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 811-07857
Oppenheimer Real Asset 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
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(Name and address of agent for service)
Registrant's telephone number, including area code: (303) 768-3200
--------------
Date of fiscal year end: August 31
Date of reporting period: September 1, 2003 - February 29, 2004
ITEM 1. REPORTS TO STOCKHOLDERS.
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STATEMENT OF INVESTMENTS February 29, 2004 / Unaudited
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PRINCIPAL MARKET VALUE
AMOUNT SEE NOTE 1
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ASSET-BACKED SECURITIES--1.5%
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BMW Vehicle Owner Trust, Automobile Loan Certificates, Series 2003-A,
Cl. A2, 1.45%, 11/25/05 1 $ 908,550 $ 909,944
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Capital Auto Receivables Asset Trust, Automobile Mtg.-Backed Nts.:
Series 2002-3, Cl. A2A, 3.05%, 9/15/05 2 1,680,000 1,697,921
Series 2002-4, Cl. A2B, 1.74%, 1/17/05 1, 2 156,210 156,382
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CitiFinancial Mortgage Securities, Inc., Home Equity Collateralized Mtg.
Obligations, Series 2002-1, Cl. AF1, 2.474%, 9/25/32 122,148 122,363
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Ford Credit Auto Owner Trust, Automobile Loan Pass-Through
Certificates, Series 2002-D, Cl. A2A, 2.10%, 3/15/05 279,338 279,882
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Harley-Davidson Motorcycle Trust, Motorcycle Receivable Nts.,
Series 2002-2, Cl. A1, 1.91%, 4/16/07 227,450 228,121
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Honda Auto Receivables Owner Trust, Automobile Receivables
Obligations, Series 2002-4, Cl. A2, 1.66%, 6/15/05 289,634 290,047
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Household Automotive Trust, Automobile Loan Certificates,
Series 2002-2, Cl. A2, 2.15%, 12/19/05 60,135 60,215
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MMCA Auto Lease Trust, Auto Retail Installment Contracts,
Series 2002-A, Cl. A2, 1.264%, 5/16/05 3,4 120,539 120,622
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MSF Funding LLC, Collateralized Mtg. Obligations, Series 2000-1,
Cl. C, 8.44%, 7/25/07 1,4 295,529 59,106
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NC Finance Trust, Collateralized Mtg. Obligations, Series 1999-I,
Cl. ECFD, 8.75%, 12/25/28 1 652,944 169,765
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Salomon Smith Barney Auto Loan Trust, Asset-Backed Auto Loan
Obligations, Series 2002-1, Cl. A2, 1.83%, 9/15/05 1 339,795 340,391
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Salomon Smith Barney Mutual Fund Fee Trust XIV, Asset-Backed Nts.,
Series 2000-14, Cl. 2, 8.61%, 9/30/08 3,590,865 1,330,865
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Toyota Auto Receivables Owner Trust, Automobile Mtg.-Backed
Obligations, Series 2003-A, Cl. A2, 1.28%, 8/15/05 1,893,704 1,895,425
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Volkswagen Auto Lease Trust, Automobile Lease Asset-Backed Securities,
Series 2002-A, Cl. A2, 1.77%, 2/20/05 2 361,841 362,293
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Whole Auto Loan Trust, Automobile Loan Receivables, Series 2002-1,
Cl. A2, 1.88%, 6/15/05 361,928 362,741
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Total Asset-Backed Securities (Cost $11,331,349) 8,386,083
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MORTGAGE-BACKED OBLIGATIONS--21.8%
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GOVERNMENT AGENCY--21.2%
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FHLMC/FNMA/SPONSORED--21.2%
Federal Home Loan Mortgage Corp.:
7%, 9/1/33 1,865,217 1,989,604
8%, 4/1/16 462,312 497,761
9%, 8/1/22-5/1/25 113,103 126,209
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Federal Home Loan Mortgage Corp., Interest-Only Stripped
Mtg.-Backed Security, Series 177, Cl. B, (5.402)%, 7/1/26 5 2,965,292 454,190
10 | OPPENHEIMER REAL ASSET FUND
PRINCIPAL MARKET VALUE
AMOUNT SEE NOTE 1
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FHLMC/FNMA/SPONSORED Continued
Federal Home Loan Mortgage Corp., Structured Pass-Through
Securities, Collateralized Mtg. Obligations:
Series H006, Cl. A1, 1.724%, 4/15/08 $ 269,477 $ 268,598
Series T-42, Cl. A2, 5.50%, 2/25/42 270,894 273,635
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Federal National Mortgage Assn.:
5%, 3/15/34 6 7,077,000 7,090,269
5.50%, 3/13/34 6 1,800,000 1,841,625
6.50%, 3/1/34 6 33,380,000 35,111,588
7%, 11/1/33 800,355 851,812
7%, 3/1/34 6 61,595,000 65,425,470
8.50%, 7/1/32 208,067 225,076
-------------
114,155,837
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GNMA/GUARANTEED--0.0%
Government National Mortgage Assn., 8.50%, 8/15/17-12/15/17 155,013 172,571
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PRIVATE--0.6%
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COMMERCIAL--0.6%
Bear Stearns Commercial Mortgage Securities, Inc., Commercial
Mtg. Obligations, Series 2003-T10, Cl. A1, 4%, 3/13/40 1,296,118 1,317,284
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GE Capital Commercial Mortgage Corp., Commercial Mtg.
Obligations, Series 2003-C1, Cl. A2, 4.093%, 1/10/38 1,081,000 1,105,036
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J.P. Morgan Chase Commercial Mortgage Securities Corp., Commercial
Mtg. Pass-Through Certificates, Series 2003-ML1A, Cl. A1, 3.972%, 3/12/39 789,040 801,267
-------------
3,223,587
-------------
Total Mortgage-Backed Obligations (Cost $117,144,181) 117,551,995
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U.S. GOVERNMENT OBLIGATIONS--9.5%
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Federal Home Loan Bank Unsec. Bonds, Series EY06, 5.25%, 8/15/06 9,286,000 9,986,072
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Federal Home Loan Mortgage Corp. Unsec. Nts., 2.875%, 12/15/06 2,7 6,310,000 6,411,717
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Federal National Mortgage Assn. Unsec. Nts.:
1.33% 2/23/05 24,000,000 24,002,904
5.25%, 6/15/06 2 1,600,000 1,716,790
5.50%, 2/15/06 2 8,000,000 8,574,616
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U.S. Treasury Nts., 3.25%, 12/15/08 785,000 802,019
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Total U.S. Government Obligations (Cost $51,149,753) 51,494,118
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FOREIGN GOVERNMENT OBLIGATIONS--0.1%
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Quebec (Province of) Nts., 8.625% 1/19/05 (Cost $530,962) 500,000 532,341
11 | OPPENHEIMER REAL ASSET FUND
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STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
PRINCIPAL MARKET VALUE
AMOUNT SEE NOTE 1
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CORPORATE BONDS AND NOTES--27.9%
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CONSUMER DISCRETIONARY--4.3%
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AUTO COMPONENTS--0.3%
Delphi Corp., 6.125% Nts., 5/1/04 $ 1,800,000 $ 1,811,875
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AUTOMOBILES--1.4%
DaimlerChrysler North America Holding Corp.:
3.40% Nts., Series D, 12/15/04 2 860,000 868,566
6.90% Unsec. Nts., 9/1/04 1,850,000 1,895,590
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General Motors Acceptance Corp.:
5.45% Nts., 4/15/04 170,000 170,693
6.85% Nts., 6/17/04 325,000 330,200
7.625% Unsec. Unsub. Nts., 6/15/04 500,000 508,945
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General Motors Nova Scotia Finance Co., 6.85% Nts., 10/15/08 1,205,000 1,318,163
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Hertz Corp. (The):
1.66% Nts., 8/13/04 4 1,400,000 1,399,525
6.50% Sr. Nts., 5/15/06 2 1,215,000 1,283,567
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7,775,249
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HOTELS, RESTAURANTS & LEISURE--0.3%
McDonald's Corp., 5.15% Nts., Series G, 7/1/04 1,700,000 1,722,260
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HOUSEHOLD DURABLES--0.3%
Fortune Brands, Inc., 7.125% Sr. Unsec. Nts., 11/1/04 3 1,415,000 1,467,515
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MEDIA--1.5%
Clear Channel Communications, Inc., 4.625% Sr. Unsec. Nts., 1/15/08 875,000 912,885
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Cox Communications, Inc., 6.69% Nts., 9/20/04 1,700,000 1,746,357
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News America, Inc., 6.625% Sr. Nts., 1/9/08 443,000 495,571
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Time Warner Cos., Inc.:
7.975% Nts., 8/15/04 1,025,000 1,053,253
8.18% Nts., 8/15/07 890,000 1,033,757
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Viacom, Inc., 6.40% Sr. Nts., 1/30/06 2 675,000 729,949
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Walt Disney Co. (The):
4.50% Nts., 9/15/04 1,500,000 1,526,334
6.75% Sr. Unsec. Nts., Series B, 3/30/06 400,000 434,697
-------------
7,932,803
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MULTILINE RETAIL--0.5%
Target Corp., 7.50% Sr. Unsec. Nts., 2/15/05 2,275,000 2,399,818
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CONSUMER STAPLES--2.3%
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BEVERAGES--0.6%
Coca-Cola Enterprises, Inc., 6.625% Unsec. Nts., 8/1/04 775,000 791,242
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Diageo Capital plc, 6.625% Unsec. Nts., 6/24/04 2,300,000 2,339,151
-------------
3,130,393
12 | OPPENHEIMER REAL ASSET FUND
PRINCIPAL MARKET VALUE
AMOUNT SEE NOTE 1
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FOOD & STAPLES RETAILING--1.1%
Albertson's, Inc., 6.55% Sr. Nts., 8/1/04 2 $ 640,000 $ 651,049
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Fred Meyer, Inc., 7.375% Sr. Nts., 3/1/05 630,000 665,014
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Kroger Co. (The), 7.625% Sr. Nts., 9/15/06 460,000 515,800
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Safeway, Inc., 7.25% Nts., 9/15/04 1,500,000 1,544,235
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Secured Finance, Inc., 9.05% Bonds, 12/15/04 2,000,000 2,098,554
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Wal-Mart Stores, Inc.:
6.55% Sr. Unsec. Nts., 8/10/04 275,000 281,544
7.50% Nts., 5/15/04 215,000 217,771
-------------
5,973,967
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FOOD PRODUCTS--0.6%
ConAgra, Inc., 7.40% Sub. Nts., 9/15/04 150,000 154,427
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General Mills, Inc., 3.875% Nts., 11/30/07 515,000 526,618
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Nabisco, Inc., 6.375% Nts., 2/1/05 2,500,000 2,596,383
-------------
3,277,428
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ENERGY--0.8%
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ENERGY EQUIPMENT & SERVICES--0.3%
Baker Hughes, Inc., 7.875% Nts., 6/15/04 1,600,000 1,628,098
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OIL & GAS--0.5%
BP America, Inc., 9.875% Debs., 3/15/04 585,000 586,695
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Conoco, Inc., 5.90% Sr. Unsec. Nts., 4/15/04 2,391,000 2,404,186
-------------
2,990,881
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FINANCIALS--11.6%
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CAPITAL MARKETS--1.0%
Bank of New York Co., Inc. (The):
3.75% Unsec. Unsub. Nts., 2/15/08 470,000 482,584
8.50% Unsec. Sub. Nts., 12/15/04 1,600,000 1,689,846
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Credit Suisse First Boston, Inc. (USA), 5.75% Nts., 4/15/07 600,000 653,481
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Deutsche Bank Finance NV, 5.75% Sr. Unsec. Unsub. Nts., 4/13/04 200,000 201,009
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Northern Trust Co., 7.50% Nts., 2/11/05 2,000,000 2,110,852
-------------
5,137,772
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COMMERCIAL BANKS--2.7%
Abbey National First Capital BV, 8.20% Sub. Nts., 10/15/04 2,300,000 2,396,892
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AmSouth Bancorp, 7.75% Sub. Nts., 5/15/04 2,480,000 2,512,548
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Bank of America Corp., 3.875% Nts., 1/15/08 2 500,000 515,962
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Bank One Corp., 7.25% Sub. Debs., 8/15/04 865,000 888,516
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Fleet Boston Corp., 8% Sub. Nts., 9/15/04 100,000 103,571
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Fleet National Bank, 8.625% Sub. Nts., 2/15/05 250,000 267,995
13 | OPPENHEIMER REAL ASSET FUND
- --------------------------------------------------------------------------------
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
PRINCIPAL MARKET VALUE
AMOUNT SEE NOTE 1
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COMMERCIAL BANKS Continued
FleetBoston Financial Corp.:
4.20% Nts., 11/30/07 $ 430,000 $ 448,701
8.125% Sub. Nts., 7/1/04 1,115,000 1,139,665
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Household Finance Corp.:
6.50% Unsec. Nts., 1/24/06 515,000 557,711
8% Nts., 8/1/04 2,000,000 2,054,984
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KeyCorp, 8% Sub. Nts., 7/1/04 595,000 607,741
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NationsBank Corp., 7.75% Sub. Nts., 8/15/04 200,000 205,727
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PNC Bank NA, 7.875% Sub. Nts., 4/15/05 2 580,000 620,988
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PNC Funding Corp.:
7% Unsec. Nts., 9/1/04 1,250,000 1,285,005
7.75% Sub. Nts., 6/1/04 450,000 457,071
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US Bancorp, 8% Sub. Nts., 7/2/04 140,000 143,075
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Washington Mutual, Inc., 4.375% Nts., 1/15/08 515,000 537,609
-------------
14,743,761
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DIVERSIFIED FINANCIAL SERVICES--4.1%
American Express Co., 5.50% Nts., 9/12/06 2 770,000 830,375
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Associates Corp. of North America, 5.80% Sr. Nts., 4/20/04 300,000 301,848
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Block Financial Corp., 6.75% Sr. Unsec. Nts., 11/1/04 2,000,000 2,070,200
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Bombardier Capital, Inc., 7.50% Nts., 8/15/04 3 1,100,000 1,131,207
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Capital One Bank, 6.50% Sr. Nts., 7/30/04 1,900,000 1,939,448
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Caterpillar Financial Services Corp., 6.875% Unsec. Nts., 8/1/04 980,000 1,002,768
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Chase Manhattan Corp.:
5.75% Sr. Unsec. Nts., 4/15/04 265,000 266,476
6.75% Sr. Nts., Series C, 12/1/04 1,000,000 1,039,233
7.125% Sub. Debs., 3/1/05 350,000 369,481
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CIT Group, Inc.:
4.125% Sr. Nts., 2/21/06 900,000 934,586
7.125% Sr. Nts., 10/15/04 1,200,000 1,243,057
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CitiFinancial, 6.50% Unsec. Nts., 8/1/04 100,000 102,174
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Citigroup, Inc.:
3.50% Nts., 2/1/08 800,000 814,151
5.80% Sr. Unsec. Nts., 3/15/04 250,000 250,393
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Goldman Sachs Group, Inc. (The):
4.125% Nts., 1/15/08 2 1,000,000 1,037,497
7.50% Sr. Unsec. Unsub. Nts., 1/28/05 2,300,000 2,424,580
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J.P. Morgan Chase & Co., 4% Nts., 2/1/08 800,000 828,159
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Lehman Brothers Holdings, Inc.:
7.375% Sr. Unsec. Nts., 5/15/04 398,000 403,063
7.75% Sr. Unsec. Nts., 1/15/05 1,940,000 2,041,365
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MBNA America Bank NA, 6.875% Nts., 7/15/04 3 1,400,000 1,426,340
14 | OPPENHEIMER REAL ASSET FUND
PRINCIPAL MARKET VALUE
AMOUNT SEE NOTE 1
- ------------------------------------------------------------------------------------------------------------------
DIVERSIFIED FINANCIAL SERVICES Continued
MBNA Corp., 5.625% Nts., 11/30/07 $ 500,000 $ 539,315
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Merrill Lynch & Co., Inc.:
4% Nts., Series B, 11/15/07 410,000 424,409
4.125% Nts., Series C, 1/15/09 590,000 605,757
-------------
22,025,882
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INSURANCE--1.9%
AXA Financial, Inc., 9% Sr. Unsec. Nts., 12/15/04 2,200,000 2,321,070
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Hartford Life, Inc., 6.90% Unsec. Nts., 6/15/04 2,150,000 2,183,015
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John Hancock Global Funding II, 5% Nts., 7/27/07 3 760,000 817,401
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Marsh & McLennan Cos., Inc., 3.625% Nts., 2/15/08 1,130,000 1,151,026
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Monumental Global Funding II, 3.85% Nts., 3/3/08 3 1,120,000 1,145,598
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Prime Property Funding II, 7% Nts., 8/15/04 3 1,000,000 1,024,174
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Teachers Insurance and Annuity Association Global Markets,
3.875% Sr. Unsec. Nts., 1/22/08 3 1,750,000 1,806,758
-------------
10,449,042
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REAL ESTATE--1.1%
CarrAmerica Realty Corp., 7.20% Sr. Unsec. Sub. Nts., 7/1/04 1,825,000 1,859,547
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EOP Operating LP, 7.75% Unsec. Nts., 11/15/07 390,000 452,572
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Equity Residential Properties Trust, 7.50% Unsec. Unsub. Nts., 4/15/04 180,000 181,220
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ERP Operating LP, 7.10% Unsec. Nts., 6/23/04 1,705,000 1,733,985
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Regency Centers LP, 7.40% Nts., 4/1/04 690,000 693,425
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Spieker Properties LP, 6.80% Unsec. Unsub. Nts., 5/1/04 1,100,000 1,108,586
-------------
6,029,335
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THRIFTS & MORTGAGE FINANCE--0.8%
Countrywide Home Loans, Inc.:
5.25% Nts., Series J, 6/15/04 1,400,000 1,415,704
5.50% Nts., Series K, 2/1/07 2 635,000 684,734
6.51% Nts., Series F, 2/11/05 250,000 261,283
6.84% Nts., Series F, 10/22/04 50,000 51,701
6.85% Nts., 6/15/04 37,000 37,582
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Washington Mutual Finance Corp., 7.375% Sr. Unsec. Nts., 9/1/04 1,800,000 1,855,456
-------------
4,306,460
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HEALTH CARE--1.7%
- ------------------------------------------------------------------------------------------------------------------
HEALTH CARE PROVIDERS & SERVICES--0.2%
Anthem, Inc., 4.875% Unsub. Nts., 8/1/05 420,000 438,160
- ------------------------------------------------------------------------------------------------------------------
Cardinal Health, Inc., 4.45% Nts., 6/30/05 370,000 382,882
-------------
821,042
15 | OPPENHEIMER REAL ASSET FUND
- --------------------------------------------------------------------------------
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
PRINCIPAL MARKET VALUE
AMOUNT SEE NOTE 1
- ------------------------------------------------------------------------------------------------------------------
PHARMACEUTICALS--1.5%
Abbott Laboratories, 5.125% Unsec. Nts., 7/1/04 $ 2,329,000 $ 2,358,709
- ------------------------------------------------------------------------------------------------------------------
Bristol-Myers Squibb Co., 4.75% Nts., 10/1/06 875,000 926,832
- ------------------------------------------------------------------------------------------------------------------
Pfizer, Inc., 3.625% Nts., 11/1/04 2,500,000 2,540,283
- ------------------------------------------------------------------------------------------------------------------
Wyeth, 6.125% Nts., 3/15/04 2,300,000 2,303,728
-------------
8,129,552
- ------------------------------------------------------------------------------------------------------------------
INDUSTRIALS--1.6%
- ------------------------------------------------------------------------------------------------------------------
AEROSPACE & DEFENSE--0.3%
Boeing Capital Corp., 6% Sr. Nts., Series X, 5/25/04 650,000 656,219
- ------------------------------------------------------------------------------------------------------------------
United Technologies Corp., 6.625% Unsec. Sub. Nts., 11/15/04 800,000 829,250
-------------
1,485,469
- ------------------------------------------------------------------------------------------------------------------
INDUSTRIAL CONGLOMERATES--1.0%
3M Co., 4.25% Nts., Series C, 9/1/04 695,000 705,500
- ------------------------------------------------------------------------------------------------------------------
General Electric Capital Corp., 5.375% Nts., Series A, 4/23/04 2,200,000 2,213,092
- ------------------------------------------------------------------------------------------------------------------
Textron Financial Corp.:
5.65% Nts., Series E, 3/26/04 250,000 250,672
7.125% Nts., 12/9/04 2,005,000 2,084,677
-------------
5,253,941
- ------------------------------------------------------------------------------------------------------------------
MACHINERY--0.2%
Deere & Co., 6.55% Sr. Unsec. Nts., 7/15/04 210,000 213,844
- ------------------------------------------------------------------------------------------------------------------
Ingersoll-Rand Co., 5.80% Sr. Unsec. Nts., 6/1/04 1,000,000 1,011,028
-------------
1,224,872
- ------------------------------------------------------------------------------------------------------------------
ROAD & RAIL--0.1%
Burlington Northern Santa Fe Corp., 8.625% Sr. Unsec. Nts., 11/1/04 600,000 622,658
- ------------------------------------------------------------------------------------------------------------------
INFORMATION TECHNOLOGY--0.3%
- ------------------------------------------------------------------------------------------------------------------
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT--0.3%
Texas Instruments, Inc., 7% Sr. Unsec. Nts., 8/15/04 1,400,000 1,436,662
- ------------------------------------------------------------------------------------------------------------------
MATERIALS--0.1%
- ------------------------------------------------------------------------------------------------------------------
CHEMICALS--0.0%
Dow Chemical Corp., 5.25% Sr. Unsec. Sub. Nts., 5/14/04 109,000 109,672
- ------------------------------------------------------------------------------------------------------------------
PAPER & FOREST PRODUCTS--0.1%
Westvaco Corp., 6.85% Unsec. Unsub. Nts., 11/15/04 350,000 361,625
- ------------------------------------------------------------------------------------------------------------------
TELECOMMUNICATION SERVICES--1.9%
- ------------------------------------------------------------------------------------------------------------------
DIVERSIFIED TELECOMMUNICATION SERVICES--1.3%
- ------------------------------------------------------------------------------------------------------------------
Alltel Corp., 7.25% Nts., 4/1/04 2,150,000 2,160,030
- ------------------------------------------------------------------------------------------------------------------
Ameritech Capital Funding, 6.30% Unsec. Sub. Nts., 10/15/04 500,000 514,558
- ------------------------------------------------------------------------------------------------------------------
British Telecommunications plc, 6.75% Unsec. Bonds, 10/28/04 1,500,000 1,551,506
- ------------------------------------------------------------------------------------------------------------------
Citizens Communications Co., 7.625% Sr. Unsub. Nts., 8/15/08 515,000 550,983
16 | OPPENHEIMER REAL ASSET FUND
PRINCIPAL MARKET VALUE
AMOUNT SEE NOTE 1
- ------------------------------------------------------------------------------------------------------------------
DIVERSIFIED TELECOMMUNICATION SERVICES Continued
GTE North, Inc., 6.40% Debs., Series E, 2/15/05 $ 605,000 $ 633,711
- ------------------------------------------------------------------------------------------------------------------
NYNEX Capital Funding Co., 8.75% Nts., Series B, 12/1/04 600,000 626,933
- ------------------------------------------------------------------------------------------------------------------
Pacific Bell, 7% Nts., 7/15/04 50,000 51,065
- ------------------------------------------------------------------------------------------------------------------
Verizon Wireless, Inc., 5.375% Unsub. Nts., 12/15/06 860,000 924,819
-------------
7,013,605
- ------------------------------------------------------------------------------------------------------------------
WIRELESS TELECOMMUNICATION SERVICES--0.6%
Vodafone Group plc:
3.95% Unsec. Nts., 1/30/08 860,000 883,850
7.625% Jr. Unsec. Nts., 2/15/05 2,432,000 2,574,515
-------------
3,458,365
- ------------------------------------------------------------------------------------------------------------------
UTILITIES--3.3%
- ------------------------------------------------------------------------------------------------------------------
ELECTRIC UTILITIES--2.2%
Alabama Power Co., 4.875% Sr. Unsec. Nts., Series N, 9/1/04 2,000,000 2,036,234
- ------------------------------------------------------------------------------------------------------------------
Cinergy Corp., 6.25% Unsec. Sub. Debs., 9/1/04 429,000 437,983
- ------------------------------------------------------------------------------------------------------------------
Consolidated Edison Co. of New York, Inc., 7.625% Unsec. Debs.,
Series 92B, 3/1/04 1,000,000 1,000,000
- ------------------------------------------------------------------------------------------------------------------
DTE Energy Co., 6.45% Sr. Unsub. Nts., 6/1/06 615,000 664,027
- ------------------------------------------------------------------------------------------------------------------
FPL Group Capital, Inc., 6.875% Unsec. Debs., 6/1/04 2,455,000 2,487,602
- ------------------------------------------------------------------------------------------------------------------
Midamerican Energy Holdings Co., 4.625% Sr. Nts., 10/1/07 910,000 955,218
- ------------------------------------------------------------------------------------------------------------------
Niagara Mohawk Power Corp., 5.375% Sr. Unsec. Nts., 10/1/04 1,405,000 1,436,894
- ------------------------------------------------------------------------------------------------------------------
Pennsylvania Electric Co., 5.75% Sr. Unsec. Nts., 4/1/04 1,135,000 1,138,969
- ------------------------------------------------------------------------------------------------------------------
Progress Energy, Inc.:
6.55% Sr. Unsec. Nts., 3/1/04 1,085,000 1,085,000
6.75% Sr. Nts., 3/1/06 465,000 504,893
-------------
11,746,820
- ------------------------------------------------------------------------------------------------------------------
GAS UTILITIES--0.9%
Consolidated Natural Gas Co., 7.25% Sr. Unsec. Nts., 10/1/04 2,300,000 2,373,851
- ------------------------------------------------------------------------------------------------------------------
NiSource Finance Corp., 3.20% Nts., 11/1/06 680,000 696,138
- ------------------------------------------------------------------------------------------------------------------
Sempra Energy, 6.925% Sr. Unsec. Unsub. Nts., 7/1/04 1,870,000 1,902,489
-------------
4,972,478
- ------------------------------------------------------------------------------------------------------------------
MULTI-UTILITIES & UNREGULATED POWER--0.2%
Duke Energy Corp., 8.25% Nts., 10/15/04 900,000 932,857
-------------
Total Corporate Bonds and Notes (Cost $149,280,216) 150,372,157
- ------------------------------------------------------------------------------------------------------------------
STRUCTURED NOTES--20.6%
- ------------------------------------------------------------------------------------------------------------------
AB Svensk Exportkredit, Goldman Sachs Commodity Index Excess
Return Linked Nts., 0.48%, 12/2/04 8 13,000,000 17,620,200
17 | OPPENHEIMER REAL ASSET FUND
- --------------------------------------------------------------------------------
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
PRINCIPAL MARKET VALUE
AMOUNT SEE NOTE 1
- ------------------------------------------------------------------------------------------------------------------
STRUCTURED NOTES Continued
- ------------------------------------------------------------------------------------------------------------------
AIG, Goldman Sachs Commodity Index Total Return Linked Nts.,
1.17%, 1/28/058 $15,000,000 $ 16,061,084
- ------------------------------------------------------------------------------------------------------------------
Business Development Bank of Canada, Goldman Sachs Commodity
Index Non Energy Excess Return Linked Nts., 1.10%, 4/23/04 8 3,000,000 5,094,000
- ------------------------------------------------------------------------------------------------------------------
Cargill, Inc., Goldman Sachs Commodity Index Total Return Linked Nts.:
1.189%, 3/4/05 8 23,000,000 25,955,311
1.57%, 3/22/04 8 9,000,000 20,284,940
- ------------------------------------------------------------------------------------------------------------------
Core Investment Grade Bond Trust I Pass-Through Certificates,
Series 2002-1, 4.727%, 11/30/07 9,700,000 10,241,309
- ------------------------------------------------------------------------------------------------------------------
Koch Supply & Trading LP, Goldman Sachs Energy Total Return
Linked Nts., 1.04%, 4/30/04 4,8 4,000,000 7,638,912
- ------------------------------------------------------------------------------------------------------------------
Sempra Energy Trading Corp., Goldman Sachs Commodity Index
Total Return Linked Nts., 1.08%, 6/9/04 4,8 5,500,000 8,386,400
-------------
Total Structured Notes (Cost $82,392,482) 111,282,156
DATE STRIKE CONTRACTS
- ------------------------------------------------------------------------------------------------------------------
OPTIONS PURCHASED--0.1%
- ------------------------------------------------------------------------------------------------------------------
Crude Oil Futures, 4/20/04 Put 9 4/15/04 $34.00 125 113,750
- ------------------------------------------------------------------------------------------------------------------
Natural Gas Futures, 4/25/04 Call 9 4/27/04 5.50 100 300,000
-------------
Total Options Purchased (Cost $365,844) 413,750
PRINCIPAL
AMOUNT
- ------------------------------------------------------------------------------------------------------------------
SHORT-TERM NOTES--13.7%
- ------------------------------------------------------------------------------------------------------------------
Amsterdam Funding Corp., 1.03%, 3/16/04 $ 5,000,000 4,997,854
- ------------------------------------------------------------------------------------------------------------------
Barton Capital Corp., 1.03%, 4/5/04 5,000,000 4,994,993
- ------------------------------------------------------------------------------------------------------------------
Cooperative Assn. of Tractor Dealers, Inc., Series A, 1.05%, 3/23/04 2,000,000 1,998,717
- ------------------------------------------------------------------------------------------------------------------
Crown Point Capital Co., 1.05%, 4/8/04 5,000,000 4,994,458
- ------------------------------------------------------------------------------------------------------------------
Eiffel Funding LLC, 1.04%, 4/16/04 5,000,000 4,993,356
- ------------------------------------------------------------------------------------------------------------------
Fairway Finance Corp., 1.04%, 5/10/04 5,000,000 4,989,250
- ------------------------------------------------------------------------------------------------------------------
Galaxy Funding, Inc., 1.05%, 5/17/04 4,576,000 4,565,320
- ------------------------------------------------------------------------------------------------------------------
Gemini Securitization Corp., 1.03%, 3/26/04 5,000,000 4,996,424
- ------------------------------------------------------------------------------------------------------------------
GOVCO, Inc., 1.04%, 5/3/04 5,000,000 4,990,375
- ------------------------------------------------------------------------------------------------------------------
Neptune Funding Corp., 1.07%, 4/12/04 5,000,000 4,993,758
- ------------------------------------------------------------------------------------------------------------------
Scaldis Capital LLC, 1.05%, 4/22/04 3,831,000 3,825,190
- ------------------------------------------------------------------------------------------------------------------
Sheffield Receivables Corp., 1.04%, 3/16/04 4,690,000 4,687,968
- ------------------------------------------------------------------------------------------------------------------
Steamboat Funding Corp., 1.03%, 3/19/04 4,367,000 4,364,751
- ------------------------------------------------------------------------------------------------------------------
Victory Receivables Corp., 1.07%, 4/21/04 4,589,000 4,582,044
- ------------------------------------------------------------------------------------------------------------------
Windmill Funding Corp., 1.02%, 3/17/04 5,000,000 4,997,733
- ------------------------------------------------------------------------------------------------------------------
Yorktown Capital LLC, 1.03%, 4/19/04 5,000,000 4,992,985
-------------
Total Short-Term Notes (Cost $73,966,736) 73,965,176
18 | OPPENHEIMER REAL ASSET FUND
PRINCIPAL MARKET VALUE
AMOUNT SEE NOTE 1
- ------------------------------------------------------------------------------------------------------------------
JOINT REPURCHASE AGREEMENTS--23.1% 10
- ------------------------------------------------------------------------------------------------------------------
Undivided interest of 25.41% in joint repurchase agreement (Principal Amount/
Market Value $490,448,000) with DB Alex Brown LLC, 0.99%, dated 2/27/04, to be
repurchased at $124,655,283 on 3/1/04, collateralized by U.S. Treasury Bonds,
3.625%--3.875%, 4/15/28--4/15/29, with a value of $501,704,285 (Cost
$124,645,000) $124,645,000 $124,645,000
- ------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS, AT VALUE (COST $610,806,523) 118.3% 638,642,776
- ------------------------------------------------------------------------------------------------------------------
LIABILITIES IN EXCESS OF OTHER ASSETS (18.3) (99,004,394)
--------------------------------
NET ASSETS 100.0% $539,638,382
================================
FOOTNOTES TO STATEMENT OF INVESTMENTS
1. Identifies issues considered to be illiquid. See Note 8 of Notes to Financial
Statements.
2. Securities with an aggregate market value of $23,132,321 are held in
collateralized accounts to cover initial margin requirements on open futures
sales contracts. See Note 5 of Notes to Financial Statements.
3. Represents securities sold under Rule 144A, which are exempt from
registration under the Securities Act of 1933, as amended. These securities have
been determined to be liquid under guidelines established by the Board of
Trustees. These securities amount to $8,939,615 or 1.66% of the Fund's net
assets as of February 29, 2004.
4. Represents the current interest rate for a variable or increasing rate
security.
5. Interest-Only Strips represent the right to receive the monthly interest
payments on an underlying pool of mortgage loans. These securities typically
decline in price as interest rates decline. Most other fixed income securities
increase in price when interest rates decline. The principal amount of the
underlying pool represents the notional amount on which current interest is
calculated. The price of these securities is typically more sensitive to changes
in prepayment rates than traditional mortgage-backed securities (for example,
GNMA pass-throughs). Interest rates disclosed represent current yields based
upon the current cost basis and estimated timing and amount of future cash
flows. These securities amount to $454,190 or 0.08% of the Fund's net assets as
of February 29, 2004.
6. When-issued security to be delivered and settled after February 29, 2004. See
Note 1 of Notes to Financial Statements.
7. A sufficient amount of liquid assets has been designated to cover outstanding
written options, as follows:
CONTRACTS EXPIRATION EXERCISE PREMIUM MARKET VALUE
CALLS SUBJECT TO CALL DATES PRICE RECEIVED SEE NOTE 1
- ------------------------------------------------------------------------------------------
Natural Gas Futures, 4/28/04 100 4/27/04 $100 $ 99,625 $140,000
-----------------------
CONTRACTS
PUTS SUBJECT TO PUT
- ------------------------------------------------------------------------------------------
Coffee Futures, 5/18/04 40 3/12/04 70 11,100 3,300
Crude Oil Futures, 4/20/04 125 4/15/04 30 24,531 20,000
-----------------------
35,631 23,300
-----------------------
$135,256 $163,300
=======================
8. Security is linked to the Goldman Sachs Commodity Index. The index currently
contains multiple commodities from the sectors of energy, metals and
agricultural products. Individual components qualify for the inclusion in the
index based on liquidity and are weighted by their respective world production
quantities.
9. Non-income producing security.
10. The Fund may have elements of risk due to concentrated investments. Such
concentrations may subject the Fund to additional risks.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
19 | OPPENHEIMER REAL ASSET FUND
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES Unaudited
- --------------------------------------------------------------------------------
February 29, 2004
- --------------------------------------------------------------------------------
ASSETS
- --------------------------------------------------------------------------------
Investments, at value (including cost and market value of
$124,645,000 in repurchase agreements) (cost $610,806,523)--
see accompanying statement $638,642,776
- --------------------------------------------------------------------------------
Receivables and other assets:
Shares of beneficial interest sold 6,308,065
Interest and principal paydowns 3,232,699
Futures margins 2,615,453
Swap contracts 120,862
Other 7,376
-------------
Total assets 650,927,231
- --------------------------------------------------------------------------------
LIABILITIES
- --------------------------------------------------------------------------------
Bank overdraft 445,802
- --------------------------------------------------------------------------------
Options written, at value (premiums received $135,256)--
see accompanying statement 163,300
- --------------------------------------------------------------------------------
Payables and other liabilities:
Investments purchased on a when-issued basis 109,406,129
Shares of beneficial interest redeemed 927,381
Distribution and service plan fees 181,291
Transfer and shareholder servicing agent fees 79,841
Shareholder communications 37,756
Trustees' compensation 7,394
Other 39,955
-------------
Total liabilities 111,288,849
- --------------------------------------------------------------------------------
NET ASSETS $539,638,382
=============
- --------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS
- --------------------------------------------------------------------------------
Par value of shares of beneficial interest $ 64,255
- --------------------------------------------------------------------------------
Additional paid-in capital 477,958,300
- --------------------------------------------------------------------------------
Accumulated net investment loss (28,082)
- --------------------------------------------------------------------------------
Accumulated net realized gain on investments 16,993,565
- --------------------------------------------------------------------------------
Net unrealized appreciation on investments 44,650,344
-------------
NET ASSETS $539,638,382
=============
20 | OPPENHEIMER REAL ASSET FUND
- --------------------------------------------------------------------------------
NET ASSET VALUE PER SHARE
- --------------------------------------------------------------------------------
Class A Shares:
Net asset value and redemption price per share
(based on net assets of $394,116,657 and 46,866,835
shares of beneficial interest outstanding) $8.41
Maximum offering price per share (net asset value
plus sales charge of 5.75% of offering price) $8.92
- --------------------------------------------------------------------------------
Class B Shares:
Net asset value, redemption price (excludes applicable
contingent deferred sales charge) and offering price
per share (based on net assets of $48,190,678
and 5,754,204 shares of beneficial interest outstanding) $8.37
- --------------------------------------------------------------------------------
Class C Shares:
Net asset value, redemption price (excludes applicable
contingent deferred sales charge) and offering price
per share (based on net assets of $63,181,212
and 7,574,370 shares of beneficial interest outstanding) $8.34
- --------------------------------------------------------------------------------
Class N Shares:
Net asset value, redemption price (excludes applicable
contingent deferred sales charge) and offering price
per share (based on net assets of $3,942,385
and 470,486 shares of beneficial interest outstanding) $8.38
- --------------------------------------------------------------------------------
Class Y Shares:
Net asset value, redemption price and offering price
per share (based on net assets of $30,207,450 and
3,588,850 shares of beneficial interest outstanding) $8.42
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
21 | OPPENHEIMER REAL ASSET FUND
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS Unaudited
- --------------------------------------------------------------------------------
For the Six Months Ended February 29, 2004
- --------------------------------------------------------------------------------
INVESTMENT INCOME
- --------------------------------------------------------------------------------
Interest $3,301,344
- --------------------------------------------------------------------------------
EXPENSES
- --------------------------------------------------------------------------------
Management fees 1,926,421
- --------------------------------------------------------------------------------
Distribution and service plan fees:
Class A 348,493
Class B 196,839
Class C 227,724
Class N 6,460
- --------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees:
Class A 333,737
Class B 80,575
Class C 77,447
Class N 6,260
Class Y 5,201
- --------------------------------------------------------------------------------
Shareholder communications:
Class A 33,519
Class B 6,959
Class C 6,180
Class N 410
- --------------------------------------------------------------------------------
Trustees' compensation 7,269
- --------------------------------------------------------------------------------
Custodian fees and expenses 2,140
- --------------------------------------------------------------------------------
Other 38,165
-----------
Total expenses 3,303,799
Less reduction to custodian expenses (2,140)
Less voluntary waiver of transfer and shareholder
servicing agent fees--Class A (2,342)
Less voluntary waiver of transfer and shareholder servicing agent
fees--Class B (10,497)
Less voluntary waiver of transfer and shareholder
servicing agent fees--Class N (1,650)
-----------
Net expenses 3,287,170
- --------------------------------------------------------------------------------
NET INVESTMENT INCOME 14,174
22 | OPPENHEIMER REAL ASSET FUND
- --------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
- --------------------------------------------------------------------------------
Net realized gain on:
Investments (including premiums on options exercised) $36,286,096
Closing of futures contracts 14,502,170
Closing and expiration of option contracts written 356,058
------------
Net realized gain 51,144,324
- --------------------------------------------------------------------------------
Net change in unrealized appreciation (depreciation) on:
Investments (506,640)
Futures contracts 13,336,989
------------
Net change in unrealized appreciation 12,830,349
- --------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $63,988,847
============
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
23 | OPPENHEIMER REAL ASSET FUND
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
SIX MONTHS YEAR
ENDED ENDED
FEBRUARY 29, 2004 AUGUST 31,
(UNAUDITED) 2003
- ------------------------------------------------------------------------------------------------------------------
OPERATIONS
- ------------------------------------------------------------------------------------------------------------------
Net investment income $ 14,174 $ 783,826
- ------------------------------------------------------------------------------------------------------------------
Net realized gain 51,144,324 29,067,435
- ------------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation 12,830,349 21,272,368
--------------------------------
Net increase in net assets resulting from operations 63,988,847 51,123,629
- ------------------------------------------------------------------------------------------------------------------
DIVIDENDS AND/OR DISTRIBUTIONS TO SHAREHOLDERS
- ------------------------------------------------------------------------------------------------------------------
Dividends from net investment income:
Class A (51,683) (1,303,888)
Class B -- (43,213)
Class C -- (29,456)
Class N -- (6,191)
Class Y (64,204) (148,718)
- ------------------------------------------------------------------------------------------------------------------
Distributions from net realized gain:
Class A (9,145,145) --
Class B (1,193,923) --
Class C (1,408,839) --
Class N (77,055) --
Class Y (793,204) --
- ------------------------------------------------------------------------------------------------------------------
BENEFICIAL INTEREST TRANSACTIONS
- ------------------------------------------------------------------------------------------------------------------
Net increase in net assets resulting from beneficial interest transactions:
Class A 117,361,536 54,035,053
Class B 6,059,233 7,287,354
Class C 20,995,831 15,042,430
Class N 2,002,335 1,134,147
Class Y 1,714,526 14,764,802
- ------------------------------------------------------------------------------------------------------------------
NET ASSETS
- ------------------------------------------------------------------------------------------------------------------
Total increase 199,388,255 141,855,949
- ------------------------------------------------------------------------------------------------------------------
Beginning of period 340,250,127 198,394,178
--------------------------------
End of period (including accumulated net investment income
(loss) of $(28,082) and $73,631, respectively) $539,638,382 $340,250,127
================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
24 | OPPENHEIMER REAL ASSET FUND
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
SIX MONTHS YEAR
ENDED ENDED
FEBRUARY 29, 2004 AUGUST 31,
CLASS A (UNAUDITED) 2003 2002 2001 2000 1999
- ------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- ------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $7.51 $6.15 $6.93 $8.18 $5.74 $5.81
- ------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .01 .03 .29 .45 .32 .20
Net realized and unrealized gain (loss) 1.13 1.38 (.71) (1.21) 2.40 .09
---------------------------------------------------------------
Total from investment operations 1.14 1.41 (.42) (.76) 2.72 .29
- ------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income -- 1 (.05) (.36) (.43) (.28) (.36)
Distributions from net realized gain (.24) -- -- (.06) -- --
---------------------------------------------------------------
Total dividends and/or distributions
to shareholders (.24) (.05) (.36) (.49) (.28) (.36)
- ------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $8.41 $7.51 $6.15 $6.93 $8.18 $5.74
===============================================================
- ------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2 15.54% 23.08% (5.54)% (9.83)% 48.55% 6.50%
- ------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $394,117 $238,828 $148,319 $117,331 $161,547 $109,328
- ------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $296,905 $193,837 $115,458 $139,631 $126,143 $ 66,106
- ------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income 0.17% 0.46% 4.73% 5.73% 4.81% 3.73%
Total expenses 1.45% 4,5 1.49% 4 1.68% 4,5 1.51% 4 1.50% 4 1.82% 4
- ------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 39% 61% 49% 105% 93% 86%
1. Less than $0.005 per share.
2. Assumes an investment on the business day before the first day of the fiscal
period, with all dividends and distribu- tions reinvested in additional shares
on the reinvestment date, and redemption at the net asset value calculated on
the last business day of the fiscal period. Sales charges are not reflected in
the total returns. Total returns are not annualized for periods of less than one
full year. Returns do not reflect the deduction of taxes that a shareholder
would pay on Fund distributions or the redemption of Fund shares.
3. Annualized for periods of less than one full year.
4. Reduction to custodian expenses less than 0.01%.
5. Voluntary waiver of transfer agent fees less than 0.01%.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
25 | OPPENHEIMER REAL ASSET FUND
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS Continued
- --------------------------------------------------------------------------------
SIX MONTHS YEAR
ENDED ENDED
FEBRUARY 29, 2004 AUGUST 31,
CLASS B (UNAUDITED) 2003 2002 2001 2000 1999
- ------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- ------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $7.51 $6.16 $6.95 $8.20 $5.75 $5.76
- ------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss) (.03) (.04) .23 .40 .27 .16
Net realized and unrealized gain (loss) 1.13 1.40 (.70) (1.22) 2.40 .10
---------------------------------------------------------------
Total from investment operations 1.10 1.36 (.47) (.82) 2.67 .26
- ------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income -- (.01) (.32) (.37) (.22) (.27)
Distributions from net realized gain (.24) -- -- (.06) -- --
---------------------------------------------------------------
Total dividends and/or distributions
to shareholders (.24) (.01) (.32) (.43) (.22) (.27)
- ------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $8.37 $7.51 $6.16 $6.95 $8.20 $5.75
===============================================================
- ------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 1 14.98% 22.12% (6.38)% (10.49)% 47.44% 5.75%
- ------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $48,191 $37,589 $24,738 $21,321 $27,156 $18,690
- ------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $39,622 $32,101 $20,032 $26,295 $21,416 $15,454
- ------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 2
Net investment income (loss) (0.73)% (0.41)% 4.10% 4.99% 4.03% 2.95%
Total expenses 2.41% 2.44% 2.45% 2.27% 2.27% 2.58%
Expenses after expense reimbursement
or fee waiver and reduction to
custodian expenses 2.36% 2.36% N/A 3,4 N/A 3 N/A 3 N/A 3
- ------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 39% 61% 49% 105% 93% 86%
1. Assumes an investment on the business day before the first day of the fiscal
period, with all dividends and distributions reinvested in additional shares on
the reinvestment date, and redemption at the net asset value calculated on the
last business day of the fiscal period. Sales charges are not reflected in the
total returns. Total returns are not annualized for periods of less than one
full year. Returns do not reflect the deduction of taxes that a shareholder
would pay on Fund distributions or the redemption of Fund shares.
2. Annualized for periods of less than one full year.
3. Reduction to custodian expenses less than 0.01%.
4. Voluntary waiver of transfer agent fees less than 0.01%.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
26 | OPPENHEIMER REAL ASSET FUND
SIX MONTHS YEAR
ENDED ENDED
FEBRUARY 29, 2004 AUGUST 31,
CLASS C (UNAUDITED) 2003 2002 2001 2000 1999
- ------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- ------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $7.48 $6.14 $6.93 $8.17 $5.73 $5.76
- ------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss) (.02) (.03) .23 .41 .27 .15
Net realized and unrealized gain (loss) 1.12 1.38 (.70) (1.22) 2.39 .11
---------------------------------------------------------------
Total from investment operations 1.10 1.35 (.47) (.81) 2.66 .26
- ------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income -- (.01) (.32) (.37) (.22) (.29)
Distributions from net realized gain (.24) -- -- (.06) -- --
---------------------------------------------------------------
Total dividends and/or distributions
to shareholders (.24) (.01) (.32) (.43) (.22) (.29)
---------------------------------------------------------------
Net asset value, end of period $8.34 $7.48 $6.14 $6.93 $8.17 $5.73
===============================================================
- ------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 1 15.04% 22.04% (6.39)% (10.43)% 47.43% 5.68%
- ------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $63,181 $36,531 $18,115 $12,588 $20,256 $15,965
- ------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $45,913 $25,746 $11,771 $16,165 $16,536 $10,477
- ------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 2
Net investment income (loss) (0.71)% (0.43)% 3.99% 4.95% 4.03% 2.96%
Total expenses 2.32% 2.40% 2.45% 2.26% 2.27% 2.58%
Expenses after expense reimbursement
or fee waiver and reduction to
custodian expenses N/A 3 2.36% N/A 3,4 N/A 3 N/A 3 N/A 3
- ------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 39% 61% 49% 105% 93% 86%
1. Assumes an investment on the business day before the first day of the fiscal
period, with all dividends and distributions reinvested in additional shares on
the reinvestment date, and redemption at the net asset value calculated on the
last business day of the fiscal period. Sales charges are not reflected in the
total returns. Total returns are not annualized for periods of less than one
full year. Returns do not reflect the deduction of taxes that a shareholder
would pay on Fund distributions or the redemption of Fund shares.
2. Annualized for periods of less than one full year.
3. Reduction to custodian expenses less than 0.01%.
4. Voluntary waiver of transfer agent fees less than 0.01%.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
27 | OPPENHEIMER REAL ASSET FUND
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS Continued
- --------------------------------------------------------------------------------
SIX MONTHS YEAR
ENDED ENDED
FEBRUARY 29, 2004 AUGUST 31,
CLASS N (UNAUDITED) 2003 2002 2001 1
- ---------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- ---------------------------------------------------------------------------------------------
Net asset value, beginning of period $7.50 $6.15 $6.99 $7.67
- ---------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income -- 2 .07 .30 .22
Net realized and unrealized gain (loss) 1.12 1.36 (.78) (.73)
------------------------------------------
Total from investment operations 1.12 1.43 (.48) (.51)
- ---------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income -- (.08) (.36) (.17)
Distributions from net realized gain (.24) -- -- --
------------------------------------------
Total dividends and/or distributions
to shareholders (.24) (.08) (.36) (.17)
- ---------------------------------------------------------------------------------------------
Net asset value, end of period $8.38 $7.50 $6.15 $6.99
==========================================
- ---------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 3 15.27% 23.63% (6.47)% (6.75)%
- ---------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ---------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $3,942 $1,578 $314 $61
- ---------------------------------------------------------------------------------------------
Average net assets (in thousands) $2,607 $1,001 $146 $14
- ---------------------------------------------------------------------------------------------
Ratios to average net assets: 4
Net investment income (loss) (0.24)% 0.27% 3.57% 5.95%
Total expenses 1.97% 1.83% 1.94% 1.88%
Expenses after expense reimbursement or fee
waiver and reduction to custodian expenses 1.84% 1.63% N/A 5,6 N/A 5
- ---------------------------------------------------------------------------------------------
Portfolio turnover rate 39% 61% 49% 105%
1. For the period from March 1, 2001 (inception of offering) to August 31, 2001.
2. Less than $0.005 per share.
3. Assumes an investment on the business day before the first day of the fiscal
period, 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%.
6. Voluntary waiver of transfer agent fees less than 0.01%.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
28 | OPPENHEIMER REAL ASSET FUND
SIX MONTHS YEAR
ENDED ENDED
FEBRUARY 29, 2004 AUGUST 31,
CLASS Y (UNAUDITED) 2003 2002 2001 2000 1999
- ------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- ------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $7.52 $6.15 $6.94 $8.16 $5.72 $5.81
- ------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .02 .06 .32 .25 .36 .20
Net realized and unrealized gain (loss) 1.14 1.39 (.73) (.95) 2.38 .10
---------------------------------------------------------------
Total from investment operations 1.16 1.45 (.41) (.70) 2.74 .30
- ------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.02) (.08) (.38) (.46) (.30) (.39)
Distributions from net realized gain (.24) -- -- (.06) -- --
---------------------------------------------------------------
Total dividends and/or distributions
to shareholders (.26) (.08) (.38) (.52) (.30) (.39)
- ------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $8.42 $7.52 $6.15 $6.94 $8.16 $5.72
===============================================================
- ------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 1 15.80% 23.69% (5.36)% (9.21)% 49.20% 6.77%
- ------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $30,207 $25,724 $6,908 $1,741 $1 $1
- ------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $25,335 $15,755 $3,420 $ 868 $1 $1
- ------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 2
Net investment income 0.62% 0.83% 3.95% 6.46% 5.28% 3.88%
Total expenses 1.00% 1.08% 1.27% 1.38% 3 1.09% 1.68%
Expenses after expense reimbursement
or fee waiver and reduction to
custodian expenses N/A 4 N/A 4 1.26% 1.17% N/A 4 N/A 4
- ------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 39% 61% 49% 105% 93% 86%
1. Assumes an investment on the business day before the first day of the fiscal
period, with all dividends and distributions reinvested in additional shares on
the reinvestment date, and redemption at the net asset value calculated on the
last business day of the fiscal period. Sales charges are not reflected in the
total returns. Total returns are not annualized for periods of less than one
full year. Returns do not reflect the deduction of taxes that a shareholder
would pay on Fund distributions or the redemption of Fund shares.
2. Annualized for periods of less than one full year.
3. Added since August 31, 2001 to reflect expenses before reduction to custodian
expenses and voluntary waiver of transfer agent fees.
4. Reduction to custodian expenses less than 0.01%.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
29 | OPPENHEIMER REAL ASSET FUND
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS Unaudited
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
Oppenheimer Real Asset 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 total return. The
Fund's investment advisor is OppenheimerFunds, Inc. (the Advisor). The
Sub-Advisor is Oppenheimer Real Asset Management, Inc. (the Manager), a wholly
owned subsidiary of the Advisor.
The Fund offers Class A, Class B, Class C, Class N and Class Y shares. Class
A shares are sold at their offering price, which is normally net asset value
plus a front-end sales charge. Class B, Class C and Class N shares are sold
without a front-end sales charge but may be subject to a contingent deferred
sales charge (CDSC). Class N shares are sold only through retirement plans.
Retirement plans that offer Class N shares may impose charges on those
accounts. Class Y shares are sold to certain institutional investors without
either a front-end sales charge or a CDSC. All classes of shares have identical
rights and voting privileges with respect to the Fund in general and exclusive
voting rights on matters that affect that class alone. 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. Effective March 15, 2004 the Fund will
assess a 2% fee on the proceeds of fund shares that are redeemed (either by
selling or exchanging to another Oppenheimer fund) within 30 days of their
purchase. The fee, which is retained by the Fund, is accounted for as an
addition to paid-in capital.
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 may be valued
primarily using dealer-supplied valuations or a portfolio pricing service
authorized by the Board of Trustees. Securities (including restricted
securities) for which market quotations are not readily available are valued at
their fair value. Securities whose values have been materially affected by what
the Manager identifies as a significant event occurring before the Fund's
assets are valued but after the close of their respective foreign exchanges
will be fair valued. 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).
30 | OPPENHEIMER REAL ASSET FUND
- --------------------------------------------------------------------------------
STRUCTURED NOTES. The Fund invests in commodity-linked structured notes whose
market values and redemption prices are linked to commodity indices. The
structured notes are leveraged, which increases the Fund's exposure to changes
in prices of the overall commodities' markets and increases volatility of each
note's market value relative to the change in the underlying commodity prices.
Fluctuations in value of these securities related to the commodity exposure are
recorded as unrealized gains and losses in the accompanying financial
statements. The Fund records a realized gain or loss when a structured note is
sold or matures. As of February 29, 2004, the market value of these securities
comprised 20.6% of the Fund's net assets, and resulted in unrealized gains of
$28,889,674. The Fund also hedges a portion of the commodity exposure generated
by these securities, as discussed in Note 5.
- --------------------------------------------------------------------------------
SECURITIES ON A WHEN ISSUED BASIS. Delivery and payment for securities that
have been purchased by the Fund on a when issued basis can take place a month
or more after the trade date. Normally the settlement date occurs within six
months after the trade date; however, the Fund may, from time to time, purchase
securities whose settlement date extends six months or more beyond trade date.
During this period, such securities do not earn interest, are subject to market
fluctuation and may increase or decrease in value prior to their delivery. The
Fund maintains segregated assets with a market value equal to or greater than
the amount of its purchase commitments. The purchase of securities on a when
issued basis may increase the volatility of the Fund's net asset value to the
extent the Fund executes such purchases while remaining substantially fully
invested. As of February 29, 2004, the Fund had entered into net when issued
commitments of $109,406,129.
In connection with its ability to purchase securities on a when issued
basis, the Fund may enter into forward roll transactions with respect to
mortgage-related securities. Forward roll transactions require the sale of
securities for delivery in the current month, and a simultaneous agreement with
the same counterparty to repurchase similar (same type, coupon and maturity)
but not identical securities on a specified future date. The Fund records the
incremental difference between the forward purchase and sale of each forward
roll as fee income or realized gain (loss) on investments.
Risks of entering into forward roll transactions include the potential
inability of the counterparty to meet the terms of the agreement; the potential
of the Fund to receive inferior securities to what was sold to the counterparty
at redelivery; counterparty credit risk; and the potential pay down speed
variance between the mortgage-related pools.
- --------------------------------------------------------------------------------
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.
31 | OPPENHEIMER REAL ASSET FUND
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES Continued
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.
As of February 29, 2004, the Fund had no estimated unused capital loss
carryforward available for federal income tax purposes.
- --------------------------------------------------------------------------------
TRUSTEES' COMPENSATION. The Board of Trustees has adopted a deferred
compensation plan for independent trustees that enables trustees to elect to
defer receipt of all or a portion of the annual compensation they are entitled
to receive from the Fund. Under the plan, deferred amounts are treated as
though equal dollar amounts had been invested in shares of the Fund or are
invested in other Oppenheimer funds selected by the Trustee. Deferral of
trustees' fees under the plan will not affect the net assets of the Fund, and
will not materially affect the Fund's assets, liabilities or net investment
income per share. Amounts will be deferred until distributed in accordance to
the Plan.
- --------------------------------------------------------------------------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS. Dividends and distributions to
shareholders, which are determined in accordance with income tax regulations,
are recorded on the ex-dividend date. Income distributions, if any, are
declared and paid quarterly. 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, if applicable,
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.
32 | OPPENHEIMER REAL ASSET FUND
- --------------------------------------------------------------------------------
OTHER. The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported amounts
of assets and liabilities and disclosure of contingent assets and liabilities
at the date of the financial statements and the reported amounts of income and
expenses during the reporting period. Actual results could differ from those
estimates.
- --------------------------------------------------------------------------------
2. SHARES OF BENEFICIAL INTEREST
The Fund has authorized an unlimited number of $0.001 par value shares of
beneficial interest of each class. Transactions in shares of beneficial
interest were as follows:
SIX MONTHS ENDED FEBRUARY 29, 2004 YEAR ENDED AUGUST 31, 2003
SHARES AMOUNT SHARES AMOUNT
- ------------------------------------------------------------------------------------------
CLASS A
Sold 21,389,535 $166,541,699 34,470,741 $ 240,879,466
Dividends and/or
distributions reinvested 1,021,224 7,760,567 182,879 1,164,613
Redeemed (7,349,375) (56,940,730) (26,972,700) (188,009,026)
-------------------------------------------------------------
Net increase 15,061,384 $117,361,536 7,680,920 $ 54,035,053
=============================================================
- ------------------------------------------------------------------------------------------
CLASS B
Sold 1,670,196 $ 12,975,717 4,589,002 $ 32,275,935
Dividends and/or
distributions reinvested 136,876 1,037,523 6,070 38,017
Redeemed (1,057,267) (7,954,007) (3,603,595) (25,026,598)
-------------------------------------------------------------
Net increase 749,805 $ 6,059,233 991,477 $ 7,287,354
=============================================================
- ------------------------------------------------------------------------------------------
CLASS C
Sold 3,552,843 $ 27,448,738 6,300,352 $ 44,752,722
Dividends and/or
distributions reinvested 148,130 1,118,382 3,715 23,258
Redeemed (1,009,988) (7,571,289) (4,370,436) (29,733,550)
-------------------------------------------------------------
Net increase 2,690,985 $ 20,995,831 1,933,631 $ 15,042,430
=============================================================
- ------------------------------------------------------------------------------------------
CLASS N
Sold 303,565 $ 2,335,877 310,503 $ 2,241,096
Dividends and/or
distributions reinvested 10,161 77,023 1,012 6,180
Redeemed (53,798) (410,565) (151,980) (1,113,129)
-------------------------------------------------------------
Net increase 259,928 $ 2,002,335 159,535 $ 1,134,147
=============================================================
33 | OPPENHEIMER REAL ASSET FUND
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
2. SHARES OF BENEFICIAL INTEREST Continued
SIX MONTHS ENDED FEBRUARY 29, 2004 YEAR ENDED AUGUST 31, 2003
SHARES AMOUNT SHARES AMOUNT
- ------------------------------------------------------------------------------------------
CLASS Y
Sold 1,007,403 $ 7,738,274 3,474,505 $ 22,981,857
Dividends and/or
distributions reinvested 28,193 213,586 8,593 56,004
Redeemed (868,188) (6,237,334) (1,184,394) (8,273,059)
- ------------------------------------------------------------------------------------------
Net increase 167,408 $ 1,714,526 2,298,704 $ 14,764,802
=============================================================
- --------------------------------------------------------------------------------
3. PURCHASES AND SALES OF SECURITIES
The aggregate cost of purchases and proceeds from sales of securities, other
than short-term obligations, for the six months ended February 29, 2004, were
$720,942,700 and $745,612,398, respectively.
- --------------------------------------------------------------------------------
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES
MANAGEMENT FEES. Management fees paid to the Advisor were in accordance with
the investment advisory agreement with the Fund which provides for a fee at an
annual rate of 1.00% of the first $200 million of average annual net assets,
0.90% of the next $200 million, 0.85% of the next $200 million, 0.80% of the
next $200 million, and 0.75% of net assets in excess of $800 million. Under the
sub-advisory agreement, the Advisor pays the Sub-Advisor the following annual
fees: 0.50% of the first $200 million of average annual net assets, 0.45% of
the next $200 million, 0.425% of the next $200 million, 0.40% of the next $200
million, and 0.375% of the net assets in excess of $800 million.
- --------------------------------------------------------------------------------
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 six months ended February 29, 2004,
the Fund paid $479,854 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 Fund, OppenheimerFunds Distributor, Inc. (the Distributor)
acts as the Fund's principal underwriter in the continuous public offering of
the Fund's classes of shares.
- --------------------------------------------------------------------------------
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
34 | OPPENHEIMER REAL ASSET FUND
of up to 0.25% of the average annual net assets of Class A shares of the Fund.
The Distributor currently uses the fees it receives from the Fund to pay
brokers, dealers and other financial institutions for personal services and
account maintenance services they provide for their customers who hold Class A
shares. Any unreimbursed expenses the Distributor incurs with respect to Class
A shares in any fiscal year cannot be recovered in subsequent years. Fees
incurred by the Fund under the plan are detailed in the Statement of
Operations.
- --------------------------------------------------------------------------------
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 to compensate the Distributor for its services in connection with the
distribution of these shares and servicing accounts. 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 0.25% per year on Class N shares. The
Distributor also receives a service fee of up to 0.25% per year under each
plan. If either the Class B, Class C or Class N plan is terminated by the Fund
or by the shareholders of a class, the Board of Trustees and its independent
trustees must determine whether the Distributor shall be entitled to payment
from the Fund of all or a portion of the service fee and/or asset-based sales
charge in respect to shares sold prior to the effective date of such
termination. The Distributor's aggregate uncompensated expenses under the plan
at February 29, 2004 for Class B, Class C and Class N shares was $2,218,750,
$996,993 and $70,706, respectively. Fees incurred by the Fund under the plans
are detailed in the Statement of Operations.
- --------------------------------------------------------------------------------
SALES CHARGES. Front-end sales charges and contingent deferred sales charges
(CDSC) do not represent expenses of the Fund. They are deducted from the
proceeds of sales of Fund shares prior to investment or from redemption
proceeds prior to remittance, as applicable. The sales charges retained by the
Distributor from the sale of shares and the CDSC retained by the Distributor on
the redemption of shares is shown in the table below for the period indicated.
CLASS A CLASS B CLASS C CLASS N
CLASS A CONTINGENT CONTINGENT CONTINGENT CONTINGENT
FRONT-END DEFERRED DEFERRED DEFERRED DEFERRED
SALES CHARGES SALES CHARGES SALES CHARGES SALES CHARGES SALES CHARGES
SIX MONTHS RETAINED BY RETAINED BY RETAINED BY RETAINED BY RETAINED BY
ENDED DISTRIBUTOR DISTRIBUTOR DISTRIBUTOR DISTRIBUTOR DISTRIBUTOR
- ------------------------------------------------------------------------------------------------------
February 29, 2004 $190,491 $804 $53,566 $24,173 $1,911
- ------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
5. FUTURES CONTRACTS
A futures contract is a commitment to buy or sell a specific amount of a
commodity or financial instrument at a negotiated price on a stipulated future
date. Futures contracts are traded on a commodity exchange. The Fund may buy
and sell futures contracts that relate to broadly based securities indices
"financial futures", debt securities "interest rate futures" and various
commodities "commodity index futures" inherent in the Fund's holdings of
structured notes. The Fund may also buy or write put or call options on these
futures contracts.
35 | OPPENHEIMER REAL ASSET FUND
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
5. FUTURES CONTRACTS Continued
The Fund generally sells futures contracts to hedge against increases in
interest rates and the resulting negative effect on the value of fixed rate
portfolio securities, decreases in market value of portfolio securities, or
decreases in commodity prices. The Fund may also purchase futures contracts
without owning the underlying fixed-income security as an efficient or cost
effective means to gain exposure to changes in interest rates, commodity prices
or market indices. The Fund will then either purchase the underlying
fixed-income security or close out the futures contract.
Upon entering into a futures contract, the Fund is required to deposit
either cash or securities (initial margin) in an amount equal to a certain
percentage of the contract value. Subsequent payments (variation margin) are
made or received by the Fund each day. The variation margin payments are equal
to the daily changes in the contract value and are recorded as unrealized gains
and losses. The Fund recognizes a realized gain or loss when the contract is
closed or expires.
Securities held in collateralized accounts to cover initial margin
requirements on open futures contracts are noted in the Statement of
Investments. The Statement of Assets and Liabilities reflects a receivable or
payable for the daily mark to market for variation margin. Realized gains and
losses are reported on the Statement of Operations as closing and expiration of
futures contracts.
Risks of entering into futures contracts (and related options) include the
possibility that there may be an illiquid market and that a change in the value
of the contract or option may not correlate with changes in the value of the
underlying securities.
As of February 29, 2004, the Fund had outstanding futures contracts as follows:
UNREALIZED
EXPIRATION NUMBER OF VALUATION AS OF APPRECIATION
CONTRACT DESCRIPTION DATES CONTRACTS FEBRUARY 29, 2004 (DEPRECIATION)
- ----------------------------------------------------------------------------------------------
CONTRACTS TO PURCHASE
AGRICULTURE
Corn 5/15/04 954 $ 14,453,100 $ 931,885
Cotton #2 5/6/04 112 4,131,120 268,205
Soybean 5/14/04 283 13,265,625 2,093,189
Wheat 5/14/04-5/19/04 739 14,446,438 (75,547)
ENERGY
Brent Crude Oil 4/15/04 1,303 41,539,640 3,015,274
Crude Oil 3/22/04 1,484 53,661,440 5,164,695
Gas Oil 3/11/04-4/8/04 447 12,108,900 418,799
Heating Oil 3/31/04 456 18,039,269 961,946
Natural Gas 3/29/04 527 28,542,320 658,594
Unleaded Gasoline 3/31/04 522 24,673,270 1,912,583
LIVESTOCK
Feeder Cattle 4/29/04 50 2,137,500 24,213
Lean Hogs 4/15/04 270 6,698,700 (233)
Live Cattle 4/30/04 288 8,853,120 291,710
36 | OPPENHEIMER REAL ASSET FUND
UNREALIZED
EXPIRATION NUMBER OF VALUATION AS OF APPRECIATION
CONTRACT DESCRIPTION DATES CONTRACTS FEBRUARY 29, 2004 (DEPRECIATION)
- ----------------------------------------------------------------------------------------------
INDUSTRIAL METALS
Copper 5/26/04 205 $ 6,898,250 $ 734,106
London Metals Exchange
Aluminum High Grade 5/19/04 260 11,202,750 157,875
London Metals Exchange Lead 5/19/04 165 3,704,250 250,006
London Metals Exchange Nickel 5/19/04 45 3,924,450 (182,719)
London Metals Exchange Zinc 5/19/04 15 427,125 10,194
PRECIOUS METALS
Gold 100 oz. 4/28/04 149 5,912,320 (197,049)
Platinum 4/27/04 59 2,617,830 155,509
Silver 5/26/04 20 671,500 35,225
SOFTS
Cocoa 5/13/04 143 2,245,100 61,594
Sugar #11 4/30/04 649 4,448,506 115,704
GOVERNMENTS
U.S. Treasury Nts., 10 yr. 3/22/04 124 14,306,500 421,989
------------
17,227,747
------------
CONTRACTS TO SELL
SOFTS
Coffee, Cl. C 5/18/04 71 2,043,469 (111,079)
GOVERNMENTS
U.S. Long Bonds 6/21/04 2 224,875 (1,226)
U.S. Treasury Nts., 2 yr. 6/30/04 528 113,272,500 (99,918)
U.S. Treasury Nts., 5 yr. 6/21/04 577 64,858,406 (235,140)
U.S. Treasury Nts., 10 yr. 6/21/04 63 7,174,125 (59,111)
------------
(506,474)
------------
$16,721,273
============
- --------------------------------------------------------------------------------
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.
37 | OPPENHEIMER REAL ASSET FUND
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
6. OPTION ACTIVITY Continued
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 or commodity 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 or commodity decreases and the
option is exercised. The risk in buying an option is that the Fund pays a
premium 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 six months ended February 29, 2004 was as
follows:
CALL OPTIONS PUT OPTIONS
- --------------------------------------------------------------------------------
NUMBER OF AMOUNT OF NUMBER OF AMOUNT OF
CONTRACTS PREMIUMS CONTRACTS PREMIUMS
- --------------------------------------------------------------------------------
Options outstanding as of
August 31, 2003 100 $ 17,875 172 $ 37,670
Options written 1,431 650,234 991 275,485
Options closed or expired (770) (175,013) (949) (272,500)
Options exercised (661) (393,471) (49) (5,024)
-----------------------------------------------
Options outstanding as of
February 29, 2004 100 $ 99,625 165 $ 35,631
===============================================
- --------------------------------------------------------------------------------
7. TOTAL RETURN SWAP CONTRACTS
The Fund may enter into a total return swap transaction to maintain a total
return on a particular investment, or portion of its portfolio, or for other
non-speculative purposes. Because the principal amount is not exchanged, it
represents neither an asset nor a liability to either counterparty, and is
referred to as notional. The Fund records an increase or decrease to interest
income, in the amount due to or owed by the Fund at termination or settlement.
Total return swaps are subject to risks (if the counterparty fails to meet its
obligations).
As of February 29, 2004, the Fund had entered into the following total return
swap agreements:
PAID BY RECEIVED BY
SWAP NOTIONAL THE FUND AT THE FUND AT TERMINATION UNREALIZED
COUNTERPARTY AMOUNT FEBRUARY 29, 2004 FEBRUARY 29, 2004 DATE APPRECIATION
- ----------------------------------------------------------------------------------------------------------
Value of total
One-Month return of
LIBOR less 50 Lehman Brothers
Deutsche Bank $14,328,922 basis points CMBS Index 6/30/04 $120,862
38 | OPPENHEIMER REAL ASSET FUND
- --------------------------------------------------------------------------------
8. ILLIQUID SECURITIES
As of February 29, 2004, investments in securities included issues that are
illiquid. A security may 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 securities. The
aggregate value of illiquid securities subject to this limitation as of
February 29, 2004 was $1,635,588, which represents 0.30% of the Fund's net
assets.
- --------------------------------------------------------------------------------
9. 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 (the SEC) 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. The
SEC's order requires the Fund's Board of Trustees to adopt operating policies
and procedures to administer interfund borrowing and lending. Under the
arrangement the Fund may lend money to other Oppenheimer funds and may borrow
from other Oppenheimer funds at a rate set by the Fund's Board of Trustees,
based upon a recommendation by the Manager. The Fund's borrowings, if any, are
subject to asset coverage requirements under the Investment Company Act and the
provisions of the SEC order and other applicable regulations. If the Fund
borrows money, there is a risk that the loan could be called on one day's
notice, in which case the Fund might have to borrow from a bank at higher rates
if a loan were not available from another Oppenheimer fund. If the Fund lends
money to another fund, it will be subject to the risk that the other fund might
not repay the loan in a timely manner, or at all.
The Fund had no interfund borrowings or loans outstanding during the six
months ended or at February 29, 2004.
39 | OPPENHEIMER REAL ASSET FUND
- --------------------------------------------------------------------------------
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.
40 | OPPENHEIMER REAL ASSET FUND
ITEM 2. CODE OF ETHICS
The registrant has adopted a code of ethics that applies to the
registrant's principal executive officer, principal financial officer, principal
accounting officer or controller or persons performing similar functions.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT
The Board of Trustees of the registrant has determined that
Edward L. Cameron, the Chairman of the Board's Audit Committee, and George C.
Bowen, a member of the Board's Audit Committee, possess the technical attributes
identified in Instruction 2(b) of Item 3 to Form N-CSR to qualify as "audit
committee financial experts," and has designated Messrs. Cameron and Bowen as
the Audit Committee's financial experts. Messrs. Cameron and Bowen are
"independent" Trustees pursuant to paragraph (a)(2) of Item 3 to Form N-CSR.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES
Not applicable to semiannual reports.
ITEM 5. NOT APPLICABLE
ITEM 6. RESERVED
ITEM 7. NOT APPLICABLE
ITEM 8. NOT APPLICABLE
ITEM 9. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The Board is responsible for approving nominees for election as trustees. To
assist in this task, the Board has designated the Audit Committee as the
nominating committee for the Board. It reviews and recommends nominees to the
Board. The Committee is comprised entirely of disinterested trustees as defined
in Section 2(a)(19) of the Investment Company Act of 1940.
The Audit Committee charter describes the responsibilities of the Committee in
nominating candidates for election as independent Trustees of the Registrant.
The Registrant's Board has adopted a written charter for the Committee. A
current copy of the Audit Committee charter is available to shareholders on the
OppenheimerFunds website at www.oppenheimerfunds.com.
Under the current policy, if the Board determines that a vacancy exists or is
likely to exist on the Board, the Audit Committee of the Board will consider
candidates for Board membership including recommended by Registrant
shareholders. The Audit Committee will consider nominees recommended by
independent Board members or recommended by any other Board members including
Board members affiliated with the Registrant's investment advisors. The
Committee may, upon Board approval, retain an executive search firm to assist in
screening potential candidates. Upon Board approval, the Audit Committee may
also use the services of legal, financial, or other external counsel that it
deems necessary or desirable in the screening process. Shareholders wishing to
submit a nominee for election to the Board may do so by mailing their submission
to the offices of OppenheimerFunds, Inc., 6803 South Tucson Way,
Centennial, CO 80112, to the attention of the Board of Trustees of the named
Registrant, c/o the Secretary of the Registrant.
The Committee's process for identifying and evaluating nominees for trustee
includes a number of factors. In screening candidates for board membership,
whether the candidate is suggested by Board members, shareholders or others, the
Committee considers the candidate's professional experience, soundness of
judgment, integrity, ability to make independent, analytical inquiries,
collegiality, willingness and ability to devote the time required to perform
Board activities adequately, ability to represent the interests of all
shareholders of the Registrant, and diversity relative to the board's
composition. Candidates are expected to provide a mix of attributes, experience,
perspective and skills necessary to effectively advance the interests of
shareholders.
ITEM 10. 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 February 29, 2004,
registrant's principal executive officer and principal financial
officer found registrant's disclosure controls and procedures to
provide reasonable assurances 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 over financial reporting that occurred during the
registrant's last fiscal half-year that has materially affected,
or is reasonably likely to materially affect, the registrant's
internal control over financial reporting.
ITEM 11. EXHIBITS.
(A) EXHIBIT ATTACHED HERETO. (ATTACH CODE OF ETHICS AS EXHIBIT)
(B) EXHIBITS ATTACHED HERETO. (ATTACH CERTIFICATIONS AS EXHIBITS)