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 811-10071
Oppenheimer Emerging Growth Fund
(Exact name of registrant as specified in charter)
6803 SOUTH TUCSON WAY, CENTENNIAL, COLORADO 80112-3924
(Address of principal executive offices)
(Zip code)
Robert G. Zack, Esq.
OppenheimerFunds, Inc.
498 Seventh Avenue, New York, New York 10018
- --------------------------------------------------------------------------------
(Name and address of agent for service)
Registrant's telephone number, including area code: (303) 768-3200
--------------
Date of fiscal year end: October 31
Date of reporting period: October 31, 2002 - April 30, 2003
ITEM 1. REPORTS TO STOCKHOLDERS.
STATEMENT OF INVESTMENTS APRIL 30, 2003 / UNAUDITED
Market Value
Shares See Note 1
- -------------------------------------------------------------------------------
Common Stocks--98.0%
- -------------------------------------------------------------------------------
Consumer Discretionary--11.3%
- -------------------------------------------------------------------------------
Hotels, Restaurants & Leisure--4.9%
Alliance Gaming Corp. 1 31,200 $ 498,264
- -------------------------------------------------------------------------------
Cheesecake Factory, Inc. (The) 1 6,600 208,494
- -------------------------------------------------------------------------------
Penn National Gaming, Inc. 1 26,800 523,404
- -------------------------------------------------------------------------------
Ruby Tuesday, Inc. 12,100 238,370
- -------------------------------------------------------------------------------
Station Casinos, Inc. 1 10,800 233,388
---------------
1,701,920
- -------------------------------------------------------------------------------
Leisure Equipment & Products--0.5%
Marvel Enterprises, Inc. 1 10,500 176,820
- -------------------------------------------------------------------------------
Media--0.5%
Radio One, Inc., Cl. D 1 11,800 180,540
- -------------------------------------------------------------------------------
Specialty Retail--4.5%
Aaron Rents, Inc. 21,200 473,820
- -------------------------------------------------------------------------------
Hot Topic, Inc. 1 10,900 266,505
- -------------------------------------------------------------------------------
Select Comfort Corp. 1 13,000 176,670
- -------------------------------------------------------------------------------
Sharper Image Corp. 1 22,300 441,317
- -------------------------------------------------------------------------------
Urban Outfitters, Inc. 1 7,200 214,704
---------------
1,573,016
- -------------------------------------------------------------------------------
Textiles & Apparel--0.9%
Quicksilver, Inc. 1 10,000 326,000
- -------------------------------------------------------------------------------
Consumer Staples--1.4%
- -------------------------------------------------------------------------------
Food & Drug Retailing--1.4%
Central European Distribution Corp. 1 8,600 234,780
- -------------------------------------------------------------------------------
United Natural Foods, Inc. 1 8,600 251,034
---------------
485,814
- -------------------------------------------------------------------------------
Energy--4.3%
- -------------------------------------------------------------------------------
Energy Equipment & Services--3.6%
Patterson-UTI Energy, Inc. 1 10,800 357,372
- -------------------------------------------------------------------------------
Pride International, Inc. 1 10,900 169,168
- -------------------------------------------------------------------------------
Rowan Cos., Inc. 19,100 391,550
- -------------------------------------------------------------------------------
W-H Energy Services, Inc. 1 19,300 347,400
---------------
1,265,490
Market Value
Shares See Note 1
- -------------------------------------------------------------------------------
Oil & Gas--0.7%
Ultra Petroleum Corp. 1 25,100 $ 251,000
- -------------------------------------------------------------------------------
Financials--8.4%
- -------------------------------------------------------------------------------
Banks--3.0%
Dime Community Bancshares, Inc. 10,800 249,048
- -------------------------------------------------------------------------------
UCBH Holdings, Inc. 16,200 412,128
- -------------------------------------------------------------------------------
W. Holding Co., Inc. 20,600 405,614
---------------
1,066,790
- -------------------------------------------------------------------------------
Diversified Financials--3.0%
American Capital Strategies Ltd. 18,200 441,532
- -------------------------------------------------------------------------------
iDine Rewards Network, Inc. 1 39,200 382,200
- -------------------------------------------------------------------------------
Providian Financial Corp. 1 30,200 222,574
---------------
1,046,306
- -------------------------------------------------------------------------------
Insurance--1.8%
Arch Capital Group Ltd. 1 8,600 299,366
- -------------------------------------------------------------------------------
Hub International Ltd. 21,600 317,736
---------------
617,102
- -------------------------------------------------------------------------------
Real Estate--0.6%
American Mortgage Acceptance Co. 13,400 206,762
- -------------------------------------------------------------------------------
Health Care--27.6%
- -------------------------------------------------------------------------------
Biotechnology--9.7%
Amylin Pharmaceuticals, Inc. 1 20,400 390,660
- -------------------------------------------------------------------------------
BioMarin Pharmaceutical, Inc. 1 33,000 362,340
- -------------------------------------------------------------------------------
Cepheid, Inc. 1 49,200 184,992
- -------------------------------------------------------------------------------
Corixa Corp. 1 31,500 225,855
- -------------------------------------------------------------------------------
Digene Corp. 1 12,900 245,229
- -------------------------------------------------------------------------------
Gen-Probe, Inc. 1 11,900 369,495
- -------------------------------------------------------------------------------
Martek Biosciences Corp. 1 15,100 513,853
- -------------------------------------------------------------------------------
Medicines Co. (The) 1 22,300 458,265
- -------------------------------------------------------------------------------
Nuerocrine Biosciences, Inc. 1 9,800 443,450
- -------------------------------------------------------------------------------
United Therapeutics Corp. 1 10,800 193,849
---------------
3,387,988
7 | OPPENHEIMER EMERGING GROWTH FUND
STATEMENT OF INVESTMENTS UNAUDITED / CONTINUED
Market Value
Shares See Note 1
- -------------------------------------------------------------------------------
Health Care Equipment & Supplies--5.2%
Advanced Neuromodulation
Systems, Inc. 1 12,100 $ 506,627
- -------------------------------------------------------------------------------
Biosite, Inc. 1 11,100 473,748
- -------------------------------------------------------------------------------
Cyberonics, Inc. 1 7,200 164,376
- -------------------------------------------------------------------------------
Immucor, Inc. 1 8,500 174,505
- -------------------------------------------------------------------------------
Osteotech, Inc. 1 25,000 261,500
- -------------------------------------------------------------------------------
Possis Medical, Inc. 1 12,900 247,680
---------------
1,828,436
- -------------------------------------------------------------------------------
Health Care Providers & Services--3.6%
Andrx Corp. 1 13,700 221,118
- -------------------------------------------------------------------------------
CTI Molecular Imaging, Inc. 1 12,800 235,008
- -------------------------------------------------------------------------------
eResearch Technology, Inc. 1 16,100 479,780
- -------------------------------------------------------------------------------
IMPAC Medical Systems, Inc. 1 17,600 313,632
---------------
1,249,538
- -------------------------------------------------------------------------------
Pharmaceuticals--9.1%
Able Laboratories, Inc. 1 6,500 109,590
- -------------------------------------------------------------------------------
Alteon, Inc. 1 38,300 151,285
- -------------------------------------------------------------------------------
Connetics Corp. 1 20,500 346,245
- -------------------------------------------------------------------------------
Eon Labs, Inc. 1 19,200 588,288
- -------------------------------------------------------------------------------
Inspire Pharmaceuticals, Inc. 1 28,800 420,480
- -------------------------------------------------------------------------------
Kos Pharmaceuticals, Inc. 1 12,900 263,160
- -------------------------------------------------------------------------------
MGI Pharma, Inc. 1 12,000 173,280
- -------------------------------------------------------------------------------
Pharmaceutical Resources, Inc. 1 12,000 527,400
- -------------------------------------------------------------------------------
Taro Pharmaceutical Industries Ltd. 1 12,800 585,729
---------------
3,165,457
- -------------------------------------------------------------------------------
Industrials--9.6%
- -------------------------------------------------------------------------------
Aerospace & Defense--0.6%
Aeroflex, Inc. 1 35,200 189,376
- -------------------------------------------------------------------------------
Airlines--0.6%
JetBlue Airways Corp. 1 7,000 220,010
Market Value
Shares See Note 1
- -------------------------------------------------------------------------------
Commercial Services & Supplies--6.6%
Corinthian Colleges, Inc. 1 12,300 $ 563,217
- -------------------------------------------------------------------------------
Corporate Executive Board Co. 1 8,100 332,019
- -------------------------------------------------------------------------------
Exult, Inc. 1 32,400 232,956
- -------------------------------------------------------------------------------
FTI Consulting, Inc. 1 10,300 466,075
- -------------------------------------------------------------------------------
Portfolio Recovery Associates, Inc. 1 9,100 248,339
- -------------------------------------------------------------------------------
Stericycle, Inc. 1 6,800 267,172
- -------------------------------------------------------------------------------
University of Phoenix Online 1 4,200 185,388
---------------
2,295,166
- -------------------------------------------------------------------------------
Road & Rail--1.8%
Pacer International, Inc. 1 21,600 343,440
- -------------------------------------------------------------------------------
Yellow Corp. 1 10,800 288,360
---------------
631,800
- -------------------------------------------------------------------------------
Information Technology--34.9%
- -------------------------------------------------------------------------------
Communications Equipment--5.1%
Emulex Corp. 1 13,600 278,664
- -------------------------------------------------------------------------------
Ixia 1 41,500 252,735
- -------------------------------------------------------------------------------
NetScreen Technologies, Inc. 1 21,000 425,880
- -------------------------------------------------------------------------------
Packeteer, Inc. 1 27,000 353,160
- -------------------------------------------------------------------------------
UTStarcom, Inc. 1 22,000 478,962
---------------
1,789,401
- -------------------------------------------------------------------------------
Computers & Peripherals--4.0%
Lexar Media, Inc. 1 83,500 404,975
- -------------------------------------------------------------------------------
Maxtor Corp. 1 50,400 277,200
- -------------------------------------------------------------------------------
Overland Storage, Inc. 1 20,600 364,414
- -------------------------------------------------------------------------------
SanDisk Corp. 1 6,800 164,560
- -------------------------------------------------------------------------------
Synaptics, Inc. 1 24,800 189,968
---------------
1,401,117
- -------------------------------------------------------------------------------
Electronic Equipment & Instruments--3.6%
Innovex, Inc. 1 52,300 452,395
- -------------------------------------------------------------------------------
Kopin Corp. 1 67,000 322,270
- -------------------------------------------------------------------------------
OSI Systems, Inc. 1 13,600 205,768
- -------------------------------------------------------------------------------
Sanmina-SCI Corp. 1 57,300 275,040
---------------
1,255,473
8 | OPPENHEIMER EMERGING GROWTH FUND
Market Value
Shares See Note 1
- -------------------------------------------------------------------------------
Internet Software & Services--5.3%
Digital Insight Corp. 1 16,900 $ 273,104
- -------------------------------------------------------------------------------
Digital River, Inc. 1 24,300 406,296
- -------------------------------------------------------------------------------
Embarcadero Technologies, Inc. 1 39,100 268,226
- -------------------------------------------------------------------------------
Harris Interactive, Inc. 1 43,300 207,407
- -------------------------------------------------------------------------------
Netease.com, Inc., Sponsored ADR 1 12,900 280,588
- -------------------------------------------------------------------------------
SupportSoft, Inc. 1 71,900 237,270
- -------------------------------------------------------------------------------
VeriSign, Inc. 1 13,200 163,944
---------------
1,836,835
- -------------------------------------------------------------------------------
IT Consulting & Services--1.1%
Cognizant Technology Solutions Corp. 1 22,100 396,916
- -------------------------------------------------------------------------------
Semiconductor Equipment & Products--10.1%
ASM International NV 1 15,800 215,354
- -------------------------------------------------------------------------------
ChipPAC, Inc. 1 67,500 364,500
- -------------------------------------------------------------------------------
Cree, Inc. 1 28,900 576,555
- -------------------------------------------------------------------------------
Integrated Circuit Systems, Inc. 1 10,700 232,404
- -------------------------------------------------------------------------------
Microsemi Corp. 1 33,100 388,263
- -------------------------------------------------------------------------------
MKS Instruments, Inc. 1 17,551 245,012
- -------------------------------------------------------------------------------
O2Micro International Ltd. 1 18,300 213,927
- -------------------------------------------------------------------------------
Power Integrations, Inc. 1 15,000 331,980
- -------------------------------------------------------------------------------
QLogic Corp. 1 4,000 175,960
- -------------------------------------------------------------------------------
Silicon Image, Inc. 1 27,400 163,852
- -------------------------------------------------------------------------------
Silicon Laboratories, Inc. 1 8,100 230,445
- -------------------------------------------------------------------------------
Skyworks Solutions, Inc. 1 29,400 157,290
- -------------------------------------------------------------------------------
Vitesse Semiconductor Corp. 1 80,500 250,435
---------------
3,545,977
- -------------------------------------------------------------------------------
Software--5.7%
Autodesk, Inc. 26,700 415,452
- -------------------------------------------------------------------------------
BEA Systems, Inc. 1 18,100 193,851
Market Value
Shares See Note 1
- -------------------------------------------------------------------------------
Software Continued
Business Objects SA, Sponsored ADR 1 16,700 $ 362,891
- -------------------------------------------------------------------------------
Group 1 Software, Inc. 1 9,700 167,034
- -------------------------------------------------------------------------------
Hyperion Solutions Corp. 1 9,700 274,316
- -------------------------------------------------------------------------------
NetIQ Corp. 1 27,800 383,084
- -------------------------------------------------------------------------------
Take-Two Interactive Software, Inc. 1 8,100 182,250
---------------
1,978,878
- -------------------------------------------------------------------------------
Telecommunication Services--0.5%
- -------------------------------------------------------------------------------
Wireless Telecommunication Services--0.5%
@Road, Inc. 1 27,000 173,070
---------------
Total Common Stocks (Cost $30,339,234) 34,242,998
Principal
Amount
- -------------------------------------------------------------------------------
Joint Repurchase Agreements--2.8%
Undivided interest of 0.30% in joint
repurchase agreement (Market Value $332,883,000)
with Banc One Capital Markets, Inc., 1.26%,
dated 4/30/03, to be repurchased at $999,035
on 5/1/03, collateralized by U.S. Treasury Nts.,
4.875%--5.875%, 11/15/04--2/15/12, with a value
of $327,261,153 and U.S. Treasury Bonds,
2.125%, 8/31/04, with a value of $12,489,849
(Cost $999,000) $999,000 999,000
- -------------------------------------------------------------------------------
Total Investments, at Value
(Cost $31,338,234) 100.8% 35,241,998
- -------------------------------------------------------------------------------
Liabilities in Excess of Other Assets (0.8) (285,618)
---------------
Net Assets 100.0% $ 34,956,380
===============
Footnotes to Statement of Investments
1. Non-income producing security.
See accompanying Notes to Financial Statements.
9 | OPPENHEIMER EMERGING GROWTH FUND
- -------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES UNAUDITED
April 30, 2003
- -------------------------------------------------------------------------------
Assets
Investments, at value (cost $31,338,234)--see
accompanying statement $ 35,241,998
- -------------------------------------------------------------------------------
Receivables and other assets:
Investments sold 628,762
Shares of beneficial interest sold 250,017
Interest and dividends 2,085
Other 1,194
-------------
Total assets 36,124,056
- -------------------------------------------------------------------------------
Liabilities
Bank overdraft 10,063
- -------------------------------------------------------------------------------
Payables and other liabilities:
Investments purchased 1,070,182
Shares of beneficial interest redeemed 35,550
Shareholder reports 14,419
Transfer and shareholder servicing agent fees 7,373
Distribution and service plan fees 5,091
Trustees' compensation 1,342
Other 23,656
-------------
Total liabilities 1,167,676
- -------------------------------------------------------------------------------
Net Assets $34,956,380
=============
- -------------------------------------------------------------------------------
Composition of Net Assets
Paid-in capital $ 47,985,758
- -------------------------------------------------------------------------------
Accumulated net investment loss (254,386)
- -------------------------------------------------------------------------------
Accumulated net realized loss on investment transactions (16,678,756)
- -------------------------------------------------------------------------------
Net unrealized appreciation on investments 3,903,764
-------------
Net Assets $34,956,380
=============
10 | OPPENHEIMER EMERGING GROWTH FUND
- -------------------------------------------------------------------------------
Net Asset Value Per Share
Class A Shares:
Net asset value and redemption price per share
(based on net assets of $22,002,589 and 3,229,317 shares
of beneficial interest outstanding) $6.81
Maximum offering price per share (net asset value plus sales
charge of 5.75% of offering price) $7.23
- -------------------------------------------------------------------------------
Class B Shares:
Net asset value, redemption price (excludes applicable
contingent deferred sales charge) and offering price per share
(based on net assets of $7,610,041
and 1,140,483
shares of beneficial interest outstanding) $6.67
- -------------------------------------------------------------------------------
Class C Shares:
Net asset value, redemption price (excludes applicable
contingent deferred sales charge) and offering price
per share (based on net assets of $3,492,929 and 522,805
shares of beneficial interest outstanding) $6.68
- -------------------------------------------------------------------------------
Class N Shares:
Net asset value, redemption price (excludes applicable
contingent deferred sales charge) and offering price per
share (based on net assets of $743,440 and
109,965 shares of beneficial interest outstanding) $6.76
- -------------------------------------------------------------------------------
Class Y Shares:
Net asset value, redemption price and offering price per share
(based on net assets of $1,107,381 and 161,002
shares of beneficial interest outstanding) $6.88
See accompanying Notes to Financial Statements.
11 | OPPENHEIMER EMERGING GROWTH FUND
STATEMENT OF OPERATIONS UNAUDITED
For the Six Months Ended April 30, 2003
- -------------------------------------------------------------------------------
Investment Income
Dividends (net of foreign withholding taxes of $412) $ 38,127
- -------------------------------------------------------------------------------
Interest 5,008
---------------
Total investment income 43,135
- -------------------------------------------------------------------------------
Expenses
Management fees 149,789
- -------------------------------------------------------------------------------
Distribution and service plan fees:
Class A 19,906
Class B 34,668
Class C 18,812
Class N 1,682
- -------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees:
Class A 42,847
Class B 32,598
Class C 13,703
Class N 1,828
Class Y 26
- -------------------------------------------------------------------------------
Shareholder reports 21,026
- -------------------------------------------------------------------------------
Custodian fees and expenses 2,376
- -------------------------------------------------------------------------------
Trustees' compensation 1,164
- -------------------------------------------------------------------------------
Other 4,175
---------------
Total expenses 344,600
Less reduction to custodian expenses (166)
Less voluntary waiver of transfer and shareholder
servicing agent fees--Class A (13,569)
Less voluntary waiver of transfer and shareholder
servicing agent fees--Class B (24,917)
Less voluntary waiver of transfer and shareholder
servicing agent fees--Class C (8,697)
Less voluntary waiver of transfer and shareholder
servicing agent fees--Class N (560)
---------------
Net expenses 296,691
- -------------------------------------------------------------------------------
Net Investment Loss (253,556)
- -------------------------------------------------------------------------------
Realized and Unrealized Gain (Loss)
Net realized loss on investments (1,536,310)
- -------------------------------------------------------------------------------
Net change in unrealized appreciation on investments 6,213,824
---------------
Net realized and unrealized gain 4,677,514
- -------------------------------------------------------------------------------
Net Increase in Net Assets Resulting from Operations $4,423,958
===============
See accompanying Notes to Financial Statements.
12 | OPPENHEIMER EMERGING GROWTH FUND
STATEMENTS OF CHANGES IN NET ASSETS
Six Months Year
Ended Ended
April 30, 2003 October 31,
(Unaudited) 2002
- --------------------------------------------------------------------------------
Operations
Net investment loss $ (253,556) $ (564,932)
- -------------------------------------------------------------------------------
Net realized loss (1,536,310) (10,327,183)
- -------------------------------------------------------------------------------
Net change in unrealized appreciation
(depreciation) 6,213,824 (4,009,696)
-------------------------------
Net increase (decrease) in net assets
resulting from operations 4,423,958 (14,901,811)
- -------------------------------------------------------------------------------
Beneficial Interest Transactions
Net increase (decrease) in net assets
resulting from beneficial interest
transactions:
Class A 33,852 9,052,385
Class B 244,389 5,795,703
Class C (1,951,625) 3,538,108
Class N 55,487 794,048
Class Y 316,791 675,716
- -------------------------------------------------------------------------------
Net Assets
Total increase 3,122,852 4,954,149
- -------------------------------------------------------------------------------
Beginning of period 31,833,528 26,879,379
-------------------------------
End of period [including accumulated
net investment loss of $254,386 and
$830, respectively] $34,956,380 $31,833,528
===============================
See accompanying Notes to Financial Statements.
13 | OPPENHEIMER EMERGING GROWTH FUND
FINANCIAL HIGHLIGHTS
Six Months Year
Ended Ended
April 30, 2003 Oct. 31,
Class A (Unaudited) 2002 2001 1
- -------------------------------------------------------------------------------------------
Per Share Operating Data
Net asset value, beginning of period $ 5.84 $ 8.45 $10.00
- -------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment loss (.04) (.10) (.03)
Net realized and unrealized gain (loss) 1.01 (2.51) (1.49)
----------------------------------------
Total from investment operations .97 (2.61) (1.52)
- -------------------------------------------------------------------------------------------
Dividends and/or distributions
to shareholders:
Dividends from net investment income -- -- (.03)
- -------------------------------------------------------------------------------------------
Net asset value, end of period $6.81 $5.84 $8.45
========================================
- -------------------------------------------------------------------------------------------
Total Return, at Net Asset Value 2 16.61% (30.89)% (15.22)%
- -------------------------------------------------------------------------------------------
Ratios/Supplemental Data
Net assets, end of period (in thousands) $22,003 $19,310 $20,392
- -------------------------------------------------------------------------------------------
Average net assets (in thousands) $17,976 $24,497 $16,941
- -------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment loss (1.46)% (1.35)% (0.57)%
Expenses, gross 1.89% 1.85% 1.58%
Expenses, net 1.74% 4,5 1.78% 4,5 1.58% 4
- -------------------------------------------------------------------------------------------
Portfolio turnover rate 120% 263% 214%
1. For the period from November 1, 2000 (inception of offering) to October 31,
2001.
2. Assumes an investment on the business day before the first day of the fiscal
period (or inception of offering), with all dividends and distributions
reinvested in additional shares on the reinvestment date, and redemption at the
net asset value calculated on the last business day of the fiscal period. Sales
charges are not reflected in the total returns. Total returns are not annualized
for periods of less than one full year.
3. Annualized for periods of less than one full year.
4. Reduction to custodian expenses less than 0.01%.
5. Net of voluntary waiver of transfer agent fees.
See accompanying Notes to Financial Statements.
14 | OPPENHEIMER EMERGING GROWTH FUND
Six Months Year
Ended Ended
April 30, 2003 Oct. 31,
Class B (Unaudited) 2002 2001 1
- --------------------------------------------------------------------------------------------
Per Share Operating Data
Net asset value, beginning of period $ 5.74 $ 8.38 $10.00
- --------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment loss (.06) (.12) (.07)
Net realized and unrealized gain (loss) .99 (2.52) (1.52)
--------------------------------------------
Total from investment operations .93 (2.64) (1.59)
- --------------------------------------------------------------------------------------------
Dividends and/or distributions
to shareholders:
Dividends from net investment income -- -- (.03)
- --------------------------------------------------------------------------------------------
Net asset value, end of period $6.67 $5.74 $8.38
============================================
- --------------------------------------------------------------------------------------------
Total Return, at Net Asset Value 2 16.20% (31.50)% (15.96)%
- --------------------------------------------------------------------------------------------
Ratios/Supplemental Data
Net assets, end of period (in thousands) $7,610 $6,395 $3,866
- --------------------------------------------------------------------------------------------
Average net assets (in thousands) $6,998 $6,979 $2,256
- --------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment loss (2.12)% (2.22)% (1.78)%
Expenses, gross 3.13% 2.74% 2.47%
Expenses, net 2.41% 4,5 2.67% 4,5 2.47% 4
- --------------------------------------------------------------------------------------------
Portfolio turnover rate 120% 263% 214%
1. For the period from November 1, 2000 (inception of offering) to October 31,
2001.
2. Assumes an investment on the business day before the first day of the fiscal
period (or inception of offering), with all dividends and distributions
reinvested in additional shares on the reinvestment date, and redemption at the
net asset value calculated on the last business day of the fiscal period. Sales
charges are not reflected in the total returns. Total returns are not annualized
for periods of less than one full year.
3. Annualized for periods of less than one full year.
4. Reduction to custodian expenses less than 0.01%.
5. Net of voluntary waiver of transfer agent fees.
See accompanying Notes to Financial Statements.
15 | OPPENHEIMER EMERGING GROWTH FUND
FINANCIAL HIGHLIGHTS CONTINUED
Six Months Year
Ended Ended
April 30, 2003 Oct. 31,
Class C (Unaudited) 2002 2001 1
- --------------------------------------------------------------------------------------------
Per Share Operating Data
Net asset value, beginning of period $ 5.75 $ 8.39 $10.00
- --------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment loss (.07) (.08) (.04)
Net realized and unrealized gain (loss) 1.00 (2.56) (1.54)
--------------------------------------------
Total from investment operations .93 (2.64) (1.58)
- --------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income -- -- (.03)
- --------------------------------------------------------------------------------------------
Net asset value, end of period $6.68 $5.75 $8.39
============================================
- --------------------------------------------------------------------------------------------
Total Return, at Net Asset Value 2 16.17% (31.47)% (15.88)%
- --------------------------------------------------------------------------------------------
Ratios/Supplemental Data
Net assets, end of period (in thousands) $3,493 $4,877 $2,356
- --------------------------------------------------------------------------------------------
Average net assets (in thousands) $3,786 $3,061 $1,022
- --------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment loss (2.15)% (2.25)% (1.76)%
Expenses, gross 2.92% 2.72% 2.46%
Expenses, net 2.46% 4,5 2.65% 4,5 2.46% 4
- --------------------------------------------------------------------------------------------
Portfolio turnover rate 120% 263% 214%
1. For the period from November 1, 2000 (inception of offering) to October 31,
2001.
2. Assumes an investment on the business day before the first day of the fiscal
period (or inception of offering), with all dividends and distributions
reinvested in additional shares on the reinvestment date, and redemption at the
net asset value calculated on the last business day of the fiscal period. Sales
charges are not reflected in the total returns. Total returns are not annualized
for periods of less than one full year.
3. Annualized for periods of less than one full year.
4. Reduction to custodian expenses less than 0.01%.
5. Net of voluntary waiver of transfer agent fees.
See accompanying Notes to Financial Statements.
16 | OPPENHEIMER EMERGING GROWTH FUND
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 $ 5.81 $ 8.43 $ 8.28
- --------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment loss (.06) (.08) (.05)
Net realized and unrealized gain (loss) 1.01 (2.54) .20
--------------------------------------------
Total from investment operations .95 (2.62) .15
- --------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income -- -- --
- --------------------------------------------------------------------------------------------
Net asset value, end of period $6.76 $5.81 $8.43
============================================
- --------------------------------------------------------------------------------------------
Total Return, at Net Asset Value 2 16.35% (31.08)% 1.81%
- --------------------------------------------------------------------------------------------
Ratios/Supplemental Data
Net assets, end of period (in thousands) $743 $594 $34
- --------------------------------------------------------------------------------------------
Average net assets (in thousands) $679 $412 $16
- --------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment loss (1.78)% (1.63)% (1.69)%
Expenses, gross 2.23% 2.18% 2.03%
Expenses, net 2.06% 4,5 2.11% 4,5 2.03% 4
- --------------------------------------------------------------------------------------------
Portfolio turnover rate 120% 263% 214%
1. For the period from March 1, 2001 (inception of offering) to October 31,
2001.
2. Assumes an investment on the business day before the first day of the fiscal
period (or inception of offering), with all dividends and distributions
reinvested in additional shares on the reinvestment date, and redemption at the
net asset value calculated on the last business day of the fiscal period. Sales
charges are not reflected in the total returns. Total returns are not annualized
for periods of less than one full year.
3. Annualized for periods of less than one full year.
4. Reduction to custodian expenses less than 0.01%.
5. Net of voluntary waiver of transfer agent fees.
See accompanying Notes to Financial Statements.
17 | OPPENHEIMER EMERGING GROWTH FUND
FINANCIAL HIGHLIGHTS CONTINUED
Six Months Year
Ended Ended
April 30, 2003 Oct. 31,
Class Y (Unaudited) 2002 2001 1
- --------------------------------------------------------------------------------------------
Per Share Operating Data
Net asset value, beginning of period $ 5.88 $ 8.47 $10.00
- --------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss) (.05) (.08) .02
Net realized and unrealized gain (loss) 1.05 (2.51) (1.51)
--------------------------------------------
Total from investment operations 1.00 (2.59) (1.49)
- --------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income -- -- (.04)
- --------------------------------------------------------------------------------------------
Net asset value, end of period $6.88 $5.88 $ 8.47
============================================
- --------------------------------------------------------------------------------------------
Total Return, at Net Asset Value 2 17.01% (30.58)% (14.99)%
- --------------------------------------------------------------------------------------------
Ratios/Supplemental Data
Net assets, end of period (in thousands) $1,107 $657 $232
- --------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 783 $532 $ 30
- --------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment loss (0.91)% (0.84)% (0.97)%
Expenses, gross 1.20% 1.48% 3.87%
Expenses, net 1.20% 4 1.29% 4,5 1.28% 4,5
- --------------------------------------------------------------------------------------------
Portfolio turnover rate 120% 263% 214%
1. For the period from November 1, 2000 (inception of offering) to October 31,
2001.
2. Assumes an investment on the business day before the first day of the fiscal
period (or inception of offering), with all dividends and distributions
reinvested in additional shares on the reinvestment date, and redemption at the
net asset value calculated on the last business day of the fiscal period. Sales
charges are not reflected in the total returns. Total returns are not annualized
for periods of less than one full year.
3. Annualized for periods of less than one full year.
4. Reduction to custodian expenses less than 0.01%.
5. Net of voluntary waiver of transfer agent fees.
See accompanying Notes to Financial Statements.
18 | OPPENHEIMER EMERGING GROWTH FUND
NOTES TO FINANCIAL STATEMENTS UNAUDITED
- --------------------------------------------------------------------------------
1. Significant Accounting Policies
Oppenheimer Emerging Growth 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 capital appreciation. The
Fund's investment advisor is OppenheimerFunds, Inc. (the Manager).
The Fund offers Class A, Class B, Class C, Class N and Class Y shares. Class
A shares are sold at their offering price, which is normally net asset value
plus a front-end sales charge. Class B, Class C and Class N shares are sold
without a front-end sales charge but may be subject to a contingent deferred
sales charge (CDSC). Class N shares are sold only through retirement plans.
Retirement plans that offer Class N shares may impose charges on those
accounts. Class Y shares are sold to certain institutional investors without
either a front-end sales charge or a CDSC. All classes of shares have identical
rights and voting privileges. Earnings, net assets and net asset value per
share may differ by minor amounts due to each class having its own expenses
directly attributable to that class. Classes A, B, C and N have separate
distribution and/or service plans. No such plan has been adopted for Class Y
shares. Class B shares will automatically convert to Class A shares six years
after the date of purchase. Effective May 1, 2003 the Fund will assess a 2% fee
on the proceeds of fund shares that are redeemed (either by selling or
exchanging to another Oppenheimer fund) within 30 days of their purchase. The
fee, which is retained by the Fund, is accounted for as an addition to paid-in
capital.
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.
19 | OPPENHEIMER EMERGING GROWTH FUND
NOTES TO FINANCIAL STATEMENTS UNAUDITED / CONTINUED
- --------------------------------------------------------------------------------
1. Significant Accounting Policies Continued
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 $16,246,448. 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
------------------------------
2009 $ 4,313,838
2010 10,396,300
-------------
Total $14,710,138
=============
- --------------------------------------------------------------------------------
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 $435 and payments of $45 were made to retired trustees, resulting in an
accumulated liability of $1,220 as of April 30, 2003.
The Board of Trustees has adopted a deferred compensation plan for
independent trustees that enables trustees to elect to defer receipt of all or
a portion of the annual compensation they are entitled to receive from the
Fund. Under the plan, the compensation deferred is invested by the Fund in the
fund(s) selected by the trustee. Deferral of trustees' fees under the plan will
not affect the net assets of the Fund, and will not materially affect the
Fund's assets, liabilities or net investment income per share.
- --------------------------------------------------------------------------------
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.
20 | OPPENHEIMER EMERGING GROWTH FUND
- --------------------------------------------------------------------------------
Classification of Dividends and Distributions to Shareholders. Net investment
income (loss) and net realized gain (loss) may differ for financial statement
and tax purposes. The character of dividends and distributions made during the
fiscal year from net investment income or net realized gains may differ from
their ultimate characterization for federal income tax purposes. Also, due to
timing of dividends and distributions, the fiscal year in which amounts are
distributed may differ from the fiscal year in which the income or net realized
gain was recorded by the Fund.
No distributions were paid during the six months ended April 30, 2003 and
the year ended October 31, 2002.
- --------------------------------------------------------------------------------
Investment Income. Dividend income is recorded on the ex-dividend date or upon
ex-dividend notification in the case of certain foreign dividends where the
ex-dividend date may have passed. Non-cash dividends included in dividend
income, if any, are recorded at the fair market value of the securities
received. Interest income, which includes accretion of discount and
amortization of premium, is accrued as earned.
- --------------------------------------------------------------------------------
Security Transactions. Security transactions are recorded on the trade date.
Realized gains and losses on securities sold are determined on the basis of
identified cost.
- --------------------------------------------------------------------------------
Other. The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported amounts
of assets and liabilities and disclosure of contingent assets and liabilities
at the date of the financial statements and the reported amounts of income and
expenses during the reporting period. Actual results could differ from those
estimates.
- --------------------------------------------------------------------------------
2. Shares of Beneficial Interest
The Fund has authorized an unlimited number of no par value shares of
beneficial interest of each class. Transactions in shares of beneficial
interest were as follows:
Six Months Ended April 30, 2003 Year Ended October 31, 2002
Shares Amount Shares Amount
- -----------------------------------------------------------------------------------------
Class A
Sold 1,620,418 $ 10,537,098 3,152,945 $ 26,194,011
Redeemed (1,695,734) (10,503,246) (2,260,696) (17,141,626)
-------------------------------------------------------------
Net increase (decrease) (75,316) $ 33,852 892,249 $ 9,052,385
=============================================================
- -----------------------------------------------------------------------------------------
Class B
Sold 416,869 $ 2,611,838 1,439,747 $ 11,365,085
Redeemed (390,334) (2,367,449) (787,181) (5,569,382)
-------------------------------------------------------------
Net increase 26,535 $ 244,389 652,566 $ 5,795,703
=============================================================
- -----------------------------------------------------------------------------------------
Class C
Sold 244,814 $ 1,512,881 1,063,885 $ 7,600,986
Redeemed (570,570) (3,464,506) (496,262) (4,062,878)
-------------------------------------------------------------
Net increase (decrease) (325,756) $ (1,951,625) 567,623 $ 3,538,108
=============================================================
21 | OPPENHEIMER EMERGING GROWTH FUND
NOTES TO FINANCIAL STATEMENTS UNAUDITED / CONTINUED
- -----------------------------------------------------------------------------------------
2. Shares of Beneficial Interest Continued
Six Months Ended April 30, 2003 Year Ended October 31, 2002
Shares Amount Shares Amount
- -----------------------------------------------------------------------------------------
Class N
Sold 96,097 $ 598,629 196,949 $ 1,522,929
Redeemed (88,458) (543,142) (98,624) (728,881)
-------------------------------------------------------------
Net increase 7,639 $ 55,487 98,325 $ 794,048
=============================================================
- -----------------------------------------------------------------------------------------
Class Y
Sold 88,108 $ 563,181 129,755 $ 1,009,456
Redeemed (38,901) (246,390) (45,335) (333,740)
-------------------------------------------------------------
Net increase 49,207 $ 316,791 84,420 $ 675,716
=============================================================
- --------------------------------------------------------------------------------
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
$36,637,981 and $37,280,985, respectively.
- --------------------------------------------------------------------------------
4. Fees and Other Transactions with Affiliates
Management Fees. Management fees paid to the Manager were in accordance with
the investment advisory agreement with the Fund which provides for a fee at an
annual rate of 1.00% of the first $500 million of average annual net assets;
0.90% of the next $500 million; and 0.85% of average annual net assets over $1
billion.
- --------------------------------------------------------------------------------
Transfer Agent Fees. OppenheimerFunds Services (OFS), a division of the
Manager, acts as the transfer and shareholder servicing agent for the Fund. The
Fund pays OFS a $19.75 per account fee.
Additionally, Class Y shares are subject to minimum fees of $5,000 for
assets of less than $10 million and $10,000 for assets of $10 million or more.
The Class Y shares are subject to the minimum fees in the event that the per
account fee does not equal or exceed the applicable minimum fees. OFS may
voluntarily waive the minimum fees.
OFS has voluntarily agreed to limit transfer and shareholder servicing agent
fees up to an annual rate of 0.35% of average annual net assets for all
classes. This undertaking may be amended or withdrawn at any time.
- --------------------------------------------------------------------------------
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.
22 | OPPENHEIMER EMERGING GROWTH 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 $40,551 $12,099 $584 $29,178 $5,369 $1,603
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 $-- $11,283 $305 $3,459
- --------------------------------------------------------------------------------
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 $19,906, all of which were paid by the
Distributor to recipients, and included $1,557 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.
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 $34,668 $28,845 $161,341 2.12%
Class C Plan 18,812 8,602 38,794 1.11
Class N Plan 1,682 1,596 7,904 1.06
23 | OPPENHEIMER EMERGING GROWTH FUND
NOTES TO FINANCIAL STATEMENTS UNAUDITED / CONTINUED
- --------------------------------------------------------------------------------
5. Borrowing and Lending Arrangements
Bank Borrowings. The Fund had the ability to borrow from banks for temporary or
emergency purposes. Asset coverage for borrowings must be at least 300%. The
Fund and other Oppenheimer funds participated in a $400 million unsecured line
of credit from a bank, for liquidity purposes. Under that line of credit, each
fund was charged interest on its borrowings at a rate equal to the Federal
Funds rate plus 0.45%. The Fund paid a commitment fee on its pro rata share of
the average unutilized amount of the credit facility at a rate of 0.08% per
annum. The credit facility was terminated on November 12, 2002, when the Fund
entered into the interfund borrowing and lending arrangements described below.
The Fund had no outstanding borrowings under the credit facility through
November 12, 2002.
- --------------------------------------------------------------------------------
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.
24 | OPPENHEIMER EMERGING GROWTH 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)