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 811-09845
Oppenheimer Emerging Technologies 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.
Management's Discussion of Fund Performance. Over the 12-month period ended
October 31, 2003, the Fund delivered strong, positive returns. The Fund's
performance was driven by the sharp upturn in technology stock prices that began
in March 2003 and continued throughout the remainder of the period, and by a
large number of exceptionally good individual stock selections produced by our
disciplined, bottom-up selection process.
During the first few months of the reporting period, the Fund achieved its
most favorable results with investments in emerging medical technology and
biotechnology companies, such as Boston Scientific Corp., Genentech, Inc. and
Gilead Sciences, Inc., which benefited from a rapidly increasing number of
approved products with wide applications. As other areas of the technology
market showed signs of recovering in March 2003, we shifted an increasing
proportion of the Fund's assets into these areas. These moves helped boost total
returns for the period, with several performers deliver- ing substantial gains.
Netease.com, Inc., a China-based Internet portal provider, climbed sharply on
the basis of rising revenues from advertising, online gaming and e-mail
messaging. Mercury Interactive Corp., a developer of testing software for
internal network applications, delivered excellent earnings and revenue growth,
driving the stock higher. Symantec Corp., an antivirus software company, emerged
as the leader in its competitive space, and grew to be one of the Fund's largest
single holdings.
In other areas of technology, rapidly expanding demand for computer storage
capacity led to strong returns from holdings of disk drive and related parts and
equipment makers, such as Marvell Technology Group Ltd. and Maxtor Corp.
Continually expanding Internet traffic levels also created a favorable
environment for the Fund's holdings of profitable Internet service providers,
including eBay, Inc. and Yahoo!, Inc. Finally, the Fund continued to derive
gains from its remaining medical technology holdings, such as Angiotech
Pharmaceuticals, Inc.
Of course, not all of the Fund's holdings enhanced returns. A few
disappointments undermined performance, particularly in late-2002 before the
market started its steady climb. Among these were Zoran Corp., a maker of
semiconductor chips for the home video market that faced unexpectedly steep
competition from Taiwanese chip makers; and NetIQ Corp., a software company that
reported weaker-than-expected earnings. Diminished visibility regarding future
growth led us to sell both positions in the first half
6 | OPPENHEIMER EMERGING TECHNOLOGIES FUND
of the reporting period. The Fund's portfolio holdings, allocations and
strategies 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. Performance is measured from the inception of
Classes A, B, C and Y on April 25, 2000. In the case of Class N shares,
performance is measured from inception of the Class on March 1, 2001. 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 that of the Standard & Poor's (S&P) 500
Index and the Lipper Science & Technology Fund Index. The S&P 500 Index is 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.
The Lipper Science & Technology Fund Index includes the top 30 market
weighted funds within the Lipper Science & Technology Classification. The index
includes funds that invest 65% of their equity portfolio in science and
technology stocks, without considering sales charges.
7 | OPPENHEIMER EMERGING TECHNOLOGIES FUND
FUND PERFORMANCE DISCUSSION
Class A Shares
Comparison of Change in Value of $10,000 Hypothetical Investments in:
Oppenheimer Emerging Technologies Fund (Class A)
Lipper Science & Technology Fund Index
S&P 500 Index
[LINE CHART]
Value of Investment Lipper Science & S&P 500 Index
Date In Fund Technology Fund Index Reinvested Monthly
04/25/2000 $9,425 $10,000 $10,000
04/30/2000 10,056 10,000 10,000
07/31/2000 11,263 9,591 9,879
10/31/2000 10,594 8,826 9,897
01/31/2001 8,615 7,139 9,487
04/30/2001 5,709 5,385 8,703
07/31/2001 4,388 4,645 8,464
10/31/2001 3,312 3,676 7,434
01/31/2002 3,416 4,157 7,956
04/30/2002 2,538 3,462 7,605
07/31/2002 1,821 2,545 6,466
10/31/2002 1,717 2,463 6,311
01/31/2003 1,746 2,466 6,126
04/30/2003 1,982 2,705 6,594
07/31/2003 2,538 3,201 7,153
10/31/2003 2,963 3,680 7,623
Average Annual Total Returns of Class A Shares of the Fund at 10/31/03*
1-Year 62.61% Since Inception -29.24%
Class B Shares
Comparison of Change in Value of $10,000 Hypothetical Investments in:
Oppenheimer Emerging Technologies Fund (Class B)
Lipper Science & Technology Fund Index
S&P 500 Index
[LINE CHART]
Value of Investment Lipper Science & S&P 500 Index
Date In Fund Technology Fund Index Reinvested Monthly
04/25/2000 $10,000 $10,000 $10,000
04/30/2000 10,670 10,000 10,000
07/31/2000 11,930 9,591 9,879
10/31/2000 11,200 8,826 9,897
01/31/2001 9,090 7,139 9,487
04/30/2001 6,020 5,385 8,703
07/31/2001 4,610 4,645 8,464
10/31/2001 3,480 3,676 7,434
01/31/2002 3,580 4,157 7,956
04/30/2002 2,650 3,462 7,605
07/31/2002 1,900 2,545 6,466
10/31/2002 1,790 2,463 6,311
01/31/2003 1,810 2,466 6,126
04/30/2003 2,050 2,705 6,594
07/31/2003 2,630 3,201 7,153
10/31/2003 2,968 3,680 7,623
Average Annual Total Returns of Class B Shares of the Fund at 10/31/03*
1-Year 65.95% Since Inception -29.21%
*See Notes on page 11 for further details.
8 | OPPENHEIMER EMERGING TECHNOLOGIES FUND
Class C Shares
Comparison of Change in Value of $10,000 Hypothetical Investments in:
Oppenheimer Emerging Technologies Fund (Class C)
Lipper Science & Technology Fund Index
S&P 500 Index
[LINE CHART]
Value of Investment Lipper Science & S&P 500 Index
Date In Fund Technology Fund Index Reinvested Monthly
04/25/2000 $10,000 $10,000 $10,000
04/30/2000 10,670 10,000 10,000
07/31/2000 11,930 9,591 9,879
10/31/2000 11,200 8,826 9,897
01/31/2001 9,090 7,139 9,487
04/30/2001 6,010 5,385 8,703
07/31/2001 4,610 4,645 8,464
10/31/2001 3,480 3,676 7,434
01/31/2002 3,580 4,157 7,956
04/30/2002 2,650 3,462 7,605
07/31/2002 1,900 2,545 6,466
10/31/2002 1,790 2,463 6,311
01/31/2003 1,810 2,466 6,126
04/30/2003 2,060 2,705 6,594
07/31/2003 2,630 3,201 7,153
10/31/2003 3,060 3,680 7,623
Average Annual Total Returns of Class C Shares of the Fund at 10/31/03*
1-Year 69.95% Since Inception -28.59%
Class N Shares
Comparison of Change in Value of $10,000 Hypothetical Investments in:
Oppenheimer Emerging Technologies Fund (Class N)
Lipper Science & Technology Fund Index
S&P 500 Index
[LINE CHART]
Value of Investment Lipper Science & S&P 500 Index
Date In Fund Technology Fund Index Reinvested Monthly
03/01/2001 $10,000 $10,000 $10,000
04/30/2001 9,165 10,201 10,094
07/31/2001 7,041 8,799 9,817
10/31/2001 5,311 6,963 8,621
01/31/2002 5,478 7,875 9,227
04/30/2002 4,067 6,559 8,821
07/31/2002 2,914 4,821 7,499
10/31/2002 2,747 4,665 7,320
01/31/2003 2,792 4,671 7,104
04/30/2003 3,171 5,124 7,647
07/31/2003 4,052 6,064 8,296
10/31/2003 4,734 6,971 8,841
Average Annual Total Returns of Class N Shares of the Fund at 10/31/03*
1-Year 71.38% Since Inception -24.45%
The performance information for both indices in the graphs begins on 4/30/00 for
Class A, Class B, Class C, and Class Y and 2/28/01 for Class N.
Past performance cannot guarantee future results. Graphs are not drawn to same
scale.
9 | OPPENHEIMER EMERGING TECHNOLOGIES FUND
FUND PERFORMANCE DISCUSSION
Class Y Shares
Comparison of Change in Value of $10,000 Hypothetical Investments in:
Oppenheimer Emerging Technologies Fund (Class Y)
Lipper Science & Technology Fund Index
S&P 500 Index
[LINE CHART]
Value of Investment Lipper Science & S&P 500 Index
Date In Fund Technology Fund Index Reinvested Monthly
04/25/2000 $10,000 $10,000 $10,000
04/30/2000 10,670 10,000 10,000
07/31/2000 11,960 9,591 9,879
10/31/2000 11,260 8,826 9,897
01/31/2001 9,172 7,139 9,487
04/30/2001 6,084 5,385 8,703
07/31/2001 4,691 4,645 8,464
10/31/2001 3,558 3,676 7,434
01/31/2002 3,669 4,157 7,956
04/30/2002 2,726 3,462 7,605
07/31/2002 1,955 2,545 6,466
10/31/2002 1,854 2,463 6,311
01/31/2003 1,895 2,466 6,126
04/30/2003 2,145 2,705 6,594
07/31/2003 2,757 3,201 7,153
10/31/2003 3,218 3,680 7,623
Average Annual Total Returns of Class Y Shares of the Fund at 10/31/03*
1-Year 73.51% Since Inception -27.56%
*See Notes on page 11 for further details.
The performance information for both indices in the graphs begins on 4/30/00 for
Class A, Class B, Class C, and Class Y and 2/28/01 for Class N.
Past performance cannot guarantee future results. Graphs are not drawn to same
scale.
10 | OPPENHEIMER EMERGING TECHNOLOGIES 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.
The Fund is a non-diversified fund, which means that it can invest more of its
assets in fewer stocks than diversified funds, and therefore has greater risks.
Because the Fund also invests in mid- and small-cap companies, including initial
public offerings, investors may be subject to greater risk of loss. While
foreign securities offer special investment opportunities, there are also
special risks such as currency fluctuations and foreign taxes.
Class A shares of the Fund were first publicly offered on 4/25/00. Unless
otherwise noted, Class A returns include the current maximum initial sales
charge of 5.75%.
Class B shares of the Fund were first publicly offered on 4/25/00. Unless
otherwise noted, Class B returns include the applicable contingent deferred
sales charge of 5% (1-year) and 3% (since inception). 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 4/25/00. 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 4/25/00. 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 EMERGING TECHNOLOGIES FUND
STATEMENT OF INVESTMENTS October 31, 2003
Market Value
Shares See Note 1
- ----------------------------------------------------------
Common Stocks--101.1%
- ----------------------------------------------------------
Consumer Discretionary--5.9%
- ----------------------------------------------------------
Household Durables--0.3%
Tripath
Technology, Inc. 1 96,400 $ 482,964
- ----------------------------------------------------------
Internet & Catalog Retail--2.7%
Amazon.com, Inc. 1 44,400 2,416,248
- ----------------------------------------------------------
InterActiveCorp 1 76,200 2,797,302
---------------
5,213,550
- ----------------------------------------------------------
Media--2.2%
EchoStar
Communications
Corp., Cl. A 1 61,900 2,372,008
- ----------------------------------------------------------
Sonic Solutions, Inc. 1 114,700 2,041,660
---------------
4,413,668
- ----------------------------------------------------------
Textiles, Apparel & Luxury Goods--0.7%
Authentidate
Holding Corp. 1 124,300 1,431,812
- ----------------------------------------------------------
Financials--1.0%
- ----------------------------------------------------------
Diversified Financial Services--1.0%
Ameritrade
Holding Corp. 1 144,000 1,964,160
- ----------------------------------------------------------
Health Care--4.1%
- ----------------------------------------------------------
Biotechnology--2.3%
Amgen, Inc. 1 23,100 1,426,656
- ----------------------------------------------------------
Genzyme Corp.
(General Division) 1 47,600 2,184,840
- ----------------------------------------------------------
Nuerocrine
Biosciences, Inc. 1 21,700 1,016,211
---------------
4,627,707
- ----------------------------------------------------------
Pharmaceuticals--1.8%
Angiotech
Pharmaceuticals,
Inc. 1 77,000 3,521,210
- ----------------------------------------------------------
Industrials--1.4%
- ----------------------------------------------------------
Commercial Services & Supplies--1.4%
Monster
Worldwide, Inc. 1 104,100 2,651,427
- ----------------------------------------------------------
Information Technology--86.2%
- ----------------------------------------------------------
Communications Equipment--16.2%
ADTRAN, Inc. 47,400 3,224,622
- ----------------------------------------------------------
Alcatel SA,
Sponsored ADR 1 150,000 1,977,000
Market Value
Shares See Note 1
- ----------------------------------------------------------
Communications Equipment Continued
Audiocodes Ltd. 1 162,500 $ 1,392,625
- ----------------------------------------------------------
Brocade
Communications
Systems, Inc. 1 195,000 1,277,250
- ----------------------------------------------------------
Ciena Corp. 1 166,600 1,067,906
- ----------------------------------------------------------
Corning, Inc. 1 190,500 2,091,690
- ----------------------------------------------------------
Emulex Corp. 1 76,700 2,172,144
- ----------------------------------------------------------
Foundry
Networks, Inc. 1 94,300 2,193,418
- ----------------------------------------------------------
Ixia 1 180,100 2,161,200
- ----------------------------------------------------------
McDATA Corp.,
Cl. B 1 206,000 2,105,320
- ----------------------------------------------------------
NetScreen
Technologies, Inc. 1 56,800 1,512,016
- ----------------------------------------------------------
Performance
Technologies, Inc. 1 180,500 1,875,395
- ----------------------------------------------------------
QLogic Corp. 1 50,000 2,802,500
- ----------------------------------------------------------
REMEC, Inc. 1 90,500 998,215
- ----------------------------------------------------------
Sonus
Networks, Inc. 1 297,100 2,439,191
- ----------------------------------------------------------
UTStarcom, Inc. 1 83,400 2,627,100
---------------
31,917,592
- ----------------------------------------------------------
Computers & Peripherals--11.7%
ATI Technologies, Inc. 1 97,400 1,393,794
- ----------------------------------------------------------
Dell, Inc. 1 57,100 2,062,452
- ----------------------------------------------------------
Dot Hill
Systems Corp. 1 60,600 812,646
- ----------------------------------------------------------
EMC Corp. 1 226,700 3,137,528
- ----------------------------------------------------------
Lexar Media, Inc. 1 126,300 2,893,533
- ----------------------------------------------------------
Maxtor Corp. 1 265,100 3,623,917
- ----------------------------------------------------------
Network
Appliance, Inc. 1 62,400 1,540,032
- ----------------------------------------------------------
Network
Engines, Inc. 1 86,000 844,434
- ----------------------------------------------------------
SanDisk Corp. 1 51,200 4,126,720
- ----------------------------------------------------------
Western
Digital Corp. 1 200,500 2,696,725
---------------
23,131,781
- ----------------------------------------------------------
Electronic Equipment & Instruments--6.5%
AU Optronics
Corp., ADR 149,400 2,028,852
- ----------------------------------------------------------
Brightpoint, Inc. 1 140,800 4,033,920
- ----------------------------------------------------------
CDW Corp. 38,600 2,317,930
12 | OPPENHEIMER EMERGING TECHNOLOGIES FUND
Market Value
Shares See Note 1
- ----------------------------------------------------------
Electronic Equipment & Instruments Continued
Innovex, Inc. 1 121,300 $ 1,370,690
- ----------------------------------------------------------
Jabil Circuit, Inc. 1 47,600 1,325,660
- ----------------------------------------------------------
Vishay
Intertechnology, Inc. 1 93,300 1,749,375
---------------
12,826,427
- ----------------------------------------------------------
Internet Software & Services--11.9%
Digital River, Inc. 1 64,100 1,755,058
- ----------------------------------------------------------
eCollege.com, Inc. 1 80,000 1,735,200
- ----------------------------------------------------------
Lionbridge
Technologies, Inc. 1 144,600 1,305,738
- ----------------------------------------------------------
MicroStrategy, Inc.,
Cl. A 1 45,700 2,513,500
- ----------------------------------------------------------
Netease.com,
Inc., ADR 1 28,900 1,312,060
- ----------------------------------------------------------
Openwave
Systems, Inc. 1 102,532 1,338,043
- ----------------------------------------------------------
SINA Corp. 1 57,500 2,221,225
- ----------------------------------------------------------
SupportSoft, Inc. 1 235,400 2,822,446
- ----------------------------------------------------------
United Online, Inc. 1 151,900 4,373,201
- ----------------------------------------------------------
VeriSign, Inc. 1 71,600 1,136,292
- ----------------------------------------------------------
Yahoo!, Inc. 1 66,700 2,914,790
---------------
23,427,553
- ----------------------------------------------------------
IT Services--2.7%
Cognizant Technology
Solutions Corp. 1 50,600 2,296,734
- ----------------------------------------------------------
Infosys Technologies
Ltd., Sponsored ADR 34,800 2,944,428
---------------
5,241,162
- ----------------------------------------------------------
Semiconductors &
Semiconductor Equipment--22.8%
Agere Systems, Inc.,
Cl. A 1 741,100 2,579,028
- ----------------------------------------------------------
AMIS Holdings, Inc. 1 45,500 916,825
- ----------------------------------------------------------
Amkor
Technology, Inc. 1 66,700 1,257,295
- ----------------------------------------------------------
Analog
Devices, Inc. 1 63,300 2,806,089
- ----------------------------------------------------------
ASML Holding NV 1 223,800 3,927,690
- ----------------------------------------------------------
Cypress
Semiconductor Corp. 1 80,000 1,716,800
- ----------------------------------------------------------
Integrated
Circuit Systems, Inc. 1 38,700 1,299,159
Market Value
Shares See Note 1
- ----------------------------------------------------------
Semiconductors &
Semiconductor Equipment Continued
Intel Corp. 96,000 $ 3,172,800
- ----------------------------------------------------------
Linear
Technology Corp. 69,700 2,969,917
- ----------------------------------------------------------
LTX Corp. 1 60,000 857,400
- ----------------------------------------------------------
Marvell Technology
Group Ltd. 1 92,000 4,036,040
- ----------------------------------------------------------
Maxim Integrated
Products, Inc. 60,000 2,982,600
- ----------------------------------------------------------
MEMC Electronic
Materials, Inc. 1 121,400 1,359,680
- ----------------------------------------------------------
Novellus
Systems, Inc. 1 60,000 2,477,400
- ----------------------------------------------------------
OmniVision
Technologies, Inc. 1 28,600 1,624,480
- ----------------------------------------------------------
PMC-Sierra, Inc. 1 89,000 1,617,130
- ----------------------------------------------------------
Power
Integrations, Inc. 1 74,500 2,594,090
- ----------------------------------------------------------
Silicon
Laboratories, Inc. 1 28,600 1,543,828
- ----------------------------------------------------------
Silicon Storage
Technology, Inc. 1 120,000 1,341,600
- ----------------------------------------------------------
Skyworks
Solutions, Inc. 1 28,400 243,672
- ----------------------------------------------------------
Taiwan Semiconductor
Manufacturing
Co. Ltd., ADR 150,452 1,663,999
- ----------------------------------------------------------
Vitesse Semiconductor
Corp. 1 261,400 1,840,256
---------------
44,827,778
- ----------------------------------------------------------
Software--14.4%
Altiris, Inc. 1 51,400 1,767,132
- ----------------------------------------------------------
Ascential
Software Corp. 1 80,000 1,775,200
- ----------------------------------------------------------
BEA Systems, Inc. 1 70,000 973,000
- ----------------------------------------------------------
Fair Isaac Corp. 23,600 1,505,208
- ----------------------------------------------------------
FileNet Corp. 1 118,600 3,168,992
- ----------------------------------------------------------
Inet
Technologies, Inc. 1 84,000 1,129,800
- ----------------------------------------------------------
Macromedia, Inc. 1 60,100 1,148,511
- ----------------------------------------------------------
Mercury
Interactive Corp. 1 49,100 2,280,204
- ----------------------------------------------------------
Micromuse, Inc. 1 171,400 1,379,770
- ----------------------------------------------------------
Microsoft Corp. 102,700 2,685,605
- ----------------------------------------------------------
Oracle Corp. 1 195,900 2,342,964
13 | OPPENHEIMER EMERGING TECHNOLOGIES FUND
STATEMENT OF INVESTMENTS Continued
Market Value
Shares See Note 1
- ----------------------------------------------------------
Software Continued
SAP AG (Systeme,
Anwendungen,
Produkte in der
Datenverarbeitung),
Sponsored ADR 47,600 $ 1,739,303
- ----------------------------------------------------------
Symantec Corp. 1 51,000 3,399,150
- ----------------------------------------------------------
Veritas
Software Corp. 1 82,600 2,985,990
---------------
28,280,829
- ----------------------------------------------------------
Telecommunication Services--2.5%
- ----------------------------------------------------------
Diversified Telecommunication Services--0.6%
PTEK Holdings, Inc. 1 134,700 1,173,237
- ----------------------------------------------------------
Wireless Telecommunication Services--1.9%
AO VimpelCom,
Sponsored ADR 1 24,900 1,620,990
- ----------------------------------------------------------
Nextel
Communications,
Inc., Cl. A 1 90,000 2,178,000
---------------
3,798,990
---------------
Total Common Stocks
(Cost $149,332,084) 198,931,847
- ----------------------------------------------------------
Preferred Stocks--0.3%
Axsun Technologies,
Inc., Cv., Series C 1,2,3 685,519 268,244
Market Value
Shares See Note 1
- ----------------------------------------------------------
Preferred Stocks Continued
Blaze Network
Products, Inc.,
8% Cv., Series D 1,2,3 166,836 $ --
- ----------------------------------------------------------
BroadBand Office,
Inc., Cv., Series C 1,2 52,909 --
- ----------------------------------------------------------
Centerpoint Broadband
Technologies, Inc.:
Cv., Series D 1,2 463,822 --
Cv., Series Z 1,2 37,491 --
- ----------------------------------------------------------
fusionOne, Inc.,
8% Non-Cum. Cv.,
Series D 1,2 264,186 15,930
- ----------------------------------------------------------
MicroPhotonix
Integration Corp.,
Cv., Series C 1,2,3 316,691 --
- ----------------------------------------------------------
Multiplex, Inc., Cv.,
Series C 1,2 387,138 159,036
- ----------------------------------------------------------
Questia Media, Inc.,
Cv., Series B 1,2 258,859 14,600
---------------
Total Preferred Stocks
(Cost $23,351,600) 457,810
- ----------------------------------------------------------
Total Investments,
at Value
(Cost $172,683,684) 101.4% 199,389,657
- ----------------------------------------------------------
Liabilities in Excess of
Other Assets (1.4) (2,677,186)
-----------------------
Net Assets 100.0% $ 196,712,471
=======================
Footnotes to Statement of Investments
1. Non-income producing security.
2. Identifies issues considered to be illiquid or restricted. See Note 7 of
Notes to Financial Statements.
3. Affiliated company. Represents ownership of at least 5% of the voting
securities of the issuer, and is or was an affiliate, as defined in the
Investment Company Act of 1940, at or during the period ended October 31, 2003.
The aggregate fair value of securities of affiliated companies held by the Fund
as of October 31, 2003 amounts to $268,244. Transactions during the period in
which the issuer was an affiliate are as follows
Shares Shares
October 31, Gross Gross October 31, Unrealized
2002 Additions Reductions 2003 Depreciation
- ---------------------------------------------------------------------------------------------------
Stocks and/or Warrants
Axsun Technologies, Inc.,
Cv., Series C 685,519 -- -- 685,519 $ 7,731,763
Blaze Network Products,
Inc., 8% Cv.,
Series D 166,836 -- -- 166,836 1,067,750
MicroPhotonix Integration
Corp., Cv.,
Series C 316,691 -- -- 316,691 1,999,999
-----------
$10,799,512
===========
See accompanying Notes to Financial Statements.
14 | OPPENHEIMER EMERGING TECHNOLOGIES FUND
STATEMENT OF ASSETS AND LIABILITIES October 31, 2003
- ------------------------------------------------------------------------------
Assets
Investments, at value--see accompanying statement:
Unaffiliated companies (cost $161,615,928) $199,121,413
Affiliated companies (cost $11,067,756) 268,244
--------------
199,389,657
- ------------------------------------------------------------------------------
Receivables and other assets:
Investments sold 5,905,917
Shares of beneficial interest sold 468,950
Dividends 50,227
Other 457
--------------
Total assets 205,815,208
- ------------------------------------------------------------------------------
Liabilities
Bank overdraft 2,639,908
- ------------------------------------------------------------------------------
Payables and other liabilities:
Investments purchased 5,195,439
Shares of beneficial interest redeemed 922,586
Shareholder reports 182,756
Transfer and shareholder servicing agent fees 52,935
Trustees' compensation 43,634
Distribution and service plan fees 39,818
Other 25,661
--------------
Total liabilities 9,102,737
- ------------------------------------------------------------------------------
Net Assets $196,712,471
==============
- ------------------------------------------------------------------------------
Composition of Net Assets
Paid-in capital $637,766,636
- ------------------------------------------------------------------------------
Accumulated net investment loss (43,429)
- ------------------------------------------------------------------------------
Accumulated net realized loss on investments and foreign
currency transactions (467,716,709)
- ------------------------------------------------------------------------------
Net unrealized appreciation on investments 26,705,973
--------------
Net Assets $196,712,471
==============
15 | OPPENHEIMER EMERGING TECHNOLOGIES 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
$93,886,272 and 29,904,232 shares of beneficial interest outstanding) $3.14
Maximum offering price per share (net asset value plus sales charge
of 5.75% of offering price) $3.33
- --------------------------------------------------------------------------------------------------------------
Class B Shares:
Net asset value, redemption price (excludes applicable contingent deferred
sales charge) and offering price per share (based on net assets of $69,788,962
and 22,786,852 shares of beneficial interest outstanding) $3.06
- --------------------------------------------------------------------------------------------------------------
Class C Shares:
Net asset value, redemption price (excludes applicable contingent deferred
sales charge) and offering price per share (based on net assets of $26,111,957
and 8,526,868 shares of beneficial interest outstanding) $3.06
- --------------------------------------------------------------------------------------------------------------
Class N Shares:
Net asset value, redemption price (excludes applicable contingent deferred
sales charge) and offering price per share (based on net assets of $4,444,938
and 1,426,308 shares of beneficial interest outstanding) $3.12
- --------------------------------------------------------------------------------------------------------------
Class Y Shares:
Net asset value, redemption price and offering price per share (based on
net assets of $2,480,342 and 772,668 shares of beneficial interest outstanding) $3.21
See accompanying Notes to Financial Statements.
16 | OPPENHEIMER EMERGING TECHNOLOGIES FUND
STATEMENT OF OPERATIONS For the Year Ended October 31, 2003
- -------------------------------------------------------------------------------------------------------
Investment Income
Dividends (net of foreign withholding taxes of $13,401) $ 217,238
- -------------------------------------------------------------------------------------------------------
Interest 37,415
-------------
Total investment income 254,653
- -------------------------------------------------------------------------------------------------------
Expenses
Management fees 1,329,343
- -------------------------------------------------------------------------------------------------------
Distribution and service plan fees:
Class A 150,621
Class B 488,293
Class C 172,328
Class N 13,452
- -------------------------------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees:
Class A 760,167
Class B 769,296
Class C 198,164
Class N 14,784
Class Y 121
- -------------------------------------------------------------------------------------------------------
Shareholder reports 314,634
- -------------------------------------------------------------------------------------------------------
Custodian fees and expenses 7,801
- -------------------------------------------------------------------------------------------------------
Trustees' compensation 5,885
- -------------------------------------------------------------------------------------------------------
Other 4,696
-------------
Total expenses 4,229,585
Less reduction to custodian expenses (694)
Less voluntary waiver of transfer and shareholder servicing agent fees--Class A (621,394)
Less voluntary waiver of transfer and shareholder servicing agent fees--Class B (685,037)
Less voluntary waiver of transfer and shareholder servicing agent fees--Class C (158,053)
Less voluntary waiver of transfer and shareholder servicing agent fees--Class N (5,430)
-------------
Net expenses 2,758,977
- -------------------------------------------------------------------------------------------------------
Net Investment Loss (2,504,324)
- -------------------------------------------------------------------------------------------------------
Realized and Unrealized Gain
Net realized gain on:
Investments 16,537,538
Closing and expiration of option contracts written 31,777
Foreign currency transactions 12
-------------
Net realized gain 16,569,327
- -------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation on investments 61,490,896
- -------------------------------------------------------------------------------------------------------
Net Increase in Net Assets Resulting from Operations $75,555,899
=============
See accompanying Notes to Financial Statements.
17 | OPPENHEIMER EMERGING TECHNOLOGIES FUND
STATEMENTS OF CHANGES IN NET ASSETS
Year Ended October 31, 2003 2002
- --------------------------------------------------------------------------------------------------------
Operations
Net investment loss $ (2,504,324) $ (2,952,878)
- --------------------------------------------------------------------------------------------------------
Net realized gain (loss) 16,569,327 (180,422,416)
- --------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation (depreciation) 61,490,896 91,696,018
-----------------------------------
Net increase (decrease) in net assets resulting from operations 75,555,899 (91,679,276)
- --------------------------------------------------------------------------------------------------------
Beneficial Interest Transactions
Net increase (decrease) in net assets resulting from
beneficial interest transactions:
Class A 13,775,737 (4,784,726)
Class B 5,478,583 (1,860,465)
Class C 2,313,751 2,051,070
Class N 1,269,615 1,159,593
Class Y 744,204 325,037
- --------------------------------------------------------------------------------------------------------
Net Assets
Total increase (decrease) 99,137,789 (94,788,767)
- --------------------------------------------------------------------------------------------------------
Beginning of period 97,574,682 192,363,449
-----------------------------------
End of period [including accumulated net investment
loss of $43,429 and $42,066, respectively] $196,712,471 $97,574,682
===================================
See accompanying Notes to Financial Statements.
18 | OPPENHEIMER EMERGING TECHNOLOGIES FUND
FINANCIAL HIGHLIGHTS
Class A Year Ended October 31, 2003 2002 2001 2000 1
- --------------------------------------------------------------------------------------------------------------
Per Share Operating Data
Net asset value, beginning of period $1.82 $3.51 $11.24 $ 10.00
- --------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss) (.04) (.04) (.01) .01
Net realized and unrealized gain (loss) 1.36 (1.65) (7.71) 1.23
-----------------------------------------------
Total from investment operations 1.32 (1.69) (7.72) 1.24
- --------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income -- -- (.01) --
-----------------------------------------------
Total dividends and/or distributions to shareholders -- -- (.01) --
- --------------------------------------------------------------------------------------------------------------
Net asset value, end of period $3.14 $1.82 $ 3.51 $11.24
===============================================
- --------------------------------------------------------------------------------------------------------------
Total Return, at Net Asset Value 2 72.53% (48.15)% (68.74)% 12.40%
- --------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
Net assets, end of period (in thousands) $93,886 $44,150 $ 91,220 $253,471
- --------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $62,832 $68,695 $158,376 $149,623
- --------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income (loss) (1.51)% (1.61)% (0.23)% 0.25%
Total expenses 2.70% 3.11% 2.08% 1.65%
Expenses after expense reimbursement
or fee waiver and reduction to
custodian expenses 1.71% 2.10% 2.04% N/A 4
- --------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 219% 159% 85% 6%
<FN>
1. For the period from April 25, 2000 (commencement of operations) to October
31, 2000.
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. Reduction to custodian expenses less than 0.01%.
</FN>
See accompanying Notes to Financial Statements.
19 | OPPENHEIMER EMERGING TECHNOLOGIES FUND
FINANCIAL HIGHLIGHTS Continued
Class B Year Ended October 31, 2003 2002 2001 2000 1
- --------------------------------------------------------------------------------------------------------------
Per Share Operating Data
Net asset value, beginning of period $1.79 $3.48 $11.20 $ 10.00
- --------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment loss (.04) (.07) (.06) (.01)
Net realized and unrealized gain (loss) 1.31 (1.62) (7.66) 1.21
-----------------------------------------------
Total from investment operations 1.27 (1.69) (7.72) 1.20
- --------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income -- -- -- --
-----------------------------------------------
Total dividends and/or
distributions to shareholders -- -- -- --
- --------------------------------------------------------------------------------------------------------------
Net asset value, end of period $3.06 $1.79 $ 3.48 $11.20
===============================================
- --------------------------------------------------------------------------------------------------------------
Total Return, at Net Asset Value 2 70.95% (48.56)% (68.93)% 12.00%
- --------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
Net assets, end of period (in thousands) $69,789 $36,813 $ 75,336 $200,251
- --------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $48,920 $58,029 $128,540 $106,620
- --------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment loss (2.23)% (2.40)% (0.99)% (0.48)%
Total expenses 3.82% 3.95% 2.84% 2.39%
Expenses after expense reimbursement
or fee waiver and reduction to
custodian expenses 2.42% 2.94% 2.80% N/A 4
- --------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 219% 159% 85% 6%
<FN>
1. For the period from April 25, 2000 (commencement of operations) to October
31, 2000.
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. Reduction to custodian expenses less than 0.01%.
</FN>
See accompanying Notes to Financial Statements.
20 | OPPENHEIMER EMERGING TECHNOLOGIES FUND
Class C Year Ended October 31, 2003 2002 2001 2000 1
- --------------------------------------------------------------------------------------------------------------
Per Share Operating Data
Net asset value, beginning of period $1.79 $ 3.48 $11.20 $10.00
- --------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment loss (.04) (.05) (.05) (.01)
Net realized and unrealized gain (loss) 1.31 (1.64) (7.67) 1.21
-----------------------------------------------
Total from investment operations 1.27 (1.69) (7.72) 1.20
- --------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income -- -- -- --
-----------------------------------------------
Total dividends and/or
distributions to shareholders -- -- -- --
- --------------------------------------------------------------------------------------------------------------
Net asset value, end of period $3.06 $1.79 $ 3.48 $11.20
===============================================
- --------------------------------------------------------------------------------------------------------------
Total Return, at Net Asset Value 2 70.95% (48.56)% (68.93)% 12.00%
- --------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
Net assets, end of period (in thousands) $26,112 $14,143 $23,121 $56,597
- --------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $17,266 $17,800 $38,049 $28,193
- --------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment loss (2.29)% (2.36)% (1.00)% (0.47)%
Total expenses 3.40% 3.84% 2.84% 2.39%
Expenses after expense reimbursement
or fee waiver and reduction to
custodian expenses 2.48% 2.83% 2.80% N/A 4
- --------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 219% 159% 85% 6%
<FN>
1. For the period from April 25, 2000 (commencement of operations) to October
31, 2000.
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. Reduction to custodian expenses less than 0.01%.
</FN>
See accompanying Notes to Financial Statements.
21 | OPPENHEIMER EMERGING TECHNOLOGIES FUND
FINANCIAL HIGHLIGHTS Continued
Class N Year Ended October 31, 2003 2002 2001 1
- --------------------------------------------------------------------------------------------------------------
Per Share Operating Data
Net asset value, beginning of period $1.81 $3.50 $6.59
- --------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment loss (.05) (.04) (.03)
Net realized and unrealized gain (loss) 1.36 (1.65) (3.06)
-----------------------------------
Total from investment operations 1.31 (1.69) (3.09)
- --------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income -- -- --
-----------------------------------
Total dividends and/or
distributions to shareholders -- -- --
- --------------------------------------------------------------------------------------------------------------
Net asset value, end of period $3.12 $1.81 $3.50
===================================
- --------------------------------------------------------------------------------------------------------------
Total Return, at Net Asset Value 2 72.38% (48.29)% (46.89)%
- --------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
Net assets, end of period (in thousands) $4,445 $1,582 $1,450
- --------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $2,698 $1,547 $1,287
- --------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment loss (1.89)% (1.80)% (1.24)%
Total expenses 2.30% 3.05% 2.61%
Expenses after expense reimbursement
or fee waiver and reduction to
custodian expenses 2.10% 2.04% 2.57%
- --------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 219% 159% 85%
<FN>
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.
</FN>
See accompanying Notes to Financial Statements.
22 | OPPENHEIMER EMERGING TECHNOLOGIES FUND
Class Y Year Ended October 31, 2003 2002 2001 2000 1
- --------------------------------------------------------------------------------------------------------------
Per Share Operating Data
Net asset value, beginning of period $1.85 $3.55 $11.26 $10.00
- --------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss) (.04) (.03) -- 2 .02
Net realized and unrealized gain (loss) 1.40 (1.67) (7.69) 1.24
-----------------------------------------------
Total from investment operations 1.36 (1.70) (7.69) 1.26
- --------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income -- -- (.02) --
-----------------------------------------------
Total dividends and/or distributions to shareholders -- -- (.02) --
- --------------------------------------------------------------------------------------------------------------
Net asset value, end of period $3.21 $1.85 $ 3.55 $11.26
===============================================
- --------------------------------------------------------------------------------------------------------------
Total Return, at Net Asset Value 3 73.51% (47.89)% (68.40)% 12.60%
- --------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
Net assets, end of period (in thousands) $2,480 $ 887 $1,236 $1
- --------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $1,492 $1,057 $ 331 $1
- --------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 4
Net investment income (loss) (1.05)% (1.03)% (0.08)% 0.33%
Total expenses 1.26% 1.57% 1.33% 1.42%
Expenses after expense reimbursement
or fee waiver and reduction to
custodian expenses N/A 5 1.53% 1.23% N/A 5
- --------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 219% 159% 85% 6%
<FN>
1. For the period from April 25, 2000 (commencement of operations) to October
31, 2000.
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. Reduction to custodian expenses less than 0.01%.
</FN>
See accompanying Notes to Financial Statements.
23 | OPPENHEIMER EMERGING TECHNOLOGIES FUND
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
1. Significant Accounting Policies
Oppenheimer Emerging Technologies Fund (the Fund) is a non-diversified,
open-end management investment company registered under the Investment Company
Act of 1940, as amended. The Fund's investment objective is to seek long-term
capital appreciation. The Fund's investment advisor is OppenheimerFunds, Inc.
(the Manager).
The 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.
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.
24 | OPPENHEIMER EMERGING TECHNOLOGIES FUND
- --------------------------------------------------------------------------------
Joint Repurchase Agreements. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission, the Fund, along with other affiliated funds
advised by the Manager, may transfer uninvested cash balances into joint
trading accounts on a daily basis. Secured by U.S. government securities, these
balances are invested in one or more repurchase agreements. Securities pledged
as collateral for repurchase agreements are held by a custodian bank until the
agreements mature. Each agreement requires that the market value of the
collateral be sufficient to cover payments of interest and principal. In the
event of default by the other party to the agreement, retention of the
collateral may be subject to legal proceedings.
- --------------------------------------------------------------------------------
Allocation of Income, Expenses, Gains and Losses. Income, expenses (other than
those attributable to a specific class), gains and losses are allocated 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
Undistributed Based on Cost of
Net Undistributed Accumulated Securities and Other
Investment Long-Term Loss Investments for Federal
Income Gain Carryforward 1,2 Income Tax Purposes
---------------------------------------------------------------------------
$-- $-- $466,057,871 $25,047,134
1. As of October 31, 2003, the Fund had $466,057,871 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 carryforwards were as follows:
Expiring
-------------------------------
2009 $268,287,393
2010 197,770,478
------------
Total $466,057,871
============
2. During the fiscal year October 31, 2003, the Fund utilized $14,755,514 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.
25 | OPPENHEIMER EMERGING TECHNOLOGIES FUND
NOTES TO FINANCIAL STATEMENTS CONTINUED
- --------------------------------------------------------------------------------
1. Significant Accounting Policies Continued
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. Accordingly,
the following amounts have been reclassified for October 31, 2003. Net assets
of the Fund were unaffected by the reclassifications.
From To Net
Ordinary Capital Tax Return Investment
Loss Loss of Capital Loss
----------------------------------------------------------
$2,502,961 $12 $-- $2,502,949
No distributions were paid during the years ended October 31, 2003 and October
31, 2002.
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 $174,342,523
============
Gross unrealized appreciation $ 48,905,269
Gross unrealized depreciation (23,858,135)
------------
Net unrealized appreciation $ 25,047,134
============
- --------------------------------------------------------------------------------
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
$2,951 and payments of $1,587 were made to retired trustees, resulting in an
accumulated liability of $43,430 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.
26 | OPPENHEIMER EMERGING TECHNOLOGIES FUND
- --------------------------------------------------------------------------------
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.
- --------------------------------------------------------------------------------
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:
Year Ended October 31, 2003 Year Ended October 31, 2002
Shares Amount Shares Amount
- --------------------------------------------------------------------------------------------
Class A
Sold 19,269,973 $ 45,613,174 9,326,514 $ 25,428,472
Redeemed (13,652,915) (31,837,437) (11,033,670) (30,213,198)
--------------------------------------------------------------
Net increase (decrease) 5,617,058 $ 13,775,737 (1,707,156) $ (4,784,726)
==============================================================
- --------------------------------------------------------------------------------------------
Class B
Sold 7,985,412 $ 18,868,771 6,616,144 $ 17,684,754
Redeemed (5,813,163) (13,390,188) (7,676,699) (19,545,219)
--------------------------------------------------------------
Net increase (decrease) 2,172,249 $ 5,478,583 (1,060,555) $ (1,860,465)
==============================================================
- --------------------------------------------------------------------------------------------
Class C
Sold 5,703,935 $ 12,775,516 3,887,508 $ 9,097,690
Redeemed (5,092,014) (10,461,765) (2,625,476) (7,046,620)
--------------------------------------------------------------
Net increase 611,921 $ 2,313,751 1,262,032 $ 2,051,070
==============================================================
27 | OPPENHEIMER EMERGING TECHNOLOGIES FUND
NOTES TO FINANCIAL STATEMENTS Continued
- --------------------------------------------------------------------------------
2. Shares of Beneficial Interest Continued
Year Ended October 31, 2003 Year Ended October 31, 2002
Shares Amount Shares Amount
- --------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------
Class N
Sold 773,300 $ 1,791,741 563,908 $ 1,409,424
Redeemed (219,846) (522,126) (105,319) (249,831)
--------------------------------------------------------------
Net increase 553,454 $ 1,269,615 458,589 $ 1,159,593
==============================================================
- --------------------------------------------------------------------------------------------
Class Y
Sold 1,072,410 $ 2,688,989 353,446 $ 890,176
Redeemed (779,149) (1,944,785) (222,801) (565,139)
------------------------------------------------------------
Net increase 293,261 $ 744,204 130,645 $ 325,037
============================================================
- --------------------------------------------------------------------------------
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
$312,543,655 and $285,630,290, respectively.
- --------------------------------------------------------------------------------
4. Fees and Other Transactions with Affiliates
Management Fees. Management fees paid to the Manager were in accordance with
the investment advisory agreement with the Fund which provides for a fee at an
annual rate of 1.00% of average annual net assets.
- --------------------------------------------------------------------------------
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 $437,532 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 EMERGING TECHNOLOGIES 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 $349,326 $111,268 $24,877 $359,549 $63,372 $12,764
<FN>
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.
</FN>
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 $8,575 $144,942 $3,379 $3,283
- --------------------------------------------------------------------------------
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 year ended October 31, 2003, expense under
the Class A Plan totaled $150,621, all of which were paid by the Distributor to
recipients, which included $2,268 retained by the Distributor and $17,132 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.
- --------------------------------------------------------------------------------
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 $488,293 $354,374 $9,187,394 13.16%
Class C Plan 172,328 44,129 877,140 3.36
Class N Plan 13,452 9,740 57,064 1.28
29 | OPPENHEIMER EMERGING TECHNOLOGIES FUND
NOTES TO FINANCIAL STATEMENTS Continued
- --------------------------------------------------------------------------------
5. Foreign Currency Contracts
A foreign currency contract is a commitment to purchase or sell a foreign
currency at a future date, at a negotiated rate. The Fund may enter into
foreign currency contracts to settle specific purchases or sales of securities
denominated in a foreign currency and for protection from adverse exchange rate
fluctuation. Risks to the Fund include the potential inability of the
counterparty to meet the terms of the contract.
The net U.S. dollar value of foreign currency underlying all contractual
commitments held by the Fund and the resulting unrealized appreciation or
depreciation are determined using prevailing foreign currency exchange rates.
Unrealized appreciation and depreciation on foreign currency contracts are
reported in the Statement of Assets and Liabilities as a receivable or payable
and in the Statement of Operations with the change in unrealized appreciation
or depreciation.
The Fund may realize a gain or loss upon the closing or settlement of the
foreign transaction. Contracts closed or settled with the same broker are
recorded as net realized gain or loss. Such realized gains and losses are
reported with all other foreign currency gains and losses in the Statement of
Operations.
As of October 31, 2003, the Fund had no outstanding foreign currency
contracts.
- --------------------------------------------------------------------------------
6. Option Activity
The Fund may buy and sell put and call options, or write put and covered call
options on portfolio securities in order to produce incremental earnings or
protect against changes in the value of portfolio securities.
The Fund generally purchases put options or writes covered call options to
hedge against adverse movements in the value of portfolio holdings. When an
option is written, the Fund receives a premium and becomes obligated to sell or
purchase the underlying security at a fixed price, upon exercise of the option.
Options are valued daily based upon the last sale price on the principal
exchange on which the option is traded and unrealized appreciation or
depreciation is recorded. The Fund will realize a gain or loss upon the
expiration or closing of the option transaction. When an option is exercised,
the proceeds on sales for a written call option, the purchase cost for a
written put option, or the cost of the security for a purchased put or call
option is adjusted by the amount of premium received or paid.
Securities designated to cover outstanding call options are noted in the
Statement of Investments where applicable. Shares subject to call, expiration
date, exercise price, premium received and market value are detailed in a note
to the Statement of Investments. Options written are reported as a liability in
the Statement of Assets and Liabilities. Realized gains and losses are reported
in the Statement of Operations.
The risk in writing a call option is that the Fund gives up the opportunity
for profit if the market price of the security increases and the option is
exercised. The risk in writing a put option is that the Fund may incur a loss
if the market price of the security decreases and the option is exercised. The
risk in buying an option is that the Fund pays a premium
30 | OPPENHEIMER EMERGING TECHNOLOGIES FUND
whether or not the option is exercised. The Fund also has the additional risk
of not being able to enter into a closing transaction if a liquid secondary
market does not exist.
Written option activity for the year ended October 31, 2003 was as follows:
Call Options
----------------------------
Number of Amount of
Contracts Premiums
--------------------------------------------------------------
Options outstanding as of
October 31, 2002 -- $ --
Options written 1,285 518,887
Options closed or expired (1,285) (518,887)
----------------------------
Options outstanding as of
October 31, 2003 -- $ --
============================
- --------------------------------------------------------------------------------
7. Illiquid or Restricted Securities
As of October 31, 2003, investments in securities included issues that are
illiquid or restricted. Restricted securities are purchased in private
placement transactions, are not registered under the Securities Act of 1933,
may have contractual restrictions on resale, and are valued under methods
approved by the Board of Trustees as reflecting fair value. A security may also
be considered illiquid if it lacks a readily available market or if its
valuation has not changed for a certain period of time. The Fund intends to
invest no more than 15% of its net assets (determined at the time of purchase
and reviewed periodically) in illiquid or restricted securities. Certain
restricted securities, eligible for resale to qualified institutional
investors, are not subject to that limitation. The aggregate value of illiquid
or restricted securities subject to this limitation as of October 31, 2003 was
$457,810, which represents 0.23% of the Fund's net assets, all of which is
considered restricted. Information concerning restricted securities is as
follows:
Valuation as of Unrealized
Security Acquisition Dates Cost October 31, 2003 Depreciation
- -------------------------------------------------------------------------------------------------------------------
Stocks and/or Warrants
Axsun Technologies, Inc.,
Cv., Series C 12/13/00 $8,000,007 $268,244 $7,731,763
Blaze Network Products,
Inc., 8% Cv., Series D 10/17/00 1,067,750 -- 1,067,750
BroadBand Office, Inc., Cv., Series C 8/28/00 999,980 -- 999,980
Centerpoint Broadband Technologies,
Inc., Cv., Series D 5/26/00 5,000,001 -- 5,000,001
Centerpoint Broadband Technologies,
Inc., Cv., Series Z 10/23/00 999,999 -- 999,999
fusionOne, Inc., 8% Non-Cum. Cv.,
Series D 9/6/00 1,434,530 15,930 1,418,600
MicroPhotonix Integration Corp., Cv.,
Series C 7/6/00 1,999,999 -- 1,999,999
Multiplex, Inc., Cv., Series C 2/9/01 2,849,336 159,036 2,690,300
Questia Media, Inc., Cv., Series B 8/18/00 999,998 14,600 985,398
31 | OPPENHEIMER EMERGING TECHNOLOGIES FUND
NOTES TO FINANCIAL STATEMENTS Continued
- --------------------------------------------------------------------------------
8. 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.
32 | OPPENHEIMER EMERGING TECHNOLOGIES FUND
INDEPENDENT AUDITORS' REPORT
- --------------------------------------------------------------------------------
The Board of Trustees and Shareholders of
Oppenheimer Emerging Technologies Fund:
We have audited the accompanying statement of assets and liabilities of
Oppenheimer Emerging Technologies Fund, including the statement of investments,
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 three
years in the period then ended, and the period from April 25, 2000
(commencement of operations) to October 31, 2000. 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.
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 Emerging Technologies 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 three years in the period then ended, and the period from April 25,
2000 (commencement of operations) to October 31, 2000, in conformity with
accounting principles generally accepted in the United States of America.
KPMG LLP
Denver, Colorado
November 21, 2003
33 | OPPENHEIMER EMERGING TECHNOLOGIES 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.
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.
$230,639 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.
34 | OPPENHEIMER EMERGING TECHNOLOGIES FUND
TRUSTEES AND OFFICERS Unaudited
- --------------------------------------------------------------------------------
Name, Position(s) Held with Principal Occupation(s) During Past 5 Years;
Fund, Length of Service, Age 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 below
TRUSTEES 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. Mr. Motley was
elected as Trustee to the Board I funds
effective October 10, 2002 and did not hold
shares of Board I funds during the calendar
year ended December 31, 2002.
Clayton K. Yeutter, Of Counsel (since 1993), Hogan & Hartson (a law
Chairman of the Board firm). Other directorships: Weyerhaeuser Corp.
of Trustees (since 2003), (since 1999) and Danielson Holding Corp. (since
Trustee (since 2000) 2002); formerly a director of Caterpillar, Inc.
Age: 72 (1993-December 2002). Oversees 25 portfolios in
the OppenheimerFunds complex.
Robert G. Galli, A trustee or director of other Oppenheimer
Trustee (since 2000) funds. Oversees 35 portfolios in the
Age: 70 OppenheimerFunds complex.
Phillip A. Griffiths, A director (since 1991) of the Institute for
Trustee (since 2000) Advanced Study, Princeton, N.J., a director
Age: 65 (since 2001) of GSI Lumonics, a trustee (since
1983) of Woodward Academy, a Senior Advisor
(since 2001) of The Andrew W. Mellon
Foundation. A member of: the National Academy
of Sciences (since 1979), American Academy of
Arts and Sciences (since 1995), American
Philosophical Society (since 1996) and Council
on Foreign Relations (since 2002). Formerly a
director of Bankers Trust New York Corporation
(1994-1999). Oversees 25 portfolios in the
OppenheimerFunds complex.
Joel W. Motley, Director (since 2002) Columbia Equity Financial
Trustee (since 2002) Corp. (privately-held financial adviser);
Age: 51 Managing Director (since 2002) Carmona Motley,
Inc. (privately-held financial adviser);
Formerly he held the following positions:
Managing Director (January 1998-December 2001),
Carmona Motley Hoffman Inc. (privately-held
financial adviser); Managing Director (January
1992-December 1997), Carmona Motley & Co.
(privately-held financial adviser). Oversees 25
portfolios in the OppenheimerFunds complex.
Kenneth A. Randall, A director of Dominion Resources, Inc.
Trustee (since 2000) (electric utility holding company) and Prime
Age: 76 Retail, Inc. (real estate investment trust);
formerly a director of Dominion Energy, Inc.
(electric power and oil & gas producer),
President and Chief Executive Officer of The
Conference Board, Inc. (international economic
and business research) and a director of
Lumbermens Mutual Casualty Company, American
Motorists Insurance Company and American
Manufacturers Mutual Insurance Company.
Oversees 25 portfolios in the OppenheimerFunds
complex.
Edward V. Regan, President, Baruch College, CUNY; a director of
Trustee (since 2000) RBAsset (real estate manager); a director of
Age: 73 OffitBank; formerly Trustee, Financial
Accounting Foundation (FASB and GASB), Senior
Fellow of Jerome Levy Economics Institute, Bard
College, Chairman of Municipal Assistance
Corporation for the City of New York, New York
State Comptroller and Trustee of New York State
and Local Retirement Fund. Oversees 25
investment companies in the OppenheimerFunds
complex.
35 | OPPENHEIMER EMERGING TECHNOLOGIES FUND
TRUSTEES AND OFFICERS Unaudited / Continued
Russell S. Reynolds, Jr., Chairman (since 1993) of The Directorship
Trustee (since 2000) Search Group, Inc. (corporate governance
Age: 71 consulting and executive recruiting); a life
trustee of International House (non-profit
educational organization), and a trustee (since
1996) of the Greenwich Historical Society.
Oversees 25 portfolios in the OppenheimerFunds
complex.
Donald W. Spiro, Chairman Emeritus (since January 1991) of the
Vice Chairman of the Manager. Formerly a director (January
Board of Trustees, 1969-August 1999) of the Manager. Oversees 25
Trustee (since 2000) portfolios in the OppenheimerFunds complex.
Age: 77
- --------------------------------------------------------------------------------
INTERESTED TRUSTEE The address of Mr. Murphy in the chart below is
AND OFFICER Two World Financial Center, 225 Liberty St.,
New York, NY 10281-1008. Mr. Murphy serves for
an indefinite term, until his resignation,
death or removal.
John V. Murphy, Chairman, Chief Executive Officer and director
President and Trustee, (since June 2001) and President (since
Trustee (since 2001) September 2000) of the Manager; President and a
Age: 54 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.
36 | OPPENHEIMER EMERGING TECHNOLOGIES FUND
- --------------------------------------------------------------------------------
OFFICERS The address of the Officers in the chart below
is as follows: for Ms. Granger and Mr. 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.
Laura Granger, Vice President of the Manager (since October
Vice President and Portfolio 2000); an officer of 3 portfolios in the
Manager (since 2000) OppenheimerFunds complex; formerly a portfolio
Age: 42 manager at Fortis Advisors (July 1998-October
2000) prior to which she was portfolio manager
at General Motors Investment Management (July
1993-July 1998).
Brian W. Wixted, Senior Vice President and Treasurer (since
Treasurer (since 2000) March 1999) of the Manager; Treasurer (since
Age: 44 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) and
Secretary (since 2001) General Counsel (since February 2002) of the
Age: 55 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.
37 | OPPENHEIMER EMERGING TECHNOLOGIES FUND
ITEM 2. CODE OF ETHICS
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT
The Board of Trustees of the Fund has determined that Edward
V. Regan, the Chairman of the Board's Audit Committee, possesses the technical
attributes identified in Instruction 2(b) of Item 3 to Form N-CSR to qualify as
an "audit committee financial expert," and has designated Mr. Regan as the Audit
Committee's financial expert. Mr. Regan is an "independent" Trustee pursuant to
paragraph (a)(2) of Item 3 to Form N-CSR.
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)