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 811-21208
Oppenheimer Select Value Fund
(Exact name of registrant as specified in charter)
6803 South Tucson Way, Centennial, Colorado 80112-3924
(Address of principal executive offices)
(Zip code)
Robert G. Zack, Esq.
OppenheimerFunds, Inc.
Two World Financial Center, New York, New York 10281-1008
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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: April 30
Date of reporting period: May 1, 2003 - April 30, 2004
Item 1. Reports to Stockholders.
FUND PERFORMANCE DISCUSSION
HOW HAS THE FUND PERFORMED? BELOW IS A DISCUSSION BY OPPENHEIMERFUNDS, INC., OF
THE FUND'S PERFORMANCE DURING ITS FISCAL YEAR ENDED APRIL 30, 2004, FOLLOWED BY
A GRAPHICAL COMPARISON OF THE FUND'S PERFORMANCE TO AN APPROPRIATE BROAD-BASED
MARKET INDEX.
MANAGEMENT'S DISCUSSION OF FUND PERFORMANCE. Oppenheimer Select Value Fund
enjoyed favorable performance on both an absolute and relative basis during the
past 12 months, performing on par with its Lipper Multi Cap Funds category.
Decisions within all of the Fund's sectors provided positive contributions to
relative performance during the past 12 months--an unusual but welcome
occurrence. The greatest favorable impact on relative performance was generated
by investments in the technology, consumer discretionary, and health care
sectors.
In technology, the Fund was helped by investments in Flextronics
International Ltd. and Titan Corp. Flextronics, a contract manufacturer for
leading technology firms, continued to benefit from increased business as more
companies look to outsource areas of their operations. Shares of Titan, which
provides information-technology services to government agencies, gained after
the company agreed to be acquired by defense contractor Lockheed Martin Corp. In
the consumer discretionary sector, the Fund was helped by investments in
clothing retailer Casual Male Corp. and restaurant giant McDonalds Corp., both
of which continued to successfully turn around formerly flagging businesses. In
health care, benefits provider Aetna Inc. improved profitability and was a
strong performer for the portfolio. At the end of the period, the Fund no longer
held positions in Titan, Casual Male, Flextronics, and Aetna.
Certain individual holdings modestly detracted from results. One of these
detractors was transportation company CNF Inc., which was hurt by prolonged
problems with its freight forwarding business. Our concerns about CNF's ability
to fix these problems led us to sell the Fund's position in the stock. A second
disappointment was communications provider AT&T Corp., hurt by
greater-than-expected price competition.
Throughout the reporting period we followed a consistent investment strategy,
as we attempt to do in all types of market conditions. Our approach continued to
be to own what we believe are the best value stocks in each sector of the
economy. We searched for attractively valued large-cap, mid-cap, and small-cap
stocks offering the potential for earnings growth. During the period, such a
strategy resulted in an underweighting of the financials sector because we
anticipated many financial companies would experience slower earnings growth. We
also maintained a modest overweight in industrial stocks because we were able to
identify a number of companies in this area that we believed were attractively
valued.
At period end, the Fund's largest position was in Bank of America Corp., the
third-largest bank in the United States. We took advantage of a drop in Bank of
America's stock price, following investors' negative reaction to an announced
merger with rival FleetBoston Financial Corporation. The lower valuation meant
that Bank of America was trading at a discount to its competitors. We also
believed the company may be positioned to gain market share in many of its key
markets.
In the energy sector, the Fund continued to own a significant position in
British Petroleum Company plc, the world's largest oil company. In our view, we
expect BP to continue to grow production at a superior rate compared to many of
its peers, and this production gap could widen over time. We also favor the
company's plans to return some of its substantial cash flow to shareholders--an
action we believe will help the stock's total return.
In the media sector, the Fund had significant holdings in cable-television
company UnitedGlobalCom, Inc. at the end of the period. Most of
UnitedGlobalCom's assets are located abroad, in markets that are generally less
competitive than the United States. In our opinion, the company's business
prospects compare favorably with those of other cable and satellite operators,
yet its stock is valued more inexpensively.
7 | OPPENHEIMER SELECT VALUE FUND
FUND PERFORMANCE DISCUSSION
COMPARING THE FUND'S PERFORMANCE TO THE MARKET. The graph that follows shows the
performance of a hypothetical $10,000 investment in Class A shares of the Fund
held until April 30, 2004. In the case of Class A shares, performance is
measured from the inception of the class on November 26, 2002. The Fund's
performance reflects the deduction of the maximum initial sales charge on Class
A shares and reinvestments of all dividends and capital gains distributions.
Past performance cannot guarantee future results.
The Fund's performance is compared to the performance of the Russell 3000
Value Index, an unmanaged, broad index of U.S. equities. Index performance
reflects the reinvestment of income but does not consider the effect of
transaction costs, and none of the data in the graphs shows the effect of taxes.
The Fund's performance reflects the effects of the Fund's business and operating
expenses. While index comparisons may be useful to provide a benchmark for the
Fund's performance, it must be noted that the Fund's investments are not limited
to the investments in the index.
8 | OPPENHEIMER SELECT VALUE FUND
CLASS A SHARES
COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN:
-- Oppenheimer Select Value Fund (Class A)
-- Russell 3000 Value Index
[LINE CHART]
Value of Investment Russell
Date In Fund 3000 Index
11/26/2002 9,425 10,000
01/31/2003 9,199 9,204
04/30/2003 9,585 9,895
07/31/2003 10,961 10,877
10/31/2003 11,828 11,663
01/31/2004 13,542 12,623
04/30/2004 13,134 12,379
AVERAGE ANNUAL TOTAL RETURNS OF CLASS A SHARES WITH SALES CHARGE OF THE FUND
AT 4/30/04
1-YEAR 29.14% SINCE INCEPTION 21.04% INCEPTION DATE 11/26/02
THE PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE, WHICH DOES NOT
GUARANTEE FUTURE RESULTS. THE INVESTMENT RETURN AND PRINCIPAL VALUE OF AN
INVESTMENT IN THE FUND WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN
REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. CURRENT
PERFORMANCE MAY BE LOWER OR HIGHER THAN THE PERFORMANCE QUOTED. FOR PERFORMANCE
DATA CURRENT TO THE MOST RECENT MONTH END, VISIT US AT WWW.OPPENHEIMERFUNDS.COM,
OR CALL US AT 1.800.525.7048. FUND RETURNS INCLUDE CHANGES IN SHARE PRICE,
REINVESTED DISTRIBUTIONS, AND THE APPLICABLE SALES CHARGE: FOR CLASS A SHARES,
THE CURRENT MAXIMUM INITIAL SALES CHARGE OF 5.75%. WITHOUT A VOLUNTARY EXPENSE
LIMIT THAT CAN BE TERMINATED AT ANY TIME, FUND PERFORMANCE WOULD HAVE BEEN
LOWER. SEE PAGE 10 FOR FURTHER INFORMATION.
9 | OPPENHEIMER SELECT VALUE FUND
NOTES
TOTAL RETURNS INCLUDE CHANGES IN SHARE PRICE AND REINVESTMENT OF DIVIDENDS AND
CAPITAL GAINS DISTRIBUTIONS IN A HYPOTHETICAL INVESTMENT FOR THE PERIODS SHOWN.
CUMULATIVE TOTAL RETURNS ARE NOT ANNUALIZED. THE FUND'S TOTAL RETURNS SHOWN DO
NOT REFLECT THE DEDUCTION OF INCOME TAXES ON AN INDIVIDUAL'S INVESTMENT. TAXES
MAY REDUCE YOUR ACTUAL INVESTMENT RETURNS ON INCOME OR GAINS PAID BY THE FUND OR
ANY GAINS YOU MAY REALIZE IF YOU SELL YOUR SHARES.
INVESTORS SHOULD CONSIDER THE FUND'S INVESTMENT OBJECTIVES, RISKS, AND OTHER
CHARGES AND EXPENSES CAREFULLY BEFORE INVESTING. THE FUND'S PROSPECTUS CONTAINS
THIS AND OTHER INFORMATION ABOUT THE FUND, AND MAY BE OBTAINED BY ASKING YOUR
FINANCIAL ADVISOR, CALLING US AT 1.800.525.7048 OR VISITING OUR WEBSITE AT
WWW.OPPENHEIMERFUNDS.COM. READ THE PROSPECTUS CAREFULLY BEFORE INVESTING.
Please remember this Fund has a limited operating history.
CLASS A shares of the Fund were first offered on 11/26/02. Unless otherwise
noted, Class A returns include the current maximum initial sales charge of
5.75%.
CLASS B shares of the Fund were first publicly offered on 2/27/04. Unless
otherwise noted, Class B returns include the applicable contingent deferred
sales charge of 5% (1-year) and 2% (5-year). Class B shares are subject to an
annual 0.75% asset-based sales charge.
CLASS C shares of the Fund were first publicly offered on 2/27/04. Unless
otherwise noted, Class C returns include the contingent deferred sales charge of
1% for the 1-year period. Class C shares are subject to an annual 0.75%
asset-based sales charge.
CLASS N shares of the Fund were first publicly offered on 2/27/04. Class N
shares are offered only through retirement plans. Unless otherwise noted, Class
N returns include the contingent deferred sales charge of 1% for the 1-year
period Class N shares are subject to an annual 0.25% asset-based sales charge.
CLASS Y shares of the Fund were first publicly offered on 2/27/04. Class Y
shares are offered only to certain institutional investors under special
agreement with the Distributor.
An explanation of the calculation of performance is in the Fund's Statement of
Additional Information.
10 | OPPENHEIMER SELECT VALUE FUND
STATEMENT OF INVESTMENTS April 30, 2004
MARKET VALUE
SHARES SEE NOTE 1
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COMMON STOCKS--97.8%
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CONSUMER DISCRETIONARY--13.5%
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HOTELS, RESTAURANTS & LEISURE--1.6%
McDonald's Corp. 4,000 $ 108,920
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MEDIA--9.8%
AMC Entertainment, Inc. 1 3,800 60,610
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Liberty Media Corp., Cl. A 1 29,700 324,918
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UnitedGlobalCom, Inc., Cl. A 1 40,190 300,621
-----------
686,149
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MULTILINE RETAIL--1.4%
Dollar Tree Stores, Inc. 1 3,700 99,715
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SPECIALTY RETAIL--0.7%
Boise Cascade Corp. 1,566 52,821
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CONSUMER STAPLES--6.4%
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FOOD & STAPLES RETAILING--1.8%
Costco Wholesale Corp. 1 3,400 127,330
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TOBACCO--4.6%
Altria Group, Inc. 5,800 321,204
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ENERGY--8.7%
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ENERGY EQUIPMENT & SERVICES--1.7%
Halliburton Co. 2,000 59,600
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Pride International, Inc. 1 3,400 57,358
-----------
116,958
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OIL & GAS--7.0%
BP plc, ADR 6,400 338,560
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Energy Partners Ltd. 1 3,700 51,800
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Frontier Oil Corp. 3,200 56,896
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LUKOIL, Sponsored ADR 400 43,600
-----------
490,856
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FINANCIALS--25.6%
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COMMERCIAL BANKS--9.7%
Bank of America Corp. 4,432 356,732
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SouthTrust Corp. 3,500 108,780
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Wells Fargo & Co. 3,800 214,548
-----------
680,060
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DIVERSIFIED FINANCIAL SERVICES--7.9%
Citigroup, Inc. 4,100 197,169
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Merrill Lynch & Co., Inc. 900 48,807
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Morgan Stanley 3,900 200,421
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SLM Corp. 2,800 107,268
-----------
553,665
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INSURANCE--8.0%
Platinum Underwriters Holdings Ltd. 6,100 195,078
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Protective Life Corp. 1,300 46,748
- -------------------------------------------------------------------------------
Prudential Financial, Inc. 5,700 250,458
MARKET VALUE
SHARES SEE NOTE 1
- -------------------------------------------------------------------------------
INSURANCE Continued
UnumProvident Corp. 4,100 $ 63,755
-----------
556,039
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HEALTH CARE--5.2%
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BIOTECHNOLOGY--2.1%
MedImmune, Inc. 1 6,100 147,864
- -------------------------------------------------------------------------------
HEALTH CARE PROVIDERS & SERVICES--1.7%
PacifiCare Health Systems, Inc. 1 500 17,880
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Province Healthcare Co. 1 6,200 99,138
-----------
117,018
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PHARMACEUTICALS--1.4%
Watson Pharmaceuticals, Inc. 1 2,800 99,708
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INDUSTRIALS--16.4%
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AEROSPACE & DEFENSE--8.9%
Boeing Co. 1,700 72,573
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Empresa Brasileira de
Aeronautica SA, ADR 4,000 103,200
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Orbital Sciences Corp. 1 8,000 103,040
- -------------------------------------------------------------------------------
Raytheon Co. 10,600 341,956
-----------
620,769
- -------------------------------------------------------------------------------
COMMERCIAL SERVICES & SUPPLIES--2.6%
Cendant Corp. 7,600 179,968
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INDUSTRIAL CONGLOMERATES--4.9%
General Electric Co. 9,200 275,540
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Tyco International Ltd. 2,500 68,625
-----------
344,165
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INFORMATION TECHNOLOGY--11.6%
- -------------------------------------------------------------------------------
COMMUNICATIONS EQUIPMENT--1.3%
QUALCOMM, Inc. 1,500 93,690
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COMPUTERS & PERIPHERALS--2.0%
Hewlett-Packard Co. 7,200 141,840
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INTERNET SOFTWARE & SERVICES--0.9%
Net2Phone, Inc. 1 16,300 63,407
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IT SERVICES--3.2%
CSG Systems International, Inc. 1 9,200 154,468
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Unisys Corp. 1 5,200 67,756
-----------
222,224
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SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT--0.2%
National Semiconductor Corp. 1 400 16,316
- -------------------------------------------------------------------------------
SOFTWARE--4.0%
Compuware Corp. 1 8,900 68,085
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Pegasystems, Inc. 1 7,800 67,080
- -------------------------------------------------------------------------------
Take-Two Interactive Software, Inc. 1 4,900 141,561
-----------
276,726
11 | OPPENHEIMER SELECT VALUE FUND
STATEMENT OF INVESTMENTS Continued
MARKET VALUE
SHARES SEE NOTE 1
- -------------------------------------------------------------------------------
MATERIALS--2.2%
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CHEMICALS--2.2%
Dow Chemical Co. 2,200 $ 87,318
- -------------------------------------------------------------------------------
Praxair, Inc. 1,800 65,790
-----------
153,108
- -------------------------------------------------------------------------------
TELECOMMUNICATION SERVICES--3.0%
- -------------------------------------------------------------------------------
DIVERSIFIED TELECOMMUNICATION SERVICES--2.0%
IDT Corp., Cl. B 1 7,700 143,374
- -------------------------------------------------------------------------------
WIRELESS TELECOMMUNICATION SERVICES--1.0%
Vodafone Group plc, Sponsored ADR 2,800 68,712
- -------------------------------------------------------------------------------
UTILITIES--5.2%
- -------------------------------------------------------------------------------
ELECTRIC UTILITIES--3.2%
AES Corp. (The) 1 17,800 154,326
- -------------------------------------------------------------------------------
PG&E Corp. 1 2,600 71,552
-----------
225,878
- -------------------------------------------------------------------------------
GAS UTILITIES--2.0%
Kinder Morgan, Inc. 1,100 66,231
- -------------------------------------------------------------------------------
Sempra Energy 2,200 69,850
-----------
136,081
-----------
Total Common Stocks (Cost $6,120,735) 6,844,565
PRINCIPAL MARKET VALUE
AMOUNT SEE NOTE 1
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JOINT REPURCHASE AGREEMENTS--5.2%
- -------------------------------------------------------------------------------
Undivided interest of 0.07% in joint repurchase
agreement (Principal Amount/Market Value
$554,815,000, with a maturity value of $554,860,310)
with PaineWebber, Inc., 0.98%, dated 4/30/04, to
be repurchased at $366,030 on 5/3/04, collateralized
by Federal National Mortgage Assn., 5.50%--6.50%,
7/1/32--11/1/33, with a value of $566,733,053
(Cost $366,000) $366,000 $ 366,000
- -------------------------------------------------------------------------------
TOTAL INVESTMENTS, AT VALUE
(COST $6,486,735) 103.0% 7,210,565
- -------------------------------------------------------------------------------
LIABILITIES IN EXCESS OF OTHER ASSETS (3.0) (206,821)
--------------------------
NET ASSETS 100.0% $7,003,744
==========================
FOOTNOTE TO STATEMENT OF INVESTMENTS
1. Non-income producing security.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
12 | OPPENHEIMER SELECT VALUE FUND
STATEMENT OF ASSETS AND LIABILITIES April 30, 2004
- ---------------------------------------------------------------------------------------------------------
ASSETS
- ---------------------------------------------------------------------------------------------------------
Investments, at value (cost $6,486,735)--see accompanying statement of investments $7,210,565
- ---------------------------------------------------------------------------------------------------------
Cash 17,752
- ---------------------------------------------------------------------------------------------------------
Receivables and other assets:
Investments sold 55,309
Shares of beneficial interest sold 29,104
Interest and dividends 5,127
Other 1,849
-----------
Total assets 7,319,706
- ---------------------------------------------------------------------------------------------------------
LIABILITIES
- ---------------------------------------------------------------------------------------------------------
Payables and other liabilities:
Investments purchased 281,456
Legal, auditing and other professional fees 15,984
Shareholder communications 12,715
Trustees' compensation 696
Distribution and service plan fees 295
Transfer and shareholder servicing agent fees 70
Other 4,746
-----------
Total liabilities 315,962
- ---------------------------------------------------------------------------------------------------------
NET ASSETS $7,003,744
===========
- ---------------------------------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS
- ---------------------------------------------------------------------------------------------------------
Par value of shares of beneficial interest $ 518
- ---------------------------------------------------------------------------------------------------------
Additional paid-in capital 5,839,007
- ---------------------------------------------------------------------------------------------------------
Accumulated net realized gain on investments 440,389
- ---------------------------------------------------------------------------------------------------------
Net unrealized appreciation on investments 723,830
-----------
NET ASSETS $7,003,744
===========
- ---------------------------------------------------------------------------------------------------------
NET ASSET VALUE PER SHARE
- ---------------------------------------------------------------------------------------------------------
Class A Shares:
Net asset value and redemption price per share (based on net assets
of $6,706,076 and 495,876 shares of beneficial interest outstanding) $13.52
Maximum offering price per share (net asset value plus sales charge
of 5.75% of offering price) $14.34
- ---------------------------------------------------------------------------------------------------------
Class B Shares:
Net asset value, redemption price (excludes applicable contingent deferred
sales charge) and offering price per share (based on net
assets of $115,611 and 8,555 shares of beneficial interest outstanding) $13.51
- ---------------------------------------------------------------------------------------------------------
Class C Shares:
Net asset value, redemption price (excludes applicable contingent deferred
sales charge) and offering price per share (based on
net assets of $174,439 and 12,907 shares of beneficial interest outstanding) $13.52
- ---------------------------------------------------------------------------------------------------------
Class N Shares:
Net asset value, redemption price (excludes applicable contingent deferred
sales charge) and offering price per share (based on net
assets of $6,664 and 493 shares of beneficial interest outstanding) $13.52
- ---------------------------------------------------------------------------------------------------------
Class Y Shares:
Net asset value, redemption price and offering price per share
(based on net assets of $953.80 and 70.47 shares of beneficial interest outstanding) $13.53
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
13 | OPPENHEIMER SELECT VALUE FUND
STATEMENT OF OPERATIONS For the Year Ended April 30, 2004
- ---------------------------------------------------------------------------------------------------------
INVESTMENT INCOME
- ---------------------------------------------------------------------------------------------------------
Dividends (net of foreign withholding taxes of $959) $ 69,312
- ---------------------------------------------------------------------------------------------------------
Interest 850
-----------
Total investment income 70,162
- ---------------------------------------------------------------------------------------------------------
EXPENSES
- ---------------------------------------------------------------------------------------------------------
Management fees 35,409
- ---------------------------------------------------------------------------------------------------------
Distribution and service plan fees:
Class A 254
Class B 73
Class C 84
Class N 3
- ---------------------------------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees:
Class A 271
Class B 26
Class C 16
- ---------------------------------------------------------------------------------------------------------
Shareholder communications:
Class A 18,439
Class B 158
Class C 181
Class N 12
Class Y 4
- ---------------------------------------------------------------------------------------------------------
Legal, auditing and other professional fees 22,112
- ---------------------------------------------------------------------------------------------------------
Trustees' compensation 9,599
- ---------------------------------------------------------------------------------------------------------
Custodian fees and expenses 42
- ---------------------------------------------------------------------------------------------------------
Other 6,502
-----------
Total expenses 93,185
Less reduction to custodian expenses (42)
Less voluntary reimbursement of expenses:
Class A (20,133)
Class B (247)
Class C (281)
Class N (18)
Class Y (5)
Less voluntary waiver of transfer and shareholder servicing agent fees:
Class B (19)
Class C (10)
-----------
Net expenses 72,430
- ---------------------------------------------------------------------------------------------------------
NET INVESTMENT LOSS (2,268)
- ---------------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN
- ---------------------------------------------------------------------------------------------------------
Net realized gain on investments 725,042
- ---------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation on investments 501,924
- ---------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $1,224,698
===========
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
14 | OPPENHEIMER SELECT VALUE FUND
STATEMENTS OF CHANGES IN NET ASSETS
YEAR ENDED APRIL 30, 2004 2003 1
- -----------------------------------------------------------------------------------------------------------------------
OPERATIONS
- -----------------------------------------------------------------------------------------------------------------------
Net investment loss $ (2,268) $ (11,440)
- -----------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) 725,042 (143,783)
- -----------------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation 501,924 221,906
----------------------------------
Net increase in net assets resulting from operations 1,224,698 66,683
- -----------------------------------------------------------------------------------------------------------------------
DIVIDENDS AND/OR DISTRIBUTIONS TO SHAREHOLDERS
- -----------------------------------------------------------------------------------------------------------------------
Distributions from net realized gain--Class A (136,971) --
- -----------------------------------------------------------------------------------------------------------------------
BENEFICIAL INTEREST TRANSACTIONS
- -----------------------------------------------------------------------------------------------------------------------
Net increase in net assets resulting from beneficial interest transactions:
Class A 2,199,702 3,244,661
Class B 119,224 --
Class C 177,747 --
Class N 7,000 --
Class Y 1,000 --
- -----------------------------------------------------------------------------------------------------------------------
NET ASSETS
- -----------------------------------------------------------------------------------------------------------------------
Total increase 3,592,400 3,311,344
- -----------------------------------------------------------------------------------------------------------------------
Beginning of period 3,411,344 100,000 2
----------------------------------
End of period $7,003,744 $3,411,344
==================================
1. For the period from November 26, 2002 (commencement of operations) to April
30, 2003.
2. Reflects the value of the Manager's initial seed money investment on November
8, 2002.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
15 | OPPENHEIMER SELECT VALUE FUND
FINANCIAL HIGHLIGHTS
CLASS A YEAR ENDED APRIL 30, 2004 2003 1
- --------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- --------------------------------------------------------------------------------
Net asset value, beginning of period $ 10.17 $10.00
- --------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss) -- 2 (.03)
Net realized and unrealized gain 3.75 .20
----------------------
Total from investment operations 3.75 .17
- --------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Distributions from net realized gain (.40) --
- --------------------------------------------------------------------------------
Net asset value, end of period $13.52 $10.17
======================
- --------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 3 37.02% 1.70%
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- --------------------------------------------------------------------------------
Net assets, end of period (in thousands) $6,706 $3,411
- --------------------------------------------------------------------------------
Average net assets (in thousands) $4,706 $3,151
- --------------------------------------------------------------------------------
Ratios to average net assets: 4
Net investment loss (0.04)% (0.85)%
Total expenses 1.96% 2.60%
Expenses after expense reimbursement or fee waiver and
reduction to custodian expenses 1.50% 2.35%
- --------------------------------------------------------------------------------
Portfolio turnover rate 102% 66%
1. For the period from November 26, 2002 (commencement of operations) to April
30, 2003.
2. Less than $0.005 per share.
3. Assumes an investment at net asset value 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 return. Total returns are not annualized for
periods of less than one full year. Returns do not reflect the deduction of
taxes that a shareholder would pay on Fund distributions or the redemption of
Fund shares.
4. Annualized for periods of less than one full year.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
16 | OPPENHEIMER SELECT VALUE FUND
PERIOD ENDED APRIL 30, 2004 1 CLASS B CLASS C CLASS N CLASS Y
- ---------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- ---------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 14.19 $ 14.19 $ 14.19 $ 14.19
- ---------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss) (.01) (.01) (.01) .01
Net realized and unrealized loss (.67) (.66) (.66) (.67)
----------------------------------------------------
Total from investment operations (.68) (.67) (.67) (.66)
- ---------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Distributions from net realized gain -- -- -- --
- ---------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $13.51 $13.52 $13.52 $13.53
====================================================
- ---------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2 (4.79)% (4.72)% (4.72)% (4.65)%
- ---------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ---------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $116 $174 $7 $1
- ---------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 44 $ 51 $3 $1
- ---------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income (loss) (1.19)% (1.01)% (0.73)% 0.26%
Total expenses 5.71% 5.48% 4.96% 4.47%
Expenses after expense reimbursement or fee waiver and
reduction to custodian expenses 2.25% 2.25% 1.75% 1.25%
- ---------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 102% 102% 102% 102%
1. For the period from February 27, 2004 (inception of offering) to April 30,
2004.
2. Assumes an investment at net asset value 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.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
17 | OPPENHEIMER SELECT VALUE FUND
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
Oppenheimer Select Value Fund (the Fund), formerly Oppenheimer Multi Cap Value
Fund 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 capital appreciation over the long-term. The Fund's investment advisor is
OppenheimerFunds, Inc. (the Manager).
The Fund offers Class A, Class B, Class C, Class N and Class Y shares. Class
A shares are sold at their offering price, which is normally net asset value
plus a front-end sales charge. As of April 30, 2004, 77% of Class A shares were
owned by the Manager. Class B, Class C and Class N shares are sold without a
front-end sales charge but may be subject to a contingent deferred sales charge
(CDSC). Class N shares are sold only through retirement plans. Retirement plans
that offer Class N shares may impose charges on those accounts. Class Y shares
are sold to certain institutional investors without either a front-end sales
charge or a CDSC. All classes of shares have identical rights and voting
privileges with respect to the Fund in general and exclusive voting rights on
matters that affect that class alone. Earnings, net assets and net asset value
per share may differ by minor amounts due to each class having its own expenses
directly attributable to that class. Classes A, B, C and N have separate
distribution and/or service plans. No such plan has been adopted for Class Y
shares. Class B shares will automatically convert to Class A shares six years
after the date of purchase.
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 Trustees. 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 Trustees. Short-term "money market type" debt securities with
remaining maturities of sixty days or less are valued at amortized cost (which
approximates market value).
- --------------------------------------------------------------------------------
FOREIGN CURRENCY TRANSLATION. The Fund's accounting records are maintained in
U.S. dollars. Prices of securities denominated in foreign currencies are
translated into U.S. dollars at the closing rates of exchange. Amounts related
to the purchase and sale of foreign securities and investment income are
translated at the rates of exchange prevailing on the respective dates of such
transactions.
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 rates.
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.
18 | OPPENHEIMER SELECT VALUE FUND
- --------------------------------------------------------------------------------
JOINT REPURCHASE AGREEMENTS. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission, the Fund, along with other affiliated funds
advised by the Manager, may transfer uninvested cash balances into joint
trading accounts on a daily basis. These balances are invested in one or more
repurchase agreements. Securities pledged as collateral for repurchase
agreements are held by a custodian bank until the agreements mature. Each
agreement requires that the market value of the collateral be sufficient to
cover payments of interest and principal. In the event of default by the other
party to the agreement, retention of the collateral may be subject to legal
proceedings.
- --------------------------------------------------------------------------------
ALLOCATION OF INCOME, EXPENSES, GAINS AND LOSSES. Income, expenses (other than
those attributable to a specific class), gains and losses are allocated on a
daily basis to each class of shares based upon the relative proportion of net
assets represented by such class. Operating expenses directly attributable to a
specific class are charged against the operations of that class.
- --------------------------------------------------------------------------------
FEDERAL TAXES. The Fund intends to comply with provisions of the Internal
Revenue Code applicable to regulated investment companies and to distribute
substantially all of its investment company taxable income, including any net
realized gain on investments not offset by capital loss carryforwards, if any,
to shareholders, therefore, no federal income or excise tax provision is
required.
The tax components of capital shown in the table below represent distribution
requirements the Fund must satisfy under the income tax regulations, losses the
Fund may be able to offset against income and gains realized in future years
and unrealized appreciation or depreciation of securities and other investments
for federal income tax purposes.
NET UNREALIZED
APPRECIATION
BASED ON COST OF
SECURITIES AND
UNDISTRIBUTED UNDISTRIBUTED ACCUMULATED OTHER INVESTMENTS
NET INVESTMENT LONG-TERM LOSS FOR FEDERAL INCOME
INCOME GAIN CARRYFORWARD 1 TAX PURPOSES
---------------------------------------------------------------------------------------------
$211,205 $229,183 $-- $723,830
1. During the fiscal years ended April 30, 2004 and April 30, 2003, the Fund
did not utilize any capital loss carryforwards.
Net investment income (loss) and net realized gain (loss) may differ for
financial statement and tax purposes. The character of dividends and
distributions made during the fiscal year from net investment income or net
realized gains may differ from their ultimate characterization for federal
income tax purposes. Also, due to timing of dividends and distributions, the
fiscal year in which amounts are distributed may differ from the fiscal year in
which the income or net realized gain was recorded by the Fund.
Accordingly, the following amounts have been reclassified for April 30, 2004.
Net assets of the Fund were unaffected by the reclassifications.
REDUCTION TO REDUCTION TO
ACCUMULATED ACCUMULATED NET
INCREASE TO NET INVESTMENT REALIZED GAIN
PAID-IN CAPITAL LOSS ON INVESTMENTS 2
-------------------------------------------------------------------------------------
$1,631 $2,268 $3,899
2. $1,631, including $849 of long-term capital gain, was distributed in
connection with Fund share redemptions.
The tax character of distributions paid during the years ended April 30, 2004
and April 30, 2003 was as follows:
YEAR ENDED PERIOD ENDED
APRIL 30, 2004 APRIL 30, 2003 3
--------------------------------------------------------------------------
Distributions paid from:
Ordinary income $136,971 $--
3. For the period from November 26, 2002 (commencement of operations) to April
30, 2003.
19 | OPPENHEIMER SELECT VALUE FUND
NOTES TO FINANCIAL STATEMENTS Continued
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES Continued
The aggregate cost of securities and other investments and the composition
of unrealized appreciation and depreciation of securities and other investments
for federal income tax purposes as of April 30, 2004 are noted below. The
primary difference between book and tax appreciation or depreciation of
securities and other investments, if applicable, is attributable to the tax
deferral of losses or tax realization of financial statement unrealized gain or
loss.
Federal tax cost of securities $6,486,735
===========
Gross unrealized appreciation $ 826,408
Gross unrealized depreciation (102,578)
-----------
Net unrealized appreciation $ 723,830
===========
- --------------------------------------------------------------------------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS. Dividends and distributions to
shareholders, which are determined in accordance with income tax regulations,
are recorded on the ex-dividend date. Income and capital gains distributions,
if any, are declared and paid annually.
- --------------------------------------------------------------------------------
INVESTMENT INCOME. Dividend income is recorded on the ex-dividend date or upon
ex-dividend notification in the case of certain foreign dividends where the
ex-dividend date may have passed. Non-cash dividends included in dividend
income, if any, are recorded at the fair market value of the securities
received. Interest income, which includes accretion of discount and
amortization of premium, is accrued as earned.
- --------------------------------------------------------------------------------
EXPENSE OFFSET ARRANGEMENT. The reduction of custodian fees, if applicable,
represents earnings on cash balances maintained by the Fund.
- --------------------------------------------------------------------------------
SECURITY TRANSACTIONS. Security transactions are recorded on the trade date.
Realized gains and losses on securities sold are determined on the basis of
identified cost.
- --------------------------------------------------------------------------------
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 BENEFICIAL INTEREST
The Fund has authorized an unlimited number of $0.001 par value shares of
beneficial interest of each class. Transactions in shares of beneficial
interest were as follows:
YEAR ENDED APRIL 30, 2004 1 PERIOD ENDED APRIL 30, 2003 2,3
SHARES AMOUNT SHARES AMOUNT
- ----------------------------------------------------------------------------------------------------------------------------
CLASS A
Sold 161,601 $2,215,782 325,568 $3,244,661
Dividends and/or distributions reinvested 1,077 13,920 -- --
Redeemed (2,370) (30,000) -- --
--------------------------------------------------------------------
Net increase 160,308 $2,199,702 325,568 $3,244,661
=================================================================
CLASS B
Sold 8,561 $ 119,314 -- $ --
Dividends and/or distributions reinvested -- -- -- --
Redeemed (6) (90) -- --
-----------------------------------------------------------------
Net increase 8,555 $ 119,224 -- $ --
=================================================================
20 | OPPENHEIMER SELECT VALUE FUND
YEAR ENDED APRIL 30, 2004 1 PERIOD ENDED APRIL 30, 2003 2,3
SHARES AMOUNT SHARES AMOUNT
- ---------------------------------------------------------------------------------------------------------------------------
CLASS C
Sold 12,907 $ 177,747 -- $ --
Dividends and/or distributions reinvested -- -- -- --
Redeemed -- -- -- --
-----------------------------------------------------------------
Net increase 12,907 $ 177,747 -- $ --
=================================================================
CLASS N
Sold 493 $ 7,000 -- $ --
Dividends and/or distributions reinvested -- -- -- --
Redeemed -- -- -- --
-----------------------------------------------------------------
Net increase 493 $ 7,000 -- $ --
=================================================================
CLASS Y
Sold 70 $ 1,000 -- $ --
Dividends and/or distributions reinvested -- -- -- --
Redeemed -- -- -- --
-----------------------------------------------------------------
Net increase 70 $ 1,000 -- $ --
=================================================================
1. For the year ended April 30, 2004 for Class A shares and for the period
February 27, 2004 (inception of offering) to April 30, 2004 for Class B, Class
C, Class N and Class Y shares.
2. For the period from November 26, 2002 (commencement of operations) to April
30, 2003.
3. The Fund sold 10,000 shares to the Manager upon seeding of the Fund on
November 8, 2002.
- --------------------------------------------------------------------------------
3. PURCHASES AND SALES OF SECURITIES
The aggregate cost of purchases and proceeds from sales of securities, other
than short-term obligations, for the year ended April 30, 2004, were $7,170,844
and $4,803,718, respectively.
- --------------------------------------------------------------------------------
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES
MANAGEMENT FEES. Management fees paid to the Manager were in accordance with
the investment advisory agreement with the Fund which provides for a fee at an
annual rate of 0.75% of the first $200 million of average annual net assets of
the Fund, 0.72% of the next $200 million, 0.69% of the next $200 million, 0.66%
of the next $200 million, and 0.60% of average annual net assets in excess of
$800 million. Effective February 27, 2004, the Manager has voluntarily
undertaken to reimburse the Fund for all expenses exceeding the following
limits: 1.50% for Class A shares, 2.25% for Class B shares, 2.25% for Class C
shares, 1.75% for Class N shares and 1.25% for Class Y shares. That voluntary
undertaking may be revised or terminated by the Manager at any time without
notice to shareholders. For the year ended April 30, 2004, management fees in
the amount of $20,725 were voluntarily waived by the Manager.
- --------------------------------------------------------------------------------
TRANSFER AGENT FEES. OppenheimerFunds Services (OFS), a division of the
Manager, acts as the transfer and shareholder servicing agent for the Fund. The
Fund pays OFS a per account fee. For the year ended April 30, 2004, the Fund
paid $226 to OFS for services to the Fund.
Additionally, Class Y shares are subject to minimum fees of $10,000 for
assets of $10 million or more. The Class Y shares are subject to the minimum
fees in the event that the per account fee does not equal or exceed the
applicable minimum fees. OFS may voluntarily waive the minimum fees.
OFS has voluntarily agreed to limit transfer and shareholder servicing agent
fees 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.
21 | OPPENHEIMER SELECT VALUE FUND
NOTES TO FINANCIAL STATEMENTS 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 Trustees and its independent
trustees must determine whether the Distributor shall be entitled to payment
from the Fund of all or a portion of the service fee and/or asset-based sales
charge in respect to shares sold prior to the effective date of such
termination. The Distributor's aggregate uncompensated expenses under the plan
at April 30, 2004 for Class B, Class C and Class N shares were zero. 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
CONTINGENT CONTINGENT CONTINGENT CONTINGENT
CLASS A DEFERRED DEFERRED DEFERRED DEFERRED
FRONT-END SALES SALES CHARGES SALES CHARGES SALES CHARGES SALES CHARGES
CHARGES RETAINED RETAINED BY RETAINED BY RETAINED BY RETAINED BY
YEAR ENDED BY DISTRIBUTOR DISTRIBUTOR DISTRIBUTOR DISTRIBUTOR DISTRIBUTOR
- ------------------------------------------------------------------------------------------------------------------------------------
April 30, 2004 $919 $-- $-- $-- $--
- --------------------------------------------------------------------------------
5. BORROWING AND LENDING ARRANGEMENTS
The Fund entered into an "interfund borrowing and lending arrangement" with
other funds in the Oppenheimer funds complex, to allow funds to borrow for
liquidity purposes. The arrangement was initiated pursuant to exemptive relief
granted by the Securities and Exchange Commission (the SEC) to allow these
affiliated funds to lend money to, and borrow money from, each other, in an
attempt to reduce borrowing costs below those of bank loan facilities. The
SEC's order requires the Fund's Board of Trustees to adopt operating policies
and procedures to administer interfund borrowing and lending. Under the
arrangement the Fund may lend money to other Oppenheimer funds and may borrow
from other Oppenheimer funds at a rate set by the Fund's Board of Trustees,
based upon a recommendation by the Manager. The Fund's borrowings, if any, are
subject to asset coverage requirements under the Investment Company Act and the
provisions of the SEC order and other applicable regulations. If the Fund
borrows money, there is a risk that the loan could be called on one day's
notice, in which case the Fund might have to borrow from a bank at higher rates
if a loan were not available from another Oppenheimer fund. If the Fund lends
money to another fund, it will be subject to the risk that the other fund might
not repay the loan in a timely manner, or at all.
The Fund had no interfund borrowings or loans outstanding during the year
ended or at April 30, 2004.
22 | OPPENHEIMER SELECT VALUE FUND
REPORT OF INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM
- --------------------------------------------------------------------------------
TO THE SHAREHOLDERS AND BOARD OF TRUSTEES OF OPPENHEIMER SELECT VALUE FUND
(FORMERLY, OPPENHEIMER MULTI CAP VALUE FUND)
We have audited the accompanying statement of assets and liabilities of
Oppenheimer Select Value Fund (the "Fund"), including the statement of
investments, as of April 30, 2004, and the related statement of operations for
the year then ended, the statements of changes in net assets for the year then
ended and for the period from November 26, 2002 (commencement of operations) to
April 30, 2003, and the financial highlights for each of the periods indicated
therein. These financial statements and financial highlights are the
responsibility of the Fund's management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits.
We conducted our audits in accordance with the standards of the Public
Company Accounting Oversight Board (United States). Those standards require
that we plan and perform the audit to obtain reasonable assurance about whether
the financial statements and financial highlights are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. Our procedures
included confirmation of securities owned as of April 30, 2004, by
correspondence with the custodian and others. An audit also includes assessing
the accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe
that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Oppenheimer Select Value Fund at April 30, 2004, the results of its operations
for the year then ended, the changes in its net assets for the year then ended
and for the period from November 26, 2002 to April 30, 2003, and the financial
highlights for each of the periods indicated therein, in conformity with U.S.
generally accepted accounting principles.
[GRAPHIC] /S/ ERNST & YOUNG LLP
New York, New York
June 4, 2004
23 | OPPENHEIMER SELECT VALUE FUND
FEDERAL INCOME TAX INFORMATION Unaudited
- --------------------------------------------------------------------------------
In early 2005, if applicable, shareholders of record will receive information
regarding all dividends and distributions paid to them by the Fund during
calendar year 2004. Regulations of the U.S. Treasury Department require the
Fund to report this information to the Internal Revenue Service.
Distributions of $0.3969 per share were paid to Class A shareholders on
December 18, 2003, all of which was designated as ordinary income for federal
income tax purposes.
Dividends, if any, paid by the Fund during the fiscal year ended April 30,
2004 which are not designated as capital gain distributions should be
multiplied by 15.39% to arrive at the amount eligible for the corporate
dividend-received deduction.
A portion, if any, of the dividends paid by the Fund during the fiscal year
ended April 30, 2004 which are not designated as capital gain distributions are
eligible for lower individual income tax rates to the extent that the Fund has
received qualified dividend income as stipulated by recent tax legislation.
$66,005 of the Fund's fiscal year taxable income may be eligible for the lower
individual income tax rates. In early 2005, shareholders of record will receive
information regarding the percentage of distributions that are eligible for
lower individual income tax rates.
The foregoing information is presented to assist shareholders in reporting
distributions received from the Fund to the Internal Revenue Service. Because
of the complexity of the federal regulations which may affect your individual
tax return and the many variations in state and local tax regulations, we
recommend that you consult your tax advisor for specific guidance.
PORTFOLIO PROXY VOTING
POLICIES AND PROCEDURES Unaudited
- --------------------------------------------------------------------------------
The Fund has adopted Portfolio Proxy Voting Policies and Procedures under which
the Fund votes proxies relating to securities ("portfolio proxies") held by the
Fund. A description of the Fund's Portfolio Proxy Voting Policies and
Procedures is available (i) without charge, upon request, by calling the Fund
toll-free at 1.800.225.5677, (ii) on the Fund's website at
www.oppenheimerfunds.com, and (iii) on the SEC's website at www.sec.gov. In
addition, the Fund will be required to file new Form N-PX, with its complete
proxy voting record for the 12 months ended June 30th, no later than August
31st of each year. The first such filing is due no later than August 31, 2004,
for the twelve months ended June 30, 2004. Once filed, the Fund's Form N-PX
filing will be available (i) without charge, upon request, by calling the Fund
toll-free at 1.800.225.5677, and (ii) on the SEC's website at www.sec.gov.
24 | OPPENHEIMER SELECT VALUE FUND
TRUSTEES AND OFFICERS Unaudited
- -----------------------------------------------------------------------------------------------------------------------------------
NAME, POSITION(S) HELD WITH PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS; OTHER TRUSTEESHIPS/DIRECTORSHIPS HELD BY TRUSTEE; NUMBER
FUND, LENGTH OF SERVICE; AGE OF PORTFOLIOS IN FUND COMPLEX CURRENTLY OVERSEEN BY TRUSTEE
INDEPENDENT THE ADDRESS OF EACH TRUSTEE AND INTERESTED TRUSTEE IN THE CHARTS BELOW IS 6803 S. TUCSON WAY,
TRUSTEES CENTENNIAL, CO 80112-3924. EACH TRUSTEE SERVES FOR AN INDEFINITE TERM, UNTIL HIS OR HER RESIGNATION,
RETIREMENT, DEATH OR REMOVAL.
RONALD J. ABDOW, Chairman (since 1959) of Abdow Corporation (operator of restaurants); Trustee of
Trustee (since 2003) the following real estate businesses (owners and operators of restaurants): G&R
Age: 72 Realty Co. (since 1978), G&R Trust Co. (since 1973), Abdow Partnership (since
1975), Auburn Associates (since 1983); Hazard Associates (since 1985); Trustee
of MML Series Investment Fund (since 1993) and of MassMutual Institutional Funds
(MMIF) (since 1994) (open-end investment companies); Trustee (since 1987) of Bay
State Health System (health services); Chairman (since 1996) of Western Mass
Development Corp. (non-profit land development); Chairman (since 1991) of
American International College (non-profit college). Oversees 10 portfolios in
the OppenheimerFunds complex
JOSEPH M. WIKLER, Self-employed as an investment consultant; a director (since 1996) of Lakes Environmental
Trustee (since 2003) Association, and Medintec (since 1992) and Cathco (since 1995) (medical device companies); a member
Age: 63 of the investment committee of the Associated Jewish Charities of Baltimore (since 1994); formerly a
director of Fortis/Hartford mutual funds (1994 - December 2001). Oversees 10 portfolios in the
OppenheimerFunds complex.
PETER I. WOLD, President of Wold Properties, Inc. (an oil and gas exploration and production company); Vice
Trustee (since 2003) President, Secretary and Treasurer of Wold Trona Company, Inc. (soda ash processing and production);
Age: 56 Vice President of Wold Talc Company, Inc. (talc mining); Managing Member, Hole-in-the-Wall Ranch
(cattle ranching); formerly Director and Chairman of the Board, Denver Branch of the Federal Reserve
Bank of Kansas City (1993 - 1999) and Director of PacifiCorp. (1995 - 1999), an electric utility.
Oversees 10 portfolios in the OppenheimerFunds complex.
- -----------------------------------------------------------------------------------------------------------------------------------
INTERESTED TRUSTEE
EUSTIS WALCOTT, Principal with Ardsley Associates (since 2000) (consulting firm); Director (since October 2000) of
Trustee (since 2003) Cornerstone Real Estate Advisors (real estate equity investment management services) and MML
Age: 66 Investors Services (individual retirement, insurance, investment, and life event planning products
and services company) (both affiliates of the Manager); Trustee of OFI Trust Company (since 2001)
(also an affiliate of the Manager); formerly Trustee of the American International College (1995 -
December 2003); Senior Vice President, MassMutual Financial Group (May 1990 - July 2000). Oversees
10 portfolios in the OppenheimerFunds complex.
- -----------------------------------------------------------------------------------------------------------------------------------
INTERESTED TRUSTEE THE ADDRESS OF MR. MURPHY IN THE CHART BELOW IS TWO WORLD FINANCIAL CENTER, 225 LIBERTY STREET, NEW
AND OFFICER YORK, NY 10281-1008. MR. MURPHY SERVES FOR AN INDEFINITE TERM, UNTIL HIS RESIGNATION, DEATH OR
REMOVAL.
JOHN V. MURPHY, Chairman, Chief Executive Officer and director (since June 2001) and President (since September
President, Trustee and 2000) of the Manager; President and a director or trustee of other Oppenheimer funds; President and
Chairman of the Board, a director (since July 2001) of Oppenheimer Acquisition Corp. (the Manager's parent holding company)
Trustee (since 2003) and of Oppenheimer Partnership Holdings, Inc. (a holding company subsidiary of the Manager); a
Age: 54 director (since November 2001) of OppenheimerFunds Distributor, Inc. (a subsidiary of the Manager);
Chairman and a director (since July 2001) of Shareholder Services, Inc. and of Shareholder Financial
Services, Inc. (transfer agent subsidiaries of the Manager); President and a director (since July
2001) of OppenheimerFunds Legacy Program (a charitable trust program established by the Manager); a
director of the following investment advisory subsidiaries of the Manager: OFI Institutional Asset
Management, Inc., Centennial Asset Management Corporation, Trinity Investment Management Corporation
and Tremont Capital Management, Inc. (since November 2001), HarbourView Asset Management Corporation
and OFI Private Investments, Inc. (since July 2001); President (since November 1, 2001) and a
director (since July 2001) of Oppenheimer Real Asset Management, Inc.; Executive Vice President
(since February 1997) of Massachusetts Mutual Life Insurance Company (the Manager's parent company);
a director (since June 1995) of DLB Acquisition Corporation (a holding company that owns the shares
of David L. Babson & Company, Inc.); a member of the Investment Company Institute's Board of
Governors (elected to serve from October 3, 2003 through September 30, 2006). Formerly, Chief
Operating Officer (September 2000-June 2001) of the Manager; President and trustee (November
1999-November 2001) of MML Series Investment Fund and MassMutual Institutional Funds (open-end
investment companies); a director (September 1999-
25 | OPPENHEIMER SELECT VALUE FUND
TRUSTEES AND OFFICERS Unaudited / Continued
JOHN V. MURPHY, August 2000) of C.M. Life Insurance Company; President, Chief Executive Officer and director
Continued (September 1999-August 2000) of MML Bay State Life Insurance Company; a director (June 1989-June
1998) of Emerald Isle Bancorp and Hibernia Savings Bank (a wholly-owned subsidiary of Emerald Isle
Bancorp). Oversees 73 portfolios as Trustee/Director and 10 portfolios as Officer in the
OppenheimerFunds complex.
- -----------------------------------------------------------------------------------------------------------------------------------
OFFICERS THE ADDRESS OF THE OFFICERS IN THE CHART BELOW IS AS FOLLOWS: FOR MR. LEAVY AND MR. ZACK, TWO WORLD
FINANCIAL CENTER, 225 LIBERTY STREET, NEW YORK, NY 10281-1008, FOR MR. WIXTED, 6803 S. TUCSON WAY,
CENTENNIAL, CO 80112-3924. EACH OFFICER SERVES FOR AN ANNUAL TERM OR UNTIL HIS OR HER EARLIER
RESIGNATION, DEATH OR REMOVAL.
CHRISTOPHER LEAVY, Senior Vice President of the Manager since September 2000; an officer of 7 portfolios in the
Vice President and OppenheimerFunds complex. Formerly a portfolio manager of Morgan Stanley Dean Witter Investment
Portfolio Manager Management (1997 - September 2000).
(since 2002)
Age: 33
BRIAN W. WIXTED, Senior Vice President and Treasurer (since March 1999) of the Manager; Treasurer of HarbourView
Treasurer, Principal Asset Management Corporation, Shareholder Financial Services, Inc., Shareholder Services, Inc.,
Financial and Accounting Oppenheimer Real Asset Management Corporation, and Oppenheimer Partnership Holdings, Inc. (since
Officer (since 2003) March 1999), of OFI Private Investments, Inc. (since March 2000), of OppenheimerFunds International
Age: 44 Ltd. and OppenheimerFunds plc (since May 2000), of OFI Institutional Asset Management, Inc. (since
November 2000), and of OppenheimerFunds Legacy Program (a Colorado non-profit corporation) (since
June 2003); Treasurer and Chief Financial Officer (since May 2000) of OFI Trust Company (a trust
company subsidiary of the Manager); Assistant Treasurer (since March 1999) of Oppenheimer
Acquisition Corp. Formerly Assistant Treasurer of Centennial Asset Management Corporation (March
1999-October 2003) and OppenheimerFunds Legacy Program (April 2000-June 2003); Principal and Chief
Operating Officer (March 1995-March 1999) at Bankers Trust Company-Mutual Fund Services Division. An
officer of 83 portfolios in the OppenheimerFunds complex.
ROBERT G. ZACK, Executive Vice President (since January 2004) and General Counsel (since February 2002) of the
Secretary (since 2003) Manager; General Counsel and a director (since November 2001) of the Distributor; General Counsel
Age: 55 (since November 2001) of Centennial Asset Management Corporation; Senior Vice President and General
Counsel (since November 2001) of HarbourView Asset Management Corporation; Secretary and General
Counsel (since November 2001) of Oppenheimer Acquisition Corp.; Assistant Secretary and a director
(since October 1997) of OppenheimerFunds International Ltd. and OppenheimerFunds plc; Vice President
and a director (since November 2001) of Oppenheimer Partnership Holdings, Inc.; a director (since
November 2001) of Oppenheimer Real Asset Management, Inc.; Senior Vice President, General Counsel
and a director (since November 2001) of Shareholder Financial Services, Inc., Shareholder Services,
Inc., OFI Private Investments, Inc. and OFI Trust Company; Vice President (since November 2001) of
OppenheimerFunds Legacy Program; Senior Vice President and General Counsel (since November 2001) of
OFI Institutional Asset Management, Inc.; a director (since June 2003) of OppenheimerFunds (Asia)
Limited. Formerly Senior Vice President (May 1985-December 2003), Acting General Counsel (November
2001-February 2002) and Associate General Counsel (May 1981-October 2001) of the Manager; Assistant
Secretary of Shareholder Services, Inc. (May 1985 November 2001), Shareholder Financial Services,
Inc. (November 1989-November 2001); and OppenheimerFunds International Ltd. (October 1997-November
2001). An officer of 83 portfolios in the OppenheimerFunds complex.
THE FUND'S STATEMENT OF ADDITIONAL INFORMATION CONTAINS ADDITIONAL INFORMATION
ABOUT THE FUND'S TRUSTEES AND IS AVAILABLE WITHOUT CHARGE UPON REQUEST.
26 | OPPENHEIMER SELECT VALUE FUND
Item 2. Code of Ethics
The registrant has adopted a code of ethics that applies to the
registrant's principal executive officer, principal financial officer, principal
accounting officer or controller or persons performing similar functions.
Item 3. Audit Committee Financial Expert
The Board of Trustees of the registrant has determined that Joseph M.
Wikler, the Chairman of the Board's Audit Committee, possesses the technical
attributes identified in Instruction 2(b) of Item 3 to Form N-CSR to qualify as
an "audit committee financial expert," and has designated Mr. Wikler as the
Audit Committee's financial expert. Mr. Wikler is an "independent" Trustee
pursuant to paragraph (a)(2) of Item 3 to Form N-CSR.
Item 4. Principal Accountant Fees and Services
(a) Audit Fees
The principal accountant for the audit of the registrant's annual
financial statements was engaged to provide $10,950 in fiscal 2004
and $14,500 in fiscal 2003.
(b) Audit-Related Fees
The principal accountant for the audit of the registrant's annual
financial statements billed no such fees to the registrant during
the last two fiscal years.
The principal accountant for the audit of the registrant's annual
financial statements billed no such fees to the registrant during
the last two fiscal years to the registrant's investment adviser
or any entity controlling, controlled by, or under common control
with the adviser that provides ongoing services to the registrant.
Such fees would include, among others: due diligence related to
mergers and acquisitions, accounting consultations and audits in
connection with acquisitions, internal control reviews and
consultation concerning financial accounting and reporting
standards.
(c) Tax Fees
The principal accountant for the audit of the registrant's annual
financial statements billed no such fees to the registrant during
the last two fiscal years.
The principal accountant for the audit of the registrant's annual
financial statements billed no such fees during the last two
fiscal years to the registrant's investment adviser or any entity
controlling, controlled by, or under common control with the
adviser that provides ongoing services to the registrant.
Such fees would include, among others: tax compliance, tax
planning and tax advice. Tax compliance generally involves
preparation of original and amended tax returns, claims for a
refund and tax payment-planning services. Tax planning and tax
advice includes assistance with tax audits and appeals, tax advice
related to mergers and acquisitions and requests for rulings or
technical advice from taxing authorities.
(d) All Other Fees
The principal accountant for the audit of the registrant's annual
financial statements billed no such fees to the registrant during
the last two fiscal years.
The principal accountant for the audit of the registrant's annual
financial statements billed no such fees to the registrant during
the last two fiscal years to the registrant's investment adviser
or any entity controlling, controlled by, or under common control
with the adviser that provides ongoing services to the registrant.
Such fees would include services provided to the registrant's
Board of Trustees with respect to analysis of the registrant's
expenses and consultations with management with respect to its due
diligence review process surrounding investments.
(e) (1) During its regularly scheduled periodic meetings, the
registrant's audit committee will pre-approve all audit,
audit-related, tax and other services to be provided by the
principal accountants of the registrant.
The audit committee has delegated pre-approval authority to its
Chairman for any subsequent new engagements that arise between
regularly scheduled meeting dates provided that any fees such
pre-approved are presented to the audit committee at its next
regularly scheduled meeting.
Pre-approval of non-audit services is waived provided that: 1) the
aggregate amount of all such services provided constitutes no more
than five percent of the total amount of fees paid by the
registrant to it principal accountant during the fiscal year in
which services are provided 2) such services were not recognized
by the registrant at the time of engagement as non-audit services
and 3) such services are promptly brought to the attention of the
audit committee of the registrant and approved prior to the
completion of the audit.
(2) 100%
(f) Not applicable as less than 50%.
(g) The principal accountant for the audit of the registrant's annual
financial statements billed no such fees to the registrant during
the last two fiscal years to the registrant and the registrant's
investment adviser or any entity controlling, controlled by, or
under common control with the adviser that provides ongoing
services to the registrant related to non-audit fees. Those
billings did not include any prohibited non-audit services as
defined by the Securities Exchange Act of 1934.
(h) The registrant's audit committee of the board of trustees has
considered whether the provision of non-audit services that were
rendered to the registrant's investment adviser, and any entity
controlling, controlled by, or under common control with the
investment adviser that provides ongoing services to the
registrant that were not pre-approved pursuant to paragraph
(c)(7)(ii) of Rule 2-01 of Regulation S-X is compatible with
maintaining the principal account's independence. No such services
were rendered.
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
trustees. To assist in this task, the Board has designated the Audit Committee
as the nominating committee for the Board. It reviews and recommends nominees to
the Board. The Committee is comprised entirely of disinterested trustees as
defined in Section 2(a)(19) of the Investment Company Act of 1940.
The Audit Committee charter describes the responsibilities of the
Committee in nominating candidates for election as independent Trustees of the
Registrant. The Registrant's Board has adopted a written charter for the
Committee. A current copy of the Audit Committee charter is available to
shareholders on the OppenheimerFunds website at www.oppenheimerfunds.com.
Under the current policy, if the Board determines that a vacancy exists
or is likely to exist on the Board, the Audit Committee of the Board will
consider candidates for Board membership including recommended by Registrant
shareholders. The Audit Committee will consider nominees recommended by
independent Board members or recommended by any other Board members including
Board members affiliated with the Registrant's investment advisors. The
Committee may, upon Board approval, retain an executive search firm to assist in
screening potential candidates. Upon Board approval, the Audit Committee may
also use the services of legal, financial, or other external counsel that it
deems necessary or desirable in the screening process. Shareholders wishing to
submit a nominee for election to the Board may do so by mailing their submission
to the offices of OppenheimerFunds, Inc., 6803 South Tucson Way, Centennial, CO
80112, to the attention of the Board of Trustees of the named Registrant, c/o
the Secretary of the Registrant.
The Committee's process for identifying and evaluating nominees for
trustees 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)