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 811-3346
Oppenheimer Disciplined Allocation 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: October 31
Date of reporting period: November 1, 2003 - April 30, 2004
Item 1. Reports to Stockholders.
STATEMENT OF INVESTMENTS April 30, 2004 / Unaudited
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MARKET VALUE
SHARES SEE NOTE 1
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COMMON STOCKS--57.4%
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CONSUMER DISCRETIONARY--9.0%
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AUTO COMPONENTS--0.2%
TRW Automotive Holdings Corp. 1 11,000 $ 230,780
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HOTELS, RESTAURANTS & LEISURE--0.7%
McDonald's Corp. 33,900 923,097
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HOUSEHOLD DURABLES--0.3%
WCI Communities, Inc. 1 16,600 403,546
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INTERNET & CATALOG RETAIL--1.2%
InterActiveCorp 1 45,000 1,434,150
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MEDIA--5.6%
EchoStar Communications Corp., Cl. A 1 50,600 1,679,414
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Liberty Media Corp., Cl. A 1 232,300 2,541,362
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UnitedGlobalCom, Inc., Cl. A 1 383,650 2,869,702
------------
7,090,478
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SPECIALTY RETAIL--1.0%
Bed Bath & Beyond, Inc. 1 11,726 435,269
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Boise Cascade Corp. 23,203 782,637
------------
1,217,906
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CONSUMER STAPLES--4.1%
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BEVERAGES--0.4%
Constellation Brands, Inc., Cl. A 1 17,200 569,836
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FOOD & STAPLES RETAILING--2.1%
Costco Wholesale Corp. 1 41,600 1,557,920
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Wal-Mart Stores, Inc. 18,600 1,060,200
------------
2,618,120
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TOBACCO--1.6%
Altria Group, Inc. 36,600 2,026,908
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ENERGY--3.4%
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ENERGY EQUIPMENT & SERVICES--0.7%
Halliburton Co. 20,400 607,920
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Talisman Energy, Inc. 2,100 119,553
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Todco, Cl. A 1 13,000 192,400
------------
919,873
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OIL & GAS--2.7%
BP plc, ADR 54,200 2,867,180
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LUKOIL, Sponsored ADR 2,100 228,900
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YUKOS, ADR 7,100 318,805
------------
3,414,885
11 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
STATEMENT OF INVESTMENTS Unaudited / Continued
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MARKET VALUE
SHARES SEE NOTE 1
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FINANCIALS--10.4%
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COMMERCIAL BANKS--2.4%
Bank of America Corp. 21,601 $ 1,738,664
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SouthTrust Corp. 19,200 596,736
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Wells Fargo & Co. 12,800 722,688
------------
3,058,088
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DIVERSIFIED FINANCIAL SERVICES--5.1%
CIT Group, Inc. 18,200 625,534
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Citigroup, Inc. 45,277 2,177,371
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J.P. Morgan Chase & Co. 19,500 733,200
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Merrill Lynch & Co., Inc. 7,600 412,148
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Morgan Stanley 34,900 1,793,511
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SLM Corp. 19,100 731,721
------------
6,473,485
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INSURANCE--2.9%
Chubb Corp. 2,400 165,600
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Platinum Underwriters Holdings Ltd. 29,400 940,212
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Prudential Financial, Inc. 30,500 1,340,170
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UnumProvident Corp. 27,200 422,960
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XL Capital Ltd., Cl. A 9,500 725,325
------------
3,594,267
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HEALTH CARE--10.4%
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BIOTECHNOLOGY--3.0%
Amgen, Inc. 1 8,700 489,549
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Gilead Sciences, Inc. 1 20,700 1,259,181
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MedImmune, Inc. 1 47,600 1,153,824
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Wyeth 23,000 875,610
------------
3,778,164
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HEALTH CARE EQUIPMENT & SUPPLIES--1.4%
Boston Scientific Corp. 1 22,600 930,894
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Medtronic, Inc. 15,800 797,268
------------
1,728,162
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HEALTH CARE PROVIDERS & SERVICES--2.7%
Aetna, Inc. 8,900 736,475
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PacifiCare Health Systems, Inc. 1 18,700 668,712
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Province Healthcare Co. 1 50,400 805,896
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Tenet Healthcare Corp. 1 108,900 1,280,664
------------
3,491,747
12 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
MARKET VALUE
SHARES SEE NOTE 1
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PHARMACEUTICALS--3.3%
Mylan Laboratories, Inc. 23,550 $ 539,531
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Pfizer, Inc. 32,100 1,147,896
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Schering-Plough Corp. 44,800 749,504
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Teva Pharmaceutical Industries Ltd., Sponsored ADR 16,100 991,116
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Watson Pharmaceuticals, Inc. 1 19,800 705,078
------------
4,133,125
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INDUSTRIALS--6.9%
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AEROSPACE & DEFENSE--2.8%
Boeing Co. 22,700 969,063
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Raytheon Co. 81,300 2,622,738
------------
3,591,801
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COMMERCIAL SERVICES & SUPPLIES--2.9%
Cendant Corp. 124,300 2,943,424
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ChoicePoint, Inc. 1 16,200 711,504
------------
3,654,928
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INDUSTRIAL CONGLOMERATES--1.2%
Tyco International Ltd. 53,000 1,454,850
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INFORMATION TECHNOLOGY--7.6%
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COMMUNICATIONS EQUIPMENT--0.1%
Cisco Systems, Inc. 1 5,000 104,350
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Geotek Communications, Inc., Series B, Escrow Shares 1,2,3 100 --
------------
104,350
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COMPUTERS & PERIPHERALS--2.0%
Dell, Inc. 1 23,500 815,685
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Hewlett-Packard Co. 86,300 1,700,110
------------
2,515,795
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ELECTRONIC EQUIPMENT & INSTRUMENTS--1.1%
Flextronics International Ltd. 1 44,700 719,670
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Symbol Technologies, Inc. 11,700 140,400
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Thermo Electron Corp. 1 19,000 554,800
------------
1,414,870
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INTERNET SOFTWARE & SERVICES--0.4%
Net2Phone, Inc. 1 130,100 506,089
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IT SERVICES--0.7%
CSG Systems International, Inc. 1 27,900 468,441
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Unisys Corp. 1 27,400 357,022
------------
825,463
13 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
STATEMENT OF INVESTMENTS Unaudited / Continued
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MARKET VALUE
SHARES SEE NOTE 1
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SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT--0.7%
Intel Corp. 19,300 $ 496,589
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National Semiconductor Corp. 1 4,700 191,713
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Texas Instruments, Inc. 8,000 200,800
------------
889,102
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SOFTWARE--2.6%
Compuware Corp. 1 31,300 239,445
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Microsoft Corp. 63,300 1,643,901
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Oracle Corp. 1 47,100 528,462
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Take-Two Interactive Software, Inc. 1 29,900 863,811
------------
3,275,619
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MATERIALS--1.5%
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CHEMICALS--1.0%
Dow Chemical Co. 18,300 726,327
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Praxair, Inc. 14,300 522,665
------------
1,248,992
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CONTAINERS & Packaging--0.2%
Smurfit-Stone Container Corp. 14,900 256,131
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PAPER & FOREST PRODUCTS--0.3%
Bowater, Inc. 8,100 339,795
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TELECOMMUNICATION SERVICES--2.1%
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DIVERSIFIED TELECOMMUNICATION SERVICES--0.9%
IDT Corp., Cl. B 1 58,300 1,085,546
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WIRELESS TELECOMMUNICATION SERVICES--1.2%
AT&T Corp. 49,900 855,785
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Vodafone Group plc, Sponsored ADR 28,900 709,206
------------
1,564,991
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UTILITIES--2.0%
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ELECTRIC UTILITIES--1.2%
AES Corp. (The) 1 115,200 998,784
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PG&E Corp. 1 19,500 536,640
------------
1,535,424
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GAS UTILITIES--0.8%
Kinder Morgan, Inc. 9,800 590,058
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Sempra Energy 12,800 406,400
------------
996,458
------------
Total Common Stocks (Cost $63,484,322) 72,366,821
14 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
MARKET VALUE
SHARES SEE NOTE 1
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OTHER SECURITIES--1.2%
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Nasdaq-100 Unit Investment Trust (Cost $1,098,130) 43,400 $ 1,507,282
PRINCIPAL
AMOUNT
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ASSET-BACKED SECURITIES--7.2%
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Bank One Auto Securitization Trust, Automobile Receivable
Certificates, Series 2003-1, Cl. A2, 1.29%, 8/21/06 $ 236,934 236,898
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BMW Vehicle Owner Trust, Automobile Loan Certificates,
Series 2003-A, Cl. A2, 1.45%, 11/25/05 168,061 168,257
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Caterpillar Financial Asset Trust, Equipment Loan Pass-Through
Certificates, Series 2003-A, Cl. A2, 1.25%, 10/25/05 116,848 116,914
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Centex Home Equity Co. LLC, Home Equity Loan Asset-Backed Certificates:
Series 2003-B, Cl. AF1, 1.64%, 2/25/18 48,810 48,789
Series 2003-C, Cl. AF1, 2.14%, 7/25/18 209,915 210,184
Series 2004-A, Cl. AF1, 2.03%, 6/25/19 146,009 146,076
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Chase Funding Mortgage Loan Asset-Backed Certificates,
Home Equity Mtg. Obligations:
Series 2003-3, Cl. 1A1, 1.18%, 8/25/17 4 90,611 90,652
Series 2003-4, Cl. 1A1, 1.22%, 9/25/17 4 223,249 223,389
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Chase Manhattan Auto Owner Trust, Automobile
Loan Pass-Through Certificates:
Series 2003-A, Cl. A2, 1.26%, 1/16/06 77,158 77,200
Series 2003-B, Cl. A2, 1.28%, 3/15/06 127,953 128,000
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Citibank Credit Card Issuance Trust, Credit Card Receivable
Nts., Series 2002-A3, Cl. A3, 4.40%, 5/15/07 200,000 205,363
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CitiFinancial Mortgage Securities, Inc., Home Equity
Collateralized Mtg. Obligations:
Series 2002-1, Cl. AF1, 2.474%, 9/25/32 21,387 21,395
Series 2003-2, Cl. AF1, 1.20%, 5/25/33 4 82,628 82,665
Series 2003-3, Cl. AF1, 1.22%, 8/25/33 2,4 143,236 143,305
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DaimlerChrysler Auto Trust, Automobile Loan Pass-Through Certificates:
Series 2003-A, Cl. A2, 1.52%, 12/8/05 410,000 410,519
Series 2003-B, Cl. A2, 1.61%, 7/8/06 480,000 480,388
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Ford Credit Auto Owner Trust, Automobile Loan Pass-Through Certificates:
Series 2002-D, Cl. A2A, 2.10%, 3/15/05 52,222 52,287
Series 2003-A, Cl. A2A, 1.62%, 8/15/05 98,876 99,025
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Harley-Davidson Motorcycle Trust, Motorcycle Receivable Nts.:
Series 2002-2, Cl. A1, 1.91%, 4/16/07 128,369 128,646
Series 2003-3, Cl. A1, 1.50%, 1/15/08 287,175 287,311
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Honda Auto Receivables Owner Trust, Automobile Receivable Obligations:
Series 2002-4, Cl. A2, 1.66%, 6/15/05 163,431 163,600
Series 2003-3, Cl. A2, 1.52%, 4/21/06 460,000 460,450
Series 2003-4, Cl. A2, 1.58%, 7/17/06 410,000 410,337
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Litigation Settlement Monetized Fee Trust, Asset-Backed Certificates,
Series 2001-1A, Cl. A1, 8.33%, 4/25/31 2 610,507 628,822
15 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
STATEMENT OF INVESTMENTS Unaudited / Continued
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PRINCIPAL MARKET VALUE
AMOUNT SEE NOTE 1
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ASSET-BACKED SECURITIES Continued
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M&I Auto Loan Trust, Automobile Loan Certificates:
Series 2002-1, Cl. A3, 2.49%, 10/22/07 $ 236,825 $ 238,280
Series 2003-1, Cl. A2, 1.60%, 7/20/06 350,000 350,406
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National City Auto Receivables Trust, Automobile Receivable
Obligations, Series 2004-A, Cl. A2, 1.50%, 2/15/07 190,000 189,822
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Nissan Auto Lease Trust, Automobile Lease Obligations,
Series 2003-A, Cl. A2, 1.69%, 12/15/05 270,000 270,464
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Nissan Auto Receivables Owner Trust, Automobile Receivable Nts.:
Series 2003-B, Cl. A2, 1.20%, 11/15/05 360,441 360,640
Series 2004-A, Cl. A2, 1.40%, 7/17/06 210,000 209,584
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Salomon Smith Barney Auto Loan Trust, Asset-Backed
Automobile Loan Obligations, Series 2002-1, Cl. A2, 1.83%, 9/15/05 43,635 43,695
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Toyota Auto Receivables Owner Trust, Automobile
Mtg.-Backed Obligations:
Series 2002-B, Cl. A3, 3.76%, 6/15/06 72,921 73,622
Series 2003-A, Cl. A2, 1.28%, 8/15/05 212,306 212,476
Series 2003-B, Cl. A2, 1.43%, 2/15/06 310,000 310,073
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USAA Auto Owner Trust, Automobile Loan Asset-Backed Nts.:
Series 2002-1, Cl. A3, 2.41%, 10/16/06 123,090 123,726
Series 2003-1, Cl. A2, 1.22%, 4/17/06 182,439 182,520
Series 2004-1, Cl. A2, 1.43%, 9/15/06 510,000 509,017
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Volkswagen Auto Loan Enhanced Trust, Automobile Loan
Receivable Certificates:
Series 2003-1, Cl. A2, 1.11%, 12/20/05 145,060 145,048
Series 2003-2, Cl. A2, 1.55%, 6/20/06 240,000 240,194
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Whole Auto Loan Trust, Automobile Loan Receivable Certificates:
Series 2002-1, Cl. A2, 1.88%, 6/15/05 127,163 127,369
Series 2003-1, Cl. A2A, 1.40%, 4/15/06 440,000 440,227
-----------
Total Asset-Backed Securities (Cost $9,026,559) 9,047,635
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MORTGAGE-BACKED OBLIGATIONS--28.7%
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CIT Equipment Collateral, Equipment Receivable-Backed
Nts., Series 2003-EF1, Cl. A2, 1.49%, 12/20/05 120,000 120,099
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Fannie Mae Whole Loan, Gtd. Real Estate Mtg. Investment
Conduit Pass-Through Certificates,
Trust 2003-W6, Cl. 2A1, 2.232%, 9/25/42 298,041 298,161
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Federal Home Loan Mortgage Corp.:
5%, 5/15/34 5 1,130,000 1,095,747
5.50%, 1/1/34 139,476 139,421
7%, 9/1/33 235,140 249,567
7%, 5/1/34 5 1,719,000 1,815,694
8%, 4/1/16 156,867 168,709
9%, 8/1/22-5/1/25 44,659 49,963
16 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
PRINCIPAL MARKET VALUE
AMOUNT SEE NOTE 1
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MORTGAGE-BACKED OBLIGATIONS Continued
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Federal Home Loan Mortgage Corp., Gtd. Real Estate Mtg.
Investment Conduit Multiclass Pass-Through Certificates:
Series 1669, Cl. G, 6.50%, 2/15/23 $ 122,742 $ 124,877
Series 2055, Cl. ZM, 6.50%, 5/15/28 218,936 231,253
Series 2080, Cl. Z, 6.50%, 8/15/28 142,449 148,927
Series 2102, Cl. VA, 6%, 10/15/09 100,094 100,728
Series 2387, Cl. PD, 6%, 4/15/30 312,000 322,835
Series 2466, Cl. PD, 6%, 4/15/30 250,111 257,032
Series 2491, Cl. PE, 6%, 12/15/27 164,270 165,645
Series 2498, Cl. PC, 5.50%, 10/15/14 58,788 60,249
Series 2500, Cl. FD, 1.60%, 3/15/32 4 81,532 81,961
Series 2526, Cl. FE, 1.50%, 6/15/29 4 91,142 91,559
Series 2551, Cl. FD, 1.50%, 1/15/33 4 77,203 77,560
Series 2551, Cl. TA, 4.50%, 2/15/18 343,708 345,874
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Federal Home Loan Mortgage Corp., Interest-Only
Stripped Mtg.-Backed Security:
Series 176, Cl. IO, 3.269%, 6/1/26 6 128,675 25,600
Series 177, Cl. B, 0.699%, 7/1/26 6 215,925 46,133
Series 183, Cl. IO, 2.394%, 4/1/27 6 208,457 42,750
Series 184, Cl. IO, 4.595%, 12/1/26 6 204,740 41,381
Series 192, Cl. IO, 10.245%, 2/1/28 6 64,513 13,687
Series 200, Cl. IO, 8.687%, 1/1/29 6 76,895 15,693
Series 2130, Cl. SC, 38.228%, 3/15/29 6 179,535 18,934
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Federal Home Loan Mortgage Corp., Principal-Only
Stripped Mtg.-Backed Security:
Series 176, Cl. PO, 5.905%, 6/1/26 7 71,845 61,438
Series 177, Cl. PO, 5.781%, 7/1/26 7 215,925 182,448
Series 199, Cl. PO, 5.380%, 8/1/28 7 128,464 107,016
Series 203, Cl. PO, 5.077%, 6/1/29 7 76,237 63,144
Series 217, Cl. PO, 6.955%, 2/1/32 7 81,014 67,162
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Federal Home Loan Mortgage Corp., Structured Pass-Through Securities,
Collateralized Mtg. Obligations, Series T-42, Cl. A2, 5.50%, 2/25/42 25,703 25,853
- ------------------------------------------------------------------------------------------------------
Federal National Mortgage Assn.:
5%, 5/1/34 5 2,055,000 1,991,422
5.50%, 7/1/33-12/1/34 1,516,716 1,514,818
5.50%, 6/18/19-5/13/34 5 7,538,000 7,578,960
6.50%, 3/1/26-10/1/30 156,944 163,712
6.50%, 5/25/34 5 4,588,000 4,775,824
7%, 2/25/22-11/1/33 1,811,918 1,914,453
7%, 5/25/34 5 8,022,000 8,483,265
7.50%, 1/1/08-6/1/08 50,174 53,535
8.50%, 7/1/32 27,359 29,565
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Federal National Mortgage Assn., Collateralized Mtg. Obligations,
Gtd. Real Estate Mtg. Investment Conduit Pass-Through Certificates:
Trust 1998-63, Cl. PG, 6%, 3/25/27 125,058 127,069
Trust 2001-50, Cl. NE, 6%, 8/25/30 209,045 215,948
Trust 2001-70, Cl. LR, 6%, 9/25/30 176,560 184,013
17 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
PRINCIPAL MARKET VALUE
AMOUNT SEE NOTE 1
- ----------------------------------------------------------------------------------------------------------------
MORTGAGE-BACKED OBLIGATIONS Continued
- ----------------------------------------------------------------------------------------------------------------
Federal National Mortgage Assn., Collateralized Mtg. Obligations,
Gtd. Real Estate Mtg. Investment Conduit Pass-Through Certificates: Continued
Trust 2001-70, Cl. PD, 6%, 3/25/29 $ 190,000 $ 194,366
Trust 2001-72, Cl. NH, 6%, 4/25/30 160,000 165,261
Trust 2001-74, Cl. PD, 6%, 5/25/30 60,000 62,457
Trust 2002-50, Cl. PD, 6%, 9/25/27 140,000 144,692
Trust 2002-73, Cl. PA, 5%, 1/25/17 101,838 102,270
Trust 2002-77, Cl. WF, 1.50%, 12/18/32 4 128,472 128,934
Trust 2002-94, Cl. MA, 4.50%, 8/25/09 235,834 238,758
- ----------------------------------------------------------------------------------------------------------------
Federal National Mortgage Assn., Gtd. Real Estate Mtg.
Investment Conduit Pass-Through Certificates Interest-Only
Stripped Mtg.-Backed Security:
Trust 2002-47, Cl. NS, 29.849%, 4/25/32 6 296,565 32,164
Trust 2002-51, Cl. S, 29.849%, 8/25/32 6 272,449 29,109
- ----------------------------------------------------------------------------------------------------------------
Federal National Mortgage Assn., Interest-Only Stripped
Mtg.-Backed Security:
Trust 222, Cl. 2, 2.692%, 6/1/23 6 272,310 58,431
Trust 240, Cl. 2, 1.765%, 9/1/23 6 623,182 137,954
Trust 252, Cl. 2, (2.05)%, 11/1/23 6 305,366 67,837
Trust 254, Cl. 2, 1.453%, 1/1/24 6 150,049 31,446
Trust 273, Cl. 2, 3.541%, 7/1/26 6 93,023 19,005
Trust 342, Cl. 2, 4.788%. 9/1/33 6 158,195 37,713
Trust 1993-223, Cl. PM, 5.819%, 10/25/23 6 155,072 14,143
Trust 2002-9, Cl. MS, 31.233%, 3/25/32 6 209,074 21,718
Trust 2002-52, Cl. SD, 21.759%, 9/25/32 6 359,825 38,817
- ----------------------------------------------------------------------------------------------------------------
First Union/Lehman Brothers/Bank of America, Commercial Mtg.
Pass-Through Certificates, Series 1998-C2, Cl. A2, 6.56%, 11/18/35 140,000 153,332
- ----------------------------------------------------------------------------------------------------------------
Government National Mortgage Assn.:
7%, 4/15/09-2/15/24 222,627 238,547
7.50%, 3/15/09 102,221 109,898
8%, 5/15/17 68,995 75,910
8.50%, 8/15/17-12/15/17 53,381 59,240
- ----------------------------------------------------------------------------------------------------------------
Government National Mortgage Assn., Interest-Only Stripped
Mtg.-Backed Security:
Series 2002-76, Cl. SY, 31.715%, 12/16/26 6 523,160 48,457
Series 2004-11, Cl. SM, 32.747%, 1/17/30 6 218,022 21,747
- ----------------------------------------------------------------------------------------------------------------
Prudential Mortgage Capital Co. II LLC, Commercial Mtg. Pass-Through
Certificates, Series PRU-HTG 2000-C1, Cl. A2, 7.306%, 10/6/15 192,000 217,372
-------------
Total Mortgage-Backed Obligations (Cost $36,112,834) 36,139,262
- ----------------------------------------------------------------------------------------------------------------
U.S. GOVERNMENT OBLIGATIONS--7.4%
- ----------------------------------------------------------------------------------------------------------------
Federal Home Loan Mortgage Corp. Unsec. Nts.:
2.375%, 4/15/06 1,100,000 1,099,694
2.75%, 8/15/06 520,000 521,249
4.50%, 1/15/13 55,000 53,637
4.875%, 11/15/13 40,000 39,710
18 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
PRINCIPAL MARKET VALUE
AMOUNT SEE NOTE 1
- ----------------------------------------------------------------------------------------------------
U.S. GOVERNMENT OBLIGATIONS Continued
- ----------------------------------------------------------------------------------------------------
Federal Home Loan Mortgage Corp. Unsec. Nts.: Continued
5.50%, 7/15/06 8 $ 1,085,000 $ 1,152,076
5.75%, 1/15/12 350,000 373,459
6.625%, 9/15/09 470,000 526,126
- ----------------------------------------------------------------------------------------------------
Federal National Mortgage Assn. Unsec. Nts.:
4.25%, 7/15/07 1,300,000 1,339,868
7.25%, 1/15/10-5/15/30 1,595,000 1,851,387
- ----------------------------------------------------------------------------------------------------
Tennessee Valley Authority Bonds:
5.375%, 11/13/08 122,000 129,867
7.125%, 5/1/30 128,000 151,068
Series C, 4.75%, 8/1/13 15,000 14,882
Series C, 6%, 3/15/13 15,000 16,302
- ----------------------------------------------------------------------------------------------------
U.S. Treasury Bonds:
5.375%, 2/15/31 924,000 936,417
STRIPS, 2.99%, 2/15/10 9 125,000 99,468
STRIPS, 3.37%, 2/15/11 9 101,000 76,034
STRIPS, 3.86%, 2/15/13 9 112,000 74,667
STRIPS, 4.96%, 2/15/16 9 171,000 94,034
STRIPS, 5.52%, 11/15/26 9 96,000 26,938
- ----------------------------------------------------------------------------------------------------
U.S. Treasury Nts.:
4%, 2/15/14 487,000 467,977
5.75%, 8/15/10 293,000 322,140
------------
Total U.S. Government Obligations (Cost $9,507,077) 9,367,000
- ----------------------------------------------------------------------------------------------------
FOREIGN GOVERNMENT OBLIGATIONS--0.1%
- ----------------------------------------------------------------------------------------------------
United Mexican States Nts., 7.50%, 1/14/12 (Cost $111,028) 110,000 120,175
- ----------------------------------------------------------------------------------------------------
NON-CONVERTIBLE CORPORATE BONDS AND NOTES--9.5%
- ----------------------------------------------------------------------------------------------------
Aetna, Inc., 7.375% Sr. Unsec. Nts., 3/1/06 250,000 271,196
- ----------------------------------------------------------------------------------------------------
Allied Waste North America, Inc., 8.875% Sr. Nts., Series B, 4/1/08 110,000 122,650
- ----------------------------------------------------------------------------------------------------
American Honda Finance Corp., 3.85% Nts., 11/6/08 60,000 59,705
- ----------------------------------------------------------------------------------------------------
AT&T Wireless Services, Inc., 7.50% Sr. Unsec. Nts., 5/1/07 175,000 194,459
- ----------------------------------------------------------------------------------------------------
AXA, 8.60% Unsec. Sub. Nts., 12/15/30 190,000 236,846
- ----------------------------------------------------------------------------------------------------
Bankers Trust Corp., 7.375% Unsec. Sub. Nts., 5/1/08 20,000 22,516
- ----------------------------------------------------------------------------------------------------
Beazer Homes USA, Inc., 8.625% Sr. Unsec. Nts., 5/15/11 115,000 125,063
- ----------------------------------------------------------------------------------------------------
Boeing Capital Corp., 5.65% Sr. Unsec. Nts., 5/15/06 38,000 40,111
- ----------------------------------------------------------------------------------------------------
British Telecommunications plc, 7.875% Nts., 12/15/05 155,000 167,825
- ----------------------------------------------------------------------------------------------------
Caesars Entertainment, Inc., 7% Sr. Unsec. Sub. Nts., 7/15/04 100,000 101,125
- ----------------------------------------------------------------------------------------------------
Cardinal Health, Inc., 4.45% Nts., 6/30/05 160,000 163,896
- ----------------------------------------------------------------------------------------------------
CenterPoint Energy, Inc.:
5.875% Nts., 6/1/08 135,000 137,611
8.125% Unsec. Nts., Series B, 7/15/05 60,000 63,680
19 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
PRINCIPAL MARKET VALUE
AMOUNT SEE NOTE 1
- ------------------------------------------------------------------------------------------------------
NON-CONVERTIBLE CORPORATE BONDS AND NOTES Continued
- ------------------------------------------------------------------------------------------------------
CIGNA Corp., 7.40% Unsec. Nts., 5/15/07 $ 295,000 $ 326,473
- ------------------------------------------------------------------------------------------------------
CIT Group, Inc., 7.75% Sr. Unsec. Unsub. Nts., 4/2/12 120,000 138,781
- ------------------------------------------------------------------------------------------------------
Citizens Communications Co., 9.25% Sr. Nts., 5/15/11 60,000 63,227
- ------------------------------------------------------------------------------------------------------
Conectiv, Inc., 5.30% Unsec. Unsub. Nts., Series B, 6/1/05 33,000 34,000
- ------------------------------------------------------------------------------------------------------
CSX Corp., 6.25% Unsec. Nts., 10/15/08 120,000 129,548
- ------------------------------------------------------------------------------------------------------
D.R. Horton, Inc., 9.375% Sr. Unsec. Sub. Nts., 3/15/11 105,000 117,600
- ------------------------------------------------------------------------------------------------------
DaimlerChrysler North America Holding Corp., 4.75% Unsec. Nts., 1/15/08 235,000 238,602
- ------------------------------------------------------------------------------------------------------
Delphi Corp., 6.55% Nts., 6/15/06 135,000 143,282
- ------------------------------------------------------------------------------------------------------
Deutsche Telekom International Finance BV, 8.50% Unsub. Nts., 6/15/10 155,000 183,368
- ------------------------------------------------------------------------------------------------------
Dominion Resources, Inc., 8.125% Sr. Unsub. Nts., 6/15/10 135,000 158,310
- ------------------------------------------------------------------------------------------------------
DTE Energy Co.:
6% Sr. Unsec. Unsub. Nts., 6/1/04 55,000 55,175
6.375% Sr. Nts., 4/15/33 125,000 119,416
6.45% Sr. Unsub. Nts., 6/1/06 120,000 127,545
- ------------------------------------------------------------------------------------------------------
Edison International, Inc., 6.875% Unsec. Nts., 9/15/04 12,000 12,225
- ------------------------------------------------------------------------------------------------------
EOP Operating LP, 7.75% Unsec. Nts., 11/15/07 145,000 164,263
- ------------------------------------------------------------------------------------------------------
FedEx Corp., 2.65% Nts., 4/1/07 10 275,000 269,128
- ------------------------------------------------------------------------------------------------------
FirstEnergy Corp., 5.50% Sr. Unsub. Nts., Series A, 11/15/06 250,000 261,013
- ------------------------------------------------------------------------------------------------------
Food Lion, Inc., 7.55% Nts., 4/15/07 165,000 179,264
- ------------------------------------------------------------------------------------------------------
Ford Holdings, Inc., 9.30% Unsec. Unsub. Debs., 3/1/30 95,000 106,849
- ------------------------------------------------------------------------------------------------------
Ford Motor Co., 8.90% Unsec. Unsub. Debs., 1/15/32 65,000 72,371
- ------------------------------------------------------------------------------------------------------
France Telecom SA:
8.20% Sr. Unsec. Nts., 3/1/06 80,000 87,049
9% Sr. Unsec. Nts., 3/1/11 80,000 94,702
9.50% Sr. Unsec. Nts., 3/1/31 4 45,000 57,877
- ------------------------------------------------------------------------------------------------------
Franklin Resources, Inc., 3.70% Nts., 4/15/08 80,000 79,031
- ------------------------------------------------------------------------------------------------------
Gap, Inc. (The), 6.90% Nts., 9/15/07 100,000 110,500
- ------------------------------------------------------------------------------------------------------
General Motors Acceptance Corp., 6.875% Unsec. Unsub. Nts., 8/28/12 340,000 355,064
- ------------------------------------------------------------------------------------------------------
General Motors Corp., 8.375% Sr. Unsec. Debs., 7/15/33 45,000 48,808
- ------------------------------------------------------------------------------------------------------
Hartford Financial Services Group, Inc. (The), 2.375% Nts., 6/1/06 70,000 69,210
- ------------------------------------------------------------------------------------------------------
Health Net, Inc., 8.375% Sr. Unsec. Unsub. Nts., 4/15/11 95,000 112,298
- ------------------------------------------------------------------------------------------------------
Hertz Corp. (The):
7.625% Sr. Nts., 6/1/12 180,000 192,609
7.625% Sr. Unsec. Nts., 8/15/07 95,000 103,146
- ------------------------------------------------------------------------------------------------------
Hilton Hotels Corp., 7.95% Sr. Nts., 4/15/07 95,000 104,738
- ------------------------------------------------------------------------------------------------------
Hutchison Whampoa International Ltd., 7.45% Sr. Bonds, 11/24/33 10 100,000 96,543
- ------------------------------------------------------------------------------------------------------
J.C. Penney Co., Inc., 7.60% Nts., 4/1/07 190,000 209,475
- ------------------------------------------------------------------------------------------------------
John Hancock Global Funding II, 7.90% Nts., 7/2/10 10 105,000 122,817
- ------------------------------------------------------------------------------------------------------
Kinder Morgan, Inc., 6.50% Sr. Unsec. Nts., 9/1/12 150,000 161,711
- ------------------------------------------------------------------------------------------------------
Kraft Foods, Inc., 5.25% Nts., 6/1/07 300,000 315,462
20 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
PRINCIPAL MARKET VALUE
AMOUNT SEE NOTE 1
- ----------------------------------------------------------------------------------------------------------
NON-CONVERTIBLE CORPORATE BONDS AND NOTES Continued
- ----------------------------------------------------------------------------------------------------------
Kroger Co. (The), 7.80% Sr. Nts., 8/15/07 $ 180,000 $ 202,897
- ----------------------------------------------------------------------------------------------------------
Lear Corp., 7.96% Sr. Unsec. Nts., Series B, 5/15/05 87,000 92,003
- ----------------------------------------------------------------------------------------------------------
Liberty Media Corp., 3.50% Nts., 9/25/06 110,000 110,275
- ----------------------------------------------------------------------------------------------------------
Merrill Lynch & Co., Inc., 4.125% Nts., Series C, 1/15/09 135,000 134,832
- ----------------------------------------------------------------------------------------------------------
MidAmerican Energy Holdings Co., 5.875% Sr. Unsec. Nts., 10/1/12 265,000 274,377
- ----------------------------------------------------------------------------------------------------------
Morgan Stanley Dean Witter & Co., 6.60% Nts., 4/1/12 155,000 170,875
- ----------------------------------------------------------------------------------------------------------
Nationwide Financial Services, Inc., 5.90% Nts., 7/1/12 125,000 131,623
- ----------------------------------------------------------------------------------------------------------
Niagara Mohawk Power Corp., 5.375% Sr. Unsec. Nts., 10/1/04 75,000 76,181
- ----------------------------------------------------------------------------------------------------------
NiSource Finance Corp., 7.875% Sr. Unsec. Nts., 11/15/10 190,000 221,466
- ----------------------------------------------------------------------------------------------------------
Northrop Grumman Corp., 7.125% Sr. Nts., 2/15/11 140,000 157,627
- ----------------------------------------------------------------------------------------------------------
Petroleos Mexicanos, 9.50% Sr. Sub. Nts., 9/15/27 70,000 80,500
- ----------------------------------------------------------------------------------------------------------
PF Export Receivables Master Trust, 3.748% Sr. Nts., Series B, 6/1/13 10 75,000 72,145
- ----------------------------------------------------------------------------------------------------------
Prudential Holdings LLC, 8.695% Bonds, Series C, 12/18/23 10 195,000 238,729
- ----------------------------------------------------------------------------------------------------------
Prudential Insurance Co. of America, 8.30% Nts., 7/1/25 10 260,000 316,205
- ----------------------------------------------------------------------------------------------------------
PSEG Energy Holdings LLC, 7.75% Unsec. Nts., 4/16/07 115,000 120,750
- ----------------------------------------------------------------------------------------------------------
Pulte Homes, Inc., 8.375% Sr. Nts., 8/15/04 45,000 45,564
- ----------------------------------------------------------------------------------------------------------
Safeway, Inc.:
2.50% Nts., 11/1/05 75,000 75,023
4.80% Sr. Unsec. Nts., 7/16/07 170,000 175,337
- ----------------------------------------------------------------------------------------------------------
Spieker Properties LP, 6.80% Unsec. Unsub. Nts., 5/1/04 75,000 75,000
- ----------------------------------------------------------------------------------------------------------
Sprint Capital Corp.:
7.125% Sr. Unsec. Nts., 1/30/06 135,000 144,879
8.75% Nts., 3/15/32 100,000 119,800
- ----------------------------------------------------------------------------------------------------------
TCI Communications, Inc., 9.80% Sr. Unsec. Debs., 2/1/12 290,000 370,746
- ----------------------------------------------------------------------------------------------------------
Telefonos de Mexico SA de CV, 8.25% Sr. Unsec. Nts., 1/26/06 95,000 103,290
- ----------------------------------------------------------------------------------------------------------
Time Warner Cos., Inc., 9.125% Debs., 1/15/13 130,000 160,619
- ----------------------------------------------------------------------------------------------------------
Time Warner Entertainment Co. LP, 10.15% Sr. Nts., 5/1/12 65,000 84,250
- ----------------------------------------------------------------------------------------------------------
Toll Corp., 8.25% Sr. Sub. Nts., 12/1/11 115,000 127,650
- ----------------------------------------------------------------------------------------------------------
TXU Corp., 6.375% Sr. Unsec. Nts., Series C, 1/1/08 100,000 107,375
- ----------------------------------------------------------------------------------------------------------
Tyco International Group SA:
5.875% Unsec. Unsub. Nts., 11/1/04 25,000 25,495
6.75% Sr. Unsub. Nts., 2/15/11 76,000 82,073
- ----------------------------------------------------------------------------------------------------------
Vornado Realty LP, 5.625% Sr. Unsec. Unsub. Nts., 6/15/07 135,000 144,231
- ----------------------------------------------------------------------------------------------------------
Walt Disney Co. (The):
4.875% Nts., 7/2/04 130,000 130,753
6.75% Sr. Unsec. Nts., Series B, 3/30/06 145,000 154,846
- ----------------------------------------------------------------------------------------------------------
Waste Management, Inc., 7% Sr. Nts., 7/15/28 90,000 95,041
- ----------------------------------------------------------------------------------------------------------
Weyerhaeuser Co., 5.50% Unsec. Unsub. Nts., 3/15/05 175,000 180,368
- ----------------------------------------------------------------------------------------------------------
Yum! Brands, Inc., 8.50% Sr. Unsec. Nts., 4/15/06 260,000 287,092
-------------
Total Non-Convertible Corporate Bonds and Notes (Cost $11,668,143) 12,018,080
21 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
PRINCIPAL MARKET VALUE
AMOUNT SEE NOTE 1
- -------------------------------------------------------------------------------------------------------------
STRUCTURED NOTES--2.0%
- -------------------------------------------------------------------------------------------------------------
Deutsche Bank AG, COUNTS Corp. Sec. Credit Linked Nts.,
Series 2003-1, 2.88%, 1/7/05 2,4 $ 950,000 $ 941,355
- -------------------------------------------------------------------------------------------------------------
JPMorgan Chase Bank, TRAC-X NA High Yield T2 Credit
Linked Nts., 6.05%, 3/25/09 10 585,000 576,225
- -------------------------------------------------------------------------------------------------------------
UBS AG, High Grade Credit Linked Nts., 2.753%, 12/10/04 2,4 950,000 953,563
--------------
Total Structured Notes (Cost $2,485,000) 2,471,143
- -------------------------------------------------------------------------------------------------------------
SHORT-TERM NOTES--3.0%
- -------------------------------------------------------------------------------------------------------------
Federal Home Loan Bank, 0.95%, 5/3/04 (Cost $3,799,830) 3,800,000 3,799,823
- -------------------------------------------------------------------------------------------------------------
JOINT REPURCHASE AGREEMENTS--5.4%
- -------------------------------------------------------------------------------------------------------------
Undivided interest of 42.91% in joint repurchase agreement (Principal
Amount/Market Value $15,818,000, with a maturity value of $15,819,186)
with Zion Bank/Capital Markets Group, 0.90%, dated 4/30/04, to be
repurchased at $6,787,509 on 5/3/04, collateralized by U.S. Treasury
Nts., 5.875%, 11/15/05, with a value of $16,157,500 (Cost $6,787,000) 6,787,000 6,787,000
- -------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS, AT VALUE (COST $144,079,923) 121.9% 153,624,221
- -------------------------------------------------------------------------------------------------------------
LIABILITIES IN EXCESS OF OTHER ASSETS (21.9) (27,638,762)
----------------------------------
NET ASSETS 100.0% $ 125,985,459
==================================
FOOTNOTES TO STATEMENT OF INVESTMENTS
1. Non-income producing security.
2. Identifies issues considered to be illiquid or restricted. See Note 8 of
Notes to Financial Statements.
3. Received as the result of issuer reorganization. Currently has minimal market
value.
4. Represents the current interest rate for a variable or increasing rate
security.
5. When-issued security to be delivered and settled after April 30, 2004. See
Note 1 of Notes to Financial Statements.
6. 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 $762,719 or 0.61% of the Fund's net assets as
of April 30, 2004.
7. Principal-Only Strips represent the right to receive the monthly principal
payments on an underlying pool of mortgage loans. The value of these securities
generally increases as interest rates decline and prepayment rates rise. The
price of these securities is typically more volatile than that of coupon-bearing
bonds of the same maturity. Interest rates disclosed represent current yields
based upon the current cost basis and estimated timing of future cash flows.
8. Securities with an aggregate market value of $233,601 are held in
collateralized accounts to cover initial margin requirements on open futures
sales contracts. See Note 6 of Notes to Financial Statements.
9. Zero coupon bond reflects effective yield on the date of purchase.
10. 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
Directors. These securities amount to $1,691,792 or 1.34% of the Fund's net
assets as of April 30, 2004.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
22 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
STATEMENT OF ASSETS AND LIABILITIES Unaudited
- --------------------------------------------------------------------------------
April 30, 2004
- ------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------
ASSETS
- ------------------------------------------------------------------------------------------------------
Investments, at value (cost $144,079,923)--see accompanying statement of investments $ 153,624,221
- ------------------------------------------------------------------------------------------------------
Receivables and other assets:
Investments sold (including $2,442,577 sold on a when-issued basis) 4,229,373
Interest, dividends and principal paydowns 579,813
Shares of capital stock sold 42,520
Futures margins 16,098
Other 7,128
--------------
Total assets 158,499,153
- ------------------------------------------------------------------------------------------------------
LIABILITIES
- ------------------------------------------------------------------------------------------------------
Bank overdraft 466,058
- ------------------------------------------------------------------------------------------------------
Payables and other liabilities:
Investments purchased (including $31,176,983 purchased on a when-issued basis) 31,785,326
Swap contracts 60,168
Shares of capital stock redeemed 54,219
Shareholder communications 51,311
Directors' compensation 28,112
Distribution and service plan fees 26,113
Transfer and shareholder servicing agent fees 22,293
Other 20,094
--------------
Total liabilities 32,513,694
- ------------------------------------------------------------------------------------------------------
NET ASSETS $ 125,985,459
==============
- ------------------------------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS
- ------------------------------------------------------------------------------------------------------
Par value of shares of capital stock $ 9,296
- ------------------------------------------------------------------------------------------------------
Additional paid-in capital 132,212,082
- ------------------------------------------------------------------------------------------------------
Accumulated net investment income 185,186
- ------------------------------------------------------------------------------------------------------
Accumulated net realized loss on investments and foreign currency transactions (15,775,588)
- ------------------------------------------------------------------------------------------------------
Net unrealized appreciation on investments and translation of assets and
liabilities denominated in foreign currencies 9,354,483
--------------
NET ASSETS $ 125,985,459
==============
23 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
STATEMENT OF ASSETS AND LIABILITIES Unaudited / Continued
- --------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------
NET ASSET VALUE PER SHARE
- ------------------------------------------------------------------------------------------
Class A Shares:
Net asset value and redemption price per share (based on net assets
of $103,472,260 and 7,642,880 shares of capital stock outstanding) $13.54
Maximum offering price per share (net asset value plus sales charge
of 5.75% of offering price) $14.37
- ------------------------------------------------------------------------------------------
Class B Shares:
Net asset value, redemption price (excludes applicable contingent deferred
sales charge) and offering price per share (based on net assets of $15,552,369
and 1,132,859 shares of capital stock outstanding) $13.73
- ------------------------------------------------------------------------------------------
Class C Shares:
Net asset value, redemption price (excludes applicable contingent deferred
sales charge) and offering price per share (based on net assets of $5,682,339
and 425,179 shares of capital stock outstanding) $13.36
- ------------------------------------------------------------------------------------------
Class N Shares:
Net asset value, redemption price (excludes applicable contingent deferred
sales charge) and offering price per share (based on net assets of $1,278,491
and 94,748 shares of capital stock outstanding) $13.49
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
24 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
STATEMENT OF OPERATIONS Unaudited
- --------------------------------------------------------------------------------
For the Six Months Ended April 30, 2004
- ---------------------------------------------------------------------------------------
INVESTMENT INCOME
- ---------------------------------------------------------------------------------------
Interest $ 757,474
- ---------------------------------------------------------------------------------------
Dividends (net of foreign withholding taxes of $5,451) 479,945
------------
Total investment income 1,237,419
- ---------------------------------------------------------------------------------------
EXPENSES
- ---------------------------------------------------------------------------------------
Management fees 392,946
- ---------------------------------------------------------------------------------------
Distribution and service plan fees:
Class A 128,831
Class B 77,041
Class C 26,553
Class N 1,653
- ---------------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees:
Class A 108,650
Class B 23,126
Class C 8,356
Class N 1,719
- ---------------------------------------------------------------------------------------
Shareholder communications:
Class A 15,382
Class B 4,378
Class C 1,209
Class N 224
- ---------------------------------------------------------------------------------------
Accounting service fees 7,500
- ---------------------------------------------------------------------------------------
Directors' compensation 3,065
- ---------------------------------------------------------------------------------------
Custodian fees and expenses 1,213
- ---------------------------------------------------------------------------------------
Other 7,130
------------
Total expenses 808,976
Less reduction to custodian expenses (691)
Less voluntary waiver of transfer and shareholder servicing agent fees:
Class A (940)
Class N (636)
------------
Net expenses 806,709
- ---------------------------------------------------------------------------------------
NET INVESTMENT INCOME 430,710
25 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
STATEMENT OF OPERATIONS Unaudited / Continued
- --------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
- ---------------------------------------------------------------------------------------
Net realized gain on:
Investments $ 7,527,374
Closing of futures contracts 219,882
Foreign currency transactions 426
------------
Net realized gain 7,747,682
- ---------------------------------------------------------------------------------------
Net change in unrealized appreciation (depreciation) on:
Investments (3,161,399)
Translation of assets and liabilities denominated in foreign currencies (284)
Futures contracts (75,967)
------------
Net change in unrealized appreciation (3,237,650)
- ---------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 4,940,742
============
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
26 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
SIX MONTHS YEAR
ENDED ENDED
APRIL 30, 2004 OCTOBER 31,
(UNAUDITED) 2003
- --------------------------------------------------------------------------------------------------------------------
OPERATIONS
- --------------------------------------------------------------------------------------------------------------------
Net investment income $ 430,710 $ 1,173,188
- --------------------------------------------------------------------------------------------------------------------
Net realized gain 7,747,682 1,451,451
- --------------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation (3,237,650) 11,944,104
-------------------------------
Net increase in net assets resulting from operations 4,940,742 14,568,743
- --------------------------------------------------------------------------------------------------------------------
DIVIDENDS AND/OR DISTRIBUTIONS TO SHAREHOLDERS
- --------------------------------------------------------------------------------------------------------------------
Dividends from net investment income:
Class A (412,673) (1,140,244)
Class B (897) (45,309)
Class C (1,071) (15,476)
Class N (1,041) (2,774)
- --------------------------------------------------------------------------------------------------------------------
CAPITAL STOCK TRANSACTIONS
- --------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from capital stock transactions:
Class A (358,917) (4,085,561)
Class B 249,419 1,001,740
Class C 851,823 1,212,712
Class N 880,487 109,096
- --------------------------------------------------------------------------------------------------------------------
NET ASSETS
- --------------------------------------------------------------------------------------------------------------------
Total increase 6,147,872 11,602,927
- --------------------------------------------------------------------------------------------------------------------
Beginning of period 119,837,587 108,234,660
-------------------------------
End of period (including accumulated net investment income
of $185,186 and $170,158, respectively) $125,985,459 $119,837,587
===============================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
27 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
SIX MONTHS YEAR
ENDED ENDED
APRIL 30, 2004 OCT. 31,
CLASS A (UNAUDITED) 2003 2002 2001 2000 1999
- -----------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $13.04 $11.56 $12.54 $14.23 $15.03 $15.45
- -----------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .06 .14 .22 .26 .44 .44
Net realized and unrealized gain (loss) .49 1.48 (.94) (1.69) .68 (.01)
--------------------------------------------------------------------------------
Total from investment operations .55 1.62 (.72) (1.43) 1.12 .43
- -----------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions
to shareholders:
Dividends from net investment income (.05) (.14) (.26) (.26) (.44) (.44)
Distributions from net realized gain -- -- -- -- (1.48) (.41)
--------------------------------------------------------------------------------
Total dividends and/or distributions
to shareholders (.05) (.14) (.26) (.26) (1.92) (.85)
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $13.54 $13.04 $11.56 $12.54 $14.23 $15.03
================================================================================
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 1 4.25% 14.17% (5.86)% (10.12)% 8.27% 2.62%
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- -----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $103,472 $100,032 $ 92,806 $112,864 $144,244 $258,159
- -----------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $104,832 $ 94,811 $104,415 $128,477 $172,514 $293,677
- -----------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 2
Net investment income 0.83% 1.18% 1.73% 1.88% 2.88% 2.72%
Total expenses 1.15% 3,4 1.26% 3,4 1.21% 3,4 1.19% 3 1.11% 3 1.04% 3
- -----------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 40% 275% 193% 164% 34% 122%
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.
28 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
SIX MONTHS YEAR
ENDED ENDED
APRIL 30, 2004 OCT. 31,
CLASS B (UNAUDITED) 2003 2002 2001 2000 1999
- ----------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- ----------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $13.23 $11.73 $12.72 $14.43 $15.20 $15.62
- ----------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income -- 1 .04 .11 .15 .30 .31
Net realized and unrealized gain (loss) .50 1.50 (.94) (1.70) .73 --
-----------------------------------------------------------------------------
Total from investment operations .50 1.54 (.83) (1.55) 1.03 .31
- ----------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions
to shareholders:
Dividends from net investment income -- 1 (.04) (.16) (.16) (.32) (.32)
Distributions from net realized gain -- -- -- -- (1.48) (.41)
-----------------------------------------------------------------------------
Total dividends and/or distributions
to shareholders -- (.04) (.16) (.16) (1.80) (.73)
- ----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $13.73 $13.23 $11.73 $12.72 $14.43 $15.20
=============================================================================
- ----------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2 3.79% 13.21% (6.61)% (10.79)% 7.48% 1.84%
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ----------------------------------------------------------------------------------------------------------------------------------
pNet assets, end of period (in thousands) $15,552 $14,747 $12,204 $14,770 $17,892 $23,522
- ----------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $15,505 $12,776 $13,639 $16,569 $19,643 $24,648
- ----------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income (loss) (0.04)% 0.31% 0.94% 1.14% 2.12% 1.97%
Total expenses 2.02% 2.15% 2.00% 1.94% 1.87% 1.80%
Expenses after expense reimbursement
or fee waiver and reduction
to custodian expenses N/A 4 2.11% N/A 4,5 N/A 4 N/A 4 N/A 4
- ----------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 40% 275% 193% 164% 34% 122%
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 distributions reinvested in additional shares on
the reinvestment date, and redemption at the net asset value calculated on the
last business day of the fiscal period. Sales charges are not reflected in the
total returns. Total returns are not annualized for periods of less than one
full year. Returns do not reflect the deduction of taxes that a shareholder
would pay on Fund distributions or the redemption of Fund shares.
3. Annualized for periods of less than one full year.
4. Reduction to custodian expenses less than 0.01%.
5. Voluntary waiver of transfer agent fees less than 0.01%.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
29 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
FINANCIAL HIGHLIGHTS Continued
- --------------------------------------------------------------------------------
SIX MONTHS YEAR
ENDED ENDED
APRIL 30, 2004 OCT. 31,
CLASS C (UNAUDITED) 2003 2002 2001 2000 1999
- ---------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- ---------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $12.88 $11.43 $12.41 $14.08 $14.88 $15.31
- ---------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .01 .07 .13 .13 .28 .32
Net realized and unrealized gain (loss) .47 1.43 (.94) (1.64) .72 (.01)
------------------------------------------------------------------------------
Total from investment operations .48 1.50 (.81) (1.51) 1.00 .31
- ---------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions
to shareholders:
Dividends from net investment income -- 1 (.05) (.17) (.16) (.32) (.33)
Distributions from net realized gain -- -- -- -- (1.48) (.41)
------------------------------------------------------------------------------
Total dividends and/or distributions
to shareholders -- (.05) (.17) (.16) (1.80) (.74)
- ---------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $13.36 $12.88 $11.43 $12.41 $14.08 $14.88
==============================================================================
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2 3.75% 13.18% (6.64)% (10.76)% 7.44% 1.84%
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ---------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $5,682 $4,666 $2,984 $2,893 $3,931 $5,719
- ---------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $5,350 $3,806 $2,961 $3,280 $4,255 $5,876
- ---------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income (loss) (0.05)% 0.29% 0.93% 1.14% 2.13% 1.97%
Total expenses 2.02% 2.17% 2.00% 1.94% 1.86% 1.80%
Expenses after expense reimbursement
or fee waiver and reduction
to custodian expenses N/A 4 2.12% N/A 4,5 N/A 4 N/A 4 N/A 4
- ---------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 40% 275% 193% 164% 34% 122%
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 distributions reinvested in additional shares on
the reinvestment date, and redemption at the net asset value calculated on the
last business day of the fiscal period. Sales charges are not reflected in the
total returns. Total returns are not annualized for periods of less than one
full year. Returns do not reflect the deduction of taxes that a shareholder
would pay on Fund distributions or the redemption of Fund shares.
3. Annualized for periods of less than one full year.
4. Reduction to custodian expenses less than 0.01%.
5. Voluntary waiver of transfer agent fees less than 0.01%.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
3O | OPPENHEIMER DISCIPLINED ALLOCATION FUND
SIX MONTHS YEAR
ENDED ENDED
APRIL 30, 2004 OCT. 31,
CLASS N (UNAUDITED) 2003 2002 2001 1
- ----------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- ----------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $13.00 $11.52 $12.52 $13.74
- ----------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .06 .12 .16 .12
Net realized and unrealized gain (loss) .46 1.46 (.91) (1.20)
-----------------------------------------------------
Total from investment operations .52 1.58 (.75) (1.08)
- ----------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.03) (.10) (.25) (.14)
Distributions from net realized gain -- -- -- --
-----------------------------------------------------
Total dividends and/or distributions to shareholders (.03) (.10) (.25) (.14)
- ----------------------------------------------------------------------------------------------------------------
Net asset value, end of period $13.49 $13.00 $11.52 $12.52
=====================================================
- ----------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2 4.00% 13.81% (6.17)% (7.90)%
- ----------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ----------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $1,278 $392 $241 $2
- ----------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $670 $342 $160 $1
- ----------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income 0.38% 0.79% 1.28% 1.04%
Total expenses 1.75% 2.04% 1.60% 1.68%
Expenses after expense reimbursement or fee waiver
and reduction to custodian expenses 1.56% 1.58% N/A 4,5 N/A 4
- ----------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 40% 275% 193% 164%
1. For the period from March 1, 2001 (inception of offering) to October 31,
2001.
2. Assumes an investment on the business day before the first day of the fiscal
period, with all dividends and distributions reinvested in additional shares on
the reinvestment date, and redemption at the net asset value calculated on the
last business day of the fiscal period. Sales charges are not reflected in the
total returns. Total returns are not annualized for periods of less than one
full year. Returns do not reflect the deduction of taxes that a shareholder
would pay on Fund distributions or the redemption of Fund shares.
3. Annualized for periods of less than one full year.
4. Reduction to custodian expenses less than 0.01%.
5. Voluntary waiver of transfer agent fees less than 0.01%.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
31 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
NOTES TO FINANCIAL STATEMENTS Unaudited
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
Oppenheimer Disciplined Allocation Fund (the Fund), a series of Oppenheimer
Series Fund, Inc. (the Company), is registered under the Investment Company Act
of 1940, as amended, as an open-end management investment company. The Fund's
investment objective is to seek to maximize total investment return (including
capital appreciation and income) principally by allocating its assets among
stocks, corporate bonds, U.S. government securities and money market
instruments, according to changing market conditions. The Fund's investment
advisor is OppenheimerFunds, Inc. (the Manager).
The Fund offers Class A, Class B, Class C and Class N 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. 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. Class B
shares will automatically convert to Class A shares six years after the date of
purchase.
The following is a summary of significant accounting policies consistently
followed by the Fund.
- --------------------------------------------------------------------------------
SECURITIES VALUATION. The Fund calculates the net asset value of its shares as
of the close of The New York Stock Exchange (the Exchange), normally 4:00 P.M.
Eastern time, on each day the Exchange is open for business. 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 Directors. Securities
(including restricted securities) for which market quotations are not readily
available are valued at their fair value. Foreign 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 Directors. Short-term "money market type" debt securities with
remaining maturities of sixty days or less are valued at amortized cost (which
approximates market value).
32 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
- --------------------------------------------------------------------------------
STRUCTURED NOTES. The Fund invests in structured notes whose market values,
interest rates and/or redemption prices are linked to the performance of
underlying foreign currencies, interest rate spreads, stock market indices,
prices of individual securities, commodities or other financial instruments or
the occurrence of other specific events. The structured notes are often
leveraged, increasing the volatility of each note's market value relative to the
change in the underlying linked financial element or event. Fluctuations in
value of these securities 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 April 30, 2004, the market value of
these securities comprised 2.0% of the Fund's net assets and resulted in
unrealized cumulative losses of $13,857.
- --------------------------------------------------------------------------------
SECURITIES ON A WHEN-ISSUED (OR FORWARD COMMITMENT) BASIS. Delivery and payment
for securities that have been purchased by the Fund on a when-issued basis can
take place ten days 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. As of April 30, 2004,
the value of the segregated assets was $25,945,399. The purchase of securities
on a when-issued (or forward commitment) basis may increase the volatility of
the Fund's net asset value to the extent the Fund executes such transactions
while remaining substantially fully invested. The Fund may also sell securities
that it purchased on a when-issued basis prior to settlement of the original
purchase. As of April 30, 2004, the Fund had purchased $31,176,983 of securities
on a when-issued basis and sold $2,442,577 of securities issued on a when-issued
basis.
In connection with its ability to purchase or sell 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 realized gain (loss) on investments or as fee income in the case
of such transactions that have an associated fee in lieu of a difference in the
forward purchase and sale price.
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 at redelivery as compared to the
securities sold to the counterparty; counterparty credit risk; and the potential
pay down speed variance between the mortgage-related pools.
33 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES Continued
FOREIGN CURRENCY TRANSLATION. The Fund's accounting records are maintained in
U.S. dollars. Prices of securities denominated in foreign currencies are
translated into U.S. dollars at the closing rates of exchange. Amounts related
to the purchase and sale of foreign securities and investment income are
translated at the rates of exchange prevailing on the respective dates of such
transactions.
Reported net realized foreign exchange gains or losses arise from sales of
portfolio securities, sales and maturities of short-term securities, sales of
foreign currencies, currency gains or losses realized between the trade and
settlement dates on securities transactions, and the difference between the
amounts of dividends, interest, and foreign withholding taxes recorded on the
Fund's books and the U.S. dollar equivalent of the amounts actually received or
paid. Net unrealized foreign exchange gains and losses arise from changes in the
values of assets and liabilities, including investments in securities at fiscal
period end, resulting from changes in exchange rate.
The effect of changes in foreign currency exchange rates on investments is
separately identified from the fluctuations arising from changes in market
values of securities held and reported with all other foreign currency gains and
losses in the Fund's Statement of Operations.
- --------------------------------------------------------------------------------
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. These balances are invested in one or more repurchase
agreements. Securities pledged as collateral for repurchase agreements are held
by a custodian bank until the agreements mature. Each agreement requires that
the market value of the collateral be sufficient to cover payments of interest
and principal. In the event of default by the other party to the agreement,
retention of the collateral may be subject to legal proceedings.
- --------------------------------------------------------------------------------
ALLOCATION OF INCOME, EXPENSES, GAINS AND LOSSES. Income, expenses (other than
those attributable to a specific class), gains and losses are allocated on a
daily basis to each class of shares based upon the relative proportion of net
assets represented by such class. Operating expenses directly attributable to a
specific class are charged against the operations of that class.
- --------------------------------------------------------------------------------
FEDERAL TAXES. The Fund intends to comply with provisions of the Internal
Revenue Code applicable to regulated investment companies and to distribute
substantially all of its investment company taxable income, including any net
realized gain on investments not offset by capital loss carryforwards, if any,
to shareholders, therefore, no federal income or excise tax provision is
required.
Net investment income (loss) and net realized gain (loss) may differ for
financial statement and tax purposes. The character of dividends and
distributions made during the fiscal year from net investment income or net
realized gains may differ from their ultimate characterization for federal
income tax purposes. Also, due to timing of dividends
34 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
and distributions, the fiscal year in which amounts are distributed may differ
from the fiscal year in which the income or net realized gain was recorded by
the Fund.
As of April 30, 2004, the Fund had available for federal income tax
purposes an estimated unused capital loss carryforward of $15,207,267 expiring
by 2012. This estimated capital loss carryforward represents carryforward as of
the end of the last fiscal year, increased for losses deferred under tax
accounting rules to the current fiscal year and is increased or decreased by
capital losses or gains realized in the first six months of the current fiscal
year. During the six months ended April 30, 2004 and the year ended October 31,
2003, the Fund used $7,747,682 and $1,129,404, respectively, of carryforward to
offset capital gains realized.
As of October 31, 2003, the Fund had available for federal income tax purposes
unused capital loss carryforwards as follows:
EXPIRING
--------------------------
2009 $12,735,068
2010 10,219,881
-----------
Total $22,954,949
===========
- --------------------------------------------------------------------------------
DIRECTORS' COMPENSATION. The Fund has adopted an unfunded retirement plan for
the Fund's independent directors. Benefits are based on years of service and
fees paid to each director during the years of service. During the six months
ended April 30, 2004, the Fund's projected benefit obligations were increased by
$1,198 and payments of $1,482 were made to retired directors, resulting in an
accumulated liability of $23,756 as of April 30, 2004.
The Board of Directors has adopted a deferred compensation plan for
independent directors that enable directors to elect to defer receipt of all or
a portion of the annual compensation they are entitled to receive from the Fund.
For purposes of determining the amount owed to the under the plan, deferred
amounts are treated as though equal dollar amounts had been invested in shares
of the Fund or in other Oppenheimer funds selected by the Director. The Fund
does purchase shares of the funds selected for deferral by the Director in
amounts equal to his or her deemed investment, resulting in a Fund asset equal
to the deferred compensation liability. Such assets are included as a component
of "Other" within the asset section of the Statement of Assets and Liabilities.
Deferral of directors' 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.
35 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES Continued
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.
- --------------------------------------------------------------------------------
OTHER. The preparation of financial statements in conformity with U.S. generally
accepted accounting principles 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.
In the ordinary course of business, the Fund enters into contracts that
contain a variety of indemnifications. The Fund's maximum exposure under these
arrangements is unknown. However, the Fund has not had prior claims or losses
pursuant to these contracts and expects the risk of loss to be remote.
- --------------------------------------------------------------------------------
2. SHARES OF CAPITAL STOCK
The Fund has authorized 550 million shares of $0.001 par value capital stock.
Transactions in shares of capital stock were as follows:
SIX MONTHS ENDED APRIL 30, 2004 YEAR ENDED OCTOBER 31, 2003
SHARES AMOUNT SHARES AMOUNT
- ----------------------------------------------------------------------------------------------------
CLASS A
Sold 597,893 $ 8,221,047 999,373 $ 12,060,988
Dividends and/or
distributions reinvested 29,481 396,413 91,508 1,096,971
Redeemed (655,212) (8,976,377) (1,446,531) (17,243,520)
------------------------------------------------------------------
Net decrease (27,838) $ (358,917) (355,650) $ (4,085,561)
==================================================================
- ----------------------------------------------------------------------------------------------------
CLASS B
Sold 203,988 $ 2,831,855 443,368 $ 5,482,870
Dividends and/or
distributions reinvested 62 837 3,597 42,750
Redeemed (185,934) (2,583,273) (372,443) (4,523,880)
------------------------------------------------------------------
Net increase 18,116 $ 249,419 74,522 $ 1,001,740
==================================================================
36 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
SIX MONTHS ENDED APRIL 30, 2004 YEAR ENDED OCTOBER 31, 2003
SHARES AMOUNT SHARES AMOUNT
- ----------------------------------------------------------------------------------------------------
CLASS C
Sold 101,489 $ 1,373,347 186,268 $ 2,221,285
Dividends and/or
distributions reinvested 78 1,025 1,273 14,766
Redeemed (38,637) (522,549) (86,326) (1,023,339)
--------------------------------------------------------------
Net increase 62,930 $ 851,823 101,215 $ 1,212,712
==============================================================
- ----------------------------------------------------------------------------------------------------
CLASS N
Sold 65,742 $ 896,525 21,478 $ 261,761
Dividends and/or
distributions reinvested 77 1,038 230 2,766
Redeemed (1,240) (17,076) (12,426) (155,431)
--------------------------------------------------------------
Net increase 64,579 $ 880,487 9,282 $ 109,096
===============================================================
- --------------------------------------------------------------------------------
3. PURCHASES AND SALES OF SECURITIES
The aggregate cost of purchases and proceeds from sales of securities, other
than U.S. government obligations and short-term obligations, for the six months
ended April 30, 2004, were $37,005,808 and $44,953,175, respectively. There were
purchases of $8,159,538 and sales of $2,985,756 of U.S. government and
government agency obligations for the six months ended April 30, 2004.
- --------------------------------------------------------------------------------
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES
MANAGEMENT FEES. Management fees paid to the Manager were in accordance with the
investment advisory agreement with the Fund which provides for a fee at an
annual rate of 0.625% of the first $300 million of average annual net assets of
the Fund, 0.50% of the next $100 million, and 0.45% of average annual net assets
in excess of $400 million.
- --------------------------------------------------------------------------------
ACCOUNTING FEES. The Manager acts as the accounting agent for the Fund at an
annual fee of $15,000, plus out-of-pocket costs and expenses reasonably
incurred.
- --------------------------------------------------------------------------------
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 April 30, 2004, the Fund paid
$143,383 to OFS for services to the Fund.
OFS has voluntarily agreed to limit transfer and shareholder servicing
agent fees for all classes to 0.35% of average annual net assets per class. 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.
37 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES Continued
SERVICE PLAN FOR CLASS A SHARES. The Fund has adopted a Service Plan for Class A
shares. It reimburses the Distributor for a portion of its costs incurred for
services provided to accounts that hold Class A shares. Reimbursement is made
quarterly at an annual rate of up to 0.25% of the average annual net assets of
Class A shares of the Fund. The Distributor currently uses all of those fees to
pay dealers, brokers, banks and other financial institutions quarterly for
providing personal services and maintenance of accounts of their customers that
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 those 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 Directors and its independent
directors 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 April 30, 2004 for Class B, Class C and Class N shares were $467,672,
$120,675 and $15,647, 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
- ----------------------------------------------------------------------------------------------------
April 30, 2004 $36,807 $79 $17,544 $394 $64
38 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
- --------------------------------------------------------------------------------
5. FOREIGN CURRENCY CONTRACTS
A foreign currency contract is a commitment to purchase or sell a foreign
currency at a future date, at a negotiated rate. The Fund may enter into foreign
currency contracts to settle specific purchases or sales of securities
denominated in a foreign currency and for protection from adverse exchange rate
fluctuation. Risks to the Fund include the potential inability of the
counterparty to meet the terms of the contract.
The net U.S. dollar value of foreign currency underlying all contractual
commitments held by the Fund and the resulting unrealized appreciation or
depreciation are determined using prevailing foreign currency exchange rates.
Unrealized appreciation and depreciation on foreign currency contracts are
reported in the Statement of Assets and Liabilities as a receivable or payable
and in the Statement of Operations with the change in unrealized appreciation or
depreciation.
The Fund may realize a gain or loss upon the closing or settlement of the
foreign transaction. Contracts closed or settled with the same broker are
recorded as net realized gains or losses. Such realized gains and losses are
reported with all other foreign currency gains and losses in the Statement of
Operations.
As of April 30, 2004, the Fund had no outstanding foreign currency
contracts.
- --------------------------------------------------------------------------------
6. 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) or debt securities (interest rate futures) in order to gain
exposure to or protection from changes in market value of stocks and bonds or
interest rates. The Fund may also buy or write put or call options on these
futures contracts.
The Fund generally sells futures contracts as a hedge against increases in
interest rates and decreases in market value of portfolio securities. The Fund
may also purchase futures contracts to gain exposure to market changes as it may
be more efficient or cost effective than actually buying securities.
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 has expired.
Cash held by the broker to cover initial margin requirements on open
futures contracts is noted in the Statement of Assets and Liabilities.
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 and/or payable for the
daily mark to market for variation margin. Realized gains and losses are
reported
39 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
6. FUTURES CONTRACTS Continued
in the Statement of Operations as the closing and expiration of futures
contracts. The net change in unrealized appreciation and depreciation is
reported on the Statement of Operations.
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 April 30, 2004, the Fund had outstanding futures contracts as follows:
UNREALIZED
EXPIRATION NUMBER OF VALUATION AS OF APPRECIATION
CONTRACT DESCRIPTION DATES CONTRACTS APRIL 30, 2004 (DEPRECIATION)
- ----------------------------------------------------------------------------------------------
CONTRACTS TO PURCHASE
U.S. Long Bonds 6/21/04 25 $2,677,344 $ (116,203)
U.S. Treasury Nts., 10 yr 6/21/04 50 5,525,000 (121,963)
-----------
(238,166)
-----------
CONTRACTS TO SELL
U.S. Treasury Nts., 2 yr 6/30/04 33 7,014,047 33,005
U.S. Treasury Nts., 5 yr 6/21/04 40 4,397,500 75,264
-----------
108,269
-----------
$ (129,897)
===========
- --------------------------------------------------------------------------------
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 unrealized
gain (loss), 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 April 30, 2004, the Fund had entered into the following total return swap
agreements:
PAID BY RECEIVED BY
NOTIONAL THE FUND AT THE FUND AT TERMINATION UNREALIZED
SWAP COUNTERPARTY AMOUNT APRIL 30, 2004 APRIL 30, 2004 DATE DEPRECIATION
- ------------------------------------------------------------------------------------------------------------
Value of total
One-Month return of Lehman
LIBOR less 50 Brothers CMBS
Deutsche Bank AG $1,758,423 basis points Index 6/30/04 $60,168
Index abbreviations are noted below:
CMBS Commercial Mortgage Backed Securities Markets
40 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
- --------------------------------------------------------------------------------
8. ILLIQUID OR RESTRICTED SECURITIES
As of April 30, 2004, investments in securities included issues that are
illiquid or restricted. Restricted securities are purchased in private placement
transactions, are not registered under the Securities Act of 1933, may have
contractual restrictions on resale, and are valued under methods approved by the
Board of Directors as reflecting fair value. A security may also be considered
illiquid if it lacks a readily available market or if its valuation has not
changed for a certain period of time. The Fund intends to invest no more than
10% of its net assets (determined at the time of purchase and reviewed
periodically) in illiquid or restricted securities. Certain restricted
securities, eligible for resale to qualified institutional investors, are not
subject to that limitation. The aggregate value of illiquid or restricted
securities subject to this limitation as of April 30, 2004 was $2,667,045, which
represents 2.12% of the Fund's net assets, of which zero is considered
restricted. Information concerning restricted securities is as follows:
VALUATION
AS OF UNREALIZED
SECURITY ACQUISITION DATE COST APRIL 30, 2004 DEPRECIATION
- --------------------------------------------------------------------------------------------------------
STOCKS AND/OR WARRANTS
Geotek Communications, Inc.,
Series B, Escrow Shares 1/4/01 $400 $-- $400
- --------------------------------------------------------------------------------
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 Directors 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 Directors, 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 April 30, 2004.
41 | OPPENHEIMER DISCIPLINED ALLOCATION 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.
42 | OPPENHEIMER DISCIPLINED ALLOCATION 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 Directors of the registrant has determined that the
registrant does not have an audit committee financial expert serving on its
Audit Committee. In this regard, no member of the Audit Committee was identified
as having all of the technical attributes identified in Instruction 2(b) to Item
3 of Form N-CSR to qualify as an "audit committee financial expert," whether
through the type of specialized education or experience described in that
Instruction. The Board has concluded that while the members of the Audit
Committee collectively have the necessary attributes and experience required to
serve effectively as an Audit Committee, no single member possesses all of the
required technical attributes through the particular methods of education or
experience set forth in the Instructions to be designated as an audit committee
financial expert.
Item 4. Principal Accountant Fees and Services
Not applicable to semiannual reports.
Item 5. Not applicable
Item 6. Schedule of Investments
Not applicable
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
directors. 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 directors 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 Directors 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 Directors of the named Registrant, c/o
the Secretary of the Registrant.
The Committee's process for identifying and evaluating nominees for
directors 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 April 30, 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)