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 - Mercury Advisors Focus Growth Fund
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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 ASSETS AND LIABILITIES Unaudited
May 31, 2003
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Assets
Investment in Master Focus Twenty Trust $ 3,804,585
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Receivables and other assets:
Shares of beneficial interest sold 3,949
Other 4,608
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Total assets 3,813,142
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Liabilities
Payables and other liabilities:
Legal, auditing and other professional fees 8,664
Distribution and service plan fees 1,474
Shares of beneficial interest redeemed 1,235
Transfer and shareholder servicing agent fees 1,019
Registration and filing fees 413
Trustees' compensation 20
Other 701
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Total liabilities 13,526
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Net Assets $3,799,616
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Composition of Net Assets
Paid-in capital $ 5,210,847
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Accumulated net investment loss (23,035)
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Accumulated net realized loss on investment transactions (1,401,225)
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Net unrealized appreciation on investments 13,029
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Net Assets $3,799,616
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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 $1,964,849
and 721,732 shares of beneficial interest outstanding) $2.72
Maximum offering price per share (net asset value plus sales charge of 5.75% of offering price) $2.89
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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 $1,016,183 and 379,905 shares of beneficial interest outstanding) $2.67
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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 $727,745 and 272,100 shares of beneficial interest outstanding) $2.67
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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 $90,565 and 33,391 shares of beneficial interest outstanding) $2.71
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Class Y Shares:
Net asset value, redemption price and offering price per share (based on net assets of $274
and 100 shares of beneficial interest outstanding) $2.74
See accompanying Notes to Financial Statements.
5 OPPENHEIMER SELECT MANAGERS MERCURY ADVISORS FOCUS GROWTH FUND
STATEMENT OF OPERATIONS Unaudited
For the Six Months Ended May 31, 2003
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Net Investment Loss Allocated from Master Focus Twenty Trust
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Investment Income $10,780
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Expenses 11,831
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Net Investment Loss Allocated from Master Focus Twenty Trust (1,051)
Fund Income and Expenses
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Investment Income
Interest income from short-term obligations 2
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Expenses
Distribution and service plan fees:
Class A 2,156
Class B 3,968
Class C 3,209
Class N 187
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Transfer and shareholder servicing agent fees:
Class A 4,126
Class B 2,269
Class C 1,840
Class N 379
Class Y 11
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Administrative fees 8,086
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Shareholder reports 6,953
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Legal, auditing and other professional fees 6,255
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Trustees' compensation 2,436
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Custodian fees and expenses 23
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Other 1,402
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Total expenses 43,300
Less voluntary reimbursement of expenses (17,969)
Less voluntary waiver of transfer and shareholder servicing agent fees--Class A (1,152)
Less voluntary waiver of transfer and shareholder servicing agent fees--Class B (1,079)
Less voluntary waiver of transfer and shareholder servicing agent fees--Class C (787)
Less voluntary waiver of transfer and shareholder servicing agent fees--Class N (316)
Less voluntary waiver of transfer and shareholder servicing agent fees--Class Y (11)
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Net expenses 21,986
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Net Investment Loss (23,035)
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Realized and Unrealized Gain (Loss)
Net realized gain on investments 465,326
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Net change in unrealized depreciation on investments (144,584)
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Net realized and unrealized gain 320,742
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Net Increase in Net Assets Resulting from Operations $297,707
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See accompanying Notes to Financial Statements.
6 OPPENHEIMER SELECT MANAGERS MERCURY ADVISORS FOCUS GROWTH FUND
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 $ (23,035) $ (50,693)
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Net realized gain (loss) 465,326 (1,359,626)
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Net change in unrealized appreciation (depreciation) (144,584) 146,859
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Net increase (decrease) in net assets resulting from operations 297,707 (1,263,460)
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Beneficial Interest Transactions
Net increase in net assets resulting from beneficial interest transactions:
Class A 204,846 1,177,797
Class B 151,224 541,064
Class C 24,811 542,491
Class N 11,455 95,080
Class Y -- --
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Net Assets
Total increase 690,043 1,092,972
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Beginning of period 3,109,573 2,016,601
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End of period [including accumulated net investment loss of $23,035
for the six months ended May 31, 2003] $3,799,616 $3,109,573
===========================
See accompanying Notes to Financial Statements.
7 OPPENHEIMER SELECT MANAGERS MERCURY ADVISORS FOCUS GROWTH FUND
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
Net asset value, beginning of period $2.52 $ 3.95 $10.00
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Income (loss) from investment operations:
Net investment loss (.01) (.04) (.02)
Net realized and unrealized gain (loss) .21 (1.39) (6.03)
-----------------------------------
Total from investment operations .20 (1.43) (6.05)
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Net asset value, end of period $2.72 $2.52 $3.95
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Total Return, at Net Asset Value 2 7.94% (36.20)% (60.50)%
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Ratios/Supplemental Data
Net assets, end of period (in thousands) $1,965 $1,591 $1,048
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Average net assets (in thousands) $1,731 $1,402 $ 444
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Ratios to average net assets: 3
Net investment loss (1.08)% (1.47)% (1.45)%
Expenses, gross 3.01% 2.76% 3.99%
Expenses, net 1.76% 4,5 1.74% 4,5 1.84% 4,5
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Portfolio turnover rate 6 137.75% 275.69% 137.66%
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 waiver of transfer agent fees.
5. Net of voluntary reimbursement of expenses.
6. Portfolio turnover rate is representative of the portfolio turnover rate of
the Master Focus Twenty Trust included elsewhere in this report.
See accompanying Notes to Financial Statements.
8 OPPENHEIMER SELECT MANAGERS MERCURY ADVISORS FOCUS GROWTH FUND
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 $ 2.49 $3.92 $10.00
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Income (loss) from investment operations:
Net investment loss (.02) (.06) (.03)
Net realized and unrealized gain (loss) .20 (1.37) (6.05)
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Total from investment operations .18 (1.43) (6.08)
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Net asset value, end of period $2.67 $2.49 $3.92
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Total Return, at Net Asset Value 2 7.23% (36.48)% (60.80)%
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Ratios/Supplemental Data
Net assets, end of period (in thousands) $1,016 $788 $667
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Average net assets (in thousands) $ 797 $864 $305
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Ratios to average net assets: 3
Net investment loss (1.84)% (2.22)% (2.21)%
Expenses, gross 3.85% 3.56% 4.78%
Expenses, net 2.49% 4,5 2.53% 4,5 2.46% 4,5
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Portfolio turnover rate 6 137.75% 275.69% 137.66%
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 waiver of transfer agent fees.
5. Net of voluntary reimbursement of expenses.
6. Portfolio turnover rate is representative of the portfolio turnover rate of
the Master Focus Twenty Trust included elsewhere in this report.
See accompanying Notes to Financial Statements.
9 OPPENHEIMER SELECT MANAGERS MERCURY ADVISORS FOCUS GROWTH FUND
FINANCIAL HIGHLIGHTS Continued
Six Months Year
Ended Ended
May 31, 2003 Nov. 30,
Class C (Unaudited) 2002 2001 1
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Per Share Operating Data
Net asset value, beginning of period $2.49 $3.92 $10.00
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Income (loss) from investment operations:
Net investment loss (.02) (.04) (.03)
Net realized and unrealized gain (loss) .20 (1.39) (6.05)
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Total from investment operations .18 (1.43) (6.08)
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Net asset value, end of period $2.67 $2.49 $3.92
==================================
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Total Return, at Net Asset Value 2 7.23% (36.48)% (60.80)%
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Ratios/Supplemental Data
Net assets, end of period (in thousands) $728 $658 $300
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Average net assets (in thousands) $644 $454 $114
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Ratios to average net assets: 3
Net investment loss (1.84)% (2.21)% (2.23)%
Expenses, gross 3.85% 3.53% 4.79%
Expenses, net 2.45% 4,5 2.47% 4,5 2.18% 4,5
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Portfolio turnover rate 6 137.75% 275.69% 137.66%
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 waiver of transfer agent fees.
5. Net of voluntary reimbursement of expenses.
6. Portfolio turnover rate is representative of the portfolio turnover rate of
the Master Focus Twenty Trust included elsewhere in this report.
See accompanying Notes to Financial Statements.
10 OPPENHEIMER SELECT MANAGERS MERCURY ADVISORS FOCUS GROWTH FUND
Six Months Year
Ended Ended
May 31, 2003 Nov. 30,
Class N (Unaudited) 2002 2001 1
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Per Share Operating Data
Net asset value, beginning of period $2.52 $3.94 $8.28
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Income (loss) from investment operations:
Net investment loss (.02) (.01) (.04)
Net realized and unrealized gain (loss) .21 (1.41) (4.30)
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Total from investment operations .19 (1.42) (4.34)
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Net asset value, end of period $2.71 $2.52 $3.94
==================================
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Total Return, at Net Asset Value 2 7.54% (36.04)% (52.42)%
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Ratios/Supplemental Data
Net assets, end of period (in thousands) $91 $72 $1
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Average net assets (in thousands) $75 $52 $1
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Ratios to average net assets: 3
Net investment loss (1.34)% (1.71)% (1.06)%
Expenses, gross 3.79% 3.18% 4.01%
Expenses, net 2.00% 4,5 2.12% 4,5 3.07% 4,5
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Portfolio turnover rate 6 137.75% 275.69% 137.66%
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 waiver of transfer agent fees.
5. Net of voluntary reimbursement of expenses.
6. Portfolio turnover rate is representative of the portfolio turnover rate of
the Master Focus Twenty Trust included elsewhere in this report.
See accompanying Notes to Financial Statements.
11 OPPENHEIMER SELECT MANAGERS MERCURY ADVISORS FOCUS GROWTH FUND
FINANCIAL HIGHLIGHTS Continued
Six Months Year
Ended Ended
May 31, 2003 Nov. 30,
Class Y (Unaudited) 2002 2001 1
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Per Share Operating Data
Net asset value, beginning of period $2.53 $3.96 $10.00
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Income (loss) from investment operations:
Net investment loss (.01) (.04) (.05)
Net realized and unrealized gain (loss) .22 (1.39) (5.99)
-----------------------------------
Total from investment operations .21 (1.43) (6.04)
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Net asset value, end of period $2.74 $2.53 $3.96
===================================
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Total Return, at Net Asset Value 2 8.30% (36.11)% (60.40)%
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Ratios/Supplemental Data
Net assets, end of period (in thousands) $1 3 $1 3 $1 3
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Average net assets (in thousands) $1 3 $1 3 $1
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Ratios to average net assets: 4
Net investment loss (0.20)% (0.40)% (0.63)%
Expenses, gross 4.49% 88.54% 503.44%
Expenses, net 1.78% 5,6 1.21% 5,6 2.83% 5,6
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Portfolio turnover rate 7 137.75% 275.69% 137.66%
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. Less than $1,000.
4. Annualized for periods of less than one full year.
5. Net of voluntary waiver of transfer agent fees.
6. Net of voluntary reimbursement of expenses.
7. Portfolio turnover rate is representative of the portfolio turnover rate of
the Master Focus Twenty Trust included elsewhere in this report.
See accompanying Notes to Financial Statements.
12 OPPENHEIMER SELECT MANAGERS MERCURY ADVISORS FOCUS GROWTH FUND
NOTES TO FINANCIAL STATEMENTS Unaudited
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1. Significant Accounting Policies
Oppenheimer Select Managers Mercury Advisors Focus Growth Fund (the Fund) is a
separate series of Oppenheimer Select Managers, a non-diversified, open-end
management investment company registered under the Investment Company Act of
1940, as amended. The Fund invests substantially all of its assets in the
Master Focus Twenty Trust (the Trust), a registered open-end investment company
that has the same goals as the Fund. The financial statements of the Trust are
included elsewhere in this report and should be read with the Fund's financial
statements. The percentage of the Trust owned by the Fund at May 31, 2003 was
2.05%. As of May 31, 2003, the total return for the Master Focus Twenty Fund
was 8.29%. The Fund's investment objective is to seek long-term capital
appreciation. The Fund's administrator is OppenheimerFunds, Inc. (the Manager).
The Fund offers Class A, Class B, Class C, Class N and Class Y shares. Class
A shares are sold at their offering price, which is normally net asset value
plus a front-end sales charge. Class B, Class C and Class N shares are sold
without a front-end sales charge but may be subject to a contingent deferred
sales charge (CDSC). Class N shares are sold only through retirement plans.
Retirement plans that offer Class N shares may impose charges on those
accounts. Class Y shares are sold to certain institutional investors without
either a front-end sales charge or a CDSC. All classes of shares have identical
rights and voting privileges. Earnings, net assets and net asset value per
share may differ by minor amounts due to each class having its own expenses
directly attributable to that class. Classes A, B, C and N have separate
distribution and/or service plans. No such plan has been adopted for Class Y
shares. Class B shares will automatically convert to Class A shares six years
after the date of purchase.
The following is a summary of significant accounting policies consistently
followed by the Fund.
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Securities Valuation. The Fund records its investment in the Trust at fair
value. Valuation of securities held by the Trust is discussed in the notes to
Master Focus Twenty Trust included elsewhere in this report.
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Allocation of Income, Expenses, Gains and Losses. The Fund records daily its
proportionate share of the Trust's income, expenses and realized and unrealized
gains and losses. In addition, the Fund accrues its own expenses.
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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 $1,360,305. This estimated
capital loss carryforward represents carryforward as of the end of the last
fiscal year, increased for losses deferred under tax accounting rules to the
current fiscal year and 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 used $465,326 of carryforward to offset
capital gains realized. During the year ended November 30, 2002, the Fund did
not use carryforward to offset capital gains realized.
As of November 30, 2002, the Fund had available for federal income tax purposes
unused capital loss carryovers as follows:
Expiring
-------------------------
2009 $ 468,169
2010 1,297,925
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Total $1,766,094
==========
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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.
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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
13 OPPENHEIMER SELECT MANAGERS MERCURY ADVISORS FOCUS GROWTH FUND
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
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1. Significant Accounting Policies Continued
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.
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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.
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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
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Class A
Sold 252,371 $ 605,334 545,912 $1,705,805
Redeemed (161,309) (400,488) (180,980) (528,008)
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Net increase 91,062 $ 204,846 364,932 $1,177,797
=================================================================
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Class B
Sold 126,449 $ 300,491 340,922 $1,107,732
Redeemed (63,184) (149,267) (194,498) (566,668)
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Net increase 63,265 $ 151,224 146,424 $ 541,064
=================================================================
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Class C
Sold 53,152 $ 128,894 287,759 $ 836,915
Redeemed (45,531) (104,083) (99,749) (294,424)
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Net increase 7,621 $ 24,811 188,010 $ 542,491
=================================================================
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Class N
Sold 6,943 $ 16,391 33,236 $ 109,548
Redeemed (2,063) (4,936) (4,905) (14,468)
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Net increase 4,880 $ 11,455 28,331 $ 95,080
=================================================================
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Class Y
Sold -- $ -- -- $ --
Redeemed -- -- -- --
-----------------------------------------------------------------
Net increase (decrease) -- $ -- -- $ --
=================================================================
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3. Fees and Other Transactions with Affiliates
Administration Fees. Administration fees paid to the Manager were in accordance
with the administration agreement with the Fund which provides for a fee of
0.50% of the average annual net assets of the Fund. During the six months ended
May 31, 2003, the Fund paid $8,086 to the Manager for administrative services.
14 OPPENHEIMER SELECT MANAGERS MERCURY ADVISORS FOCUS GROWTH FUND
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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.
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Distribution and Service Plan (12b-1) Fees. Under its General Distributor's
Agreement with the Manager, OppenheimerFunds Distributor, Inc. (the
Distributor) acts as the Fund's principal underwriter in the continuous public
offering of the different classes of shares of the Fund.
The compensation paid to (or retained by) the Distributor from the sale of
shares or on the redemption of shares is shown in the table below for the
period indicated.
Aggregate Class A Concessions Concessions Concessions Concessions
Front-End Front-End on Class A on Class B on Class C on Class N
Sales Charges Sales Charges Shares Shares Shares Shares
on Class A Retained by Advanced by Advanced by Advanced by Advanced by
Six Months Ended Shares Distributor Distributor 1 Distributor 1 Distributor 1 Distributor 1
- -----------------------------------------------------------------------------------------------------------------------------------
May 31, 2003 $4,380 $2,470 $103 $2,837 $586 $148
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 $-- $48 $60 $12
- --------------------------------------------------------------------------------
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 $2,156, all of which were paid by the
Distributor to recipients, and included $219 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 $3,968 $3,160 $29,204 2.87%
Class C Plan 3,209 1,976 48,693 6.69
Class N Plan 187 169 7,521 8.30
15 OPPENHEIMER SELECT MANAGERS MERCURY ADVISORS FOCUS GROWTH FUND
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
4. 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 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.
- --------------------------------------------------------------------------------
5. Fund Reorganization
In April, 2003, the Board of Trustees approved the reorganization of
Oppenheimer Select Managers Mercury Advisors Focus Growth Fund with and into
Oppenheimer Main Street Fund. Shareholders of Oppenheimer Select Managers
Mercury Advisors Focus Growth Fund will be asked to approve a reorganization
whereby shareholders would receive shares of Oppenheimer Main Street Fund. If
shareholder approval is received, it is expected that the reorganization will
occur during the fourth quarter of calendar 2003.
16 OPPENHEIMER SELECT MANAGERS MERCURY ADVISORS FOCUS 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 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)