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 811-5225
Oppenheimer Quest Opportunity Value 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.
Two World Financial Center, New York, New York 10281-1008
- --------------------------------------------------------------------------------
(Name and address of agent for service)
Registrant's telephone number, including area code: (303) 768-3200
--------------
Date of fiscal year end: October 31
Date of reporting period: November 1, 2002 - October 31, 2003
ITEM 1. REPORTS TO STOCKHOLDERS.
FUND PERFORMANCE DISCUSSION
How has the Fund performed? Below is a discussion by OppenheimerFunds, Inc., of
the Fund's performance during its fiscal year ended October 31, 2003, followed
by a graphical comparison of the Fund's performance to an appropriate
broad-based market index. The Fund's portfolio manager is employed by its
sub-advisor, OpCap Advisors.
Management's Discussion of Fund Performance. At the beginning of the fiscal
year, the equity portion of the portfolio was positioned conservatively, with a
significant overweighting in financial services' stocks and an underweighting in
the information technology sector. Starting on April 14, 2003, under the
direction of new portfolio manager Frank LeCates, the Fund was repositioned to
reflect a more constructive outlook for the economy and corporate profitability.
The Fund took on a more aggressive posture, with a greater emphasis on lagging
sectors that may rebound as the economic cycle picks up, including health care,
consumer disposables, paper, metals, steel, oil companies. In the latter half of
the period, performance benefited substantially as the Fund's equity
investments, which comprised roughly 70% to 75% of total market value of
investments (as of October 31, 2003), participated in the market's strong rally.
The Fund's relative performance was hurt by its underweight allocation (2% to
10% of assets) in the top-performing information technology sector. The Fund's
portfolio managers believed that many stocks in the sector were quite expensive.
One exception was EMC Corp., a leader in information storage systems, software,
and networks. Since EMC had been tainted by the 1990s "tech bubble" and was
losing market share due high product prices, its stock price dropped sharply.
The Fund's increased exposure was rewarded when EMC introduced new products that
were favorably received and formed a strategic alliance with Dell, Inc. Once the
stock price reached what we believed was its fair value estimate, the position
in EMC was trimmed.
The Fund also pared back its positions in aluminum manufacturer Alcan, Inc.,
the top-contributing stock in the portfolio, and in mortgage lender Freddie Mac,
the largest detractor from results. Alcan's stock price rose quickly after a
French firm accepted its purchase offer. Since then, the supply-demand
relationship for aluminum has deteriorated. In the case of Freddie Mac, the
stock has suffered on news of unusual accounting issues (under- rather than
overstatement of earnings) and loss of the senior leadership. The Fund's
managers reduced the portfolio's exposure not because of a lack of faith in the
company, but because the position was overly large.
In keeping an upbeat view of the economy, the Fund took a persistently
defensive stance on bonds. More robust economic growth generally leads to higher
interest rates, which in turn depress bond prices, and the effect is most
pronounced for longer-term securities. Keeping that possibility in mind, the
Fund focused on short-term bonds and
6 | OPPENHEIMER QUEST OPPORTUNITY VALUE FUND
even money market instruments for the fixed-income portfolio. The shorter
duration served the Fund well in the second half as long-term yields rose in
anticipation of higher interest rates. The Fund's holdings, strategies and
management are subject to change.
Comparing the Fund's Performance to the Market. The graphs that follow show the
performance of a hypothetical $10,000 investment in each Class of shares of the
Fund held until October 31, 2003. In the case of Class A, Class B and Class C
shares, performance is measured over a ten-year period. In the case of Class N
shares, performance is measured from inception of the Class on March 1, 2001. In
the case of Class Y shares, performance is measured from inception of the class
on December 16, 1996. The Fund's performance reflects the deduction of the
maximum initial sales charge on Class A shares, the applicable contingent
deferred sales charge on Class B, Class C and Class N shares, and reinvestments
of all dividends and capital gains distributions.
The Fund's performance is compared to the performance of the Standard &
Poor's (S&P) 500 Index, a broad-based index of equity securities widely regarded
as a general measure of the performance of the U.S. equity securities market.
Index performance reflects the reinvestment of dividends but does not consider
the effect of capital gains or transaction costs, and none of the data in the
graphs shows the effect of taxes. The Fund's performance reflects the effects of
Fund business and operating expenses. While index comparisons may be useful to
provide a benchmark for the Fund's performance, it must be noted that the Fund's
investments are not limited to the securities in the index.
7 | OPPENHEIMER QUEST OPPORTUNITY VALUE FUND
FUND PERFORMANCE DISCUSSION
Class A Shares
Comparison of Change in Value of $10,000 Hypothetical Investments in:
[GRAPHIC]
PLOT POINTS FOLLOW:
Oppenheimer Quest
Opportunity Value S&P 500
Fund (Class A) Index
10/31/1993 $ 9,425 $10,000
01/31/1994 9,807 10,365
04/30/1994 9,641 9,769
07/31/1994 9,802 10,003
10/31/1994 10,217 10,386
01/31/1995 10,200 10,419
04/30/1995 11,511 11,472
07/31/1995 13,168 12,611
10/31/1995 13,271 13,128
01/31/1996 14,570 14,443
04/30/1996 15,234 14,934
07/31/1996 14,675 14,698
10/31/1996 16,397 16,290
01/31/1997 17,962 18,245
04/30/1997 17,781 18,686
07/31/1997 20,593 22,358
10/31/1997 20,113 21,519
01/31/1998 20,766 23,153
04/30/1998 22,892 26,360
07/31/1998 21,975 26,674
10/31/1998 21,286 26,256
01/31/1999 22,119 30,681
04/30/1999 24,609 32,114
07/31/1999 23,959 32,063
10/31/1999 24,758 32,993
01/31/2000 23,929 33,853
04/30/2000 23,993 35,364
07/31/2000 23,251 34,937
10/31/2000 25,455 34,999
01/31/2001 26,681 33,549
04/30/2001 27,068 30,779
07/31/2001 26,942 29,934
10/31/2001 24,744 26,288
01/31/2002 25,172 28,135
04/30/2002 24,732 26,896
07/31/2002 22,083 22,865
10/31/2002 21,131 22,319
01/31/2003 20,666 21,663
04/30/2003 21,417 23,317
07/31/2003 22,879 25,297
10/31/2003 24,237 26,959
Average Annual Total Returns of Class A Shares of the Fund at 10/31/03*
1-Year 8.10% 5-Year 1.42% 10-Year 9.26%
Class B Shares
Comparison of Change in Value of $10,000 Hypothetical Investments in:
[GRAPHIC]
PLOT POINTS FOLLOW:
Oppenheimer Quest
Opportunity Value S&P 500
Fund (Class B) Index
10/31/1993 $10,000 $10,000
01/31/1994 10,393 10,365
04/30/1994 10,200 9,769
07/31/1994 10,360 10,003
10/31/1994 10,784 10,386
01/31/1995 10,748 10,419
04/30/1995 12,117 11,472
07/31/1995 13,840 12,611
10/31/1995 13,932 13,128
01/31/1996 15,273 14,443
04/30/1996 15,953 14,934
07/31/1996 15,349 14,698
10/31/1996 17,126 16,290
01/31/1997 18,737 18,245
04/30/1997 18,528 18,686
07/31/1997 21,426 22,358
10/31/1997 20,902 21,519
01/31/1998 21,559 23,153
04/30/1998 23,736 26,360
07/31/1998 22,752 26,674
10/31/1998 22,008 26,256
01/31/1999 22,848 30,681
04/30/1999 25,389 32,114
07/31/1999 24,680 32,063
10/31/1999 25,477 32,993
01/31/2000 24,624 33,853
04/30/2000 24,689 35,364
07/31/2000 23,926 34,937
10/31/2000 26,193 34,999
01/31/2001 27,455 33,549
04/30/2001 27,854 30,779
07/31/2001 27,724 29,934
10/31/2001 25,462 26,288
01/31/2002 25,902 28,135
04/30/2002 25,450 26,896
07/31/2002 22,724 22,865
10/31/2002 21,745 22,319
01/31/2003 21,266 21,663
04/30/2003 22,039 23,317
07/31/2003 23,543 25,297
10/31/2003 24,940 26,959
Average Annual Total Returns of Class B Shares of the Fund at 10/31/03*
1-Year 8.84% 5-Year 1.69% 10-Year 9.57%
*See Notes on page 11 for further details.
8 | OPPENHEIMER QUEST OPPORTUNITY VALUE FUND
Class C Shares
Comparison of Change in Value of $10,000 Hypothetical Investments in:
[GRAPHIC]
PLOT POINTS FOLLOW:
Oppenheimer Quest
Opportunity Value S&P 500
Fund (Class C) Index
10/31/1993 $10,000 $10,000
01/31/1994 10,387 10,365
04/30/1994 10,200 9,769
07/31/1994 10,359 10,003
10/31/1994 10,778 10,386
01/31/1995 10,748 10,419
04/30/1995 12,111 11,472
07/31/1995 13,834 12,611
10/31/1995 13,920 13,128
01/31/1996 15,259 14,443
04/30/1996 15,933 14,934
07/31/1996 15,329 14,698
10/31/1996 17,106 16,290
01/31/1997 18,719 18,245
04/30/1997 18,504 18,686
07/31/1997 21,403 22,358
10/31/1997 20,878 21,519
01/31/1998 21,533 23,153
04/30/1998 23,709 26,360
07/31/1998 22,726 26,674
10/31/1998 21,982 26,256
01/31/1999 22,818 30,681
04/30/1999 25,358 32,114
07/31/1999 24,656 32,063
10/31/1999 25,442 32,993
01/31/2000 24,555 33,853
04/30/2000 24,592 35,364
07/31/2000 23,802 34,937
10/31/2000 26,017 34,999
01/31/2001 27,229 33,549
04/30/2001 27,583 30,779
07/31/2001 27,410 29,934
10/31/2001 25,139 26,288
01/31/2002 25,535 28,135
04/30/2002 25,046 26,896
07/31/2002 22,331 22,865
10/31/2002 21,330 22,319
01/31/2003 20,824 21,663
04/30/2003 21,545 23,317
07/31/2003 22,971 25,297
10/31/2003 24,290 26,959
Average Annual Total Returns of Class C Shares of the Fund at 10/31/03*
1-Year 12.88% 5-Year 2.02% 10-Year 9.28%
Class N Shares
Comparison of Change in Value of $10,000 Hypothetical Investments in:
[GRAPHIC]
PLOT POINTS FOLLOW:
Oppenheimer Quest
Opportunity Value S&P 500
Fund (Class N) Index
03/01/2001 $10,000 $10,000
04/30/2001 10,221 10,094
07/31/2001 10,170 9,817
10/31/2001 9,337 8,621
01/31/2002 9,496 9,227
04/30/2002 9,326 8,821
07/31/2002 8,327 7,499
10/31/2002 7,957 7,320
01/31/2003 7,772 7,104
04/30/2003 8,054 7,647
07/31/2003 8,599 8,296
10/31/2003 9,102 8,841
Average Annual Total Returns of Class N Shares of the Fund at 10/31/03*
1-Year 13.39% Since Inception -3.47%
The performance information for the S&P 500 Index in the graphs begins on
10/31/93 for Class A, Class B and Class C, 2/28/01 for Class N and 12/31/96 for
Class Y.
Past performance cannot guarantee future results. Graphs are not drawn to same
scale.
9 | OPPENHEIMER QUEST OPPORTUNITY VALUE FUND
FUND PERFORMANCE DISCUSSION
Class Y Shares
Comparison of Change in Value of $10,000 Hypothetical Investments in:
[GRAPHIC]
PLOT POINTS FOLLOW:
Oppenheimer Quest
Opportunity Value S&P 500
Fund (Class Y) Index
12/16/1996 $10,000 $10,000
01/31/1997 10,635 10,624
04/30/1997 10,531 10,881
07/31/1997 12,215 13,019
10/31/1997 11,951 12,531
01/31/1998 12,353 13,482
04/30/1998 13,636 15,349
07/31/1998 13,109 15,532
10/31/1998 12,713 15,289
01/31/1999 13,216 17,866
04/30/1999 14,712 18,700
07/31/1999 14,343 18,670
10/31/1999 14,841 19,212
01/31/2000 14,361 19,713
04/30/2000 14,408 20,593
07/31/2000 13,985 20,344
10/31/2000 15,331 20,380
01/31/2001 16,080 19,536
04/30/2001 16,332 17,923
07/31/2001 16,261 17,431
10/31/2001 14,951 15,308
01/31/2002 15,225 16,383
04/30/2002 14,965 15,661
07/31/2002 13,377 13,314
10/31/2002 12,807 12,997
01/31/2003 12,538 12,614
04/30/2003 12,997 13,578
07/31/2003 13,892 14,730
10/31/2003 14,724 15,698
Average Annual Total Returns of Class Y Shares of the Fund at 10/31/03*
1-Year 14.97% 5-Year 2.98% Since Inception 5.79%
*See Notes on page 11 for further details.
The performance information for the S&P 500 Index in the graphs begins on
10/31/93 for Class A, Class B and Class C, 2/28/01 for Class N and 12/31/96 for
Class Y.
Past performance cannot guarantee future results. Graphs are not drawn to same
scale.
10 | OPPENHEIMER QUEST OPPORTUNITY VALUE FUND
NOTES
In reviewing performance and rankings, please remember that past performance
cannot guarantee future results. Investment return and principal value of an
investment in the Fund will fluctuate so that an investor's shares, when
redeemed, may be worth more or less than the original cost. Because of ongoing
market volatility, the Fund's performance may be subject to substantial
fluctuations, and current performance may be more or less than the results
shown. For updates on the Fund's performance, visit our website at
www.oppenheimerfunds.com.
Total returns and the ending account values in the graphs include changes in
share price and reinvestment of dividends and capital gains distributions in a
hypothetical investment for the periods shown. The Fund's total returns shown do
not reflect the deduction of income taxes on an individual's investment. Taxes
may reduce your actual investment returns on income or gains paid by the Fund or
any gains you may realize if you sell your shares. For more complete information
about the Fund, including charges, expenses and risks, please refer to the
prospectus. To obtain a copy, call your financial advisor, call OppenheimerFunds
Distributor, Inc. at 1.800.CALL OPP (1.800.225.5677) or visit the
OppenheimerFunds website at www.oppenheimerfunds.com. Read the prospectus
carefully before you invest or send money.
OppenheimerFunds, Inc. became the Fund's advisor on 11/22/95. The Fund's
subadvisor is OpCap Advisors, which was the Fund's advisor prior to 11/22/95.
The portfolio manager is employed by the Fund's subadvisor.
Class A shares of the Fund were first publicly offered on 1/3/89. Unless
otherwise noted, Class A returns include the current maximum initial sales
charge of 5.75%. The Fund's maximum sales charge for Class A shares was lower
prior to 11/24/95, so actual performance may have been higher. Class A shares
are subject to a maximum annual 0.25% asset-based sales charge. There is a
voluntary waiver of a portion of the Class A asset-based sales charge as
described in the Prospectus.
Class B shares of the Fund were first publicly offered on 9/1/93. Unless
otherwise noted, Class B returns include the applicable contingent deferred
sales charges of 5% (1-year) and 2% (5-year). Because Class B shares convert to
Class A shares 72 months after purchase, the "since inception" return for Class
B uses Class A performance for the period after conversion. Class B shares are
subject to an annual 0.75% asset-based sales charge.
Class C shares of the Fund were first publicly offered on 9/1/93. Unless
otherwise noted, Class C returns include the contingent deferred sales charge of
1% for the one-year period. Class C shares are subject to an annual 0.75%
asset-based sales charge.
Class N shares of the Fund were first publicly offered on 3/1/01. Class N shares
are offered only through retirement plans. Unless otherwise noted, Class N
returns include the contingent deferred sales charge of 1% for the one-year
period. Class N shares are subject to an annual 0.25% asset-based sales charge.
Class Y shares of the Fund were first publicly offered on 12/16/96. Class Y
shares are offered only to certain institutional investors under special
agreement with the Distributor.
An explanation of the calculation of performance is in the Fund's Statement of
Additional Information.
11 | OPPENHEIMER QUEST OPPORTUNITY VALUE FUND
STATEMENT OF INVESTMENTS October 31, 2003
Market Value
Shares See Note 1
- ---------------------------------------------
Common Stocks--74.0%
- ---------------------------------------------
Consumer Discretionary--11.7%
- ---------------------------------------------
Automobiles--1.0%
Honda Motor Co.
Ltd., Sponsored
ADR 1,005,000 $ 20,150,250
- ---------------------------------------------
Hotels, Restaurants & Leisure--4.2%
Carnival Corp. 1,259,400 43,965,654
- ---------------------------------------------
Marriott
International, Inc.,
Cl. A 1,012,800 43,752,960
----------------
87,718,614
- ---------------------------------------------
Media--4.3%
Clear Channel
Communications,
Inc. 451,000 18,409,820
- ---------------------------------------------
General Motors
Corp., Cl. H 1 1,729,100 28,409,113
- ---------------------------------------------
Liberty Media
Corp., Cl. A 1 1,983,000 20,008,470
- ---------------------------------------------
Omnicom
Group, Inc. 167,600 13,374,480
- ---------------------------------------------
Time Warner,
Inc. 1 650,000 9,938,500
----------------
90,140,383
- ---------------------------------------------
Multiline Retail--1.3%
Dollar General
Corp. 1,232,300 27,689,781
- ---------------------------------------------
Specialty Retail--0.9%
Office Depot,
Inc. 1 1,344,000 20,065,920
- ---------------------------------------------
Consumer Staples--4.6%
- ---------------------------------------------
Food Products--2.1%
Dean Foods
Co. 1 538,000 16,274,500
- ---------------------------------------------
Kraft Foods, Inc.,
Cl. A 950,000 27,645,000
----------------
43,919,500
- ---------------------------------------------
Household Products--0.5%
Procter & Gamble
Corp. (The) 113,000 11,106,770
- ---------------------------------------------
Personal Products--1.2%
Gillette Co. 811,000 25,870,900
- ---------------------------------------------
Tobacco--0.8%
Altria Group,
Inc. 367,100 17,070,150
Market Value
Shares See Note 1
- ---------------------------------------------
Energy--5.1%
- ---------------------------------------------
Oil & Gas--5.1%
BP plc, ADR 986,500 $ 41,807,870
- ---------------------------------------------
ConocoPhillips 783,100 44,754,165
- ---------------------------------------------
Exxon Mobil Corp. 565,000 20,667,700
----------------
107,229,735
- ---------------------------------------------
Financials--20.8%
- ---------------------------------------------
Capital Markets--0.8%
Bank of New York
Co., Inc. (The) 506,500 15,797,735
- ---------------------------------------------
Commercial Banks--5.0%
Wells Fargo
& Co. 1,884,200 106,118,144
- ---------------------------------------------
Diversified Financial Services--4.5%
Citigroup, Inc. 1,467,133 69,542,104
- ---------------------------------------------
Morgan Stanley 163,000 8,943,810
- ---------------------------------------------
Schwab (Charles)
Corp. 1,136,000 15,404,160
----------------
93,890,074
- ---------------------------------------------
Insurance--4.9%
AFLAC, Inc. 1,042,000 38,012,160
- ---------------------------------------------
American
International
Group, Inc. 431,700 26,260,311
- ---------------------------------------------
UnumProvident
Corp. 770,400 12,611,448
- ---------------------------------------------
XL Capital Ltd.,
Cl. A 395,000 27,452,500
----------------
104,336,419
- ---------------------------------------------
Thrifts & Mortgage Finance--5.6%
Fannie Mae 225,000 16,130,250
- ---------------------------------------------
Freddie Mac 1,806,200 101,382,006
----------------
117,512,256
- ---------------------------------------------
Health Care--11.0%
- ---------------------------------------------
Biotechnology--0.7%
Wyeth 367,000 16,199,380
- ---------------------------------------------
Health Care Providers & Services--4.1%
Anthem, Inc. 1 199,000 13,617,570
- ---------------------------------------------
McKesson Corp. 1,283,000 38,836,410
- ---------------------------------------------
Quest Diagnostics,
Inc. 1 493,000 33,351,450
----------------
85,805,430
12 | OPPENHEIMER QUEST OPPORTUNITY VALUE FUND
Market Value
Shares See Note 1
- ---------------------------------------------
Pharmaceuticals--6.2%
Eli Lilly & Co. 233,200 $ 15,535,784
- ---------------------------------------------
Johnson &
Johnson 256,000 12,884,480
- ---------------------------------------------
Pfizer, Inc. 1,976,000 62,441,600
- ---------------------------------------------
Sanofi-Synthelabo
SA, ADR 1,288,000 39,799,200
----------------
130,661,064
- ---------------------------------------------
Industrials--4.6%
- ---------------------------------------------
Industrial Conglomerates--3.9%
General Electric
Co. 1,827,900 53,027,379
- ---------------------------------------------
Tyco International
Ltd. 1,400,000 29,232,000
----------------
82,259,379
- ---------------------------------------------
Road & Rail--0.7%
Union Pacific
Corp. 219,000 13,709,400
- ---------------------------------------------
Information Technology--7.9%
- ---------------------------------------------
Communications Equipment--2.3%
JDS Uniphase
Corp. 1 5,268,600 18,703,530
- ---------------------------------------------
Nokia Corp.,
Sponsored ADR,
A Shares 1,739,000 29,545,610
----------------
48,249,140
- ---------------------------------------------
Computers & Peripherals--2.2%
Dell, Inc. 1 492,000 17,771,040
- ---------------------------------------------
EMC Corp. 1 1,997,000 27,638,480
----------------
45,409,520
- ---------------------------------------------
Semiconductors & Semiconductor Equipment--0.2%
Agere Systems,
Inc., Cl. A 1 1,455,900 5,066,532
- ---------------------------------------------
Software--3.2%
Dassault Systemes
SA, ADR 578,866 24,381,836
- ---------------------------------------------
Microsoft Corp. 1,659,200 43,388,080
----------------
67,769,916
Market Value
Shares See Note 1
- ---------------------------------------------
Materials--4.9%
- ---------------------------------------------
Metals & Mining--3.3%
Alcan, Inc. 546,000 $ 21,801,780
- ---------------------------------------------
Inco Ltd. 1 572,300 19,000,360
- ---------------------------------------------
Nucor Corp. 547,200 30,002,976
----------------
70,805,116
- ---------------------------------------------
Paper & Forest Products--1.6%
International
Paper Co. 632,000 24,869,200
- ---------------------------------------------
MeadWestvaco
Corp. 335,000 8,683,200
----------------
33,552,400
- ---------------------------------------------
Telecommunication Services--2.1%
- ---------------------------------------------
Diversified Telecommunication Services--2.1%
Alltel Corp. 785,400 37,125,858
- ---------------------------------------------
Verizon
Communications,
Inc. 234,000 7,862,400
----------------
44,988,258
- ---------------------------------------------
Utilities--1.3%
- ---------------------------------------------
Electric Utilities--1.3%
Exelon Corp. 419,000 26,585,550
----------------
Total Common Stocks
(Cost $1,295,128,865) 1,559,677,716
13 | OPPENHEIMER QUEST OPPORTUNITY VALUE FUND
STATEMENT OF INVESTMENTS Continued
Principal Market Value
Amount See Note 1
- ---------------------------------------------
U.S. Government Obligations--19.8%
U.S. Treasury Nts.,
5.75%, 11/15/05
(Cost
$414,041,973) $388,000,000 $ 418,130,916
- ---------------------------------------------
Short-Term Notes--4.8%
- ---------------------------------------------
American Express Credit Corp.:
1.03%, 11/5/03 50,000,000 49,994,278
1.03%, 12/3/03 11,000,000 10,989,929
- ---------------------------------------------
Federal Home Loan Bank:
0.96%, 11/20/03 16,000,000 15,991,893
1.09%, 11/7/03 10,000,000 9,998,367
- ---------------------------------------------
Student Loan
Marketing Assn.,
0.94%, 11/3/03 13,376,000 13,375,301
----------------
Total Short-Term Notes
(Cost $100,349,768) 100,349,768
- ---------------------------------------------
Total Investments,
at Value
(Cost
$1,809,520,606) 98.6% 2,078,158,400
- ---------------------------------------------
Other Assets
Net of Liabilities 1.4 30,118,064
------------------------
Net Assets 100.0% $2,108,276,464
========================
Footnote to Statement of Investments
1. Non-income producing security.
See accompanying Notes to Financial Statements.
14 | OPPENHEIMER QUEST OPPORTUNITY VALUE FUND
STATEMENT OF ASSETS AND LIABILITIES October 31, 2003
- --------------------------------------------------------------------------------
Assets
- --------------------------------------------------------------------------------
Investments, at value (including securities loaned
of approximately $218,791,000)
(cost $1,809,520,606)--see accompanying statement $2,078,158,400
- --------------------------------------------------------------------------------
Cash 1,020,826
- --------------------------------------------------------------------------------
Collateral for securities loaned 223,234,041
- --------------------------------------------------------------------------------
Receivables and other assets:
Investments sold 30,687,710
Interest and dividends 12,087,913
Shares of beneficial interest sold 1,073,102
Other 35,081
----------------
Total assets 2,346,297,073
- --------------------------------------------------------------------------------
Liabilities
- --------------------------------------------------------------------------------
Return of collateral for securities loaned 223,234,041
- --------------------------------------------------------------------------------
Payables and other liabilities:
Investments purchased 9,734,563
Shares of beneficial interest redeemed 3,398,045
Transfer and shareholder servicing agent fees 495,912
Distribution and service plan fees 444,038
Trustees' compensation 345,181
Shareholder reports 342,082
Other 26,747
----------------
Total liabilities 238,020,609
- --------------------------------------------------------------------------------
Net Assets $2,108,276,464
================
- --------------------------------------------------------------------------------
Composition of Net Assets
- --------------------------------------------------------------------------------
Par value of shares of beneficial interest $ 707,430
- --------------------------------------------------------------------------------
Additional paid-in capital 1,946,641,501
- --------------------------------------------------------------------------------
Undistributed net investment income 3,284,257
- --------------------------------------------------------------------------------
Accumulated net realized loss on investment transactions (110,994,518)
- --------------------------------------------------------------------------------
Net unrealized appreciation on investments 268,637,794
----------------
Net Assets $2,108,276,464
================
15 | OPPENHEIMER QUEST OPPORTUNITY VALUE FUND
STATEMENT OF ASSETS AND LIABILITIES Continued
- --------------------------------------------------------------------------------
Net Asset Value Per Share
- --------------------------------------------------------------------------------
Class A Shares:
Net asset value and redemption price per share (based on net
assets of $1,429,156,584 and 47,631,394 shares of beneficial
interest outstanding) $30.00
Maximum offering price per share (net asset value
plus sales charge of 5.75% of offering price) $31.83
- --------------------------------------------------------------------------------
Class B Shares:
Net asset value, redemption price (excludes applicable
contingent deferred sales charge) and offering price per
share (based on net assets of $424,121,409
and 14,443,777 shares of beneficial interest outstanding) $29.36
- --------------------------------------------------------------------------------
Class C Shares:
Net asset value, redemption price (excludes applicable
contingent deferred sales charge) and offering price per share
(based on net assets of $205,336,398
and 7,009,831 shares of beneficial interest outstanding) $29.29
- --------------------------------------------------------------------------------
Class N Shares:
Net asset value, redemption price (excludes applicable
contingent deferred sales charge) and offering price per share
(based on net assets of $19,538,217
and 657,377 shares of beneficial interest outstanding) $29.72
- --------------------------------------------------------------------------------
Class Y Shares:
Net asset value, redemption price and offering price per share
(based on net assets of $30,123,856 and 1,000,619 shares of
beneficial interest outstanding) $30.11
See accompanying Notes to Financial Statements.
16 | OPPENHEIMER QUEST OPPORTUNITY VALUE FUND
STATEMENT OF OPERATIONS For the Year Ended October 31, 2003
- --------------------------------------------------------------------------------
Investment Income
- --------------------------------------------------------------------------------
Dividends (net of foreign withholding taxes of $380,694) $ 29,677,915
- --------------------------------------------------------------------------------
Interest 11,225,424
----------------
Total investment income 40,903,339
- --------------------------------------------------------------------------------
Expenses
- --------------------------------------------------------------------------------
Management fees 17,971,564
- --------------------------------------------------------------------------------
Distribution and service plan fees:
Class A 3,410,081
Class B 5,283,897
Class C 1,982,203
Class N 88,318
- --------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees:
Class A 3,482,975
Class B 1,550,793
Class C 521,794
Class N 128,208
Class Y 113,757
- --------------------------------------------------------------------------------
Shareholder reports 566,427
- --------------------------------------------------------------------------------
Trustees' compensation 62,125
- --------------------------------------------------------------------------------
Custodian fees and expenses 19,179
- --------------------------------------------------------------------------------
Other 140,900
----------------
Total expenses 35,322,221
Less reduction to custodian expenses (3,687)
Less voluntary waiver of transfer and shareholder
servicing agent fees--Class A (17,840)
Less voluntary waiver of transfer and shareholder servicing
agent fees--Class B (11,604)
Less voluntary waiver of transfer and shareholder
servicing agent fees--Class C (2,641)
Less voluntary waiver of transfer and
shareholder servicing agent fees--Class N (71,597)
Less voluntary waiver of transfer and shareholder servicing
agent fees--Class Y (25,868)
----------------
Net expenses 35,188,984
- --------------------------------------------------------------------------------
Net Investment Income 5,714,355
- --------------------------------------------------------------------------------
Realized and Unrealized Gain
- --------------------------------------------------------------------------------
Net realized gain on investments 83,270,706
- --------------------------------------------------------------------------------
Net change in unrealized appreciation on investments 186,989,138
- --------------------------------------------------------------------------------
Net Increase in Net Assets Resulting from Operations $275,974,199
==============
See accompanying Notes to Financial Statements.
17 | OPPENHEIMER QUEST OPPORTUNITY VALUE FUND
STATEMENTS OF CHANGES IN NET ASSETS
Year Ended October 31, 2003 2002
- --------------------------------------------------------------------------------
Operations
- --------------------------------------------------------------------------------
Net investment income $ 5,714,355 $ 13,152,268
- --------------------------------------------------------------------------------
Net realized gain (loss) 83,270,706 (167,047,784)
- --------------------------------------------------------------------------------
Net change in unrealized appreciation 186,989,138 (240,811,400)
---------------------------------
Net increase (decrease) in net assets
resulting from operations 275,974,199 (394,706,916)
- --------------------------------------------------------------------------------
Dividends and/or Distributions to Shareholders
- --------------------------------------------------------------------------------
Dividends from net investment income:
Class A (11,712,436) (15,901,977)
Class B -- (6,149,541)
Class C (389,823) (1,540,507)
Class N (132,979) (56,109)
Class Y (317,784) (378,333)
- --------------------------------------------------------------------------------
Beneficial Interest Transactions
- --------------------------------------------------------------------------------
Net increase (decrease) in net assets
resulting from beneficial interest
transactions:
Class A 75,115,637 117,293,913
Class B (328,186,775) (314,532,059)
Class C (23,354,332) (13,709,069)
Class N 2,256,746 14,922,973
Class Y 1,839,588 (18,471,746)
- --------------------------------------------------------------------------------
Net Assets
- --------------------------------------------------------------------------------
Total decrease (8,907,959) (633,229,371)
- --------------------------------------------------------------------------------
Beginning of period 2,117,184,423 2,750,413,794
---------------------------------
End of period [including undistributed
net investment income of $3,284,257 and
$10,122,924, respectively] $2,108,276,464 $2,117,184,423
=================================
See accompanying Notes to Financial Statements.
18 | OPPENHEIMER QUEST OPPORTUNITY VALUE FUND
FINANCIAL HIGHLIGHTS
Class A Year Ended October 31, 2003 2002 2001 2000 1999
- ---------------------------------------------------------------------------------------------------------
Per Share Operating Data
- ---------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 26.41 $ 31.30 $ 36.04 $ 39.96 $ 36.44
- ---------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .14 .24 .33 .59 .22
Net realized and unrealized gain (loss) 3.71 (4.74) (1.19) .34 5.46
-------------------------------------------------------------
Total from investment operations 3.85 (4.50) (.86) .93 5.68
- ----------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.26) (.39) (.58) (.20) (.31)
Distributions from net realized gain -- -- (3.30) (4.65) (1.85)
-------------------------------------------------------------
Total dividends and/or distributions
to shareholders (.26) (.39) (3.88) (4.85) (2.16)
- ----------------------------------------------------------------------------------------------------------
Net asset value, end of period $30.00 $26.41 $31.30 $36.04 $39.96
=============================================================
- ---------------------------------------------------------------------------------------------------------
Total Return, at Net Asset Value 1 14.70% (14.60)% (2.79)% 2.82% 16.31%
- ---------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
- ---------------------------------------------------------------------------------------------------------
Net assets, end of period
(in thousands) $1,429,157 $1,181,014 $1,285,953 $1,325,552 $1,820,497
- ---------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $1,292,117 $1,300,422 $1,348,895 $1,486,116 $1,894,250
- ---------------------------------------------------------------------------------------------------------
Ratios to average net assets: 2
Net investment income 0.53% 0.82% 1.01% 1.42% 0.50%
Total expenses 1.44% 3,4 1.52% 3,4 1.51% 3 1.53% 3 1.57% 3
- ---------------------------------------------------------------------------------------------------------
Portfolio turnover rate 63% 73% 42% 63% 47%
1. Assumes an investment on the business day before the first day of the fiscal
period, with all dividends and distributions reinvested in additional shares on
the reinvestment date, and redemption at the net asset value calculated on the
last business day of the fiscal period. Sales charges are not reflected in the
total returns. Total returns are not annualized for periods of less than one
full year. Returns do not reflect the deduction of taxes that a shareholder
would pay on Fund distributions or the redemption of Fund shares.
2. Annualized for periods of less than one full year.
3. Reduction to custodian expenses less than 0.01%.
4. Voluntary waiver of transfer agent fees less than 0.01%.
See accompanying Notes to Financial Statements.
19 | OPPENHEIMER QUEST OPPORTUNITY VALUE FUND
FINANCIAL HIGHLIGHTS Continued
Class B Year Ended October 31, 2003 2002 2001 2000 1999
- ---------------------------------------------------------------------------------------------------------
Per Share Operating Data
- ---------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 25.79 $ 30.56 $ 35.25 $ 39.19 $ 35.79
- ---------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss) (.11) .03 .15 .32 (.02)
Net realized and unrealized gain (loss) 3.68 (4.63) (1.20) .39 5.41
-----------------------------------------------------------
Total from investment operations 3.57 (4.60) (1.05) .71 5.39
- ---------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income -- (.17) (.34) -- (.14)
Distributions from net realized gain -- -- (3.30) (4.65) (1.85)
-----------------------------------------------------------
Total dividends and/or distributions
to shareholders -- (.17) (3.64) (4.65) (1.99)
- ---------------------------------------------------------------------------------------------------------
Net asset value, end of period $29.36 $25.79 $30.56 $35.25 $39.19
===========================================================
- ---------------------------------------------------------------------------------------------------------
Total Return, at Net Asset Value 1 13.84% (15.16)% (3.40)% 2.23% 15.72%
- ---------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
- ---------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $424,121 $693,380 $1,157,671 $1,393,095 $1,969,529
- ---------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $527,653 $981,593 $1,326,222 $1,585,561 $1,986,358
- ---------------------------------------------------------------------------------------------------------
Ratios to average net assets: 2
Net investment income (loss) (0.19)% 0.17% 0.42% 0.82% (0.03)%
Total expenses 2.20% 3,4 2.17% 3,4 2.11% 3 2.13% 3 2.10% 3
- ---------------------------------------------------------------------------------------------------------
Portfolio turnover rate 63% 73% 42% 63% 47%
1. Assumes an investment on the business day before the first day of the fiscal
period, with all dividends and distributions reinvested in additional shares on
the reinvestment date, and redemption at the net asset value calculated on the
last business day of the fiscal period. Sales charges are not reflected in the
total returns. Total returns are not annualized for periods of less than one
full year. Returns do not reflect the deduction of taxes that a shareholder
would pay on Fund distributions or the redemption of Fund shares.
2. Annualized for periods of less than one full year.
3. Reduction to custodian expenses less than 0.01%.
4. Voluntary waiver of transfer agent fees less than 0.01%.
See accompanying Notes to Financial Statements.
20 | OPPENHEIMER QUEST OPPORTUNITY VALUE FUND
Class C Year Ended October 31, 2003 2002 2001 2000 1999
- ---------------------------------------------------------------------------------------------------------
Per Share Operating Data
- ----------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 25.77 $ 30.55 $ 35.24 $ 39.17 $ 35.75
- ----------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss) (.06) .05 .14 .35 (.01)
Net realized and unrealized gain (loss) 3.63 (4.65) (1.18) .37 5.40
------------------------------------------------------------
Total from investment operations 3.57 (4.60) (1.04) .72 5.39
- ----------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.05) (.18) (.35) -- (.12)
Distributions from net realized gain -- -- (3.30) (4.65) (1.85)
------------------------------------------------------------
Total dividends and/or distributions
to shareholders (.05) (.18) (3.65) (4.65) (1.97)
- ----------------------------------------------------------------------------------------------------------
Net asset value, end of period $29.29 $25.77 $30.55 $35.24 $39.17
============================================================
- ----------------------------------------------------------------------------------------------------------
Total Return, at Net Asset Value 1 13.88% (15.16)% (3.37)% 2.26% 15.74%
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
- ----------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $205,336 $203,490 $257,556 $287,103 $428,182
- ----------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $198,226 $245,055 $280,327 $336,213 $448,383
- ----------------------------------------------------------------------------------------------------------
Ratios to average net assets: 2
Net investment income (loss) (0.19)% 0.18% 0.41% 0.86% (0.02)%
Total expenses 2.17% 3,4 2.16% 3,4 2.11% 3 2.08% 3 2.08% 3
- ----------------------------------------------------------------------------------------------------------
Portfolio turnover rate 63% 73% 42% 63% 47%
1. Assumes an investment on the business day before the first day of the fiscal
period, with all dividends and distributions reinvested in additional shares on
the reinvestment date, and redemption at the net asset value calculated on the
last business day of the fiscal period. Sales charges are not reflected in the
total returns. Total returns are not annualized for periods of less than one
full year. Returns do not reflect the deduction of taxes that a shareholder
would pay on Fund distributions or the redemption of Fund shares.
2. Annualized for periods of less than one full year.
3. Reduction to custodian expenses less than 0.01%.
4. Voluntary waiver of transfer agent fees less than 0.01%.
See accompanying Notes to Financial Statements.
21 | OPPENHEIMER QUEST OPPORTUNITY VALUE FUND
FINANCIAL HIGHLIGHTS Continued
Class N Year Ended October 31, 2003 2002 2001 1
- ---------------------------------------------------------------------------------------------
Per Share Operating Data
- ---------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 26.21 $ 31.26 $ 33.48
- ---------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .09 .49 .03
Net realized and unrealized gain (loss) 3.65 (5.02) (2.25)
-----------------------------------
Total from investment operations 3.74 (4.53) (2.22)
- ---------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.23) (.52) --
Distributions from net realized gain -- -- --
-----------------------------------
Total dividends and/or distributions to shareholders (.23) (.52) --
- ---------------------------------------------------------------------------------------------
Net asset value, end of period $29.72 $26.21 $31.26
===================================
- ---------------------------------------------------------------------------------------------
Total Return, at Net Asset Value 2 14.39% (14.78)% (6.63)%
- ---------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------
Ratios/Supplemental Data
- ---------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $19,538 $14,843 $2,292
- ---------------------------------------------------------------------------------------------
Average net assets (in thousands) $17,677 $10,295 $ 646
- ---------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income 0.23% 0.55% 0.47%
Total expenses 2.14% 1.76% 1.63%
Expenses after expense reimbursement or fee waiver
and reduction to custodian expenses 1.73% N/A 4,5 N/A 4
- ---------------------------------------------------------------------------------------------
Portfolio turnover rate 63% 73% 42%
1. For the period from March 1, 2001 (inception of offering) to October 31,
2001.
2. Assumes an investment on the business day before the first day of the fiscal
period (or inception of offering), with all dividends and distributions
reinvested in additional shares on the reinvestment date, and redemption at the
net asset value calculated on the last business day of the fiscal period. Sales
charges are not reflected in the total returns. Total returns are not annualized
for periods of less than one full year. 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. Reduction to custodian expenses less than 0.01%.
5. Voluntary waiver of transfer agent fees less than 0.01%.
See accompanying Notes to Financial Statements.
22 | OPPENHEIMER QUEST OPPORTUNITY VALUE FUND
Class Y Year Ended October 31, 2003 2002 2001 2000 1999
- ---------------------------------------------------------------------------------------------------------
Per Share Operating Data
- ---------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 26.53 $ 31.40 $ 36.21 $ 40.17 $ 36.64
- ---------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .20 .56 .45 .71 .35
Net realized and unrealized gain (loss) 3.72 (4.99) (1.21) .39 5.48
-----------------------------------------------------------
Total from investment operations 3.92 (4.43) (.76) 1.10 5.83
- ---------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.34) (.44) (.75) (.41) (.45)
Distributions from net realized gain -- -- (3.30) (4.65) (1.85)
-----------------------------------------------------------
Total dividends and/or distributions
to shareholders (.34) (.44) (4.05) (5.06) (2.30)
- ---------------------------------------------------------------------------------------------------------
Net asset value, end of period $30.11 $26.53 $31.40 $36.21 $40.17
===========================================================
- ---------------------------------------------------------------------------------------------------------
Total Return, at Net Asset Value 1 14.97% (14.34)% (2.48)% 3.30% 16.74%
- ---------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
- ---------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $30,124 $24,458 $46,942 $39,945 $54,692
- ---------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $27,078 $28,726 $45,797 $43,926 $41,178
- ---------------------------------------------------------------------------------------------------------
Ratios to average net assets: 2
Net investment income 0.74% 1.17% 1.32% 1.87% 0.98%
Total expenses 1.33% 1.34% 1.17% 1.07% 1.14%
Expenses after expense reimbursement
or fee waiver and reduction to
custodian expenses 1.23% 1.23% N/A 3 N/A 3 N/A 3
- ---------------------------------------------------------------------------------------------------------
Portfolio turnover rate 63% 73% 42% 63% 47%
1. Assumes an investment on the business day before the first day of the fiscal
period, with all dividends and distributions reinvested in additional shares on
the reinvestment date, and redemption at the net asset value calculated on the
last business day of the fiscal period. Sales charges are not reflected in the
total returns. Total returns are not annualized for periods of less than one
full year. Returns do not reflect the deduction of taxes that a shareholder
would pay on Fund distributions or the redemption of Fund shares.
2. Annualized for periods of less than one full year.
3. Reduction to custodian expenses less than 0.01%.
See accompanying Notes to Financial Statements.
23 | OPPENHEIMER QUEST OPPORTUNITY VALUE FUND
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
1. Significant Accounting Policies
Oppenheimer Quest Opportunity Value Fund (the Fund), a series of Oppenheimer
Quest For Value Funds, 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 growth of capital. The Fund's investment advisor is
OppenheimerFunds, Inc. (the Manager). The Manager has entered into a
sub-advisory agreement with OpCap Advisors.
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. Securities traded on NASDAQ are valued based on the closing
price provided by NASDAQ 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 using 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).
- --------------------------------------------------------------------------------
Foreign Currency Translation. The Fund's accounting records are maintained in
U.S. dollars. Prices of securities denominated in foreign currencies are
translated into U.S. dollars at the closing rates of exchange. Amounts related
to the purchase and sale of foreign securities and investment income are
translated at the rates of exchange prevailing on the respective dates of such
transactions.
24 | OPPENHEIMER QUEST OPPORTUNITY VALUE FUND
The effect of changes in foreign currency exchange rates on investments is
separately identified from the fluctuations arising from changes in market
values of securities held and reported with all other foreign currency gains
and losses in the Fund's Statement of Operations.
- --------------------------------------------------------------------------------
Allocation of Income, Expenses, Gains and Losses. Income, expenses (other than
those attributable to a specific class), gains and losses are allocated on a
daily basis 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 comply with provisions of the Internal
Revenue Code applicable to regulated investment companies and to distribute
substantially all of its investment company 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.
The tax components of capital shown in the table below represent distribution
requirements the Fund must satisfy under the income tax regulations, losses the
Fund may be able to offset against income and gains realized in future years
and unrealized appreciation or depreciation of securities and other investments
for federal income tax purposes.
Net Unrealized
Appreciation
Based on Cost of
Securities and
Undistributed Undistributed Accumulated Other Investments
Net Investment Long-Term Loss for Federal Income
Income Gain Carryforward 1,2 Tax Purposes
------------------------------------------------------------------
$3,626,050 $-- $110,007,031 $267,650,311
1. As of October 31, 2003, the Fund had $110,007,031 of net capital loss
carryforwards available to offset future realized capital gains, if any, and
thereby reduce future taxable gain distributions. As of October 31, 2003,
details of the capital loss carryforward were as follows:
Expiring
----------------------
2010 $110,007,031
2. During the fiscal year October 31, 2003, the Fund utilized $72,470,684 of
capital loss carryforward to offset capital gains realized in that fiscal year.
During the fiscal year October 31, 2002, the Fund did not utilize any capital
loss carryforwards.
The tax character of distributions paid during the years ended October 31, 2003
and October 31, 2002 was as follows:
Year Ended Year Ended
October 31, 2003 October 31, 2002
------------------------------------------------------
Distributions paid from:
Ordinary income $12,553,022 $24,026,467
25 | OPPENHEIMER QUEST OPPORTUNITY VALUE FUND
NOTES TO FINANCIAL STATEMENTS CONTINUED
- --------------------------------------------------------------------------------
1. Significant Accounting Policies Continued
The aggregate cost of securities and other investments and the composition of
unrealized appreciation and depreciation of securities and other investments
for federal income tax purposes as of October 31, 2003 are noted below. The
primary difference between book and tax appreciation or depreciation of
securities and other investments, if applicable, is attributable to the tax
deferral of losses or tax realization of financial statement unrealized gain or
loss.
Federal tax cost of securities
and other investments $1,810,508,089
==============
Gross unrealized appreciation $ 283,161,402
Gross unrealized depreciation (15,511,091)
--------------
Net unrealized appreciation $ 267,650,311
==============
- --------------------------------------------------------------------------------
Trustees' Compensation. The Fund has adopted an unfunded retirement plan for
the Fund's independent trustees. Benefits are based on years of service and
fees paid to each trustee during the years of service. During the year ended
October 31, 2003, the Fund's projected benefit obligations were increased by
$9,969 and payments of $8,954 were made to retired trustees, resulting in an
accumulated liability of $341,794 as of October 31, 2003.
The Board of Trustees has adopted a deferred compensation plan for
independent trustees that enables trustees to elect to defer receipt of all or
a portion of the annual compensation they are entitled to receive from the
Fund. Under the plan, deferred amounts are treated as though equal dollar
amounts had been invested in shares of the Fund or are invested in other
Oppenheimer funds selected by the Trustee. Deferral of trustees' fees under the
plan will not affect the net assets of the Fund, and will not materially affect
the Fund's assets, liabilities or net investment income per share. Amounts will
be deferred until distributed in accordance to the Plan.
- --------------------------------------------------------------------------------
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. Income and capital gain distributions, if
any, are declared and paid annually.
- --------------------------------------------------------------------------------
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.
- --------------------------------------------------------------------------------
Expense Offset Arrangement. The reduction of custodian fees represents earnings
on cash balances maintained by the Fund.
- --------------------------------------------------------------------------------
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.
26 | OPPENHEIMER QUEST OPPORTUNITY VALUE FUND
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 $0.01 par value shares of
beneficial interest of each class. Transactions in shares of beneficial
interest were as follows:
Year Ended October 31, 2003 Year Ended October 31, 2002
Shares Amount Shares Amount
- ----------------------------------------------------------------------------------------
Class A
Sold 15,512,162 $ 418,441,325 14,738,098 $ 441,197,976
Dividends and/or
distributions reinvested 414,020 10,892,875 463,238 14,754,127
Redeemed (13,009,920) (354,218,563) (11,574,654) (338,658,190)
-------------------------------------------------------------
Net increase 2,916,262 $ 75,115,637 3,626,682 $ 117,293,913
=============================================================
- ----------------------------------------------------------------------------------------
Class B
Sold 1,759,775 $ 46,740,716 2,934,475 $ 87,327,724
Dividends and/or
distributions reinvested -- -- 178,950 5,599,347
Redeemed (14,198,043) (374,927,491) (14,116,397) (407,459,130)
-------------------------------------------------------------
Net decrease (12,438,268) $(328,186,775) (11,002,972) $(314,532,059)
=============================================================
- ----------------------------------------------------------------------------------------
Class C
Sold 839,530 $ 22,356,887 1,336,866 $ 39,503,632
Dividends and/or
distributions reinvested 13,425 347,059 43,323 1,354,281
Redeemed (1,738,392) (46,058,278) (1,916,590) (54,566,982)
-------------------------------------------------------------
Net decrease (885,437) $ (23,354,332) (536,401) $ (13,709,069)
=============================================================
- ----------------------------------------------------------------------------------------
Class N
Sold 313,856 $ 8,489,890 587,227 $ 17,677,458
Dividends and/or
distributions reinvested 5,090 132,970 1,771 56,093
Redeemed (227,811) (6,366,114) (96,091) (2,810,578)
-------------------------------------------------------------
Net increase 91,135 $ 2,256,746 492,907 $ 14,922,973
=============================================================
- ----------------------------------------------------------------------------------------
Class Y
Sold 360,532 $ 9,593,522 415,522 $ 12,503,449
Dividends and/or
distributions reinvested 12,055 317,784 11,852 378,332
Redeemed (293,840) (8,071,718) (1,000,613) (31,353,527)
-------------------------------------------------------------
Net increase (decrease) 78,747 $ 1,839,588 (573,239) $ (18,471,746)
=============================================================
27 | OPPENHEIMER QUEST OPPORTUNITY VALUE FUND
NOTES TO financial statements Continued
- --------------------------------------------------------------------------------
3. Purchases and Sales of Securities
The aggregate cost of purchases and proceeds from sales of securities, other
than short-term obligations, for the year ended October 31, 2003, were
$1,203,876,017 and $1,378,441,606, 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. Effective June 15, 2003, the
agreement provides for a fee at an annual rate of 0.91% of the first $400
million of average annual net assets of the Fund, 0.86% of the next $400
million, 0.85% of the next $200 million, 0.81% of the next $2 billion, 0.70% of
the next $1 billion, 0.65% of the next $1 billion and 0.60% of average annual
net assets in excess of $5 billion. Prior to June 15, 2003, the annual advisory
fee rate was 1.00% of the first $400 million of average annual net assets of
the Fund, 0.90% of the next $400 million, 0.85% of the next $2.2 billion, 0.75%
of the next $1 billion and 0.65% of average annual net assets in excess of $4
billion.
- --------------------------------------------------------------------------------
Sub-Advisor Fees. The Manager retains OpCap Advisors (the Sub-Advisor) to
provide the day-to-day portfolio management of the Fund. For the year ended
October 31, 2003, the Manager paid $6,316,831 to the Sub-Advisor for its
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 per account fee. For the year ended October 31, 2003, the Fund
paid $5,675,279 to OFS for services to the Fund.
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.
28 | OPPENHEIMER QUEST OPPORTUNITY VALUE 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
Year Ended Shares Distributor Distributor 1 Distributor 1 Distributor 1 Distributor 1
- ---------------------------------------------------------------------------------------------------------
October 31, 2003 $1,359,505 $383,133 $293,848 $1,292,892 $163,255 $65,552
1. The Distributor advances concession payments to dealers for certain sales of
Class A shares and for sales of Class B, Class C and Class N shares from its
own resources at the time of sale.
Class A Class B Class C Class N
Contingent Contingent Contingent Contingent
Deferred Deferred Deferred Deferred
Sales Charges Sales Charges Sales Charges Sales Charges
Retained by Retained by Retained by Retained by
Year Ended Distributor Distributor Distributor Distributor
- -----------------------------------------------------------------------------------
October 31, 2003 $19,454 $1,407,485 $23,232 $37,651
- -----------------------------------------------------------------------------------
Distribution and Service Plan for Class A Shares. The Fund has adopted a
Distribution and Service Plan for Class A shares. Under the plan the Fund paid
an asset-based sales charge to the Distributor at an annual rate equal to 0.15%
of average annual net assets representing Class A shares purchased before
September 1, 1993 and 0.10% of average annual net assets representing Class A
shares purchased on or before December 31, 2002. Beginning January 1, 2003, the
Board of Trustees set the annual rate at zero. The Fund also pays a service fee
to the Distributor of 0.25% of the average annual net assets of Class A shares.
For the year ended October 31, 2003, expense under the Class A plan totaled
$3,410,081, all of which were paid by the Distributor to recipients, which
included $60,996 retained by the Distributor and $214,494 which was paid to an
affiliate of the Manager.
- --------------------------------------------------------------------------------
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 year ended October 31, 2003,
were as follows:
Distributor's
Distributor's Aggregate
Aggregate Uncompensated
Uncompensated Expenses as %
Total Expenses Amount Retained Expenses of Net Assets
Under Plan by Distributor Under Plan of Class
- --------------------------------------------------------------------------------
Class B Plan $5,283,897 $3,785,989 $1,418,909 0.33%
Class C Plan 1,982,203 229,137 6,029,056 2.94
Class N Plan 88,318 73,239 398,200 2.04
29 | OPPENHEIMER QUEST OPPORTUNITY VALUE FUND
NOTES TO FINANCIAL STATEMENTS Continued
- --------------------------------------------------------------------------------
5. Securities Lending
The Fund lends portfolio securities from time to time in order to earn
additional income. In return, the Fund receives collateral in the form of US
Treasury obligations or cash, against the loaned securities and maintains
collateral in an amount not less than 100% of the market value of the loaned
securities during the period of the loan. The market value of the loaned
securities is determined at the close of business of the funds and any
additional required collateral is delivered to the Fund on the next business
day. If the borrower defaults on its obligation to return the securities loaned
because of insolvency or other reasons, the Fund could experience delays and
cost in recovering the securities loaned or in gaining access to the
collateral. Cash collateral in invested in cash equivalents. As of October 31,
2003, the Fund had on loan securities valued at $218,790,990. Cash of
$223,234,041 was received as collateral for the loans, and has been invested in
approved instruments.
- --------------------------------------------------------------------------------
6. 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 year
ended or at October 31, 2003.
30 | OPPENHEIMER QUEST OPPORTUNITY VALUE FUND
INDEPENDENT AUDITORS' REPORT
- --------------------------------------------------------------------------------
The Board of Trustees and Shareholders of
Oppenheimer Quest For Value Funds:
We have audited the accompanying statement of assets and liabilities including
the statement of investments of Oppenheimer Quest Opportunity Value Fund (one
of the portfolios constituting the Oppenheimer Quest For Value Funds) as of
October 31, 2003, and the related statement of operations for the year then
ended, the statements of changes in net assets for each of the two years in the
period then ended, and the financial highlights for each of the four years in
the period then ended. These financial statements and financial highlights are
the responsibility of the Fund's management. Our responsibility is to express
an opinion on these financial statements and financial highlights based on our
audits. The financial highlights for the year ended October 31, 1999, were
audited by other auditors whose report dated November 19, 1999, expressed an
unqualified opinion on this information.
We conducted our audits in accordance with auditing standards generally
accepted in the United States of America. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the
financial statements and financial highlights are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. Our procedures
included confirmation of securities owned as of October 31, 2003, by
correspondence with the custodian and brokers or by other appropriate auditing
procedures where replies from brokers were not received. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of
Oppenheimer Quest Opportunity Value Fund as of October 31, 2003, the results of
its operations for the year then ended, the changes in its net assets for each
of the two years in the period then ended, and the financial highlights for
each of the four years in the period then ended, in conformity with accounting
principles generally accepted in the United States of America.
KPMG LLP
Denver, Colorado
November 21, 2003
31 | OPPENHEIMER QUEST OPPORTUNITY VALUE FUND
FEDERAL INCOME TAX INFORMATION Unaudited
- --------------------------------------------------------------------------------
In early 2004, if applicable, shareholders of record will receive information
regarding all dividends and distributions paid to them by the Fund during
calendar year 2003. Regulations of the U.S. Treasury Department require the
Fund to report this information to the Internal Revenue Service.
Dividends of $0.2554, $0.0496, $0.2296 and $0.3419 per share were paid to
Class A, Class C, Class N and Class Y shareholders, respectively, on December
11, 2002, all of which was designated as ordinary income for federal income tax
purposes.
Dividends, if any, paid by the Fund during the fiscal year ended October 31,
2003 which are not designated as capital gain distributions should be
multiplied by 100% to arrive at the amount eligible for the corporate
dividend-received deduction.
A portion, if any, of the dividends paid by the Fund during the fiscal year
ended October 31, 2003 which are not designated as capital gain distributions
are eligible for lower individual income tax rates to the extent that the Fund
has received qualified dividend income as stipulated by recent tax legislation.
$23,687,452 of the Fund's fiscal year taxable income may be eligible for the
lower individual income tax rates. In early 2004, shareholders of record will
receive information regarding the percentage of distributions that are eligible
for lower individual income tax rates.
The foregoing information is presented to assist shareholders in reporting
distributions received from the Fund to the Internal Revenue Service. Because
of the complexity of the federal regulations which may affect your individual
tax return and the many variations in state and local tax regulations, we
recommend that you consult your tax advisor for specific guidance.
PORTFOLIO PROXY VOTING
POLICIES AND PROCEDURES Unaudited
- --------------------------------------------------------------------------------
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.
32 | OPPENHEIMER QUEST OPPORTUNITY VALUE FUND
TRUSTEES AND OFFICERS Unaudited
- --------------------------------------------------------------------------------
Name, Position(s) Held with Principal Occupation(s) During
Fund, Length of Service, Age Past 5 Years; Other Trusteeships/
Directorships Held by Trustee; Number of
Portfolios in Fund Complex Currently
Overseen by Trustee
INDEPENDENT The address of each Trustee in the chart
TRUSTEES below is 6803 S. Tucson Way, Centennial,
CO 80112-3924. Each Trustee serves for an
indefinite term, until his or her
resignation, retirement, death or
removal.
Thomas W. Courtney, Principal of Courtney Associates, Inc.
Chairman of the (venture capital firm); former General
Board of Trustees, Partner of Trivest Venture Fund (private
Trustee (since 1987) venture capital fund); former President
Age: 70 of Investment Counseling Federated
Investors, Inc.; Trustee of the following
open-end investment companies: Cash
Assets Trust, PIMCO ADVISORS VIT, Tax
Free Trust of Arizona and Hawaiian Tax
Free Trust. Oversees 11 portfolios in the
OppenheimerFunds complex.
Paul Y. Clinton, Principal of Clinton Management
Trustee (since 1987) Associates, a financial and venture
Age: 71 capital consulting firm; Trustee of the
following open-end investment companies:
Trustee of Capital Cash Management Trust,
Prime Cash Fund, PIMCO ADVISORS VIT and
Narragansett Insured Tax-Free Income
Fund. Formerly: Director, External
Affairs, Kravco Corporation, a national
real estate owner and property management
corporation; President of Essex
Management Corporation, a management
consulting company; a general partner of
Capital Growth Fund, a venture capital
partnership; a general partner of Essex
Limited Partnership, an investment
partnership; President of Geneve Corp., a
venture capital fund; Chairman of
Woodland Capital Corp., a small business
investment company; and Vice President of
W.R. Grace & Co. Oversees 11 portfolios
in the OppenheimerFunds complex.
Robert G. Galli, A trustee or director of other
Trustee (since 1998) Oppenheimer funds. Oversees 35 portfolios
Age: 70 in the OppenheimerFunds complex.
Lacy B. Herrmann, Chairman and Chief Executive Officer of
Trustee (since 1987) Aquila Management Corporation, the
Age: 74 sponsoring organization and manager,
administrator and/or sub-adviser to the
following open-end investment companies,
and Chairman of the Board of Trustees and
President of each: Churchill Cash
Reserves Trust, Aquila-Cascadia Equity
Fund, Cash Assets Trust, Prime Cash Fund,
Narragansett Insured Tax-Free Income
Fund, Tax-Free Fund For Utah, Churchill
Tax-Free Fund of Kentucky, Tax-Free Fund
of Colorado, Tax-Free Trust of Oregon,
Tax-Free Trust of Arizona, Hawaiian
Tax-Free Trust, and Aquila Rocky Mountain
Equity Fund and PIMCO ADVISORS VIT; Vice
President, Director, Secretary, and
formerly Treasurer of Aquila
Distributors, Inc., distributor of the
above funds; President and Chairman of
the Board of Trustees of Capital Cash
Management Trust ("CCMT"), and an Officer
and Trustee/Director of its predecessors;
President and Director of STCM Management
Company, Inc., sponsor and adviser to
CCMT; Chairman, President and a Director
of InCap Management Corporation, formerly
sub-adviser and administrator of Prime
Cash Fund and Short Term Asset Reserves;
Trustee Emeritus of Brown University.
Oversees 11 portfolios in the
OppenheimerFunds complex.
33 | OPPENHEIMER QUEST OPPORTUNITY VALUE FUND
TRUSTEES AND OFFICERS Unaudited / Continued
Brian Wruble, Special Limited Partner (since January
Trustee (since 2001) 1999) of Odyssey Investment Partners, LLC
Age: 60 (private equity investment); General
Partner (since September 1996) of Odyssey
Partners, L.P. (hedge fund in
distribution since 1/1/97); Board of
Governing Trustees (since August 1990) of
The Jackson Laboratory (non-profit);
Trustee (since May 1992) of Institute for
Advanced Study (educational institute);
formerly Trustee (May 2000 - 2002) of
Research Foundation of AIMR (investment
research, non-profit); Governor, Jerome
Levy Economics Institute of Bard College
(economics research) (August
1990-September 2001); Director of Ray &
Berendtson, Inc. (executive search firm)
(May 2000-April 2002). Oversees 10
portfolios in the OppenheimerFunds
complex.
- --------------------------------------------------------------------------------
OFFICERS The address of the Officers in the chart
below is as follows: for Messrs. Murphy
and Zack, Two World Financial Center, 225
Liberty St., New York, NY 10281-1008, for
Mr. Wixted, 6803 S. Tucson Way,
Centennial, CO 80112-3924. Each Officer
serves for an annual term or until his or
her earlier resignation, death or
removal.
John V. Murphy, Chairman, Chief Executive Officer and
President (since 2001) director (since June 2001) and President
Age: 54 (since September 2000) of the Manager;
President and a director or trustee of
other Oppenheimer funds; President and a
director (since July 2001) of Oppenheimer
Acquisition Corp. (the Manager's parent
holding company) and of Oppenheimer
Partnership Holdings, Inc. (a holding
company subsidiary of the Manager); a
director (since November 2001) of
OppenheimerFunds Distributor, Inc. (a
subsidiary of the Manager); Chairman and
a director (since July 2001) of
Shareholder Services, Inc. and of
Shareholder Financial Services, Inc.
(transfer agent subsidiaries of the
Manager); President and a director (since
July 2001) of OppenheimerFunds Legacy
Program (a charitable trust program
established by the Manager); a director
of the investment advisory subsidiaries
of the Manager: OFI Institutional Asset
Management, Inc. and Centennial Asset
Management Corporation (since November
2001), HarbourView Asset Management
Corporation and OFI Private Investments,
Inc. (since July 2001); President (since
November 1, 2001) and a director (since
July 2001) of Oppenheimer Real Asset
Management, Inc.; a director (since
November 2001) of Trinity Investment
Management Corp. and Tremont Advisers,
Inc. (Investment advisory affiliates of
the Manager); Executive Vice President
(since February 1997) of Massachusetts
Mutual Life Insurance Company (the
Manager's parent company); a director
(since June 1995) of DLB Acquisition
Corporation (a holding company that owns
the shares of David L. Babson & Company,
Inc.); formerly, Chief Operating Officer
(September 2000-June 2001) of the
Manager; President and trustee (November
1999-November 2001) of MML Series
Investment Fund and MassMutual
Institutional Funds (open-end investment
companies); a director (September
1999-August 2000) of C.M. Life Insurance
Company; President, Chief Executive
Officer and director (September
1999-August 2000) of MML Bay State Life
Insurance Company; a director (June
1989-June 1998) of Emerald Isle Bancorp
and Hibernia Savings Bank (a wholly-owned
subsidiary of Emerald Isle Bancorp).
Oversees 72 portfolios as Trustee/Officer
and 10 portfolios as Officer in the
OppenheimerFunds complex.
34 | OPPENHEIMER QUEST OPPORTUNITY VALUE FUND
Brian W. Wixted, Senior Vice President and Treasurer
Treasurer (since 1999) (since March 1999) of the Manager;
Age: 44 Treasurer (since March 1999) of
HarbourView Asset Management Corporation,
Shareholder Services, Inc., Oppenheimer
Real Asset Management Corporation,
Shareholder Financial Services, Inc.,
Oppenheimer Partnership Holdings, Inc.,
OFI Private Investments, Inc. (since
March 2000), OppenheimerFunds
International Ltd. and OppenheimerFunds
plc (since May 2000) and OFI
Institutional Asset Management, Inc.
(since November 2000) (offshore fund
management subsidiaries of the Manager);
Treasurer and Chief Financial Officer
(since May 2000) of Oppenheimer Trust
Company (a trust company subsidiary of
the Manager); Assistant Treasurer (since
March 1999) of Oppenheimer Acquisition
Corp. and OppenheimerFunds Legacy Program
(since April 2000); formerly Principal
and Chief Operating Officer (March
1995-March 1999), Bankers Trust
Company-Mutual Fund Services Division. An
officer of 82 portfolios in the
OppenheimerFunds complex.
Robert G. Zack, Senior Vice President (since May 1985)
Secretary (since 2001) and General Counsel (since February 2002)
Age: 55 of the Manager; General Counsel and a
director (since November 2001) of
OppenheimerFunds Distributor, Inc.;
Senior Vice President and General Counsel
(since November 2001) of HarbourView
Asset Management Corporation; Vice
President and a director (since November
2000) of Oppenheimer Partnership
Holdings, Inc.; Senior Vice President,
General Counsel and a director (since
November 2001) of Shareholder Services,
Inc., Shareholder Financial Services,
Inc., OFI Private Investments, Inc.,
Oppenheimer Trust Company and OFI
Institutional Asset Management, Inc.;
General Counsel (since November 2001) of
Centennial Asset Management Corporation;
a director (since November 2001) of
Oppenheimer Real Asset Management, Inc.;
Assistant Secretary and a director (since
November 2001) of OppenheimerFunds
International Ltd.; Vice President (since
November 2001) of OppenheimerFunds Legacy
Program; Secretary (since November 2001)
of Oppenheimer Acquisition Corp.;
formerly Acting General Counsel (November
2001-February 2002) and Associate General
Counsel (May 1981-October 2001) of the
Manager; Assistant Secretary of
Shareholder Services, Inc. (May
1985-November 2001), Shareholder
Financial Services, Inc. (November
1989-November 2001); OppenheimerFunds
International Ltd. and OppenheimerFunds
plc (October 1997-November 2001). An
officer of 82 portfolios in the
OppenheimerFunds complex.
The Fund's Statement of Additional Information contains additional information
about the Fund's Trustees and is available without charge upon request.
35 | OPPENHEIMER QUEST OPPORTUNITY VALUE FUND
ITEM 2. CODE OF ETHICS
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT
The Board of Trustees of the Fund has determined that the Fund does not have an
audit committee financial expert serving on its Audit Committee. In this regard,
no member of the Audit Committee was identified as having all of the technical
attributes identified in Instruction 2(b) to Item 3 of Form N-CSR to qualify as
an "audit committee financial expert," whether through the type of specialized
education or experience described in that Instruction. The Board has concluded
that while the members of the Audit Committee collectively have the necessary
attributes and experience required to serve effectively as an Audit Committee,
no single member possesses all of the required technical attributes through the
particular methods of education or experience set forth in the Instructions to
be designated as an audit committee financial expert.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES - NOT REQUIRED
ITEM 5. NOT APPLICABLE
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 October 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.
(A) EXHIBIT ATTACHED HERETO. (ATTACH CODE OF ETHICS AS EXHIBIT)
(B) EXHIBITS ATTACHED HERETO. (ATTACH CERTIFICATIONS AS EXHIBITS)