
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Energy--1.9%
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Energy Equipment & Services--0.3%
Schlumberger Ltd. 8,500 356,405
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Oil & Gas--1.6%
BP plc, ADR 44,700 1,722,738
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Financials--12.1%
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Banks--2.8%
Bank of New York Co., Inc. (The) 27,300 722,085
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Wachovia Corp. 29,100 1,111,911
7 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
Market Value
Shares See Note 1
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Banks Continued
Wells Fargo Co. 24,000 $ 1,158,240
------------
2,992,236
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Diversified Financials--5.2%
Citigroup, Inc. 32,677 1,282,572
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Franklin Resources, Inc. 38,800 1,353,344
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Freddie Mac 16,093 931,785
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Merrill Lynch & Co., Inc. 7,600 311,980
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Morgan Stanley 5,000 223,750
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SLM Corp. 13,160 1,473,920
------------
5,577,351
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Insurance--4.1%
AMBAC Financial Group, Inc. 3,000 175,050
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American International Group, Inc. 4,900 283,955
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Chubb Corp. 20,600 1,089,534
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MBIA, Inc. 4,900 219,030
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Prudential Financial, Inc. 35,700 1,141,329
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Travelers Property Casualty Corp., Cl. A 897 14,558
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Travelers Property Casualty Corp., Cl. B 42,244 686,465
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XL Capital Ltd., Cl. A 10,700 880,610
------------
4,490,531
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Health Care--11.8%
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Biotechnology--3.5%
Amgen, Inc. 1 28,500 1,747,335
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Genentech, Inc. 1 19,500 740,805
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Gilead Sciences, Inc. 1 28,200 1,301,148
------------
3,789,288
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Health Care Equipment & Supplies--4.2%
Biomet, Inc. 24,800 755,408
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Medtronic, Inc. 23,800 1,136,212
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Stryker Corp. 22,500 1,507,725
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Varian Medical Systems, Inc. 1 21,700 1,168,762
------------
4,568,107
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Health Care Providers & Services--2.0%
Aetna, Inc. 25,100 1,249,980
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Lincare Holdings, Inc. 1 24,400 741,028
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Service Corp. International 1 37,000 125,060
------------
2,116,068
8 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
Market Value
Shares See Note 1
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Pharmaceuticals--2.1%
Forest Laboratories, Inc. 1 18,200 $ 941,304
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Pfizer, Inc. 43,980 1,352,385
------------
2,293,689
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Industrials--7.4%
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Aerospace & Defense--3.2%
Boeing Co. 37,000 1,009,360
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Lockheed Martin Corp. 28,900 1,446,445
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Northrop Grumman Corp. 11,100 976,245
------------
3,432,050
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Commercial Services & Supplies--2.8%
Cendant Corp. 1 106,500 1,520,820
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Republic Services, Inc. 1 70,000 1,502,200
------------
3,023,020
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Industrial Conglomerates--0.4%
General Electric Co. 9,500 279,775
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Tyco International Ltd. 10,900 170,040
------------
449,815
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Road & Rail--1.0%
CNF Transportation, Inc. 38,000 1,152,920
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Information Technology--6.9%
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Communications Equipment--0.2%
Geotek Communications, Inc., Series B (Escrow Shares) 1,2 100 --
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Nokia Corp., Sponsored ADR, A Shares 12,000 198,840
------------
198,840
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Computers & Peripherals--2.4%
Dell Computer Corp. 1 52,400 1,514,884
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Hewlett-Packard Co. 34,400 560,720
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International Business Machines Corp. 6,400 543,360
------------
2,618,964
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Electronic Equipment & Instruments--1.6%
California Amplifier, Inc. 1 24 78
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Flextronics International Ltd. 1 132,500 1,159,375
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Thermo Electron Corp. 1 34,200 621,414
------------
1,780,867
9 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
Market Value
Shares See Note 1
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Software--2.7%
Microsoft Corp. 57,800 $1,477,946
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Oracle Corp. 1 57,500 683,100
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Symantec Corp. 1 16,900 742,755
------------
2,903,801
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Materials--2.2%
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Chemicals--0.3%
FMC Corp. 1 13,300 240,996
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Monsanto Co. 8,751 152,268
------------
393,264
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Metals & Mining--0.9%
Alcoa, Inc. 41,300 947,009
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Paper & Forest Products--1.0%
Sappi Ltd., Sponsored ADR 86,800 1,071,980
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Telecommunication Services--0.3%
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Wireless Telecommunication Services--0.3%
Microcell Telecommunications, Inc., Cl. B 1 1,899 114
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Vodafone Group plc, Sponsored ADR 16,900 333,944
------------
334,058
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Utilities--1.1%
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Electric Utilities--0.8%
Dominion Resources, Inc. 12,600 745,668
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Pepco Holdings, Inc. 8,000 137,440
------------
883,108
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Multi-Utilities--0.3%
Equitable Resources, Inc. 8,000 307,360
------------
Total Common Stocks (Cost $58,948,940) 62,965,607
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Other Securities--1.3%
Nasdaq-100 Unit Investment Trust 1 (Cost $1,334,441) 52,400 1,438,380
Units
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Rights, Warrants and Certificates--0.0%
Concentric Network Corp. Wts., Exp. 12/15/07 1,2 100 1
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Microcell Telecommunications, Inc. Wts., Exp. 6/1/06 1,3 500 120
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Price Communications Corp. Wts., Exp. 8/1/07 1,2 516 17,544
------------
Total Rights, Warrants and Certificates (Cost $5,248) 17,665
10 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
Principal Market Value
Amount See Note 1
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Asset-Backed Securities--6.4%
BMW Vehicle Owner Trust, Automobile Loan Certificates,
Series 2003-A, Cl. A2, 1.45%, 11/25/05 $310,000 $ 310,000
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Capital Auto Receivables Asset Trust, Automobile
Mtg.-Backed Nts., Series 2002-4, Cl. A2B, 1.74%,
1/17/05 2 499,063 499,993
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CitiFinancial Mortgage Securities, Inc., Home Equity
Collateralized Mtg. Obligations, Series 2002-1,
Cl. AF1, 2.474%, 9/25/32 2 209,626 210,550
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Daimler Chrysler Auto Trust, Automobile Loan Pass-Through
Certificates, Series 2002-B, Cl. A2, 2.20%, 4/6/05 2 274,270 275,283
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Ford Credit Auto Owner Trust, Automobile Installment
Sales, Series 2003-A, Cl. A2A, 1.62%, 8/15/05 260,000 260,610
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Ford Credit Auto Owner Trust, Automobile Loan
Certificates, Series 2002-D, Cl. A2A, 2.10%, 3/15/05 512,138 514,012
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Harley-Davidson Motorcycle Trust, Motorcycle Receivable
Nts., Series 2002-2, Cl. A1, 1.91%, 4/16/07 243,812 244,893
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Honda Auto Receivables Owner Trust, Automobile
Receivables Obligations:
Series 2002-3, Cl. A2, 2.26%, 12/18/04 410,000 411,494
Series 2002-4, Cl. A2, 1.66%, 6/15/05 220,000 220,480
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Household Automotive Trust, Automobile Loan Certificates,
Series 2002-2, Cl. A2, 2.15%, 12/19/05 283,807 284,837
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Litigation Settlement Monetized Fee Trust, Asset-Backed
Certificates, Series 2001-1A, Cl. A1, 8.33%, 4/25/31 2 827,154 784,804
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M&I Auto Loan Trust, Automobile Loan Certificates,
Series 2002-1, Cl. A2, 1.95%, 7/20/05 190,000 190,534
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MMCA Auto Lease Trust, Auto Retail Installment Contracts,
Series 2002-A, Cl. A2, 1.48%, 5/16/05 2,4 280,000 280,245
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Nissan Auto Lease Trust, Auto Lease Obligations,
Series 2002-A, Cl. A2, 1.86%, 11/15/04 2 390,000 390,686
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Nissan Auto Receivables Owner Trust, Auto Receivable
Nts., Series 2002-C, Cl. A2, 1.94%, 9/15/04 430,000 431,033
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Salomon Smith Barney Auto Loan Trust, Asset-Backed Auto
Loan Obligations, Series 2002-1, Cl. A2, 1.83%, 9/15/05 2 310,000 310,773
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Toyota Auto Receivables Owner Trust, Automobile
Mortgage-Backed Obligations, Series 2003-A, Cl. A2,
1.28%, 8/15/05 470,000 469,929
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USAA Auto Owner Trust, Automobile Loan Asset-Backed
Certificates, Series 2002-1, Cl. A2, 1.95%, 3/15/05 130,000 130,313
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Volkswagen Auto Lease Trust, Automobile Lease Asset-Backed
Securities, Series 2002-A, Cl. A2, 1.77%, 2/20/05 410,000 411,001
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Whole Auto Loan Trust, Automobile Loan Receivables,
Series 2002-1, Cl. A2, 1.88%, 6/15/05 350,000 351,299
------------
Total Asset-Backed Securities (Cost $7,009,255) 6,982,769
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Mortgage-Backed Obligations--22.4%
Federal Home Loan Mortgage Corp., Gtd. Mtg. Pass-Through
Participation Certificates:
8%, 4/1/16 286,619 312,049
9%, 8/1/22-5/1/25 72,819 81,367
11 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
Principal Market Value
Amount See Note 1
- -----------------------------------------------------------------------------------
Mortgage-Backed Obligations Continued
FHLMC Structured Pass-Through Certificates,
Collateralized Mtg. Obligations:
Series H002, Cl. A2, 1.861%, 12/15/06 $ 332,725 $ 332,258
Series H003, Cl. A2, 1.88%, 1/15/07 430,000 432,196
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Federal National Mortgage Assn.:
5.50%, 5/13/33 5 800,000 822,000
6%, 5/25/33 5 2,909,000 3,028,089
6.50%, 3/1/26 171,907 180,160
6.50%, 5/25/33 5 5,989,000 6,258,505
7%, 2/25/22 933,133 984,807
7%, 5/25/33-6/25/33 5 7,592,000 8,022,827
7.50%, 1/1/08-6/1/08 99,544 106,326
8.50%, 7/1/32 79,976 86,292
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Federal National Mortgage Assn., Interest-Only Stripped
Mtg.-Backed Security, Trust 1993-223, Cl. PM, (1.054)%,
10/25/23 6 282,483 27,705
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GE Capital Mortgage Services, Inc., Collateralized Mtg.
Obligations, Series 1999-2, Cl. A3, 6.50%, 4/25/29 500,000 513,805
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Government National Mortgage Assn.:
7%, 4/15/09-2/15/24 366,348 392,484
7.50%, 3/15/09 144,996 156,915
8%, 5/15/17 107,314 117,942
8.50%, 8/15/17-12/15/17 84,633 93,649
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Granite Mortgages plc, Mtg.-Backed Obligations,
Series 2002-2, Cl. 1A1, 1.439%, 1/21/17 2,4 221,538 221,538
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Morgan Stanley Capital I, Inc., Commercial Mtg.
Pass-Through Certificates, Series 1996-WF1, Cl. A2,
7.385%, 11/15/28 3,4 262,151 263,721
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Norwest Asset Securities Corp., Collateralized Mtg.
Obligations, Mtg. Pass-Through Certificates,
Series 1999-18, Cl. A2, 6%, 7/25/29 950,596 971,034
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Prudential Mortgage Capital Co. II LLC, Commercial Mtg.
Pass-Through Certificates, Series PRU-HTG 2000-C1,
Cl. A2, 7.306%, 10/6/15 192,000 226,104
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Washington Mutual Mortgage Securities Corp.,
Collateralized Mtg. Obligations, Pass-Through
Certificates:
Series 2002-AR15, Cl. A1, 2.26%, 12/25/32 2 134,033 135,142
Series 2002-AR19, Cl. A1, 1.77%, 1/25/33 4 332,888 333,018
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Wells Fargo Mortgage-Backed Securities Trust,
Collateralized Mtg. Obligations, Series 2003-A,
Cl. A1, 1.79%, 2/25/33 2 160,724 162,163
------------
Total Mortgage-Backed Obligations (Cost $23,924,559) 24,262,096
- -----------------------------------------------------------------------------------
U.S. Government Obligations--3.0%
Federal National Mortgage Assn. Unsec. Nts., 7.25%,
1/15/10-5/15/30 1,750,000 2,177,766
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Tennessee Valley Authority Bonds, 7.125%, 5/1/30 112,000 142,545
- -----------------------------------------------------------------------------------
U.S. Treasury Bonds:
5.375%, 2/15/31 188,000 205,199
STRIPS, 4.96%, 2/15/16 7 171,000 94,282
STRIPS, 5.48%, 11/15/27 7 97,000 27,065
- -----------------------------------------------------------------------------------
U.S. Treasury Nts.:
3%, 2/15/08 76,000 76,808
3.875%, 2/15/13 8 518,000 518,850
------------
Total U.S. Government Obligations (Cost $3,128,682) 3,242,515
12 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
Principal Market Value
Amount See Note 1
- -----------------------------------------------------------------------------------
Foreign Government Obligations--0.1%
United Mexican States Nts., 7.50%, 1/14/12 (Cost $111,162) $110,000 $ 124,327
- -----------------------------------------------------------------------------------
Non-Convertible Corporate Bonds and Notes--14.1%
ABN Amro NA Holding Capital NV, 6.473% Bonds, 12/29/49 3 105,000 116,746
- -----------------------------------------------------------------------------------
AEP Resources, Inc., 6.50% Sr. Nts., 12/1/03 3 153,000 155,500
- -----------------------------------------------------------------------------------
Albertson's, Inc., 7.45% Unsec. Debs., 8/1/29 100,000 113,878
- -----------------------------------------------------------------------------------
American International Group, Inc./SunAmerica Global
Financing VI, 6.30% Sr. Sec. Nts., 5/10/11 3 155,000 174,677
- -----------------------------------------------------------------------------------
AT&T Wireless Services, Inc.:
7.50% Sr. Unsec. Nts., 5/1/07 285,000 321,911
8.75% Sr. Unsec. Nts., 3/1/31 85,000 106,224
- -----------------------------------------------------------------------------------
AXA Group, 8.60% Unsec. Sub. Nts., 12/15/30 190,000 229,649
- -----------------------------------------------------------------------------------
Boeing Capital Corp., 7.375% Sr. Nts., 9/27/10 290,000 330,084
- -----------------------------------------------------------------------------------
Bristol-Myers Squibb Co., 5.75% Nts., 10/1/11 210,000 228,423
- -----------------------------------------------------------------------------------
British Sky Broadcasting Group plc, 8.20% Sr. Unsec.
Nts., 7/15/09 95,000 108,461
- -----------------------------------------------------------------------------------
Burlington Northern Santa Fe Corp., 5.90% Sr. Nts.,
7/1/12 155,000 169,483
- -----------------------------------------------------------------------------------
Cardinal Health, Inc., 4.45% Nts., 6/30/05 160,000 168,347
- -----------------------------------------------------------------------------------
CIT Group, Inc., 7.75% Sr. Unsec. Unsub. Nts., 4/2/12 120,000 139,380
- -----------------------------------------------------------------------------------
Citigroup, Inc., 6.625% Unsec. Sub. Nts., 6/15/32 350,000 396,526
- -----------------------------------------------------------------------------------
Citizens Communications Co., 9.25% Sr. Nts., 5/15/11 115,000 145,611
- -----------------------------------------------------------------------------------
Clear Channel Communications, Inc., 7.65% Sr. Nts.,
9/15/10 120,000 140,679
- -----------------------------------------------------------------------------------
Cox Communications, Inc., 7.75% Sr. Nts., 11/1/10 158,000 190,020
- -----------------------------------------------------------------------------------
Credit Suisse First Boston (USA), Inc., 6.125% Nts.,
11/15/11 230,000 250,180
- -----------------------------------------------------------------------------------
DaimlerChrysler NA Holding Corp., 6.40% Nts., 5/15/06 215,000 235,069
- -----------------------------------------------------------------------------------
Delhaize America, Inc., 9% Unsub. Debs., 4/15/31 100,000 107,000
- -----------------------------------------------------------------------------------
Delphi Corp., 6.55% Nts., 6/15/06 130,000 137,953
- -----------------------------------------------------------------------------------
Deutsche Telekom International BV:
8.25% Unsec. Unsub. Nts., 6/15/05 4 160,000 177,848
8.75% Unsec. Unsub. Nts., 6/15/30 45,000 55,806
- -----------------------------------------------------------------------------------
Dime Capital Trust I, 9.33% Capital Securities,
Series A, 5/6/27 240,000 293,913
- -----------------------------------------------------------------------------------
Dominion Resources, Inc., 8.125% Sr. Unsub. Nts.,
6/15/10 135,000 163,320
- -----------------------------------------------------------------------------------
DTE Energy Co., 6.375% Sr. Nts., 4/15/33 125,000 131,512
- -----------------------------------------------------------------------------------
Duke Energy Corp., 5.625% Nts., 11/30/12 100,000 106,047
- -----------------------------------------------------------------------------------
EOP Operating LP, 7.75% Unsec. Nts., 11/15/07 145,000 167,985
- -----------------------------------------------------------------------------------
Farmers Insurance Exchange, 8.625% Nts., 5/1/24 3 300,000 264,709
- -----------------------------------------------------------------------------------
Federated Department Stores, Inc., 6.625% Sr. Nts.,
4/1/11 135,000 149,696
- -----------------------------------------------------------------------------------
FirstEnergy Corp., 7.375% Sr. Unsub. Nts.,
Series C, 11/15/31 165,000 182,518
- -----------------------------------------------------------------------------------
Ford Motor Co., 7.45% Bonds, 7/16/31 210,000 187,416
- -----------------------------------------------------------------------------------
France Telecom SA:
8.70% Sr. Unsec. Nts., 3/1/06 75,000 85,241
9.25% Sr. Unsec. Nts., 3/1/11 70,000 85,756
10% Sr. Unsec. Nts., 3/1/31 4 45,000 60,059
- -----------------------------------------------------------------------------------
Franklin Resources, Inc., 3.70% Nts., 4/15/08 78,000 78,267
13 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
Principal Market Value
Amount See Note 1
- -----------------------------------------------------------------------------------
Non-Convertible Corporate Bonds and Notes Continued
General Electric Capital Corp., 6% Nts., 6/15/12 $285,000 $ 315,048
- -----------------------------------------------------------------------------------
General Motors Acceptance Corp., 6.875% Unsec. Unsub.
Nts., 8/28/12 305,000 310,696
- -----------------------------------------------------------------------------------
General Motors Corp., 7.20% Nts., 1/15/11 310,000 318,306
- -----------------------------------------------------------------------------------
Goldman Sachs Group, Inc. (The), 6.60% Sr. Unsec.
Nts., 1/15/12 120,000 135,518
- -----------------------------------------------------------------------------------
Hertz Corp. (The), 7.625% Sr. Nts., 6/1/12 360,000 360,901
- -----------------------------------------------------------------------------------
Household Finance Corp., 7% Nts., 5/15/12 160,000 183,560
- -----------------------------------------------------------------------------------
Hutchison Whampoa International Ltd., 6.50%
Nts., 2/13/13 3 147,000 149,317
- -----------------------------------------------------------------------------------
Hypovereinsbank, 8.741% Bonds, 6/30/31 3 112,000 105,787
- -----------------------------------------------------------------------------------
J.P. Morgan Chase & Co., 6.75% Sub. Nts., 2/1/11 127,000 144,841
- -----------------------------------------------------------------------------------
John Hancock Global Funding II:
5% Nts., 7/27/07 3 165,000 175,163
7.90% Nts., 7/2/10 3 105,000 125,138
- -----------------------------------------------------------------------------------
Kinder Morgan, Inc., 6.50% Sr. Unsec. Nts., 9/1/12 150,000 167,359
- -----------------------------------------------------------------------------------
Kroger Co. (The), 6.75% Nts., 4/15/12 100,000 111,615
- -----------------------------------------------------------------------------------
Lockheed Martin Corp., 8.50% Bonds, 12/1/29 155,000 208,594
- -----------------------------------------------------------------------------------
Marsh & McLennan Cos., Inc., 4.85% Nts., 2/15/13 96,000 97,331
- -----------------------------------------------------------------------------------
MBNA America Bank NA, 6.625% Sub. Nts., 6/15/12 180,000 196,588
- -----------------------------------------------------------------------------------
Metropolitan Life Global Funding I, 4.75% Nts., 6/20/07 230,000 243,296
- -----------------------------------------------------------------------------------
MidAmerican Energy Holdings Co., 5.875% Sr. Nts., 10/1/12 265,000 277,460
- -----------------------------------------------------------------------------------
Morgan Stanley, 6.60% Nts., 4/1/12 155,000 175,771
- -----------------------------------------------------------------------------------
Nationwide Financial Services, Inc., 5.90% Nts., 7/1/12 125,000 131,161
- -----------------------------------------------------------------------------------
News America Holdings, Inc., 7.75% Sr. Unsec.
Debs., 12/1/45 200,000 228,329
- -----------------------------------------------------------------------------------
NiSource Finance Corp., 7.875% Sr. Unsec. Nts., 11/15/10 190,000 230,172
- -----------------------------------------------------------------------------------
Northrop Grumman Corp., 7.125% Sr. Nts., 2/15/11 140,000 164,202
- -----------------------------------------------------------------------------------
Petroleos Mexicanos, 9.50% Sr. Sub. Nts., 9/15/27 70,000 83,475
- -----------------------------------------------------------------------------------
Pharmacia Corp., 6.60% Sr. Unsec. Nts., 12/1/28 75,000 89,097
- -----------------------------------------------------------------------------------
Prudential Holdings LLC, 8.695% Bonds, Series C,
12/18/23 3 185,000 225,363
- -----------------------------------------------------------------------------------
Prudential Insurance Co. of America, 8.30% Nts., 7/1/25 3 250,000 305,872
- -----------------------------------------------------------------------------------
Pulte Corp., 8.125% Sr. Unsec. Nts., 3/1/11 125,000 146,661
- -----------------------------------------------------------------------------------
Raytheon Co., 5.70% Sr. Unsec. Nts., 11/1/03 265,000 268,347
- -----------------------------------------------------------------------------------
Reed Elsevier Capital, Inc., 6.75% Bonds, 8/1/11 110,000 124,323
- -----------------------------------------------------------------------------------
Safeway, Inc., 4.80% Sr. Unsec. Nts., 7/16/07 170,000 175,853
- -----------------------------------------------------------------------------------
Sears Roebuck Acceptance Corp., 6.90% Nts., 8/1/03 100,000 101,089
- -----------------------------------------------------------------------------------
Simon DeBartolo Group LP, 6.875% Unsec. Nts., 11/15/06 155,000 172,002
- -----------------------------------------------------------------------------------
Sprint Capital Corp., 8.75% Nts., 3/15/32 180,000 198,000
- -----------------------------------------------------------------------------------
Target Corp., 5.40% Nts., 10/1/08 145,000 157,685
- -----------------------------------------------------------------------------------
TCI Communications, Inc., 9.80% Sr. Unsec. Debs., 2/1/12 290,000 374,740
- -----------------------------------------------------------------------------------
Time Warner Entertainment Co. LP:
8.375% Sr. Debs., 3/15/23 35,000 43,261
10.15% Sr. Nts., 5/1/12 65,000 86,605
- -----------------------------------------------------------------------------------
Time Warner, Inc., 9.125% Debs., 1/15/13 130,000 159,214
- -----------------------------------------------------------------------------------
Tyco International Group SA, 6.75% Sr. Unsub. Nts., 2/15/11 225,000 226,125
- -----------------------------------------------------------------------------------
14 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
Principal Market Value
Amount See Note 1
- -----------------------------------------------------------------------------------
Non-Convertible Corporate Bonds and Notes Continued
Union Carbide Corp., 6.25% Nts., 6/15/03 $150,000 $ 150,373
- -----------------------------------------------------------------------------------
Verizon Global Funding Corp., 7.75% Sr. Unsub.
Nts., 12/1/30 240,000 297,484
- -----------------------------------------------------------------------------------
Viacom, Inc., 7.70% Sr. Unsec. Nts., 7/30/10 270,000 327,949
- -----------------------------------------------------------------------------------
Vornado Realty LP, 5.625% Sr. Unsec. Unsub. Nts., 6/15/07 135,000 139,127
- -----------------------------------------------------------------------------------
Walt Disney Co. (The):
6.375% Sr. Unsec. Nts., 3/1/12 115,000 126,016
6.75% Sr. Nts., 3/30/06 145,000 159,149
- -----------------------------------------------------------------------------------
Waste Management, Inc.:
7% Sr. Nts., 7/15/28 100,000 111,011
7.75% Sr. Unsec. Nts., 5/15/32 90,000 110,015
- -----------------------------------------------------------------------------------
Wyeth, 5.875% Nts., 3/15/04 160,000 165,865
------------
Total Non-Convertible Corporate Bonds and Notes
(Cost $14,149,390) 15,236,748
- -----------------------------------------------------------------------------------
Structured Notes--3.2%
Deutsche Bank AG, COUNTS Corp. Sec. Bond Linked Nts.,
Series 2003-1, 3.019%, 1/7/05 2,4 950,000 944,015
- -----------------------------------------------------------------------------------
JPMorgan Chase Bank, High Yield Index Credit Linked
Trust Nts., 7.55%, 11/15/07 1,470,588 1,568,015
- -----------------------------------------------------------------------------------
UBS AG, High Grade Credit Linked Nts., 3.133%,
12/10/04 4 950,000 948,575
------------
Total Structured Notes (Cost $3,419,019) 3,460,605
- -----------------------------------------------------------------------------------
Short-Term Notes--3.3%
Federal Home Loan Bank, 1.20%, 5/1/03 (Cost $3,600,000) 3,600,000 3,600,000
- -----------------------------------------------------------------------------------
Joint Repurchase Agreements--5.3%
Undivided interest of 8.14% in joint repurchase
agreement (Market Value $70,406,000) with Zions
Bank/Capital Markets Group, 1.26%, dated 4/30/03, to be
repurchased at $5,728,200 on 5/1/03, collateralized by
U.S. Treasury Nts., 4.625%, 5/15/06, with a value of
$21,007,167 and U.S. Treasury Bonds, 2%, 11/30/04, with
a value of $50,899,000 (Cost $5,728,000) 5,728,000 5,728,000
- -----------------------------------------------------------------------------------
Total Investments, at Value (Cost $121,358,696) 117.2% 127,058,712
- -----------------------------------------------------------------------------------
Liabilities in Excess of Other Assets (17.2) (18,683,361)
---------------------
Net Assets 100.0% $108,375,351
=====================
15 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
Footnotes to Statement of Investments
1. Non-income producing security.
2. Identifies issues considered to be illiquid or restricted--See Note 7 of
Notes to Financial Statements.
3. Represents securities sold under Rule 144A, which are exempt from
registration under the Securities Act of 1933, as amended. These securities have
been determined to be liquid under guidelines established by the Board of
Directors. These securities amount to $2,062,113 or 1.90% of the Fund's net
assets as of April 30, 2003.
4. Represents the current interest rate for a variable or increasing rate
security.
5. When-issued security to be delivered and settled after April 30, 2003.
6. Interest-Only Strips represent the right to receive the monthly interest
payments on an underlying pool of mortgage loans. These securities typically
decline in price as interest rates decline. Most other fixed income securities
increase in price when interest rates decline. The principal amount of the
underlying pool represents the notional amount on which current interest is
calculated. The price of these securities is typically more sensitive to changes
in prepayment rates than traditional mortgage-backed securities (for example,
GNMA pass-throughs). Interest rates disclosed represent current yields based
upon the current cost basis and estimated timing and amount of future cash
flows. These securities amount to $27,705 or 0.03% of the Fund's net assets as
of April 30, 2003.
7. Zero coupon bond reflects effective yield on the date of purchase.
8. Securities with an aggregate market value of $200,328 are held in
collateralized accounts to cover initial margin requirements on open futures
sales contracts. See Note 5 of Notes to Financial Statements.
See accompanying Notes to Financial Statements.
16 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
STATEMENT OF ASSETS AND LIABILITIES Unaudited
- -------------------------------------------------------------------------------
April 30, 2003
- -----------------------------------------------------------------------------------
Assets
Investments, at value (cost $121,358,696)--see accompanying
statement $127,058,712
- -----------------------------------------------------------------------------------
Cash 15,927
- -----------------------------------------------------------------------------------
Receivables and other assets:
Investments sold 857,117
Interest, dividends and principal paydowns 441,195
Shares of capital stock sold 11,301
Other 2,783
-------------
Total assets 128,387,035
- -----------------------------------------------------------------------------------
Liabilities
Payables and other liabilities:
Investments purchased (including $18,105,944 purchased on
a when-issued basis) 19,681,508
Shares of capital stock redeemed 164,978
Shareholder reports 46,400
Daily variation on futures contracts 37,735
Directors' compensation 28,252
Transfer and shareholder servicing agent fees 22,818
Distribution and service plan fees 21,687
Other 8,306
-------------
Total liabilities 20,011,684
- -----------------------------------------------------------------------------------
Net Assets $108,375,351
=============
- -----------------------------------------------------------------------------------
Composition of Net Assets
Par value of shares of capital stock $ 9,151
- -----------------------------------------------------------------------------------
Additional paid-in capital 130,169,896
- -----------------------------------------------------------------------------------
Undistributed net investment income 150,693
- -----------------------------------------------------------------------------------
Accumulated net realized loss on investment transactions (27,611,840)
- -----------------------------------------------------------------------------------
Net unrealized appreciation on investments and translation
of assets and liabilities denominated in foreign currencies 5,657,451
-------------
Net Assets $108,375,351
=============
17 | OPPENHEIMER DISCIPLINED ALLOCATION 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
$91,771,467 and 7,759,044 shares of capital stock outstanding) $11.83
Maximum offering price per share (net asset value plus sales charge of
5.75% of offering price) $12.55
- ---------------------------------------------------------------------------------
Class B Shares:
Net asset value, redemption price (excludes applicable contingent
deferred sales charge) and offering price per share (based on net
assets of $12,566,385 and 1,046,745 shares of capital stock
outstanding) $12.01
- ---------------------------------------------------------------------------------
Class C Shares:
Net asset value, redemption price (excludes applicable contingent
deferred sales charge) and offering price per share (based on net
assets of $3,734,640 and 319,444 shares of capital stock outstanding) $11.69
- ---------------------------------------------------------------------------------
Class N Shares:
Net asset value, redemption price (excludes applicable contingent
deferred sales charge) and offering price per share (based on net
assets of $302,859 and 25,682 shares of capital stock outstanding) $11.79
See accompanying Notes to Financial Statements.
18 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
STATEMENT OF OPERATIONS Unaudited
- --------------------------------------------------------------------------------
For the Six Months Ended April 30, 2003
- -----------------------------------------------------------------------------------
Investment Income
Interest $ 1,159,772
- -----------------------------------------------------------------------------------
Dividends (net of foreign withholding taxes of $3,419) 320,198
------------
Total investment income 1,479,970
- -----------------------------------------------------------------------------------
Expenses
Management fees 335,218
- -----------------------------------------------------------------------------------
Distribution and service plan fees:
Class A 113,376
Class B 60,218
Class C 17,069
Class N 679
- -----------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees:
Class A 112,637
Class B 24,268
Class C 7,122
Class N 1,137
- -----------------------------------------------------------------------------------
Shareholder reports 52,357
- -----------------------------------------------------------------------------------
Accounting service fees 7,500
- -----------------------------------------------------------------------------------
Directors' compensation 3,216
- -----------------------------------------------------------------------------------
Custodian fees and expenses 291
- -----------------------------------------------------------------------------------
Other 1,572
------------
Total expenses 736,660
Less reduction to custodian expenses (291)
Less voluntary waiver of transfer and shareholder servicing agent
fees--Class B (3,733)
Less voluntary waiver of transfer and shareholder servicing agent
fees-- Class C (1,248)
Less voluntary waiver of transfer and shareholder servicing agent
fees--Class N (746)
------------
Net expenses 730,642
- -----------------------------------------------------------------------------------
Net Investment Income 749,328
- -----------------------------------------------------------------------------------
Realized and Unrealized Gain (Loss)
Net realized loss on:
Investments (including premiums on options exercised) (2,158,125)
Closing of futures contracts (502,979)
------------
Net realized loss (2,661,104)
- -----------------------------------------------------------------------------------
Net change in unrealized appreciation on:
Investments 5,009,267
Translation of assets and liabilities denominated in foreign
currencies 155
------------
Net change 5,009,422
------------
Net realized and unrealized gain 2,348,318
- -----------------------------------------------------------------------------------
Net Increase in Net Assets Resulting from Operations $ 3,097,646
============
See accompanying Notes to Financial Statements.
19 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
Six Months Year
Ended Ended
April 30, 2003 October 31,
(Unaudited) 2002
- -----------------------------------------------------------------------------------------
Operations
Net investment income $ 749,328 $ 1,967,602
- -----------------------------------------------------------------------------------------
Net realized loss (2,661,104) (10,767,199)
- -----------------------------------------------------------------------------------------
Net change in unrealized appreciation 5,009,422 1,737,908
---------------------------------
Net increase (decrease) in net assets resulting
from operations 3,097,646 (7,061,689)
- -----------------------------------------------------------------------------------------
Dividends and/or Distributions to Shareholders
Dividends from net investment income:
Class A (721,220) (2,252,545)
Class B (39,478) (179,379)
Class C (13,087) (40,660)
Class N (1,638) (3,372)
- -----------------------------------------------------------------------------------------
Capital Stock Transactions
Net increase (decrease) in net assets resulting from
capital stock transactions:
Class A (2,994,319) (11,878,838)
Class B 83,627 (1,491,347)
Class C 673,371 322,450
Class N 55,789 276,606
- -----------------------------------------------------------------------------------------
Net Assets
Total increase (decrease) 140,691 (22,308,774)
- -----------------------------------------------------------------------------------------
Beginning of period 108,234,660 130,543,434
---------------------------------
End of period [including undistributed net investment
income of $150,693 and $176,788, respectively] $108,375,351 $108,234,660
=================================
See accompanying Notes to Financial Statements.
20 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Six Months Year
Ended Ended
April 30, 2003 Oct. 31,
Class A (Unaudited) 2002 2001 2000 1999 1998
- ------------------------------------------------------------------------------------------------------
Per Share Operating Data
Net asset value, beginning of period $11.56 $12.54 $14.23 $15.03 $15.45 $16.81
- ------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .09 .22 .26 .44 .44 .45
Net realized and unrealized gain (loss) .27 (.94) (1.69) .68 (.01) .45
-----------------------------------------------------------
Total from investment operations .36 (.72) (1.43) 1.12 .43 .90
- ------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.09) (.26) (.26) (.44) (.44) (.45)
Distributions from net realized gain -- -- -- (1.48) (.41) (1.81)
-----------------------------------------------------------
Total dividends and/or
distributions to shareholders (.09) (.26) (.26) (1.92) (.85) (2.26)
- ------------------------------------------------------------------------------------------------------
Net asset value, end of period $11.83 $11.56 $12.54 $14.23 $15.03 $15.45
===========================================================
- ------------------------------------------------------------------------------------------------------
Total Return, at Net Asset Value 1 3.14% (5.86)% (10.12)% 8.27% 2.62% 5.93%
- ------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
Net assets, end of period (in thousands) $91,771 $ 92,806 $112,864 $144,244 $258,159 $298,558
- ------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $92,294 $104,415 $128,477 $172,514 $293,677 $268,715
- ------------------------------------------------------------------------------------------------------
Ratios to average net assets: 2
Net investment income 1.52% 1.73% 1.88% 2.88% 2.72% 2.96%
Expenses 1.25% 1.21% 1.19% 1.11% 1.04% 1.04% 3
- ------------------------------------------------------------------------------------------------------
Portfolio turnover rate 135% 193% 164% 34% 122% 97%
<FN>
1. Assumes an investment on the business day before the first day of the fiscal
period, with all dividends and distributions reinvested in additional shares on
the reinvestment date, and redemption at the net asset value calculated on the
last business day of the fiscal period. Sales charges are not reflected in the
total returns. Total returns are not annualized for periods of less than one
full year.
2. Annualized for periods of less than one full year.
3. Expense ratio has been calculated without adjustment for the reduction to
custodian expenses.
</FN>
See accompanying Notes to Financial Statements.
21 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
FINANCIAL HIGHLIGHTS Continued
- --------------------------------------------------------------------------------
Six Months Year
Ended Ended
April 30, 2003 Oct. 31,
Class B (Unaudited) 2002 2001 2000 1999 1998
- ------------------------------------------------------------------------------------------------------------
Per Share Operating Data
Net asset value, beginning of period $11.73 $12.72 $14.43 $15.20 $15.62 $16.99
- ------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .04 .11 .15 .30 .31 .36
Net realized and unrealized gain (loss) .28 (.94) (1.70) .73 -- .43
-----------------------------------------------------------------
Total from investment operations .32 (.83) (1.55) 1.03 .31 .79
- ------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to
shareholders:
Dividends from net investment income (.04) (.16) (.16) (.32) (.32) (.35)
Distributions from net realized gain -- -- -- (1.48) (.41) (1.81)
-----------------------------------------------------------------
Total dividends and/or
distributions to shareholders (.04) (.16) (.16) (1.80) (.73) (2.16)
- ------------------------------------------------------------------------------------------------------------
Net asset value, end of period $12.01 $11.73 $12.72 $14.43 $15.20 $15.62
=================================================================
- ------------------------------------------------------------------------------------------------------------
Total Return, at Net Asset Value 1 2.72% (6.61)% (10.79)% 7.48% 1.84% 5.10%
- ------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
Net assets, end of period (in thousands) $12,566 $12,204 $14,770 $17,892 $23,522 $21,754
- ------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $12,145 $13,639 $16,569 $19,643 $24,648 $14,235
- ------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 2
Net investment income 0.67% 0.94% 1.14% 2.12% 1.97% 2.19%
Expenses, gross 2.15% 2.00% 1.94% 1.87% 1.80% 1.80% 3
Expenses, net 2.09% 4,5 2.00% 4,6 1.94% 4 1.87% 4 1.80% 4 1.80%
- ------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 135% 193% 164% 34% 122% 97%
<FN>
1. Assumes an investment on the business day before the first day of the fiscal
period, with all dividends and distributions reinvested in additional shares on
the reinvestment date, and redemption at the net asset value calculated on the
last business day of the fiscal period. Sales charges are not reflected in the
total returns. Total returns are not annualized for periods of less than one
full year.
2. Annualized for periods of less than one full year.
3. Expense ratio has been calculated without adjustment for the reduction to
custodian expenses.
4. Reduction to custodian expenses less than 0.01%.
5. Net of voluntary waiver of transfer agent fees.
6. Voluntary waiver of transfer agent fees less than 0.01%.
See accompanying Notes to Financial Statements.
</FN>
22 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
Six Months Year
Ended Ended
April 30, 2003 Oct. 31,
Class C (Unaudited) 2002 2001 2000 1999 1998
- ----------------------------------------------------------------------------------------------------------
Per Share Operating Data
Net asset value, beginning of period $11.43 $12.41 $14.08 $14.88 $15.31 $16.70
- ----------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .06 .13 .13 .28 .32 .37
Net realized and unrealized gain (loss) .24 (.94) (1.64) .72 (.01) .40
---------------------------------------------------------------
Total from investment operations .30 (.81) (1.51) 1.00 .31 .77
- ----------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.04) (.17) (.16) (.32) (.33) (.35)
Distributions from net realized gain -- -- -- (1.48) (.41) (1.81)
---------------------------------------------------------------
Total dividends and/or
distributions to shareholders (.04) (.17) (.16) (1.80) (.74) (2.16)
- ----------------------------------------------------------------------------------------------------------
Net asset value, end of period $11.69 $11.43 $12.41 $14.08 $14.88 $15.31
===============================================================
- ----------------------------------------------------------------------------------------------------------
Total Return, at Net Asset Value 1 2.66% (6.64)% (10.76)% 7.44% 1.84% 5.10%
- ----------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
Net assets, end of period (in thousands) $3,735 $2,984 $2,893 $3,931 $5,719 $4,824
- ----------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $3,446 $2,961 $3,280 $4,255 $5,876 $2,861
- ----------------------------------------------------------------------------------------------------------
Ratios to average net assets: 2
Net investment income 0.66% 0.93% 1.14% 2.13% 1.97% 2.18%
Expenses, gross 2.17% 2.00% 1.94% 1.86% 1.80% 1.80% 3
Expenses, net 2.10% 4,5 2.00% 4,6 1.94% 4 1.86% 4 1.80% 4 1.80%
- ----------------------------------------------------------------------------------------------------------
Portfolio turnover rate 135% 193% 164% 34% 122% 97%
<FN>
1. Assumes an investment on the business day before the first day of the fiscal
period, with all dividends and distributions reinvested in additional shares on
the reinvestment date, and redemption at the net asset value calculated on the
last business day of the fiscal period. Sales charges are not reflected in the
total returns. Total returns are not annualized for periods of less than one
full year.
2. Annualized for periods of less than one full year.
3. Expense ratio has been calculated without adjustment for the reduction to
custodian expenses.
4. Reduction to custodian expenses less than 0.01%.
5. Net of voluntary waiver of transfer agent fees.
6. Voluntary waiver of transfer agent fees less than 0.01%.
</FN>
See accompanying Notes to Financial Statements.
23 | OPPENHEIMER DISCIPLINED ALLOCATION 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 $11.52 $12.52 $13.74
- ---------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .08 .16 .12
Net realized and unrealized gain (loss) .26 (.91) (1.20)
---------------------------------
Total from investment operations .34 (.75) (1.08)
- ---------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.07) (.25) (.14)
Distributions from net realized gain -- -- --
---------------------------------
Total dividends and/or distributions to shareholders (.07) (.25) (.14)
- ---------------------------------------------------------------------------------------------
Net asset value, end of period $11.79 $11.52 $12.52
=================================
- ---------------------------------------------------------------------------------------------
Total Return, at Net Asset Value 2 2.95% (6.17)% (7.90)%
- ---------------------------------------------------------------------------------------------
Ratios/Supplemental Data
Net assets, end of period (in thousands) $303 $241 $2
- ---------------------------------------------------------------------------------------------
Average net assets (in thousands) $274 $160 $1
- ---------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income 1.21% 1.28% 1.04%
Expenses, gross 2.09% 1.60% 1.68%
Expenses, net 1.54% 4,5 1.60% 4,6 1.68% 4
- ---------------------------------------------------------------------------------------------
Portfolio turnover rate 135% 193% 164%
<FN>
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.
6. Voluntary waiver of transfer agent fees less than 0.01%.
</FN>
See accompanying Notes to Financial Statements.
24 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
NOTES TO FINANCIAL STATEMENTS Unaudited
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. Significant Accounting Policies
Oppenheimer Disciplined Allocation Fund (the Fund), a series of Oppenheimer
Series Fund, Inc. (the Company), 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 to maximize total investment return (including
capital appreciation and income) principally by allocating its assets among
stocks, corporate bonds, U.S. government securities and money market
instruments, according to changing market conditions. The Fund's investment
advisor is OppenheimerFunds, Inc. (the Manager).
The Fund offers Class A, Class B, Class C and Class N 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. 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. 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 Directors, or at their fair value. Fair value is
determined in good faith under consistently applied procedures under the
supervision of the Board of Directors. Short-term "money market type" debt
securities with remaining maturities of sixty days or less are valued at
amortized cost (which approximates market value).
- --------------------------------------------------------------------------------
Structured Notes. The Fund invests in index-linked structured notes whose
principal and/or interest depend on the performance of an underlying index. The
structured notes are leveraged, which increases the volatility of each note's
market value relative to the change in the underlying index. Fluctuations in
value of these securities are recorded as unrealized gains and losses in the
accompanying financial statements. The Fund records a realized gain or loss when
a structured note is sold or matures. As of April 30, 2003, the market value of
these securities comprised 3.2% of the Fund's net assets, and resulted in
unrealized gains in the current period of $41,586.
25 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. Significant Accounting Policies Continued
Securities on a When-Issued Basis. Delivery and payment for securities that have
been purchased by the Fund on a when-issued basis can take place a month or more
after the trade date. Normally the settlement date occurs within six months
after the trade date; however, the Fund may, from time to time, purchase
securities whose settlement date extends six months or more beyond trade date.
During this period, such securities do not earn interest, are subject to market
fluctuation and may increase or decrease in value prior to their delivery. The
Fund maintains segregated assets with a market value equal to or greater than
the amount of its purchase commitments. The purchase of securities on a
when-issued basis may increase the volatility of the Fund's net asset value to
the extent the Fund makes such purchases while remaining substantially fully
invested. As of April 30, 2003, the Fund had entered into when-issued purchase
commitments of $18,105,944.
In connection with its ability to purchase securities on a when-issued basis,
the Fund may enter into forward roll transactions with respect to
mortgage-related securities. Forward roll transactions require the sale of
securities for delivery in the current month, and a simultaneous agreement with
the same counterparty to repurchase similar (same type, coupon and maturity) but
not identical securities on a specified future date. The forward roll may not
extend for a period of greater than one year. The Fund generally records the
incremental difference between the forward purchase and sell of each forward
roll as interest income.
Risks to the Fund of entering into forward roll transactions include the
potential inability of the counterparty to meet the terms of the agreement; the
potential of the Fund to receive inferior securities to what was sold to the
counterparty at redelivery; counterparty credit risk; and the potential pay down
speed variance between the mortgage-related pools.
- --------------------------------------------------------------------------------
Foreign Currency Translation. The accounting records of the Fund are maintained
in U.S. dollars. Prices of securities denominated in foreign currencies are
translated into U.S. dollars at the closing rates of exchange. Amounts related
to the purchase and sale of foreign securities and investment income are
translated at the rates of exchange prevailing on the respective dates of such
transactions.
The effect of changes in foreign currency exchange rates on investments is
separately identified from the fluctuations arising from changes in market
values of securities held and reported with all other foreign currency gains and
losses in the Fund's Statement of Operations.
- --------------------------------------------------------------------------------
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
26 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
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.
- --------------------------------------------------------------------------------
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 $26,743,869. 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
----------------------
2008 $ 167,496
2009 13,696,976
2010 10,218,293
-----------
Total $24,082,765
-----------
-----------
- --------------------------------------------------------------------------------
Directors' Compensation. The Fund has adopted an unfunded retirement plan for
the Fund's independent directors. Benefits are based on years of service and
fees paid to each director during the years of service. During the six months
ended April 30, 2003, the Fund's projected benefit obligations were increased by
$1,348 and payments of $3,797 were made to retired directors, resulting in an
accumulated liability of $27,975 as of April 30, 2003.
The Board of Directors has adopted a deferred compensation plan for
independent directors that enables directors 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 director. Deferral of directors' 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.
27 | OPPENHEIMER DISCIPLINED ALLOCATION 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 primarily because of paydown gains and losses and the
recognition of certain foreign currency gains (losses) as ordinary income (loss)
for tax purposes. The character of 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.
The tax character of distributions paid during the six months ended April 30,
2003 and the year ended October 31, 2002 was as follows:
Six Months Ended Year Ended
April 30, 2003 October 31, 2002
------------------------------------------------------
Distributions paid from:
Ordinary income $775,423 $ 2,475,956
Long-term capital gain -- --
Return of capital -- --
------------------------------
Total $775,423 $2,475,956
------------------------------
------------------------------
- --------------------------------------------------------------------------------
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.
28 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
- --------------------------------------------------------------------------------
2. Shares of Capital Stock
The Fund has authorized 550 million shares of $0.001 par value capital stock.
Transactions in shares of capital stock were as follows:
Six Months Ended April 30, 2003 Year Ended October 31, 2002
Shares Amount Shares Amount
- ------------------------------------------------------------------------------------
Class A
Sold 526,855 $ 6,109,420 628,916 $ 7,576,816
Dividends and/or
distributions reinvested 60,074 694,295 174,069 2,175,432
Redeemed (854,253) (9,798,034) (1,777,767) (21,631,086)
-------------------------------------------------------
Net decrease (267,324) $(2,994,319) (974,782) $(11,878,838)
-------------------------------------------------------
-------------------------------------------------------
- ------------------------------------------------------------------------------------
Class B
Sold 199,184 $ 2,332,979 220,549 $ 2,710,789
Dividends and/or
distributions reinvested 3,169 37,201 13,413 171,302
Redeemed (195,829) (2,286,553) (354,813) (4,373,438)
-------------------------------------------------------
Net increase (decrease) 6,524 $ 83,627 (120,851) $ (1,491,347)
-------------------------------------------------------
-------------------------------------------------------
- ------------------------------------------------------------------------------------
Class C
Sold 104,617 $ 1,199,784 101,338 $ 1,207,406
Dividends and/or
distributions reinvested 1,092 12,479 3,185 39,488
Redeemed (47,299) (538,892) (76,698) (924,444)
-------------------------------------------------------
Net increase 58,410 $ 673,371 27,825 $ 322,450
-------------------------------------------------------
-------------------------------------------------------
- ------------------------------------------------------------------------------------
Class N
Sold 5,869 $ 68,061 108,852 $ 1,331,998
Dividends and/or
distributions reinvested 141 1,632 134 1,621
Redeemed (1,215) (13,904) (88,230) (1,057,013)
-------------------------------------------------------
Net increase 4,795 $ 55,789 20,756 $ 276,606
-------------------------------------------------------
-------------------------------------------------------
- --------------------------------------------------------------------------------
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
$152,970,123 and $152,061,277, respectively.
- --------------------------------------------------------------------------------
4. Fees and Other Transactions with Affiliates
Management Fees. Management fees paid to the Manager are in accordance with the
investment advisory agreement with the Fund which provides for a fee of 0.625%
of the first $300 million of average annual net assets of the Fund, 0.50% of the
next $100 million, and 0.45% of average annual net assets in excess of $400
million.
- --------------------------------------------------------------------------------
Accounting Fees. The Manager acts as the accounting agent for the Fund at an
annual fee of $15,000, plus out-of-pocket costs and expenses reasonably
incurred.
29 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
4. Fees and Other Transactions with Affiliates Continued
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 for all classes, up to an annual rate of 0.35% of average net assets per
class. 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 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
Six Months on Class A Retained by Advanced by Advanced by Advanced by Advanced by
Ended Shares Distributor Distributor 1 Distributor 1 Distributor 1 Distributor 1
- -----------------------------------------------------------------------------------------------
April 30, 2003 $55,435 $28,587 $3,971 $42,813 $4,422 $471
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
Six Months Retained by Retained by Retained by Retained by
Ended Distributor Distributor Distributor Distributor
- --------------------------------------------------------------------------------
April 30, 2003 $30 $49,848 $217 $91
- --------------------------------------------------------------------------------
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 $113,376, all of which were paid by the
Distributor to recipients, and included $72,174 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.
30 | OPPENHEIMER DISCIPLINED ALLOCATION 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 $60,218 $47,061 $501,278 3.99%
Class C Plan 17,069 4,329 99,950 2.68
Class N Plan 679 615 460 0.15
- --------------------------------------------------------------------------------
5. Futures Contracts
A futures contract is a commitment to buy or sell a specific amount of a
commodity or financial instrument at a particular price on a stipulated future
date at a negotiated price. Futures contracts are traded on a commodity
exchange. The Fund may buy and sell futures contracts that relate to broadly
based securities indices "financial futures" or debt securities "interest rate
futures" in order to gain exposure to or to seek to protect against changes in
market value of stock and bonds or interest rates. The Fund may also buy or
write put or call options on these futures contracts.
The Fund generally sells futures contracts to hedge against increases in
interest rates and decreases in market value of portfolio securities. The Fund
may also purchase futures contracts to gain exposure to market changes as it may
be more efficient or cost effective than actually buying fixed income
securities.
Upon entering into a futures contract, the Fund is required to deposit either
cash or securities (initial margin) in an amount equal to a certain percentage
of the contract value. Subsequent payments (variation margin) are made or
received by the Fund each day. The variation margin payments are equal to the
daily changes in the contract value and are recorded as unrealized gains and
losses. The Fund recognizes a realized gain or loss when the contract is closed
or expires.
Securities held in collateralized accounts to cover initial margin
requirements on open futures contracts are noted in the Statement of
Investments. The Statement of Assets and Liabilities reflects a receivable
and/or payable for the daily mark to market for variation margin. Realized gains
and losses are reported on the Statement of Operations as closing and expiration
of futures contracts.
Risks of entering into futures contracts (and related options) include the
possibility that there may be an illiquid market and that a change in the value
of the contract or option may not correlate with changes in the value of the
underlying securities.
31 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
5. Futures Contracts Continued
As of April 30, 2003, the Fund had outstanding futures contracts as follows:
Unrealized
Expiration Number of Valuation as of Appreciation
Contract Description Dates Contracts April 30, 2003 (Depreciation)
- -------------------------------------------------------------------------------------------
Contracts to Purchase
U.S. Treasury Nts., 2 yr. 6/26/03 13 $2,806,781 $ 7,547
U.S. Treasury Nts., 10 yr. 6/19/03 41 4,720,125 21,938
----------
29,485
----------
Contracts to Sell
U.S. Long Bonds 6/19/03 20 2,280,625 (29,125)
U.S. Treasury Nts., 5 yr. 6/19/03 105 11,943,750 (43,086)
----------
(72,211)
----------
$(42,726)
----------
----------
- --------------------------------------------------------------------------------
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.
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.
32 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
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 2 $ 106
Options written 236 11,340
Options exercised (238) (11,446)
-------------------------
Options outstanding as of
April 30, 2003 -- $ --
-------------------------
-------------------------
- --------------------------------------------------------------------------------
7. 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 Directors 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 10% 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 $4,232,737, which
represents 3.91% of the Fund's net assets, of which zero is considered
restricted. Information concerning restricted securities is as follows:
Acquisition Valuation as of Unrealized
Security Date Cost April 30, 2003 Depreciation
- --------------------------------------------------------------------------------
Stocks and/or Warrants
Geotek Communications, Inc.,
Series B (Escrowed) 1/4/01 $400 $-- $400
- --------------------------------------------------------------------------------
8. Borrowing and Lending Arrangements
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 Directors, 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
33 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
8. Borrowing and Lending Arrangements Continued
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.
34 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
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)