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 811-10153
Oppenheimer Select Managers Series - Gartmore Millennium Growth Fund II
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(Exact name of registrant as specified in charter)
6803 SOUTH TUCSON WAY, CENTENNIAL, COLORADO 80112-3924
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(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
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Date of fiscal year end: November 30
Date of reporting period: December 1, 2002 - May 31, 2003
ITEM 1. REPORTS TO STOCKHOLDERS.
STATEMENT OF INVESTMENTS May 31, 2003 / Unaudited
Market Value
Shares See Note 1
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Common Stocks--99.8%
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Consumer Discretionary--23.9%
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Automobiles--1.0%
Monaco Coach Corp. 1 2,778 $ 40,837
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Hotels, Restaurants & Leisure--5.1%
California Pizza Kitchen, Inc. 1 1,829 37,202
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Cheesecake Factory, Inc. (The) 1 1,022 34,676
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Darden Restaurants, Inc. 748 14,818
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International Game Technology 1 327 28,789
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Ruby Tuesday, Inc. 1,265 29,184
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Starbucks Corp. 1 2,110 51,993
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Yum! Brands, Inc. 1 672 18,789
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215,451
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Household Durables--1.5%
Furniture Brands International, Inc. 1 1,786 46,936
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La-Z-Boy, Inc. 732 16,038
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62,974
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Internet & Catalog Retail--0.9%
Amazon.com, Inc. 1 1,100 39,534
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Leisure Equipment & Products--1.7%
Mattel, Inc. 1 2,580 55,496
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Polaris Industries, Inc. 267 16,049
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71,545
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Media--6.4%
Cox Radio, Inc., Cl. A 1 3,027 68,985
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EchoStar Communications Corp., Cl. A 1 1,300 43,654
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Getty Images, Inc. 1 1,219 49,248
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Insight Communications Co., Inc. 1 1,447 18,898
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Sirius Satellite Radio, Inc. 1 29,800 47,680
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XM Satellite Radio Holdings, Inc. 1 3,900 44,226
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272,691
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Multiline Retail--1.6%
Family Dollar Stores, Inc. 830 30,253
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Fred's, Inc. 1,044 38,409
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68,662
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Specialty Retail--5.0%
Bed Bath & Beyond, Inc. 1 1,325 55,438
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Guitar Center, Inc. 1 2,462 58,965
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Staples, Inc. 1 1,885 36,550
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Tractor Supply Co. 1 923 41,812
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United Rentals, Inc. 1 1,560 19,937
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212,702
Market Value
Shares See Note 1
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Textiles, Apparel & Luxury Goods--0.7%
Coach, Inc. 1 618 $ 30,362
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Consumer Staples--1.6%
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Food & Staples Retailing--1.2%
Performance Food Group Co. 1 1,430 51,766
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Food Products--0.4%
Wrigley, William Jr. Co. 313 17,684
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Energy--3.8%
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Energy Equipment & Services--2.3%
Nabors Industries Ltd. 1 470 21,188
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Pride International, Inc. 1 2,140 40,724
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Smith International, Inc. 1 886 36,228
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98,140
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Oil & Gas--1.5%
Burlington Resources, Inc. 566 30,162
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Noble Energy, Inc. 897 32,678
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62,840
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Financials--7.6%
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Commercial Banks--3.4%
BankUnited Financial Corp., Cl. A 1 1,900 34,998
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Commerce Bancorp, Inc. 1,209 46,124
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Net.B@nk, Inc. 3,400 45,118
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Synovus Financial Corp. 832 18,986
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145,226
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Diversified Financial Services--2.7%
E-LOAN, Inc. 1 4,700 21,338
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iDine Rewards Network, Inc. 1 3,900 41,886
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Moody's Corp. 310 16,166
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World Acceptance Corp. 1 2,400 33,888
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113,278
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Insurance--1.5%
HCC Insurance Holdings, Inc. 1,361 38,993
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Lincoln National Corp. 788 27,422
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66,415
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Health Care--29.7%
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Biotechnology--7.4%
Abgenix, Inc. 1 2,754 29,606
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Biopure Corp. 1 5,500 32,890
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Cell Therapeutics, Inc. 1 1,600 20,016
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Chiron Corp. 1 356 15,696
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Genentech, Inc. 1 1,400 87,654
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Genta, Inc. 1 1,800 20,862
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Genzyme Corp. (General Division) 1 880 41,791
5 | OPPENHEIMER SELECT MANAGERS GARTMORE MILLENNIUM GROWTH FUND II
STATEMENT OF INVESTMENTS Unaudited / Continued
Market Value
Shares See Note 1
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Biotechnology Continued
Gilead Sciences, Inc. 1 675 $ 35,613
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Medimmune, Inc. 1 874 30,983
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315,111
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Health Care Equipment & Supplies--2.6%
Dentsply International, Inc. 513 19,181
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St. Jude Medical, Inc. 1 648 36,353
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Stryker Corp. 476 32,054
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Varian Medical Systems, Inc. 1 359 20,014
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107,602
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Health Care Providers & Services--16.9%
Advisory Board Co. (The) 1 4,245 161,989
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American Healthways, Inc. 1 1,556 40,193
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AmSurg Corp. 1 2,180 61,411
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Andrx Corp. 1 1,556 29,953
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Anthem, Inc. 1 1,069 78,411
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Caremark Rx, Inc. 1 1,818 41,050
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Express Scripts, Inc. 1 440 28,794
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Health Management Assn., Inc., Cl. A 1,124 20,963
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ICON plc, Sponsored ADR 1 1,269 34,897
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Laboratory Corp. of America Holdings 1 566 18,197
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Schein (Henry), Inc. 1 489 24,039
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Universal Health Services, Inc., Cl. B 1 452 20,525
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VistaCare, Inc., Cl. A 1 3,602 76,723
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WellPoint Health Networks, Inc. 1 967 82,524
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719,669
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Pharmaceuticals--2.8%
Allergan, Inc. 520 37,497
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Impax Laboratories, Inc. 1 1,300 11,076
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IVAX Corp. 1 1,077 18,643
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Medicis Pharmaceutical Corp., Cl. A 1 598 33,488
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Mylan Laboratories, Inc. 678 19,581
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120,285
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Industrials--9.2%
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Airlines--0.5%
SkyWest, Inc. 1,415 19,357
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Commercial Services & Supplies--7.2%
Ceridian Corp. 1 3,673 63,359
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Cintas Corp. 490 18,140
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Corporate Executive Board Co. 1 957 40,385
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H&R Block, Inc. 1,033 42,291
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Iron Mountain, Inc. 1 1,165 46,018
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Portfolio Recovery Associates, Inc. 1 2,495 74,750
Market Value
Shares See Note 1
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Commercial Services & Supplies Continued
University of Phoenix Online 1 455 $ 20,789
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305,732
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Machinery--0.5%
Danaher Corp. 339 22,686
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Road & Rail--0.6%
Knight Transportation, Inc. 1 1,063 26,958
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Trading Companies & Distributors--0.4%
Fastenal Co. 549 18,353
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Information Technology--21.3%
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Communications Equipment--6.5%
Avanex Corp. 1 21,600 89,640
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Comtech Telecommunications Corp. 1 1,000 21,301
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Enterasys Networks, Inc. 1 23,800 82,586
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Packeteer, Inc. 1 2,200 34,056
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Sonus Networks, Inc. 1 4,700 21,855
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Tellium, Inc. 1 28,700 29,274
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278,712
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Computers & Peripherals--5.0%
ATI Technologies, Inc. 1 5,800 48,430
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Maxtor Corp. 1 4,600 34,592
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Sigma Designs, Inc. 1 12,450 130,725
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213,747
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Electronic Equipment & Instruments--1.6%
Applied Films Corp. 1 900 20,025
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PerkinElmer, Inc. 1,800 23,022
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Waters Corp. 1 854 24,219
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67,266
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Internet Software & Services--0.4%
Netegrity, Inc. 1 3,100 18,848
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IT Services--1.4%
Computer Horizons Corp. 1 4,600 21,666
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MPS Group, Inc. 1 2,610 18,714
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Sapient Corp. 1 8,100 19,116
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59,496
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Semiconductors & Semiconductor Equipment--4.2%
Conexant Systems, Inc. 1 13,600 52,496
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GlobespanVirata, Inc. 1 5,800 48,082
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Marvell Technology Group Ltd. 1 2,400 76,104
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176,682
6 | OPPENHEIMER SELECT MANAGERS GARTMORE MILLENNIUM GROWTH FUND II
Market Value
Shares See Note
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Software--2.2%
FactSet Research Systems, Inc. 1,397 $ 53,785
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Veritas Software Corp. 1 1,400 38,850
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92,635
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Materials--0.5%
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Chemicals--0.5%
Ecolab, Inc. 371 19,941
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Telecommunication Services--2.2%
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Wireless Telecommunication Services--2.2%
Alvarion Ltd. 1 5,900 20,355
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AO VimpelCom, Sponsored ADR 1 700 31,500
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Nextel Communications, Inc., Cl. A 1 2,900 43,471
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95,326
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Total Common Stocks (Cost $3,661,191) 4,248,513
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Total Investments, at Value
(Cost $3,661,191) 99.8% 4,248,513
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Other Assets Net of Liabilities 0.2 7,847
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Net Assets 100.0% $ 4,256,360
======================
Footnotes to Statement of Investments
1. Non-income producing security.
See accompanying Notes to Financial Statements.
7 | OPPENHEIMER SELECT MANAGERS GARTMORE MILLENNIUM GROWTH FUND II
STATEMENT OF ASSETS AND LIABILITIES Unaudited
May 31, 2003
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Assets
Investments, at value (cost $3,661,191)--
see accompanying statement $4,248,513
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Receivables and other assets:
Investments sold 445,625
Shares of beneficial interest sold 38,837
Dividends 310
Other 431
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Total assets 4,733,716
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Liabilities
Bank overdraft 136,301
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Payables and other liabilities:
Investments purchased 258,783
Shares of beneficial interest redeemed 65,020
Shareholder reports 6,626
Transfer and shareholder servicing agent fees 340
Distribution and service plan fees 328
Trustees' compensation 219
Other 9,739
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Total liabilities 477,356
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Net Assets $4,256,360
==========
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Composition of Net Assets
Paid-in capital $6,022,613
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Accumulated net investment loss (25,505)
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Accumulated net realized loss on investment transactions (2,328,070)
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Net unrealized appreciation on investments 587,322
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Net Assets $4,256,360
==========
8 | OPPENHEIMER SELECT MANAGERS GARTMORE MILLENNIUM GROWTH FUND II
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Net Asset Value Per Share
Class A Shares:
Net asset value and redemption price per share (based on net assets of
$3,527,352 and 547,582 shares of beneficial interest outstanding) $6.44
Maximum offering price per share (net asset value plus sales charge of
5.75% of offering price) $6.83
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Class B Shares:
Net asset value, redemption price (excludes applicable contingent
deferred sales charge) and offering price per share (based on net
assets of $223,560 and 35,304 shares of beneficial interest
outstanding) $6.33
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Class C Shares:
Net asset value, redemption price (excludes applicable contingent
deferred sales charge) and offering price per share (based on net
assets of $402,333 and 63,563 shares of beneficial interest
outstanding) $6.33
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Class N Shares:
Net asset value, redemption price (excludes applicable contingent
deferred sales charge) and offering price per share (based on net
assets of $102,465 and 16,023 shares of beneficial interest
outstanding) $6.39
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Class Y Shares:
Net asset value, redemption price and offering price per share
(based on net assets of $650 and 100 shares of beneficial interest
outstanding) $6.50
See accompanying Notes to Financial Statements.
9 | OPPENHEIMER SELECT MANAGERS GARTMORE MILLENNIUM GROWTH FUND II
STATEMENT OF OPERATIONS Unaudited
For the Six Months Ended May 31, 2003
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Investment Income
Dividends $5,309
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Interest 520
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Total investment income 5,829
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Expenses
Management fees 20,463
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Distribution and service plan fees:
Class A 327
Class B 992
Class C 831
Class N 183
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Transfer and shareholder servicing agent fees:
Class A 1,436
Class B 1,170
Class C 802
Class N 392
Class Y 8
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Legal, auditing and other professional fees 7,653
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Trustees' compensation 2,430
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Shareholder reports 1,551
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Custodian fees and expenses 72
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Other 1,075
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Total expenses 39,385
Less voluntary reimbursement of expenses (5,862)
Less voluntary waiver of transfer and shareholder servicing agent fees--Class B (1,154)
Less voluntary waiver of transfer and shareholder servicing agent fees--Class C (667)
Less voluntary waiver of transfer and shareholder servicing agent fees--Class N (360)
Less voluntary waiver of transfer and shareholder servicing agent fees--Class Y (8)
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Net expenses 31,334
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Net Investment Loss (25,505)
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Realized and Unrealized Gain (Loss)
Net realized loss on investments (72,345)
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Net change in unrealized appreciation on investments 548,766
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Net realized and unrealized gain 476,421
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Net Increase in Net Assets Resulting from Operations $450,916
===========
See accompanying Notes to Financial Statements.
10 | OPPENHEIMER SELECT MANAGERS GARTMORE MILLENNIUM GROWTH FUND II
STATEMENTS OF CHANGES IN NET ASSETS
Six Months Year
Ended Ended
May 31, 2003 November 30,
(Unaudited) 2002
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Operations
Net investment loss $(25,505) $(57,525)
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Net realized loss (72,345) (885,171)
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Net change in unrealized appreciation (depreciation) 548,766 (121,962)
---------------------------
Net increase (decrease) in net assets resulting from operations 450,916 (1,064,658)
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Beneficial Interest Transactions
Net increase (decrease) in net assets
resulting from beneficial interest
transactions:
Class A 10,651 79,719
Class B (3,689) 133,805
Class C 209,654 79,667
Class N 22,718 50,078
Class Y -- --
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Net Assets
Total increase (decrease) 690,250 (721,389)
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Beginning of period 3,566,110 4,287,499
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End of period [including accumulated net
investment loss of $25,505 for the
six months ended May 31, 2003] $4,256,360 $3,566,110
---------------------------
See accompanying Notes to Financial Statements.
11 | OPPENHEIMER SELECT MANAGERS GARTMORE MILLENNIUM GROWTH FUND II
FINANCIAL HIGHLIGHTS
Six Months Year
Ended Ended
May 31, 2003 Nov. 30,
CLASS A (Unaudited) 2002 2001 1
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Per Share Operating Data
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Net asset value, beginning of period $5.77 $ 7.56 $10.00
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Income (loss) from investment operations:
Net investment loss (.04) (.09) (.07)
Net realized and unrealized gain (loss) .71 (1.70) (2.37)
---------------------------------
Total from investment operations .67 (1.79) (2.44)
Net asset value, end of period $6.44 $5.77 $ 7.56
=================================
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Total Return, at Net Asset Value 2 11.61% (23.68)% (24.40)%
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Ratios/Supplemental Data
Net assets, end of period (in thousands) $3,527 $3,148 $4,046
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Average net assets (in thousands) $2,982 $3,560 $4,255
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Ratios to average net assets: 3
Net investment loss (1.41)% (1.42)% (1.04)%
Expenses, gross 2.07% 2.24% 1.75%
Expenses, net 1.73% 4 1.73% 4,5 1.75% 6
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Portfolio turnover rate 228% 408% 370%
1. For the period from February 16, 2001 (inception of offering) to November 30,
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. Net of voluntary reimbursement of expenses.
5. Net of voluntary waiver of transfer agent fees.
6. Voluntary reimbursement of expenses less than 0.01%.
See accompanying Notes to Financial Statements.
12 | OPPENHEIMER SELECT MANAGERS GARTMORE MILLENNIUM GROWTH FUND II
Six Months Year
Ended Ended
May 31, 2003 Nov. 30,
CLASS B (Unaudited) 2002 2001 1
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Per Share Operating Data
Net asset value, beginning of period $ 5.69 $ 7.51 $10.00
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Income (loss) from investment operations:
Net investment loss (.06) (.05) (.14)
Net realized and unrealized gain (loss) .70 (1.77) (2.35)
------------------------------------
Total from investment operations .64 (1.82) (2.49)
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Net asset value, end of period $6.33 $5.69 $ 7.51
====================================
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Total Return, at Net Asset Value 2 11.25% (24.23)% (24.90)%
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Ratios/Supplemental Data
Net assets, end of period (in thousands) $224 $193 $ 95
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Average net assets (in thousands) $199 $148 $118
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Ratios to average net assets: 3
Net investment loss (2.17)% (2.16)% (1.93)%
Expenses, gross 4.13% 3.66% 2.74%
Expenses, net 2.63% 4,5 2.77% 4,5 2.57% 4
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Portfolio turnover rate 228% 408% 370%
1. For the period from February 16, 2001 (inception of offering) to November 30,
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. Net of voluntary reimbursement of expenses.
5. Net of voluntary waiver of transfer agent fees.
See accompanying Notes to Financial Statements.
13 | OPPENHEIMER SELECT MANAGERS GARTMORE MILLENNIUM GROWTH FUND II
FINANCIAL HIGHLIGHTS Continued
Six Months Year
Ended Ended
May 31, 2003 Nov. 30,
CLASS C (Unaudited) 2002 2001 1
- ----------------------------------------------------------------------------------------------
Per Share Operating Data
Net asset value, beginning of period $ 5.69 $7.51 $10.00
- ----------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment loss (.03) (.11) (.04)
Net realized and unrealized gain (loss) .67 (1.71) (2.45)
-----------------------------------
Total from investment operations .64 (1.82) (2.49)
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Net asset value, end of period $6.33 $5.69 $ 7.51
==================================
- ----------------------------------------------------------------------------------------------
Total Return, at Net Asset Value 2 11.25% (24.23)% (24.90)%
- ----------------------------------------------------------------------------------------------
Ratios/Supplemental Data
Net assets, end of period (in thousands) $402 $156 $114
- ----------------------------------------------------------------------------------------------
Average net assets (in thousands) $168 $131 $ 40
- ----------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment loss (2.18)% (2.16)% (1.93)%
Expenses, gross 3.90% 3.51% 2.76%
Expenses, net 2.76% 4,5 2.79% 4,5 2.28% 4
- ----------------------------------------------------------------------------------------------
Portfolio turnover rate 228% 408% 370%
1. For the period from February 16, 2001 (inception of offering) to November 30,
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. Net of voluntary reimbursement of expenses.
5. Net of voluntary waiver of transfer agent fees.
See accompanying Notes to Financial Statements.
14 | OPPENHEIMER SELECT MANAGERS GARTMORE MILLENNIUM GROWTH FUND II
Six Months Year
Ended Ended
May 31, 2003 Nov. 30,
CLASS N (Unaudited) 2002 2001 1
- ------------------------------------------------------------------------------------------
Per Share Operating Data
Net asset value, beginning of period $5.73 $7.53 $9.06
- ------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment loss (.05) (.10) (.03)
Net realized and unrealized gain (loss) .71 (1.70) (1.50)
-----------------------------------
Total from investment operations .66 (1.80) (1.53)
- ------------------------------------------------------------------------------------------
Net asset value, end of period $6.39 $5.73 $7.53
===================================
- ------------------------------------------------------------------------------------------
Total Return, at Net Asset Value 2 11.52% (23.90)% (16.89)%
- ------------------------------------------------------------------------------------------
Ratios/Supplemental Data
Net assets, end of period (in thousands) $102 $68 $31
- ------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 74 $50 $ 9
- ------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment loss (1.66)% (1.67)% (1.53)%
Expenses, gross 3.51% 3.14% 2.27%
Expenses, net 2.19% 4,5 2.28% 4,5 1.74% 4
- ------------------------------------------------------------------------------------------
Portfolio turnover rate 228% 408% 370%
1. For the period from March 1, 2001 (inception of offering) to November 30,
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. Net of voluntary reimbursement of expenses.
5. Net of voluntary waiver of transfer agent fees.
See accompanying Notes to Financial Statements.
15 | OPPENHEIMER SELECT MANAGERS GARTMORE MILLENNIUM GROWTH FUND II
FINANCIAL HIGHLIGHTS Continued
Six Months Year
Ended Ended
May 31, 2003 Nov. 30,
CLASS Y (Unaudited) 2002 2001 1
- ------------------------------------------------------------------------------------------
Per Share Operating Data
Net asset value, beginning of period $ 5.79 $ 7.57 $10.00
- ------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment loss (.01) (.08) (.05)
Net realized and unrealized gain (loss) .72 (1.70) (2.38)
-----------------------------------
Total from investment operations .71 (1.78) (2.43)
- ------------------------------------------------------------------------------------------
Net asset value, end of period $6.50 $5.79 $ 7.57
===================================
- ------------------------------------------------------------------------------------------
Total Return, at Net Asset Value 2 12.26% (23.51)% (24.30)%
- ------------------------------------------------------------------------------------------
Ratios/Supplemental Data
Net assets, end of period (in thousands) $1 $1 $1
- ------------------------------------------------------------------------------------------
Average net assets (in thousands) $1 $1 $1
- ------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment loss (0.20)% (0.80)% (0.63)%
Expenses, gross 3.55% 88.69% 501.80%
Expenses, net 1.61% 4,5 1.62% 4,5 1.45% 4,5
- ------------------------------------------------------------------------------------------
Portfolio turnover rate 228% 408% 370%
1. For the period from February 16, 2001 (inception of offering) to November 30,
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. Net of voluntary reimbursement of expenses.
5. Net of voluntary waiver of transfer agent fees.
See accompanying Notes to Financial Statements.
16 | OPPENHEIMER SELECT MANAGERS GARTMORE MILLENNIUM GROWTH FUND II
NOTES TO FINANCIAL STATEMENTS Unaudited
- --------------------------------------------------------------------------------
1. Significant Accounting Policies
Oppenheimer Select Managers Gartmore Millennium Growth Fund II (the Fund), a
series of Oppenheimer Select Managers, is an open-end management investment
company registered under the Investment Company Act of 1940, as amended. The
Fund's investment objective is to seek long-term capital appreciation. The
Fund's investment advisor is OppenheimerFunds, Inc. (the Manager). The Manager
has entered into a sub-advisory agreement with Gartmore Mutual Fund Capital
Trust (the Sub-Advisor).
The Fund offers Class A, Class B, Class C, Class N and Class Y shares. Class
A shares are sold at their offering price, which is normally net asset value
plus a front-end sales charge. Class B, Class C and Class N shares are sold
without a front-end sales charge but may be subject to a contingent deferred
sales charge (CDSC). Class N shares are sold only through retirement plans.
Retirement plans that offer Class N shares may impose charges on those
accounts. Class Y shares are sold to certain institutional investors without
either a front-end sales charge or a CDSC. All classes of shares have identical
rights and voting privileges. Earnings, net assets and net asset value per
share may differ by minor amounts due to each class having its own expenses
directly attributable to that class. Classes A, B, C and N have separate
distribution and/or service plans. No such plan has been adopted for Class Y
shares. Class B shares will automatically convert to Class A shares six years
after the date of purchase.
The following is a summary of significant accounting policies consistently
followed by the Fund.
- --------------------------------------------------------------------------------
Securities Valuation. Securities listed or traded on National Stock Exchanges
or other domestic or foreign exchanges are valued based on the last sale price
of the security traded on that exchange prior to the time when the Fund's
assets are valued. In the absence of a sale, the security is valued at the last
sale price on the prior trading day, if it is within the spread of the closing
bid and asked prices, and if not, at the closing bid price. Securities
(including restricted securities) for which quotations are not readily
available are valued primarily using dealer-supplied valuations, a portfolio
pricing service authorized by the Board of Trustees, or at their fair value.
Fair value is determined in good faith under consistently applied procedures
under the supervision of the Board of Trustees. Short-term "money market type"
debt securities with remaining maturities of sixty days or less are valued at
amortized cost (which approximates market value).
- --------------------------------------------------------------------------------
Joint Repurchase Agreements. The Fund, along with other affiliated funds of the
Manager, may transfer uninvested cash balances into one or more joint
repurchase agreement accounts. These balances are invested in one or more
repurchase agreements, secured by U.S. government securities. Securities
pledged as collateral for repurchase agreements are held by a custodian bank
until the agreements mature. Each agreement requires that the market value of
the collateral be sufficient to cover payments of interest and principal;
however, in the event of default by the other party to the agreement, retention
of the collateral may be subject to legal proceedings.
- --------------------------------------------------------------------------------
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 May 31, 2003, the Fund had available for federal income tax purposes
an estimated unused capital loss carryforward of $2,328,070. 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 May 31, 2003, the Fund did not use carryforward to offset capital
gains realized. During the year ended November 30, 2002, the Fund did not use
carryforward to offset capital gains realized.
17 | OPPENHEIMER SELECT MANAGERS GARTMORE MILLENNIUM GROWTH FUND II
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
1. Significant Accounting Policies Continued
As of November 30, 2002, the Fund had available for federal income tax
purposes unused capital loss carryforwards as follows:
Expiring
-------------------------
2009 $ 1,370,554
2010 880,670
-----------
Total $2,251,224
===========
- --------------------------------------------------------------------------------
Dividends and Distributions to Shareholders. Dividends and distributions to
shareholders, which are determined in accordance with income tax regulations,
are recorded on the ex-dividend date.
- --------------------------------------------------------------------------------
Classification of Dividends and Distributions to Shareholders. Net investment
income (loss) and net realized gain (loss) may differ for financial statement
and tax purposes. The character of dividends and distributions made during the
fiscal year from net investment income or net realized gains may differ from
their ultimate characterization for federal income tax purposes. Also, due to
timing of dividends and distributions, the fiscal year in which amounts are
distributed may differ from the fiscal year in which the income or net realized
gain was recorded by the Fund.
No distributions were paid during the six months ended May 31, 2003 and the
year ended November 30, 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 May 31, 2003 Year Ended November 30, 2002
Shares Amount Shares Amount
- -------------------------------------------------------------------------------------------
Class A
Sold 9,542 $ 53,707 30,084 $196,309
Redeemed (7,956) (43,056) (19,548) (116,590)
---------------------------------------------------------------
Net increase 1,586 $ 10,651 10,536 $ 79,719
==============================================================
- -------------------------------------------------------------------------------------------
Class B
Sold 20,768 $ 112,778 42,282 $258,845
Redeemed (19,476) (116,467) (20,912) (125,040)
---------------------------------------------------------------
Net increase (decrease) 1,292 $ (3,689) 21,370 $133,805
==============================================================
18 | OPPENHEIMER SELECT MANAGERS GARTMORE MILLENNIUM GROWTH FUND II
Six Months Ended May 31, 2003 Year Ended November 30, 2002
Shares Amount Shares Amount
- -------------------------------------------------------------------------------------------
Class C
Sold 41,510 $ 238,897 20,939 $138,980
Redeemed (5,399) (29,243) (8,689) (59,313)
---------------------------------------------------------------
Net increase 36,111 $209,654 12,250 $79,667
==============================================================
- -------------------------------------------------------------------------------------------
Class N
Sold 4,285 $ 23,573 7,953 $ 51,460
Redeemed (144) (855) (237) (1,382)
---------------------------------------------------------------
Net increase 4,141 $ 22,718 7,716 $ 50,078
==============================================================
- -------------------------------------------------------------------------------------------
Class Y
Sold -- $ -- -- $ --
Redeemed -- -- -- --
---------------------------------------------------------------
Net increase (decrease) -- $ -- -- $ --
==============================================================
- --------------------------------------------------------------------------------
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 May 31, 2003, were
$7,989,407 and $7,941,990, 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 1.20% of the first $400 million of average annual net assets of
the Fund, 1.10% of the next $400 million, and 1.00% of average annual net
assets in excess of $800 million. The Manager has voluntarily undertaken to
assume certain Fund expenses. The Manager reserves the right to amend or
terminate that expense assumption at any time.
- --------------------------------------------------------------------------------
Sub-Advisor Fees. The Manager retains Gartmore Mutual Fund Capital Trust (the
Sub-Advisor) to provide the day-to-day portfolio management of the Fund. For
the six months ended May 31, 2003, the Manager paid $11,627 to the Sub-Advisor
for services to the Fund.
- --------------------------------------------------------------------------------
Transfer Agent Fees. OppenheimerFunds Services (OFS), a division of the
Manager, acts as the transfer and shareholder servicing agent for the Fund. The
Fund pays OFS a $19.75 per account fee.
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.
19 | OPPENHEIMER SELECT MANAGERS GARTMORE MILLENNIUM GROWTH FUND II
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
4. Fees and Other Transactions with Affiliates Continued
The compensation paid to (or retained by) the Distributor from the sale of
shares or on the redemption of shares is shown in the table below for the
period indicated.
Aggregate Class A Concessions Concessions Concessions Concessions
Front-End Front-End on Class A on Class B on Class C on Class N
Sales Charges Sales Charges Shares Shares Shares Shares
on Class A Retained by Advanced by Advanced by Advanced by Advanced by
Six Months Ended Shares Distributor Distributor 1 Distributor 1 Distributor 1 Distributor 1
- ------------------------------------------------------------------------------------------------------------------------------------
May 31, 2003 $1,114 $151,402 $7 $2,084 $484 $229
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 Deferred Contingent Deferred Contingent Deferred Contingent Deferred
Sales Charges Sales Charges Sales Charges Sales Charges
Retained by Retained by Retained by Retained by
Six Months Ended Distributor Distributor Distributor Distributor
- ------------------------------------------------------------------------------------------------------------------------------------
May 31, 2003 $-- $1,842 $-- $--
- --------------------------------------------------------------------------------
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 May 31, 2003, payments
under the Class A Plan totaled $327, all of which were paid by the Distributor
to recipients, and included $82 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 May 31,
2003, were as follows:
Distributor's Aggregate
Distributor's Aggregate Unreimbursed
Total Payments Amount Retained Unreimbursed Expenses Expenses as % of
Under Plan by Distributor Under Plan Net Assets of Class
- --------------------------------------------------------------------------------------------------------------
Class B Plan $992 $836 $39,155 17.51%
Class C Plan 831 458 27,590 6.86
Class N Plan 183 140 8,142 7.95
- --------------------------------------------------------------------------------
5. 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 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
20 | OPPENHEIMER SELECT MANAGERS GARTMORE MILLENNIUM GROWTH FUND II
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 May 31, 2003.
- --------------------------------------------------------------------------------
6. Fund Reorganization
In April, 2003, the Board of Trustees approved the reorganization of
Oppenheimer Select Managers Gartmore Millennium Growth Fund II with and into
Oppenheimer MidCap Fund. Shareholders of Oppenheimer Select Managers Gartmore
Millennium Growth Fund II will be asked to approve a reorganization whereby
shareholders would receive shares of Oppenheimer MidCap Fund. If shareholder
approval is received, it is expected that the reorganization will occur during
the third quarter of calendar 2003.
21 | OPPENHEIMER SELECT MANAGERS GARTMORE MILLENNIUM GROWTH FUND II
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 May 31, 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)