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 S&P 500 Index Fund
(Exact name of registrant as specified in charter)
6803 South Tucson Way, Centennial, Colorado 80112-3924
(Address of principal executive offices)
(Zip code)
Robert G. Zack, Esq.
OppenheimerFunds, Inc.
498 Seventh Avenue, New York, New York 10018
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(Name and address of agent for service)
Registrant's telephone number, including area code: (303) 768-3200
--------------
Date of fiscal year end: December 31
Date of reporting period: January 1, 2003 - June 30, 2003
ITEM 1. REPORTS TO STOCKHOLDERS.
STATEMENT OF ASSETS AND LIABILITIES Unaudited
June 30, 2003
- --------------------------------------------------------------------------
Assets
Investments in Master S&P 500 Index Series $ 41,189,453
- --------------------------------------------------------------------------
Receivables and other assets:
Shares of beneficial interest sold 135,221
Other 967
-----------
Total assets 41,325,641
- --------------------------------------------------------------------------
Liabilities
Payables and other liabilities:
Shares of beneficial interest redeemed 43,270
Distribution and service plan fees 22,995
Transfer and shareholder servicing agent fees 10,794
Registration and filing fees 4,524
Shareholder reports 4,087
Trustees' compensation 659
Legal, auditing and other professional fees 205
Custodian fees 10
Other 108,637
-----------
Total liabilities 195,181
- --------------------------------------------------------------------------
Net Assets $41,130,460
===========
- --------------------------------------------------------------------------
Composition of Net Assets
Paid-in capital $43,029,574
- --------------------------------------------------------------------------
Undistributed net investment income 61,642
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Accumulated net realized loss on investment transactions (1,230,686)
- --------------------------------------------------------------------------
Net unrealized depreciation on investments (730,070)
-----------
Net Assets $41,130,460
===========
6 | OPPENHEIMER SELECT MANAGERS MERCURY ADVISORS S&P 500(R) INDEX FUND
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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
$8,877,470 and 1,177,545 shares of beneficial interest outstanding) $7.54
Maximum offering price per share (net asset value plus sales charge of
5.75% of offering price) $8.00
- --------------------------------------------------------------------------------
Class B Shares:
Net asset value, redemption price (excludes applicable contingent
deferred sales charge) and offering price per share (based on net
assets of $6,728,551 and 904,516 shares of beneficial
interest outstanding) $7.44
- --------------------------------------------------------------------------------
Class C Shares:
Net asset value, redemption price (excludes applicable contingent
deferred sales charge) and offering price per share (based on net
assets of $7,543,992 and 1,014,755 shares of beneficial
interest outstanding) $7.43
- --------------------------------------------------------------------------------
Class N Shares:
Net asset value, redemption price (excludes applicable contingent
deferred sales charge) and offering price per share (based on net
assets of $17,979,506 and 2,399,865 shares of beneficial
interest outstanding) $7.49
- --------------------------------------------------------------------------------
Class Y Shares:
Net asset value, redemption price and offering price per share
(based on net assets of $941 and 123 shares of beneficial
interest outstanding) $7.65
See accompanying Notes to Financial Statements.
7 | OPPENHEIMER SELECT MANAGERS MERCURY ADVISORS S&P 500(R) INDEX FUND
STATEMENT OF OPERATIONS Unaudited
For the Six Months Ended June 30, 2003
- ----------------------------------------------------------------------------------------------------
Net Investment Income Allocated from Master S&P 500 Index Series
Investment income $ 296,794
- ----------------------------------------------------------------------------------------------------
Expenses 6,496
----------
Total investment income from Master S&P 500 Index Series 290,298
Fund Income and Expenses
- ----------------------------------------------------------------------------------------------------
Investment Income
Interest from short-term obligations 44
- ----------------------------------------------------------------------------------------------------
Expenses
Distribution and service plan fees:
Class A 8,993
Class B 26,150
Class C 29,866
Class N 36,454
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Transfer and shareholder servicing agent fees:
Class A 28,818
Class B 18,332
Class C 17,351
Class N 34,842
Class Y 29
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Administrative fees 82,767
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Shareholder reports 24,868
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Legal, auditing and other professional fees 3,177
- ----------------------------------------------------------------------------------------------------
Trustees' compensation 2,731
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Custodian fees and expenses 56
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Other 38,480
----------
Total expenses 352,914
Less voluntary reimbursement of expenses (73,757)
Less voluntary waiver of transfer and shareholder servicing agent fees--Class A (20,878)
Less voluntary waiver of transfer and shareholder servicing agent fees--Class B (11,481)
Less voluntary waiver of transfer and shareholder servicing agent fees--Class C (7,883)
Less voluntary waiver of transfer and shareholder servicing agent fees--Class N (10,186)
Less voluntary waiver of transfer and shareholder servicing agent fees--Class Y (29)
----------
Net expenses 228,700
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Net Investment Income 61,642
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Realized and Unrealized Gain (Loss)
Net realized loss on investments (35,909)
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Net change in unrealized appreciation on investments 3,847,585
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Net Increase in Net Assets Resulting from Operations $3,873,318
==========
See accompanying Notes to Financial Statements.
8 | OPPENHEIMER SELECT MANAGERS MERCURY ADVISORS S&P 500(R) INDEX FUND
STATEMENTS OF CHANGES IN NET ASSETS
Six Months Year
Ended Ended
June 30, 2003 December 31,
(Unaudited) 2002
- -------------------------------------------------------------------------------------------------------
Operations
Net investment income $ 61,642 $ 63,469
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Net realized loss (35,909) (929,632)
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Net change in unrealized appreciation (depreciation) 3,847,585 (4,893,113)
---------------------------
Net increase (decrease) in net assets resulting from operations 3,873,318 (5,759,276)
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Dividends and/or Distributions to Shareholders
Dividends from net investment income:
Class A -- (23,993)
Class B -- --
Class C -- --
Class N -- (43,513)
Class Y -- (2)
- -------------------------------------------------------------------------------------------------------
Beneficial Interest Transactions
Net increase (decrease) in net assets resulting from beneficial interest
transactions:
Class A 1,686,194 4,148,608
Class B 1,902,966 3,813,804
Class C 1,885,266 4,395,652
Class N 3,232,265 10,658,816
Class Y -- (12)
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Net Assets
Total increase 12,580,009 17,190,084
- -------------------------------------------------------------------------------------------------------
Beginning of period 28,550,451 11,360,367
---------------------------
End of period [including undistributed net investment income of $61,642
for the six months ended June 30, 2003] $41,130,460 $28,550,451
===========================
See accompanying Notes to Financial Statements.
9 | OPPENHEIMER SELECT MANAGERS MERCURY ADVISORS S&P 500(R) INDEX FUND
FINANCIAL HIGHLIGHTS
Six Months Year
Ended Ended
June 30, 2003 Dec. 31,
Class A (Unaudited) 2002 2001 1
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Per Share Operating Data
Net asset value, beginning of period $ 6.77 $ 8.85 $10.00
- ---------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .02 .03 .01
Net realized and unrealized gain (loss) .75 (2.08) (1.16)
-------------------------------
Total from investment operations .77 (2.05) (1.15)
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Dividends and/or distributions to shareholders:
Dividends from net investment income -- (.03) --
- ---------------------------------------------------------------------------------------
Net asset value, end of period $ 7.54 $ 6.77 $ 8.85
===============================
- ---------------------------------------------------------------------------------------
Total Return, at Net Asset Value 2 11.37% (23.21)% (11.50)%
- ---------------------------------------------------------------------------------------
Ratios/Supplemental Data
Net assets, end of period (in thousands) $8,877 $6,334 $3,598
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Average net assets (in thousands) $7,396 $5,202 $1,397
- ---------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income 0.74% 0.62% 0.33%
Expenses, gross 2.00% 2.03% 1.87%
Expenses, net 0.99% 4,5 1.08% 4,5 0.99% 4,5
- ---------------------------------------------------------------------------------------
Portfolio turnover rate 6 1.06% 4.59% 3.21%
1. For the period from February 16, 2001 (commencement of operations) to
December 31, 2001.
2. Assumes an investment on the business day before the first day of the fiscal
period (or commencement of operations), 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. Returns do not reflect the deduction of
taxes that a shareholder would pay on Fund distributions or the redemption of
Fund shares.
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. Portfolio turnover rate is representative of the portfolio turnover rate of
the Master S&P 500 Index Fund included elsewhere in this report.
See accompanying Notes to Financial Statements.
10 | OPPENHEIMER SELECT MANAGERS MERCURY ADVISORS S&P 500(R) INDEX FUND
Six Months Year
Ended Ended
June 30, 2003 Dec. 31,
Class B (Unaudited) 2002 2001 1
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Per Share Operating Data
Net asset value, beginning of period $ 6.71 $ 8.80 $10.00
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Income (loss) from investment operations:
Net investment income (loss) -- 2 -- (.01)
Net realized and unrealized gain (loss) .73 (2.09) (1.19)
-------------------------------
Total from investment operations .73 (2.09) (1.20)
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Dividends and/or distributions to shareholders:
Dividends from net investment income -- -- --
- ---------------------------------------------------------------------------------------
Net asset value, end of period $7.44 $6.71 $8.80
===============================
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Total Return, At Net Asset Value 3 10.88% (23.75)% (12.00)%
- ---------------------------------------------------------------------------------------
Ratios/Supplemental Data
Net assets, end of period (in thousands) $6,729 $4,184 $1,189
- ---------------------------------------------------------------------------------------
Average net assets (in thousands) $5,287 $2,929 $ 468
- ---------------------------------------------------------------------------------------
Ratios to average net assets: 4
Net investment loss (0.02)% (0.10)% (0.40)%
Expenses, gross 2.66% 2.78% 2.65%
Expenses, net 1.78% 5,6 1.83% 5,6 1.68% 5,6
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Portfolio turnover rate 7 1.06% 4.59% 3.21%
1. For the period from February 16, 2001 (commencement of operations) to
December 31, 2001.
2. Less than $0.005 per share.
3. Assumes an investment on the business day before the first day of the fiscal
period (or commencement of operations), 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. Returns do not reflect the deduction of
taxes that a shareholder would pay on Fund distributions or the redemption of
Fund shares.
4. Annualized for periods of less than one full year.
5. Net of voluntary reimbursement of expenses.
6. Net of voluntary waiver of transfer agent fees.
7. Portfolio turnover rate is representative of the portfolio turnover rate of
the Master S&P 500 Index Fund included elsewhere in this report.
See accompanying Notes to Financial Statements.
11 | OPPENHEIMER SELECT MANAGERS MERCURY ADVISORS S&P 500(R) INDEX FUND
FINANCIAL HIGHLIGHTS Continued
Six Months Year
Ended Ended
June 30, 2003 Dec. 31,
Class C (Unaudited) 2002 2001 1
- ---------------------------------------------------------------------------------------
Per Share Operating Data
Net asset value, beginning of period $ 6.70 $ 8.79 $10.00
- ---------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss) -- 2 -- (.01)
Net realized and unrealized gain (loss) .73 (2.09) (1.20)
-------------------------------
Total from investment operations .73 (2.09) (1.21)
- ---------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income -- -- --
- ---------------------------------------------------------------------------------------
Net asset value, end of period $7.43 $6.70 $8.79
===============================
- ---------------------------------------------------------------------------------------
Total Return, at Net Asset Value 3 10.90% (23.78)% (12.10)%
- ---------------------------------------------------------------------------------------
Ratios/Supplemental Data
Net assets, end of period (in thousands) $7,544 $4,952 $1,558
- ---------------------------------------------------------------------------------------
Average net assets (in thousands) $6,037 $3,592 $ 500
- ---------------------------------------------------------------------------------------
Ratios to average net assets: 4
Net investment loss (0.02)% (0.10)% (0.39)%
Expenses, gross 2.54% 2.70% 2.64%
Expenses, net 1.84% 5,6 1.80% 5,6 1.76% 5,6
- ---------------------------------------------------------------------------------------
Portfolio turnover rate 7 1.06% 4.59% 3.21%
1. For the period from February 16, 2001 (commencement of operations) to
December 31, 2001.
2. Less than $0.005 per share.
3. Assumes an investment on the business day before the first day of the fiscal
period (or commencement of operations), 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. Returns do not reflect the deduction of
taxes that a shareholder would pay on Fund distributions or the redemption of
Fund shares.
4. Annualized for periods of less than one full year.
5. Net of voluntary reimbursement of expenses.
6. Net of voluntary waiver of transfer agent fees.
7. Portfolio turnover rate is representative of the portfolio turnover rate of
the Master S&P 500 Index Fund included elsewhere in this report.
See accompanying Notes to Financial Statements.
12 | OPPENHEIMER SELECT MANAGERS MERCURY ADVISORS S&P 500(R) INDEX FUND
Six Months Year
Ended Ended
June 30, 2003 Dec. 31,
Class N (Unaudited) 2002 2001 1
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Per Share Operating Data
Net asset value, beginning of period $ 6.74 $ 8.82 $ 9.54
- ---------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .02 .02 --
Net realized and unrealized gain (loss) .73 (2.08) (.72)
-------------------------------
Total from investment operations .75 (2.06) (.72)
- ---------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income -- (.02) --
- ---------------------------------------------------------------------------------------
Net asset value, end of period $7.49 $6.74 $8.82
===============================
- ---------------------------------------------------------------------------------------
Total Return, at Net Asset Value 2 11.13% (23.33)% (7.55)%
- ---------------------------------------------------------------------------------------
Ratios/Supplemental Data
Net assets, end of period (in thousands) $17,980 $13,080 $5,014
- ---------------------------------------------------------------------------------------
Average net assets (in thousands) $14,730 $ 9,977 $1,425
- ---------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income 0.48% 0.38% 0.07%
Expenses, gross 1.94% 2.16% 2.14%
Expenses, net 1.36% 4,5 1.29% 4,5 1.40% 4,5
- ---------------------------------------------------------------------------------------
Portfolio turnover rate 6 1.06% 4.59% 3.21%
1. For the period from March 1, 2001 (commencement of operations) to December
31, 2001.
2. Assumes an investment on the business day before the first day of the fiscal
period (or commencement of operations), 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. Returns do not reflect the deduction of
taxes that a shareholder would pay on Fund distributions or the redemption of
Fund shares.
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. Portfolio turnover rate is representative of the portfolio turnover rate of
the Master S&P 500 Index Fund included elsewhere in this report.
See accompanying Notes to Financial Statements.
13 | OPPENHEIMER SELECT MANAGERS MERCURY ADVISORS S&P 500(R) INDEX FUND
FINANCIAL HIGHLIGHTS Continued
Six Months Year
Ended Ended
June 30, 2003 Dec. 31,
Class Y (Unaudited) 2002 2001 1
- ---------------------------------------------------------------------------------------
Per Share Operating Data
Net asset value, beginning of period $ 6.83 $ 8.90 $10.00
- ---------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .07 .07 .04
Net realized and unrealized gain (loss) .75 (2.12) (1.14)
-------------------------------
Total from investment operations .82 (2.05) (1.10)
- ---------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income -- (.02) --
- ---------------------------------------------------------------------------------------
Net asset value, end of period $7.65 $6.83 $8.90
===============================
- ---------------------------------------------------------------------------------------
Total Return, at Net Asset Value 2 12.01% (23.06)% (11.00)%
- ---------------------------------------------------------------------------------------
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 income 1.61% 0.80% 0.57%
Expenses, gross 6.80% 46.32% 384.04%
Expenses, net 0.52% 4,5 0.83% 4,5 0.62% 4,5
- ---------------------------------------------------------------------------------------
Portfolio turnover rate 6 1.06% 4.59% 3.21%
1. For the period from February 16, 2001 (commencement of operations) to
December 31, 2001.
2. Assumes an investment on the business day before the first day of the fiscal
period (or commencement of operations), 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. Returns do not reflect the deduction of
taxes that a shareholder would pay on Fund distributions or the redemption of
Fund shares.
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. Portfolio turnover rate is representative of the portfolio turnover rate of
the Master S&P 500 Index Fund included elsewhere in this report.
See accompanying Notes to Financial Statements.
14 | OPPENHEIMER SELECT MANAGERS MERCURY ADVISORS S&P 500(R) INDEX FUND
NOTES TO FINANCIAL STATEMENTS Unaudited
- --------------------------------------------------------------------------------
1. Significant Accounting Policies
Oppenheimer Select Managers Mercury S&P 500(R) Index 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 S&P 500 Index Series of the Quantitative Master Series 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 June 30, 2003 was 1.95%. As of June 30, 2003
the total return for the Master S&P 500 Index Fund was 11.80%. The Fund's
investment objective is to seek to match the performance of the Standard &
Poor's 500 Composite Stock Price Index (the "S&P 500") as closely as possible
before the deduction of Fund expenses. 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.
- --------------------------------------------------------------------------------
Securities Valuation. The Fund's investment in the Trust is valued based on the
daily reported net asset value of the Trust. Valuation of securities held by
the Trust is discussed in the notes to Master S&P 500 Index Series included
elsewhere in this report.
- --------------------------------------------------------------------------------
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.
- --------------------------------------------------------------------------------
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 June 30, 2003, the Fund had available for federal income tax purposes
an estimated unused capital loss carryforward of $1,090,163. 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 June 30, 2003, the Fund did not use carryforward to offset capital
gains realized. During the year ended December 31, 2002, the Fund did not use
carryforward to offset capital gains realized.
As of December 31, 2002, the Fund had available for federal income tax purposes
an unused capital loss carryforward as follows:
Expiring
-------------------------
2009 $ 200,753
2010 853,501
----------
Total $1,054,254
==========
- --------------------------------------------------------------------------------
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. Capital gain distributions, if any, are
declared and paid monthly.
15 | OPPENHEIMER SELECT MANAGERS MERCURY ADVISORS S&P 500(R) INDEX FUND
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
1. Significant Accounting Policies Continued
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.
The tax character of distributions paid during the six months ended June 30,
2003 and the year ended December 31, 2002 was as follows:
Six Months Ended Year Ended
June 30, 2003 December 31, 2002
-----------------------------------------------------------------------
Distributions paid from:
Ordinary income $-- $67,508
- --------------------------------------------------------------------------------
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 June 30, 2003 Year Ended December 31, 2002
Shares Amount Shares Amount
- ----------------------------------------------------------------------------------------------------------------------------
Class A
Sold 412,347 $ 2,848,070 780,715 $ 6,024,191
Dividends and/or distributions reinvested -- -- 3,389 23,559
Redeemed (170,029) (1,161,876) (255,444) (1,899,142)
-----------------------------------------------------------------
Net increase 242,318 $ 1,686,194 528,660 $ 4,148,608
=================================================================
- ----------------------------------------------------------------------------------------------------------------------------
Class B
Sold 360,069 $ 2,445,352 616,148 $ 4,695,369
Dividends and/or distributions reinvested -- -- -- --
Redeemed (79,241) (542,386) (127,633) (881,565)
-----------------------------------------------------------------
Net increase 280,828 $ 1,902,966 488,515 $ 3,813,804
=================================================================
- ----------------------------------------------------------------------------------------------------------------------------
Class C
Sold 367,153 $ 2,509,212 746,146 $ 5,682,782
Dividends and/or distributions reinvested -- -- -- --
Redeemed (91,101) (623,946) (184,645) (1,287,130)
-----------------------------------------------------------------
Net increase 276,052 $ 1,885,266 561,501 $ 4,395,652
=================================================================
- ----------------------------------------------------------------------------------------------------------------------------
Class N
Sold 788,384 $ 5,466,978 1,916,160 $14,688,292
Dividends and/or distributions reinvested -- -- 6,101 42,162
Redeemed (329,416) (2,234,713) (549,800) (4,071,638)
-----------------------------------------------------------------
Net increase 458,968 $ 3,232,265 1,372,461 $10,658,816
=================================================================
16 | OPPENHEIMER SELECT MANAGERS MERCURY ADVISORS S&P 500(R) INDEX FUND
Six Months Ended June 30, 2003 Year Ended December 31, 2002
Shares Amount Shares Amount
- ----------------------------------------------------------------------------------------------------------------------------
Class Y
Sold -- $ -- -- $ --
Dividends and/or distributions reinvested -- -- -- --
Redeemed -- -- (2) (12)
-----------------------------------------------------------------
Net increase (decrease) -- $ -- (2) $ (12)
=================================================================
- --------------------------------------------------------------------------------
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 at an
annual rate of 0.50% of the average annual net assets of the Fund. During the
six months ended June 30, 2003, the Fund paid $82,767 to the Manager for
administration services.
- --------------------------------------------------------------------------------
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.
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
- -----------------------------------------------------------------------------------------------------------------------------------
June 30, 2003 $42,361 $13,472 $3,373 $57,443 $18,642 $26,767
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
- -----------------------------------------------------------------------------------------------------------------------------------
June 30, 2003 $-- $7,977 $2,010 $11,960
- --------------------------------------------------------------------------------
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 June 30, 2003, expense
under the Class A Plan totaled $8,993, all of which were paid by the
Distributor to recipients, which included $239 retained by the Distributor and
$343 which was paid to an affiliate of the Manager. Any unreimbursed expenses
the Distributor incurs with respect to Class A shares in any fiscal year cannot
be recovered in subsequent years.
17 | OPPENHEIMER SELECT MANAGERS MERCURY ADVISORS S&P 500(R) INDEX FUND
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
3. Fees and Other Transactions with Affiliates Continued
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 June 30,
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 $26,150 $18,084 $249,201 3.70%
Class C Plan 29,866 16,509 140,979 1.87
Class N Plan 36,454 19,946 493,935 2.75
- --------------------------------------------------------------------------------
4. Borrowing and Lending Arrangements
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 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 June 30, 2003.
- --------------------------------------------------------------------------------
5. Fund Reorganization
In April 2003, the Board of Trustees approved the reorganization of Oppenheimer
Select Managers Mercury Advisors S&P 500 Index Fund with and into Oppenheimer
Growth Fund. Shareholders of Oppenheimer Select Managers Mercury Advisors S&P
500 Index Fund will be asked to approve a reorganization whereby shareholders
would receive shares of Oppenheimer Growth Fund. If shareholder approval is
received, it is expected that the reorganization will occur during the fourth
quarter of calendar 2003.
- --------------------------------------------------------------------------------
Portfolio Proxy Voting Policies and Procedures
The Fund has adopted Portfolio Proxy Voting Policies and Procedures under which
the Fund votes proxies relating to securities ("portfolio proxies") held by the
Fund. A description of the Fund's Portfolio Proxy Voting Policies and
Procedures is available (i) without charge, upon request, by calling the Fund
toll-free at 1.800.225.5677, (ii) on the Fund's website at
www.oppenheimerfunds.com, and (iii) on the SEC's website at www.sec.gov. In
addition, the Fund will be required to file new Form N-PX, with its complete
proxy voting record for the 12 months ended June 30th, no later than August
31st of each year. The first such filing is due no later than August 31, 2004,
for the twelve months ended June 30, 2004. Once filed, the Fund's Form N-PX
filing will be available (i) without charge, upon request, by calling the Fund
toll-free at 1.800.225.5677, and (ii) on the SEC's website at www.sec.gov.
18 | OPPENHEIMER SELECT MANAGERS MERCURY ADVISORS S&P 500(R) INDEX 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 June 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)