UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES
Investment Company Act file number 811-09845
Oppenheimer Emerging Technologies Fund
(Exact name of registrant as specified in charter)
6803 South Tucson Way, Centennial, Colorado 80112-3924
(Address of principal executive offices)
(Zip code)
Robert G. Zack, Esq.
OppenheimerFunds, Inc.
Two World Financial Center, New York, New York 10281-1008
- --------------------------------------------------------------------------------
(Name and address of agent for service)
Registrant's telephone number, including area code: (303) 768-3200
--------------
Date of fiscal year end: October 31
Date of reporting period: November 1, 2003 - April 30, 2004
Item 1. Reports to Stockholders.
- --------------------------------------------------------------------------------
STATEMENT OF INVESTMENTS APRIL 30, 2004 / UNAUDITED
- --------------------------------------------------------------------------------
MARKET VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
COMMON STOCKS--92.4%
- --------------------------------------------------------------------------------
CONSUMER DISCRETIONARY--3.0%
- --------------------------------------------------------------------------------
HOTELS, RESTAURANTS & LEISURE--1.7%
GTech Holdings
Corp. 25,000 $ 1,523,000
- --------------------------------------------------------------------------------
International
Game Technology 38,300 1,445,442
-----------
2,968,442
- --------------------------------------------------------------------------------
INTERNET & CATALOG RETAIL--0.7%
Priceline.com, Inc. 1 50,500 1,223,615
- --------------------------------------------------------------------------------
MEDIA--0.6%
TiVo, Inc. 1 154,300 1,081,643
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HEALTH CARE--5.4%
- --------------------------------------------------------------------------------
BIOTECHNOLOGY--2.5%
Amgen, Inc. 1 22,400 1,260,448
- --------------------------------------------------------------------------------
Genzyme Corp.
(General Division) 1 29,400 1,280,664
- --------------------------------------------------------------------------------
Martek Biosciences
Corp. 1 29,100 1,847,559
-----------
4,388,671
- --------------------------------------------------------------------------------
HEALTH CARE EQUIPMENT & SUPPLIES--0.7%
I-Flow Corp. 1 85,000 1,244,400
- --------------------------------------------------------------------------------
PHARMACEUTICALS--2.2%
Angiotech
Pharmaceuticals, Inc. 1 71,900 1,499,115
- --------------------------------------------------------------------------------
MGI Pharma, Inc. 1 37,100 2,293,522
-----------
3,792,637
- --------------------------------------------------------------------------------
INFORMATION TECHNOLOGY--83.6%
- --------------------------------------------------------------------------------
COMMUNICATIONS EQUIPMENT--19.6%
ADTRAN, Inc. 150,400 3,686,304
- --------------------------------------------------------------------------------
Airspan
Networks, Inc. 1 170,000 907,800
- --------------------------------------------------------------------------------
Alcatel SA,
Sponsored ADR 1 145,700 2,135,962
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Arris Group, Inc. 1 182,300 1,090,154
- --------------------------------------------------------------------------------
Audiocodes Ltd. 1 197,700 1,854,426
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Avaya, Inc. 1 95,700 1,309,176
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Carrier Access Corp. 1 106,700 1,135,288
- --------------------------------------------------------------------------------
Cisco Systems, Inc. 1 77,700 1,621,599
MARKET VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
COMMUNICATIONS EQUIPMENT Continued
Corning, Inc. 1 136,500 $ 1,505,595
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Ditech
Communications
Corp. 1 145,700 2,095,166
- --------------------------------------------------------------------------------
F5 Networks, Inc. 1 57,100 1,450,340
- --------------------------------------------------------------------------------
Ixia 1 126,100 1,126,073
- --------------------------------------------------------------------------------
Juniper Networks,
Inc. 1 77,500 1,695,700
- --------------------------------------------------------------------------------
Performance
Technologies, Inc. 1 184,700 2,399,253
- --------------------------------------------------------------------------------
Polycom, Inc. 1 97,100 1,852,668
- --------------------------------------------------------------------------------
Powerwave
Technologies, Inc. 1 99,600 674,292
- --------------------------------------------------------------------------------
REMEC, Inc. 1 77,800 489,362
- --------------------------------------------------------------------------------
Research in
Motion Ltd. 1 41,400 3,591,864
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Sierra Wireless, Inc. 1 38,800 867,180
- --------------------------------------------------------------------------------
Telular Corp. 1 107,100 1,192,023
- --------------------------------------------------------------------------------
UTStarcom, Inc. 1 68,600 1,807,610
-------------
34,487,835
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COMPUTERS & PERIPHERALS--3.5%
EMC Corp. 1 174,900 1,951,884
- --------------------------------------------------------------------------------
Lexar Media, Inc. 1 120,500 1,120,650
- --------------------------------------------------------------------------------
Network
Engines, Inc. 1 331,200 1,106,208
- --------------------------------------------------------------------------------
Novatel
Wireless, Inc. 1 78,800 1,161,512
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Western Digital
Corp. 1 97,100 784,568
-------------
6,124,822
- --------------------------------------------------------------------------------
ELECTRONIC EQUIPMENT & INSTRUMENTS--5.8%
Aeroflex, Inc. 1 165,100 2,076,958
- --------------------------------------------------------------------------------
Amphenol Corp.,
Cl. A 1 38,900 1,229,629
- --------------------------------------------------------------------------------
AU Optronics
Corp., ADR 187,400 4,025,352
- --------------------------------------------------------------------------------
Merix Corp. 1 42,300 657,765
- --------------------------------------------------------------------------------
Staktek
Holdings, Inc. 1 71,100 639,900
12 | OPPENHEIMER EMERGING TECHNOLOGIES FUND
MARKET VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
ELECTRONIC EQUIPMENT & INSTRUMENTS Continued
Vishay
Intertechnology, Inc. 1 90,600 $ 1,576,440
-------------
10,206,044
- --------------------------------------------------------------------------------
INTERNET SOFTWARE & SERVICES--10.8%
Aladdin Knowledge
Systems Ltd. 1 90,600 1,851,864
- --------------------------------------------------------------------------------
Blue Coat
Systems, Inc. 1 18,000 802,638
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Digital River, Inc. 1 70,000 1,802,500
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eCollege.com, Inc. 1 90,700 1,639,856
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National Information
Consortium, Inc. 1 221,200 1,152,452
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Netease.com, Inc.,
ADR 1 28,100 1,152,662
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SINA Corp. 1 84,600 2,411,100
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SonicWALL, Inc. 1 97,100 695,236
- --------------------------------------------------------------------------------
SupportSoft, Inc. 1 228,600 2,260,854
- --------------------------------------------------------------------------------
VeriSign, Inc. 1 119,500 1,927,535
- --------------------------------------------------------------------------------
Yahoo!, Inc. 1 64,800 3,269,808
-------------
18,966,505
- --------------------------------------------------------------------------------
IT SERVICES--1.9%
Cognizant
Technology
Solutions Corp. 1 49,100 2,124,066
- --------------------------------------------------------------------------------
Infosys Technologies
Ltd., Sponsored
ADR 1 14,400 1,165,968
-------------
3,290,034
- --------------------------------------------------------------------------------
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT--24.8%
Agere Systems, Inc.,
Cl. A 1 508,000 1,148,080
- --------------------------------------------------------------------------------
AMIS Holdings, Inc. 1 73,300 1,057,059
- --------------------------------------------------------------------------------
Amkor
Technology, Inc. 1 113,400 916,272
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Analog Devices, Inc. 88,400 3,765,840
- --------------------------------------------------------------------------------
ASML Holding NV 1 75,700 1,177,135
MARKET VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
SEMICONDUCTORS & SEMICONDUCTOR
EQUIPMENT Continued
Atheros
Communications,
Inc. 1 69,200 $ 977,796
- --------------------------------------------------------------------------------
ATI Technologies,
Inc. 1 142,100 2,067,555
- --------------------------------------------------------------------------------
ATMI, Inc. 1 38,900 858,912
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Conexant
Systems, Inc. 1 201,400 876,090
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Cypress
Semiconductor
Corp. 1 106,200 1,483,614
- --------------------------------------------------------------------------------
Fairchild
Semiconductor
International, Inc.,
Cl. A 1 77,700 1,512,819
- --------------------------------------------------------------------------------
Integrated Device
Technology, Inc. 1 80,000 1,076,000
- --------------------------------------------------------------------------------
Integrated Silicon
Solution, Inc. 1 108,200 1,485,586
- --------------------------------------------------------------------------------
Intel Corp. 69,000 1,775,370
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Linear Technology
Corp. 58,000 2,066,540
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LSI Logic Corp. 1 143,800 1,069,872
- --------------------------------------------------------------------------------
LTX Corp. 1 94,500 1,032,885
- --------------------------------------------------------------------------------
Marvell Technology
Group Ltd. 1 79,600 3,082,908
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Maxim Integrated
Products, Inc. 35,000 1,609,650
- --------------------------------------------------------------------------------
Microchip
Technology, Inc. 59,900 1,678,398
- --------------------------------------------------------------------------------
National
Semiconductor
Corp. 1 28,900 1,178,831
- --------------------------------------------------------------------------------
OmniVision
Technologies, Inc. 1 104,100 2,321,638
- --------------------------------------------------------------------------------
ON Semiconductor
Corp. 1 155,000 748,650
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PLX Technology,
Inc. 1 72,100 935,858
- --------------------------------------------------------------------------------
PMC-Sierra, Inc. 1 93,400 1,134,810
- --------------------------------------------------------------------------------
Silicon Laboratories,
Inc. 1 26,200 1,235,330
13 | OPPENHEIMER EMERGING TECHNOLOGIES FUND
- --------------------------------------------------------------------------------
STATEMENT OF INVESTMENTS UNAUDITED / CONTINUED
- --------------------------------------------------------------------------------
MARKET VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
SEMICONDUCTORS & SEMICONDUCTOR
EQUIPMENT Continued
Silicon Storage
Technology, Inc. 1 155,400 $ 2,059,050
- --------------------------------------------------------------------------------
Skyworks
Solutions, Inc. 1 122,100 1,045,176
- --------------------------------------------------------------------------------
Texas Instruments,
Inc. 48,600 1,219,860
- --------------------------------------------------------------------------------
TranSwitch Corp. 1 242,800 390,908
- --------------------------------------------------------------------------------
TriQuint
Semiconductor, Inc. 1 97,100 533,079
-------------
43,521,571
- --------------------------------------------------------------------------------
SOFTWARE--17.2%
Activision, Inc. 1 189,800 2,858,388
- --------------------------------------------------------------------------------
Altiris, Inc. 1 89,500 2,264,350
- --------------------------------------------------------------------------------
Autodesk, Inc. 76,800 2,572,800
- --------------------------------------------------------------------------------
FileNet Corp. 1 71,500 1,963,390
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InterVoice-Brite, Inc. 1 130,300 1,622,235
- --------------------------------------------------------------------------------
Macromedia, Inc. 1 69,500 1,431,700
- --------------------------------------------------------------------------------
Mercury Interactive
Corp. 1 67,100 2,855,105
- --------------------------------------------------------------------------------
Microsoft Corp. 119,200 3,095,624
- --------------------------------------------------------------------------------
SAP AG, Sponsored
ADR 22,000 820,160
- --------------------------------------------------------------------------------
Sonic Solutions, Inc. 1 72,600 1,307,526
- --------------------------------------------------------------------------------
Symantec Corp. 1 121,600 5,478,080
- --------------------------------------------------------------------------------
Veritas Software
Corp. 1 149,100 3,976,497
-------------
30,245,855
- --------------------------------------------------------------------------------
TELECOMMUNICATION SERVICES--0.4%
- --------------------------------------------------------------------------------
WIRELESS TELECOMMUNICATION SERVICES--0.4%
Wireless
Facilities, Inc. 1 77,700 745,143
-------------
Total Common Stocks
(Cost $154,802,341) 162,287,217
MARKET VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
PREFERRED STOCKS--0.4%
- --------------------------------------------------------------------------------
Axsun Technologies,
Inc., Cv., Series C 1,2,3 685,519 $ 346,941
- --------------------------------------------------------------------------------
Blaze Network
Products, Inc., 8% Cv.,
Series D 1,2,3 166,836 --
- --------------------------------------------------------------------------------
BroadBand Office,
Inc., Cv., Series C 1,2 52,909 --
- --------------------------------------------------------------------------------
Centerpoint
Broadband
Technologies, Inc.:
Cv., Series D 1,2 463,822 --
Cv., Series Z 1,2 37,491 --
- --------------------------------------------------------------------------------
fusionOne, Inc.,
8% Non-Cum. Cv.,
Series D 1,2 264,186 5,997
- --------------------------------------------------------------------------------
MicroPhotonix
Integration Corp.,
Cv., Series C 1,2,3 316,691 --
- --------------------------------------------------------------------------------
Multiplex, Inc.,
Cv., Series C 1,2 387,138 247,923
- --------------------------------------------------------------------------------
Questia Media,
Inc., Cv., Series B 1,2 258,859 139,396
-------------
Total Preferred Stocks
(Cost $23,351,600) 740,257
PRINCIPAL
AMOUNT
- --------------------------------------------------------------------------------
JOINT REPURCHASE AGREEMENTS--5.8%
- --------------------------------------------------------------------------------
Undivided interest of 1.84% 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 $10,220,835 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 $10,220,000) $10,220,000 10,220,000
- --------------------------------------------------------------------------------
TOTAL INVESTMENTS,
AT VALUE
(COST $188,373,941) 98.6% 173,247,474
- --------------------------------------------------------------------------------
OTHER ASSETS
NET OF LIABILITIES 1.4 2,381,269
-------------------------
NET ASSETS 100.0% $175,628,743
=========================
14 | OPPENHEIMER EMERGING TECHNOLOGIES FUND
FOOTNOTES TO STATEMENT OF INVESTMENTS
1. Non-income producing security.
2. Identifies issues considered to be illiquid or restricted. See Note 5 of
Notes to Financial Statements.
3. Affiliated company. Represents ownership of at least 5% of the voting
securities of the issuer, and is or was an affiliate, as defined in the
Investment Company Act of 1940, at or during the period ended April 30, 2004.
The aggregate fair value of securities of affiliated companies held by the Fund
as of April 30, 2004 amounts to $346,941. Transactions during the period in
which the issuer was an affiliate are as follows:
SHARES GROSS GROSS SHARES
OCTOBER 31, 2003 ADDITIONS REDUCTIONS APRIL 30, 2004
- -------------------------------------------------------------------------------------------------------
STOCKS AND/OR WARRANTS
Axsun Technologies, Inc., Cv., Series C 685,519 -- -- 685,519
Blaze Network Products, Inc., 8% Cv.,
Series D 166,836 -- -- 166,836
MicroPhotonix Integration Corp., Cv.,
Series C 316,691 -- -- 316,691
UNREALIZED
DEPRECIATION
- -------------------------------------------------------------------------------------------------------
STOCKS AND/OR WARRANTS
Axsun Technologies, Inc., Cv., Series C $ 7,653,066
Blaze Network Products, Inc., 8% Cv., Series D 1,067,750
MicroPhotonix Integration Corp., Cv., Series C 1,999,999
---------------
$ 10,720,815
===============
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
15 | OPPENHEIMER EMERGING TECHNOLOGIES FUND
- --------------------------------------------------------------------------------
STATMENT OF ASSETS AND LIABILITIES UNAUDITED
- --------------------------------------------------------------------------------
APRIL 30, 2004
- ---------------------------------------------------------------------------------------
ASSETS
- ---------------------------------------------------------------------------------------
Investments, at value--see accompanying statement of investments:
Unaffiliated companies (cost $177,306,185) $ 172,900,533
Affiliated companies (cost $11,067,756) 346,941
---------------
173,247,474
- ---------------------------------------------------------------------------------------
Cash 142,407
- ---------------------------------------------------------------------------------------
Receivables and other assets:
Investments sold 5,076,369
Shares of beneficial interest sold 181,349
Interest and dividends 35,485
Other 6,636
---------------
Total assets 178,689,720
- ---------------------------------------------------------------------------------------
LIABILITIES
- ---------------------------------------------------------------------------------------
Payables and other liabilities:
Investments purchased 2,465,173
Shares of beneficial interest redeemed 330,333
Shareholder communications 127,974
Trustees' compensation 45,774
Distribution and service plan fees 40,153
Transfer and shareholder servicing agent fees 37,683
Other 13,887
---------------
Total liabilities 3,060,977
- ---------------------------------------------------------------------------------------
NET ASSETS $ 175,628,743
===============
- ---------------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS
- ---------------------------------------------------------------------------------------
Paid-in capital $ 646,235,749
- ---------------------------------------------------------------------------------------
Accumulated net investment loss (2,024,023)
- ---------------------------------------------------------------------------------------
Accumulated net realized loss on investments (453,456,516)
- ---------------------------------------------------------------------------------------
Net unrealized depreciation on investments (15,126,467)
---------------
NET ASSETS $ 175,628,743
===============
16 | OPPENHEIMER EMERGING TECHNOLOGIES FUND
- -----------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE PER SHARE
- ------------------------------------------------------------------------------------------------------------------------------------
Class A Shares:
Net asset value and redemption price per share (based on net assets of
$86,097,529 and 31,815,424 shares of beneficial interest outstanding) $2.71
Maximum offering price per share (net asset value plus sales charge of 5.75% of
offering price) $2.88
- ------------------------------------------------------------------------------------------------------------------------------------
Class B Shares:
Net asset value, redemption price (excludes applicable contingent deferred
sales charge) and offering price per share (based on net assets of $59,960,964
and 22,801,757 shares of beneficial interest outstanding) $2.63
- ------------------------------------------------------------------------------------------------------------------------------------
Class C Shares:
Net asset value, redemption price (excludes applicable contingent deferred
sales charge) and offering price per share (based on net assets of $23,854,345
and 9,071,232 shares of beneficial interest outstanding) $2.63
- ------------------------------------------------------------------------------------------------------------------------------------
Class N Shares:
Net asset value, redemption price (excludes applicable contingent deferred
sales charge) and offering price per share (based on net assets of $3,022,419
and 1,126,521 shares of beneficial interest outstanding) $2.68
- ------------------------------------------------------------------------------------------------------------------------------------
Class Y Shares:
Net asset value, redemption price and offering price per share (based on net
assets of $2,693,486 and 970,059 shares of beneficial interest outstanding) $2.78
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
17 | OPPENHEIMER EMERGING TECHNOLOGIES FUND
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS UNAUDITED
- --------------------------------------------------------------------------------
FOR THE SIX MONTHS ENDED APRIL 30, 2004
- --------------------------------------------------------------------------------------------
INVESTMENT INCOME
- --------------------------------------------------------------------------------------------
Dividends $ 66,912
- --------------------------------------------------------------------------------------------
Interest 11,737
---------------
Total investment income 78,649
- --------------------------------------------------------------------------------------------
EXPENSES
- --------------------------------------------------------------------------------------------
Management fees 1,010,609
- --------------------------------------------------------------------------------------------
Distribution and service plan fees:
Class A 118,650
Class B 348,696
Class C 136,180
Class N 9,377
- --------------------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees:
Class A 344,172
Class B 329,206
Class C 87,471
Class N 10,776
Class Y 97
- --------------------------------------------------------------------------------------------
Shareholder communications:
Class A 28,139
Class B 25,046
Class C 5,337
Class N 19
- --------------------------------------------------------------------------------------------
Custodian fees and expenses 17,559
- --------------------------------------------------------------------------------------------
Trustees' compensation 4,794
- --------------------------------------------------------------------------------------------
Other 15,071
---------------
Total expenses 2,491,199
Less reduction to custodian expenses (149)
Less voluntary waiver of transfer and shareholder servicing agent fees:
Class A (176,637)
Class B (209,932)
Class C (40,735)
Class N (4,503)
---------------
Net expenses 2,059,243
- --------------------------------------------------------------------------------------------
NET INVESTMENT LOSS (1,980,594)
- --------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
- --------------------------------------------------------------------------------------------
Net realized gain on investments 14,260,193
- --------------------------------------------------------------------------------------------
Net change in unrealized appreciation (depreciation) on investments (41,832,440)
- --------------------------------------------------------------------------------------------
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS $(29,552,841)
===============
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
18 | OPPENHEIMER EMERGING TECHNOLOGIES FUND
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
SIX MONTHS YEAR
ENDED ENDED
APRIL 30, 2004 OCTOBER 31,
(UNAUDITED) 2003
- --------------------------------------------------------------------------------------------------------
OPERATIONS
- --------------------------------------------------------------------------------------------------------
Net investment loss $ (1,980,594) $ (2,504,324)
- --------------------------------------------------------------------------------------------------------
Net realized gain 14,260,193 16,569,327
- --------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation (depreciation) (41,832,440) 61,490,896
----------------------------------
Net increase (decrease) in net assets resulting from operations (29,552,841) 75,555,899
- --------------------------------------------------------------------------------------------------------
BENEFICIAL INTEREST TRANSACTIONS
- --------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from
beneficial interest transactions:
Class A 6,737,202 13,775,737
Class B 144,139 5,478,583
Class C 1,784,927 2,313,751
Class N (863,202) 1,269,615
Class Y 666,047 744,204
- ---------------------------------------------------------------------------------------------------------
NET ASSETS
- --------------------------------------------------------------------------------------------------------
Total increase (decrease) (21,083,728) 99,137,789
- ---------------------------------------------------------------------------------------------------------
Beginning of period 196,712,471 97,574,682
-----------------------------------
End of period (including accumulated net investment loss
of $2,024,023 and $43,429, respectively) $ 175,628,743 $196,712,471
===================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
19 | OPPENHEIMER EMERGING TECHNOLOGIES FUND
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
SIX MONTHS YEAR
ENDED ENDED
APRIL 30, 2004 OCT. 31,
CLASS A (UNAUDITED) 2003 2002 2001 2000 1
- ----------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- ----------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $3.14 $1.82 $ 3.51 $11.24 $10.00
- ----------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss) (.03) (.04) (.04) (.01) .01
Net realized and unrealized gain (loss) (.40) 1.36 (1.65) (7.71) 1.23
------------------------------------------------------
Total from investment operations (.43) 1.32 (1.69) (7.72) 1.24
- ----------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income -- -- -- (.01) --
- ----------------------------------------------------------------------------------------------------------------
Net asset value, end of period $2.71 $3.14 $ 1.82 $ 3.51 $11.24
======================================================
- ----------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2 (13.69)% 72.53% (48.15)% (68.74)% 12.40%
- ----------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ----------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $86,098 $93,886 $44,150 $ 91,220 $253,471
- ----------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $99,230 $62,832 $68,695 $158,376 $149,623
- ----------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income (loss) (1.60)% (1.51)% (1.61)% (0.23)% 0.25%
Total expenses 2.04% 2.70% 3.11% 2.08% 1.65%
Expenses after expense reimbursement
or fee waiver and reduction to
custodian expenses 1.68% 1.71% 2.10% 2.04% N/A 4
- ----------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 83% 219% 159% 85% 6%
<FN>
1. For the period from April 25, 2000 (commencement of operations) to October
31, 2000.
2. Assumes an investment on the business day before the first day of the fiscal
period, with all dividends and distribu- tions reinvested in additional shares
on the reinvestment date, and redemption at the net asset value calculated on
the last business day of the fiscal period. Sales charges are not reflected in
the total returns. Total returns are not annualized for periods of less than one
full year. Returns do not reflect the deduction of taxes that a shareholder
would pay on Fund distributions or the redemption of Fund shares.
3. Annualized for periods of less than one full year.
4. Reduction to custodian expenses less than 0.01%.
</FN>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
20 | OPPENHEIMER EMERGING TECHNOLOGIES FUND
SIX MONTHS YEAR
ENDED ENDED
APRIL 30, 2004 OCT. 31,
CLASS B (UNAUDITED) 2003 2002 2001 2000 1
- ----------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- ----------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $3.06 $1.79 $ 3.48 $11.20 $10.00
- ----------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment loss (.04) (.04) (.07) (.06) (.01)
Net realized and unrealized gain (loss) (.39) 1.31 (1.62) (7.66) 1.21
-------------------------------------------------------
Total from investment operations (.43) 1.27 (1.69) (7.72) 1.20
- ----------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income -- -- -- -- --
- ----------------------------------------------------------------------------------------------------------------
Net asset value, end of period $2.63 $3.06 $ 1.79 $ 3.48 $11.20
=======================================================
- ----------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2 (14.05)% 70.95% (48.56)% (68.93)% 12.00%
- ----------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ----------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $59,961 $69,789 $36,813 $ 75,336 $200,251
- ----------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $70,049 $48,920 $58,029 $128,540 $106,620
- ----------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment loss (2.38)% (2.23)% (2.40)% (0.99)% (0.48)%
Total expenses 3.06% 3.82% 3.95% 2.84% 2.39%
Expenses after expense reimbursement
or fee waiver and reduction to
custodian expenses 2.46% 2.42% 2.94% 2.80% N/A 4
- ----------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 83% 219% 159% 85% 6%
<FN>
1. For the period from April 25, 2000 (commencement of operations) to October
31, 2000.
2. Assumes an investment on the business day before the first day of the fiscal
period, with all dividends and distribu- tions reinvested in additional shares
on the reinvestment date, and redemption at the net asset value calculated on
the last business day of the fiscal period. Sales charges are not reflected in
the total returns. Total returns are not annualized for periods of less than one
full year. Returns do not reflect the deduction of taxes that a shareholder
would pay on Fund distributions or the redemption of Fund shares.
3. Annualized for periods of less than one full year.
4. Reduction to custodian expenses less than 0.01%.
</FN>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
21 | OPPENHEIMER EMERGING TECHNOLOGIES FUND
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS CONTINUED
- --------------------------------------------------------------------------------
SIX MONTHS YEAR
ENDED ENDED
APRIL 30, 2004 OCT. 31,
CLASS C (UNAUDITED) 2003 2002 2001 2000 1
- ----------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- ----------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $3.06 $1.79 $ 3.48 $11.20 $10.00
- ----------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment loss (.03) (.04) (.05) (.05) (.01)
Net realized and unrealized gain (loss) (.40) 1.31 (1.64) (7.67) 1.21
-------------------------------------------------------
Total from investment operations (.43) 1.27 (1.69) (7.72) 1.20
- ----------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income -- -- -- -- --
- ----------------------------------------------------------------------------------------------------------------
Net asset value, end of period $2.63 $3.06 $ 1.79 $ 3.48 $11.20
=======================================================
- ----------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2 (14.05)% 70.95% (48.56)% (68.93)% 12.00%
- ----------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ----------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $23,854 $26,112 $14,143 $ 23,121 $ 56,597
- ----------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $27,359 $17,266 $17,800 $ 38,049 $ 28,193
- ----------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment loss (2.34)% (2.29)% (2.36)% (1.00)% (0.47)%
Total expenses 2.72% 3.40% 3.84% 2.84% 2.39%
Expenses after expense reimbursement
or fee waiver and reduction to
custodian expenses 2.42% 2.48% 2.83% 2.80% N/A 4
- ----------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 83% 219% 159% 85% 6%
<FN>
1. For the period from April 25, 2000 (commencement of operations) to October
31, 2000.
2. Assumes an investment on the business day before the first day of the fiscal
period, with all dividends and distribu- tions reinvested in additional shares
on the reinvestment date, and redemption at the net asset value calculated on
the last business day of the fiscal period. Sales charges are not reflected in
the total returns. Total returns are not annualized for periods of less than one
full year. Returns do not reflect the deduction of taxes that a shareholder
would pay on Fund distributions or the redemption of Fund shares.
3. Annualized for periods of less than one full year.
4. Reduction to custodian expenses less than 0.01%.
</FN>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
22 | OPPENHEIMER EMERGING TECHNOLOGIES FUND
SIX MONTHS YEAR
ENDED ENDED
APRIL 30, 2004 OCT. 31,
CLASS N (UNAUDITED) 2003 2002 2000 1
- ----------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- ----------------------------------------------------------------------------------------------------
Net asset value, beginning of period $3.12 $1.81 $ 3.50 $ 6.59
- ----------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment loss (.02) (.05) (.04) (.03)
Net realized and unrealized gain (loss) (.42) 1.36 (1.65) (3.06)
-------------------------------------------
Total from investment operations (.44) 1.31 (1.69) (3.09)
- ----------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income -- -- -- --
- ----------------------------------------------------------------------------------------------------
Net asset value, end of period $2.68 $3.12 $ 1.81 $ 3.50
===========================================
- ----------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2 (14.10)% 72.38% (48.29)% (46.89)%
- ----------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ----------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $3,022 $4,445 $1,582 $1,450
- ----------------------------------------------------------------------------------------------------
Average net assets (in thousands) $3,768 $2,698 $1,547 $1,287
- ----------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment loss (1.80)% (1.89)% (1.80)% (1.24)%
Total expenses 2.12% 2.30% 3.05% 2.61%
Expenses after expense reimbursement or fee waiver
and reduction to custodian expenses 1.88% 2.10% 2.04% 2.57%
- ----------------------------------------------------------------------------------------------------
Portfolio turnover rate 83% 219% 159% 85%
<FN>
1. For the period from March 1, 2001 (inception of offering) to October 31,
2001.
2. Assumes an investment on the business day before the first day of the fiscal
period, with all dividends and distribu- tions reinvested in additional shares
on the reinvestment date, and redemption at the net asset value calculated on
the last business day of the fiscal period. Sales charges are not reflected in
the total returns. Total returns are not annualized for periods of less than one
full year. Returns do not reflect the deduction of taxes that a shareholder
would pay on Fund distributions or the redemption of Fund shares.
3. Annualized for periods of less than one full year.
</FN>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
23 | OPPENHEIMER EMERGING TECHNOLOGIES FUND
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS CONTINUED
- --------------------------------------------------------------------------------
SIX MONTHS YEAR
ENDED ENDED
APRIL 30, 2004 OCT. 31,
CLASS Y (UNAUDITED) 2003 2002 2001 2000 1
- ----------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- ----------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $3.21 $1.85 $3.55 $11.26 $10.00
- ----------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss) (.03) (.04) (.03) -- 2 .02
Net realized and unrealized gain (loss) (.40) 1.40 (1.67) (7.69) 1.24
-------------------------------------------------------
Total from investment operations (.43) 1.36 (1.70) (7.69) 1.26
- ----------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income -- -- -- (.02) --
- ----------------------------------------------------------------------------------------------------------------
Net asset value, end of period $2.78 $3.21 $1.85 $ 3.55 $11.26
=======================================================
- ----------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 3 (13.40)% 73.51% (47.89)% (68.40)% 12.60%
- ----------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ----------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $2,693 $2,480 $ 887 $1,236 $1
- ----------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $2,843 $1,492 $1,057 $ 331 $1
- ----------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 4
Net investment income (loss) (0.90)% (1.05)% (1.03)% (0.08)% 0.33%
Total expenses 1.05% 1.26% 1.57% 1.33% 1.42%
Expenses after expense reimbursement
or fee waiver and reduction to
custodian expenses N/A 5 N/A 5 1.53% 1.23% N/A 5
- ----------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 83% 219% 159% 85% 6%
<FN>
1. For the period from April 25, 2000 (commencement of operations) to October
31, 2000.
2. Less than $0.005 per share.
3. Assumes an investment on the business day before the first day of the fiscal
period, with all dividends and distribu- tions reinvested in additional shares
on the reinvestment date, and redemption at the net asset value calculated on
the last business day of the fiscal period. Sales charges are not reflected in
the total returns. Total returns are not annualized for periods of less than one
full year. Returns do not reflect the deduction of taxes that a shareholder
would pay on Fund distributions or the redemption of Fund shares.
4. Annualized for periods of less than one full year.
5. Reduction to custodian expenses less than 0.01%.
</FN>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
24 | OPPENHEIMER EMERGING TECHNOLOGIES FUND
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS UNAUDITED
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
Oppenheimer Emerging Technologies Fund (the Fund) is a non-diversified,
open-end management investment company registered under the Investment Company
Act of 1940, as amended. The Fund's investment objective is to seek long-term
capital appreciation. The Fund's investment advisor is OppenheimerFunds, Inc.
(the Manager).
The Fund offers Class A, Class B, Class C, Class N and Class Y shares. Class
A shares are sold at their offering price, which is normally net asset value
plus a front-end sales charge. Class B, Class C and Class N shares are sold
without a front-end sales charge but may be subject to a contingent deferred
sales charge (CDSC). Class N shares are sold only through retirement plans.
Retirement plans that offer Class N shares may impose charges on those
accounts. Class Y shares are sold to certain institutional investors without
either a front-end sales charge or a CDSC. All classes of shares have identical
rights and voting privileges 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 Fund assesses a 2% fee on the
proceeds of fund shares that are redeemed (either by selling or exchanging to
another Oppenheimer fund) within 30 days of their purchase. The fee, which is
retained by the Fund, is accounted for as an addition to paid-in capital.
The following is a summary of significant accounting policies consistently
followed by the Fund.
- --------------------------------------------------------------------------------
SECURITIES VALUATION. 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).
25 | OPPENHEIMER EMERGING TECHNOLOGIES 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 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.
- --------------------------------------------------------------------------------
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.
26 | OPPENHEIMER EMERGING TECHNOLOGIES FUND
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.
As of April 30, 2004, the Fund had available for federal income tax purposes
an estimated unused capital loss carryforward of $451,797,678 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 $14,260,193 and $14,755,514, 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 $268,287,393
2010 197,770,478
------------
Total $466,057,871
============
- --------------------------------------------------------------------------------
TRUSTEES' COMPENSATION. The Fund has adopted an unfunded retirement plan for
the Fund's independent trustees. Benefits are based on years of service and
fees paid to each trustee during the years of service. During the six months
ended April 30, 2004, the Fund's projected benefit obligations were increased
by $1,493 and payments of $2,419 were made to retired trustees, resulting in an
accumulated liability of $42,504 as of April 30, 2004.
The Board of Trustees has adopted a deferred compensation plan for
independent trustees that enable trustees 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 Trustee 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 Trustee.
The Fund does purchase shares of the funds selected for deferral by the Trustee
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 trustees' fees under the plan will not affect the net
assets of the Fund, and will not materially affect the Fund's assets,
liabilities or net investment income per share. Amounts will be deferred until
distributed in accordance to the Plan.
- --------------------------------------------------------------------------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS. Dividends and distributions to
shareholders, which are determined in accordance with income tax regulations,
are recorded on the ex-dividend date. Income and capital gain distributions, if
any, are declared and paid annually.
27 | OPPENHEIMER EMERGING TECHNOLOGIES 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 BENEFICIAL INTEREST
The Fund has authorized an unlimited number of no par value shares of
beneficial interest of each class. Transactions in shares of beneficial
interest were as follows:
SIX MONTHS ENDED APRIL 30, 2004 YEAR ENDED OCTOBER 31, 2003
SHARES AMOUNT SHARES AMOUNT
- ---------------------------------------------------------------------------------
CLASS A
Sold 8,703,214 $ 27,805,715 19,269,973 $ 45,613,174
Redeemed (6,792,022) (21,068,513) (13,652,915) (31,837,437)
--------------------------------------------------------
Net increase 1,911,192 $ 6,737,202 5,617,058 $ 13,775,737
========================================================
- ---------------------------------------------------------------------------------
CLASS B
Sold 3,291,400 $ 10,102,290 7,985,412 $ 18,868,771
Redeemed (3,276,495) (9,958,151) (5,813,163) (13,390,188)
--------------------------------------------------------
Net increase 14,905 $ 144,139 2,172,249 $ 5,478,583
========================================================
- ---------------------------------------------------------------------------------
CLASS C
Sold 1,724,916 $ 5,360,866 5,703,935 $ 12,775,516
Redeemed (1,180,552) (3,575,939) (5,092,014) (10,461,765)
--------------------------------------------------------
Net increase 544,364 $ 1,784,927 611,921 $ 2,313,751
========================================================
28 | OPPENHEIMER EMERGING TECHNOLOGIES FUND
SIX MONTHS ENDED APRIL 30, 2004 YEAR ENDED OCTOBER 31, 2003
SHARES AMOUNT SHARES AMOUNT
- ---------------------------------------------------------------------------------
CLASS N
Sold 571,613 $ 1,768,387 773,300 $ 1,791,741
Redeemed (871,400) (2,631,589) (219,846) (522,126)
-------------------------------------------------------
Net increase (decrease) (299,787) $ (863,202) 553,454 $ 1,269,615
=======================================================
- ---------------------------------------------------------------------------------
CLASS Y
Sold 454,002 $ 1,480,229 1,072,410 $ 2,688,989
Redeemed (256,611) (814,182) (779,149) (1,944,785)
-------------------------------------------------------
Net increase 197,391 $ 666,047 293,261 $ 744,204
=======================================================
- --------------------------------------------------------------------------------
3. PURCHASES AND SALES OF SECURITIES
The aggregate cost of purchases and proceeds from sales of securities, other
than short-term obligations, for the six months ended April 30, 2004, were
$166,302,420 and $175,092,512, respectively.
- --------------------------------------------------------------------------------
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES
MANAGEMENT FEES. Management fees paid to the Manager were in accordance with
the investment advisory agreement with the Fund. Effective January 1, 2004, the
agreement provides for a fee at an annual rate of 1.00% of the first $200
million of average annual net assets, 0.95% of the next $200 million, 0.90% of
the next $200 million and 0.85% of average net assets over $600 million. Prior
to January 1, 2004, the Fund paid the Manager an advisory fee at an annual rate
of 1.00% of average annual net assets.
- --------------------------------------------------------------------------------
TRANSFER AGENT FEES. OppenheimerFunds Services (OFS), a division of the
Manager, acts as the transfer and shareholder servicing agent for the Fund. The
Fund pays OFS a per account fee. For the six months ended April 30, 2004, the
Fund paid $355,167 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.
- --------------------------------------------------------------------------------
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
29 | OPPENHEIMER EMERGING TECHNOLOGIES FUND
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS UNAUDITED / CONTINUED
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES Continued
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 $9,338,728,
$932,235 and $74,514, 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 $74,587 $62 $102,047 $5,552 $342
- --------------------------------------------------------------------------------
5. 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 Trustees as reflecting fair value. A security may also
be considered illiquid if it lacks a readily available market or if its
valuation has not changed for a certain period of time. The Fund intends to
invest no more than 15%
30 | OPPENHEIMER EMERGING TECHNOLOGIES FUND
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 $740,257, which
represents 0.42% of the Fund's net assets, all of which are considered
restricted. Information concerning restricted securities is as follows:
ACQUISITION VALUATION AS OF UNREALIZED
SECURITY DATES COST APRIL 30, 2004 DEPRECIATION
- ---------------------------------------------------------------------------------------------------------------------
STOCKS AND/OR WARRANTS
Axsun Technologies, Inc., Cv., Series C 12/13/00 $8,000,007 $346,941 $7,653,066
Blaze Network Products, Inc., 8% Cv.,
Series D 10/17/00 1,067,750 -- 1,067,750
BroadBand Office, Inc., Cv., Series C 8/28/00 999,980 -- 999,980
Centerpoint Broadband Technologies,
Inc., Cv., Series D 5/26/00 5,000,001 -- 5,000,001
Centerpoint Broadband Technologies,
Inc., Cv., Series Z 10/23/00 999,999 -- 999,999
fusionOne, Inc., 8% Non-Cum. Cv., Series D 9/6/00 1,434,530 5,997 1,428,533
MicroPhotonix Integration Corp., Cv.,
Series C 7/6/00 1,999,999 -- 1,999,999
Multiplex, Inc., Cv., Series C 2/9/01 2,849,336 247,923 2,601,413
Questia Media, Inc., Cv., Series B 8/18/00 999,998 139,396 860,602
- --------------------------------------------------------------------------------
6. BORROWING AND LENDING ARRANGEMENTS
The Fund entered into an "interfund borrowing and lending arrangement" with
other funds in the Oppenheimer funds complex, to allow funds to borrow for
liquidity purposes. The arrangement was initiated pursuant to exemptive relief
granted by the Securities and Exchange Commission (the SEC) to allow these
affiliated funds to lend money to, and borrow money from, each other, in an
attempt to reduce borrowing costs below those of bank loan facilities. The
SEC's order requires the Fund's Board of Trustees to adopt operating policies
and procedures to administer interfund borrowing and lending. Under the
arrangement the Fund may lend money to other Oppenheimer funds and may borrow
from other Oppenheimer funds at a rate set by the Fund's Board of Trustees,
based upon a recommendation by the Manager. The Fund's borrowings, if any, are
subject to asset coverage requirements under the Investment Company Act and the
provisions of the SEC order and other applicable regulations. If the Fund
borrows money, there is a risk that the loan could be called on one day's
notice, in which case the Fund might have to borrow from a bank at higher rates
if a loan were not available from another Oppenheimer fund. If the Fund lends
money to another fund, it will be subject to the risk that the other fund might
not repay the loan in a timely manner, or at all.
The Fund had no interfund borrowings or loans outstanding during the six
months ended or at April 30, 2004.
31 | OPPENHEIMER EMERGING TECHNOLOGIES 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.
32 | OPPENHEIMER EMERGING TECHNOLOGIES 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 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
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)