UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES
Investment Company Act file number 811-3346
Oppenheimer Disciplined Allocation Fund
(Exact name of registrant as specified in charter)
6803 South Tucson Way, Centennial, Colorado 80112-3924
(Address of principal executive offices) (Zip code)
Robert G. Zack, Esq.
OppenheimerFunds, Inc.
Two World Financial Center, New York, New York 10281-1008
(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 - October 31, 2004
ITEM 1. REPORTS TO STOCKHOLDERS.
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TOP HOLDINGS AND ALLOCATIONS
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TOP TEN COMMON STOCK HOLDINGS
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UnitedGlobalCom, Inc., Cl. A 3.2%
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Raytheon Co. 2.4
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Cendant Corp. 2.1
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BP plc, ADR 1.9
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Take-Two Interactive Software, Inc. 1.8
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Liberty Media Corp., Cl. A 1.8
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Altria Group, Inc. 1.7
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Citigroup, Inc. 1.6
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IDT Corp., Cl. B 1.6
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Bank of America Corp. 1.6
Portfolio holdings and allocations are subject to change. Percentages are as of
October 31, 2004, and are based on net assets.
For more current Fund holdings, please visit www.oppenheimerfunds.com.
TOP TEN COMMON STOCK INDUSTRIES
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Media 6.0%
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Software 4.0
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Diversified Financial Services 4.0
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Aerospace & Defense 3.4
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Oil & Gas 3.3
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Commercial Banks 3.2
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Insurance 2.8
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Pharmaceuticals 2.6
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Commercial Services & Supplies 2.1
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Biotechnology 2.0
Portfolio holdings and allocations are subject to change. Percentages are as of
October 31, 2004, and are based on net assets.
8 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
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[GRAPHIC]
EDGAR REPRESENTATION OF PRINTED NUMBERS USED IN GRAPHIC
PORTFOLIO ALLOCATION
Bonds and Notes 48.4%
Stocks 45.1
Cash Equivalents 6.5
Portfolio holdings and allocations are subject to change. Percentages are as of
October 31, 2004, and are based on total investments.
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9 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
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FUND PERFORMANCE DISCUSSION
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HOW HAS THE FUND PERFORMED? BELOW IS A DISCUSSION BY OPPENHEIMERFUNDS, INC., OF
THE FUND'S PERFORMANCE DURING ITS FISCAL YEAR ENDED OCTOBER 31, 2004, FOLLOWED
BY A GRAPHICAL COMPARISON OF THE FUND'S PERFORMANCE TO APPROPRIATE BROAD-BASED
MARKET INDICES.
MANAGEMENT'S DISCUSSION OF FUND PERFORMANCE. Security selection and asset
allocation between equities and fixed income contributed equally to the Fund's
performance during the reporting period ended October 31, 2004. Early in the
year, when equities were rising, we had a higher allocation to equities. We
subsequently lowered this weighting and increased the fixed income allocation to
take advantage of this market's volatility during the second half.
The fixed income side of the portfolio appreciated owing to our decisions on
mortgages, the direction of interest rates and corporate credit risk. In
mortgages, we emphasized high coupon mortgages, which did quite well,
particularly in the second half, a period marked by uneasiness about the economy
and rising interest rates. During the course of the year, we also managed the
duration of the portfolio to take advantage of market volatility resulting from
investor sentiment that we felt was out of sync with reality. In corporate
bonds, we decided to emphasize corporate credit risk, particularly high yield
and lower investment grade bonds (DDD-rated), both of which did particularly
well during the period.
The Fund performed well in seven of the 10 equity sectors we follow. In
consumer staples, there were two notable contributors to performance. One was a
wholesale club operator, which did well despite increases in the costs of
materials and packaging. The other was an alcoholic beverages distributor, which
benefited from surging sales from its imported beer brands, especially Corona.
In financials, we took advantage of inefficient pricing in the IPO of Genworth
Financial, Inc., a spin off from GE Co. The equipment and services component of
the healthcare sector, particularly a managed healthcare provider, benefited
Fund performance, as did our decision to realize gains early in the year from
our biotechnology holdings. Our performance in the industrial sector was due in
large part to positions in Raytheon Co., a manufacturing conglomerate and an
aerospace company, among others. Strong stock selection across the board, with
an emphasis on semiconductor companies, drove our performance in the information
technology sector. The Fund's position in Take-Two Interactive Software, Inc.,
which develops and manufactures third party video games, contributed
meaningfully to performance in the software and services sector. The same was
true of a position in a leading industrial gas manufacturer, which enabled us to
perform well in the materials sector.
10 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
Conversely, the Fund's slight underperformance in the energy sector resulted
from our limited stake in this sector, despite stellar performance from
investments in BP plc, ADR and a Russian integrated oil company.
Underperformance in the telecommunications sector, our largest detractor, was
due to our limited exposure in the wireless sub-sector, which did very well over
the period, and to our remaining faithful to long distance provider IDT Corp.,
which declined significantly. Finally, undermining performance the most in the
consumer discretionary sector was an investment in a diversified internet
services company, which suffered from negative growth in on-line travel
bookings.
COMPARING THE FUND'S PERFORMANCE TO THE MARKET. The graphs that follow show the
performance of a hypothetical $10,000 investment in each class of shares of the
Fund held until October 31, 2004. In the case of Class A shares, performance is
measured over a ten-fiscal-year period. In the case of Class B, performance is
measured from inception of the class on October 2, 1995. In the case of Class C,
performance is measured from inception of the class on May 1, 1996. In the case
of Class N shares, performance is measured from inception of the Class on March
1, 2001. The Fund's performance reflects the deduction of the maximum initial
sales charge on Class A shares, the applicable contingent deferred sales charge
on Class B, Class C, and Class N shares, and reinvestments of all dividends and
capital gains distributions. Past performance cannot guarantee future results.
The Fund's performance is compared to the performance of the Standard &
Poor's (S&P) 500 Index, a broad-based index of equity securities widely regarded
as a general measure of the performance of the U.S. equity securities market.
The Fund's performance is also compared to Merrill Lynch Corporate and
Government Master Index, a broad-based index of U.S. Treasury and government
agency securities, corporate and Yankee bonds regarded as a general measurement
of the performance of the domestic debt securities market. 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 indices.
11 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
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FUND PERFORMANCE DISCUSSION
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CLASS A SHARES
COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN:
Oppenheimer Disciplined Allocation Fund (Class A)
S&P 500 Index
Merrill Lynch Corporate and Government Master Index
[GRAPHIC]
EDGAR REPRESENTATION OF PRINTED NUMBERS USED IN GRAPHIC
Oppenheimer Merrill Lynch
Disciplined Corporate and
Allocation Fund Government
Date (Class A) S&P 500 Index Master Index
12/31/1993 $ 9,425.00 $10,000.00 $10,000.00
03/31/1994 9,185.00 9,621.00 9,706.00
06/30/1994 9,028.00 9,662.00 9,590.00
09/30/1994 9,281.00 10,133.00 9,632.00
12/31/1994 9,226.00 10,131.00 9,673.00
03/31/1995 9,789.00 11,117.00 10,145.00
06/30/1995 10,430.00 12,176.00 10,801.00
09/30/1995 10,909.00 13,143.00 11,000.00
12/31/1995 11,436.00 13,934.00 11,510.00
03/31/1996 11,628.00 14,682.00 11,256.00
06/30/1996 11,707.00 15,340.00 11,303.00
09/30/1996 11,933.00 15,814.00 11,499.00
10/31/1996 1 12,153.00 16,250.00 11,763.00
01/31/1997 12,818.00 18,201.00 11,867.00
04/30/1997 12,854.00 18,641.00 11,933.00
07/31/1997 14,571.00 22,303.00 12,552.00
10/31/1997 14,441.00 21,466.00 12,818.00
01/31/1998 14,719.00 23,097.00 13,200.00
04/30/1998 15,716.00 26,295.00 13,275.00
07/31/1998 15,296.00 26,609.00 13,575.00
10/31/1998 15,296.00 26,191.00 14,140.00
01/31/1999 16,523.00 30,606.00 14,353.00
04/30/1999 16,579.00 32,035.00 14,126.00
07/31/1999 16,299.00 31,985.00 13,890.00
10/31/1999 15,697.00 32,913.00 14,035.00
01/31/2000 15,401.00 33,771.00 13,954.00
04/30/2000 16,270.00 35,278.00 14,266.00
07/31/2000 16,381.00 34,852.00 14,679.00
10/31/2000 16,996.00 34,913.00 15,047.00
01/31/2001 17,188.00 33,467.00 15,856.00
04/30/2001 16,190.00 30,704.00 15,977.00
07/31/2001 16,200.00 29,861.00 16,553.00
10/31/2001 15,276.00 26,224.00 17,360.00
01/31/2002 15,595.00 28,067.00 17,042.00
04/30/2002 15,472.00 26,830.00 17,168.00
07/31/2002 14,237.00 22,809.00 17,723.00
10/31/2002 14,381.00 22,265.00 18,327.00
01/31/2003 14,293.00 21,610.00 18,787.00
04/30/2003 14,832.00 23,260.00 19,283.00
07/31/2003 15,823.00 25,235.00 18,945.00
10/31/2003 16,418.00 26,893.00 19,400.00
01/31/2004 17,470.00 29,075.00 19,824.00
04/30/2004 17,116.00 28,579.00 19,634.00
07/31/2004 17,027.00 28,556.00 19,821.00
10/31/2004 17,588.00 29,424.00 20,475.00
AVERAGE ANNUAL TOTAL RETURNS OF CLASS A SHARES WITH SALES CHARGE OF THE FUND AT
10/31/04
1-Year 0.97% 5-Year 1.10% 10-Year 5.91%
1. The Fund changed its fiscal year end from 12/31 to 10/31.
12 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
CLASS B SHARES
COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN:
Oppenheimer Disciplined Allocation Fund (Class B)
S&P 500 Index
Merrill Lynch Corporate and Government Master Index
[GRAPHIC]
EDGAR REPRESENTATION OF PRINTED NUMBERS USED IN GRAPHIC
Oppenheimer Merrill Lynch
Disciplined Corporate and
Allocation Fund Government
Date (Class B) S&P 500 Index Master Index
10/02/1995 $10,000.00 $10,000.00 $10,000.00
12/31/1995 10,493.00 10,602.00 10,463.00
03/31/1996 10,647.00 11,170.00 10,232.00
06/30/1996 10,697.00 11,671.00 10,275.00
09/30/1996 10,880.00 12,032.00 10,453.00
10/31/1996 1 11,072.00 12,364.00 10,693.00
01/31/1997 11,651.00 13,848.00 10,788.00
04/30/1997 11,664.00 14,183.00 10,848.00
07/31/1997 13,198.00 16,969.00 11,411.00
10/31/1997 13,060.00 16,332.00 11,652.00
01/31/1998 13,283.00 17,573.00 11,999.00
04/30/1998 14,159.00 20,007.00 12,068.00
07/31/1998 13,749.00 20,245.00 12,341.00
10/31/1998 13,726.00 19,928.00 12,854.00
01/31/1999 14,805.00 23,286.00 13,048.00
04/30/1999 14,821.00 24,374.00 12,841.00
07/31/1999 14,546.00 24,335.00 12,627.00
10/31/1999 13,978.00 25,041.00 12,758.00
01/31/2000 13,687.00 25,694.00 12,685.00
04/30/2000 14,437.00 26,841.00 12,968.00
07/31/2000 14,507.00 26,517.00 13,344.00
10/31/2000 15,023.00 26,563.00 13,678.00
01/31/2001 15,171.00 25,463.00 14,414.00
04/30/2001 14,259.00 23,360.00 14,524.00
07/31/2001 14,239.00 22,719.00 15,047.00
10/31/2001 13,407.00 19,952.00 15,781.00
01/31/2002 13,686.00 21,354.00 15,492.00
04/30/2002 13,579.00 20,413.00 15,606.00
07/31/2002 12,495.00 17,354.00 16,111.00
10/31/2002 12,621.00 16,940.00 16,660.00
01/31/2003 12,544.00 16,442.00 17,079.00
04/30/2003 13,017.00 17,697.00 17,529.00
07/31/2003 13,887.00 19,200.00 17,222.00
10/31/2003 14,409.00 20,461.00 17,635.00
01/31/2004 15,332.00 22,121.00 18,021.00
04/30/2004 15,021.00 21,744.00 17,848.00
07/31/2004 14,943.00 21,727.00 18,018.00
10/31/2004 15,436.00 22,387.00 18,613.00
AVERAGE ANNUAL TOTAL RETURNS OF CLASS B SHARES WITH SALES CHARGE OF THE FUND AT
10/31/04
1-Year 1.13% 5-Year 1.12% Since Inception (10/2/95) 4.90%
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%; FOR CLASS B SHARES, THE
CONTINGENT DEFERRED SALES CHARGE OF 5% (1-YEAR) AND 2% (5-YEAR); AND FOR CLASS C
AND N SHARES, THE CONTINGENT 1% DEFERRED SALES CHARGE FOR THE 1-YEAR PERIOD.
BECAUSE CLASS B SHARES CONVERT TO CLASS A SHARES 72 MONTHS AFTER PURCHASE, THE
SINCE-INCEPTION RETURN FOR CLASS B USES CLASS A PERFORMANCE FOR THE PERIOD AFTER
CONVERSION. SEE PAGE 16 FOR FURTHER INFORMATION.
1. The Fund changed its fiscal year end from 12/31 to 10/31.
13 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
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FUND PERFORMANCE DISCUSSION
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CLASS C SHARES
COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN:
Oppenheimer Disciplined Allocation Fund (Class C)
S&P 500 Index
Merrill Lynch Corporate and Government Master Index
[GRAPHIC]
EDGAR REPRESENTATION OF PRINTED NUMBERS USED IN GRAPHIC
Oppenheimer Merrill Lynch
Disciplined Corporate and
Allocation Fund Government
Date (Class C) S&P 500 Index Master Index
05/01/1996 $10,000.00 $10,000.00 $10,000.00
06/30/1996 10,062.00 10,297.00 10,113.00
09/30/1996 10,225.00 10,615.00 10,288.00
10/31/1996 1 10,408.00 10,908.00 10,524.00
01/31/1997 10,955.00 12,217.00 10,618.00
04/30/1997 10,965.00 12,512.00 10,677.00
07/31/1997 12,406.00 14,971.00 11,231.00
10/31/1997 12,274.00 14,409.00 11,469.00
01/31/1998 12,489.00 15,503.00 11,810.00
04/30/1998 13,304.00 17,650.00 11,878.00
07/31/1998 12,921.00 17,861.00 12,146.00
10/31/1998 12,901.00 17,581.00 12,651.00
01/31/1999 13,912.00 20,544.00 12,842.00
04/30/1999 13,927.00 21,503.00 12,639.00
07/31/1999 13,664.00 21,469.00 12,428.00
10/31/1999 13,138.00 22,092.00 12,557.00
01/31/2000 12,858.00 22,668.00 12,485.00
04/30/2000 13,561.00 23,679.00 12,764.00
07/31/2000 13,628.00 23,394.00 13,134.00
10/31/2000 14,115.00 23,435.00 13,463.00
01/31/2001 14,248.00 22,464.00 14,187.00
04/30/2001 13,400.00 20,609.00 14,295.00
07/31/2001 13,373.00 20,043.00 14,810.00
10/31/2001 12,596.00 17,602.00 15,533.00
01/31/2002 12,835.00 18,839.00 15,248.00
04/30/2002 12,704.00 18,009.00 15,360.00
07/31/2002 11,666.00 15,310.00 15,857.00
10/31/2002 11,760.00 14,945.00 16,397.00
01/31/2003 11,658.00 14,505.00 16,809.00
04/30/2003 12,073.00 15,613.00 17,253.00
07/31/2003 12,856.00 16,939.00 16,951.00
10/31/2003 13,310.00 18,051.00 17,357.00
01/31/2004 14,310.00 19,516.00 17,737.00
04/30/2004 13,809.00 19,183.00 17,567.00
07/31/2004 13,707.00 19,168.00 17,734.00
10/31/2004 14,125.00 19,750.00 18,319.00
AVERAGE ANNUAL TOTAL RETURNS OF CLASS C SHARES WITH SALES CHARGE OF THE FUND AT
10/31/04
1-Year 5.13% 5-Year 1.46% Since Inception (5/1/96) 4.15%
1. The Fund changed its fiscal year end from 12/31 to 10/31.
14 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
CLASS N SHARES
COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN:
Oppenheimer Disciplined Allocation Fund (Class N)
S&P 500 Index
Merrill Lynch Corporate and Government Master Index
[GRAPHIC]
EDGAR REPRESENTATION OF PRINTED NUMBERS USED IN GRAPHIC
Oppenheimer Merrill Lynch
Disciplined Corporate and
Allocation Fund Government
Date (Class N) S&P 500 Index Master Index
03/01/2001 $10,000 $10,000 $10,000
04/30/2001 9,793 10,094 9,968
07/31/2001 9,785 9,817 10,328
10/31/2001 9,210 8,621 10,831
01/31/2002 9,399 9,227 10,633
04/30/2002 9,317 8,821 10,711
07/31/2002 8,570 7,499 11,058
10/31/2002 8,642 7,320 11,435
01/31/2003 8,581 7,104 11,722
04/30/2003 8,897 7,647 12,031
07/31/2003 9,484 8,296 11,820
10/31/2003 9,835 8,841 12,104
01/31/2004 10,458 9,559 12,368
04/30/2004 10,229 9,396 12,250
07/31/2004 10,167 9,388 12,367
10/31/2004 10,493 9,674 12,775
AVERAGE ANNUAL TOTAL RETURNS OF CLASS N SHARES WITH SALES CHARGE OF THE FUND AT
10/31/04
1-Year 5.68% 5-Year N/A Since Inception (3/1/01) 1.32%
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%; FOR CLASS B SHARES, THE
CONTINGENT DEFERRED SALES CHARGE OF 5% (1-YEAR) AND 2% (5-YEAR); AND FOR CLASS C
AND N SHARES, THE CONTINGENT 1% DEFERRED SALES CHARGE FOR THE 1-YEAR PERIOD.
BECAUSE CLASS B SHARES CONVERT TO CLASS A SHARES 72 MONTHS AFTER PURCHASE, THE
SINCE-INCEPTION RETURN FOR CLASS B USES CLASS A PERFORMANCE FOR THE PERIOD AFTER
CONVERSION. SEE PAGE 16 FOR FURTHER INFORMATION.
15 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
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NOTES
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Total returns and the ending account values in the graphs include changes in
share price and reinvestment of dividends and capital gains distributions in a
hypothetical investment for the periods shown. The Fund's total returns shown do
not reflect the deduction of income taxes on an individual's investment. Taxes
may reduce your actual investment returns on income or gains paid by the Fund or
any gains you may realize if you sell your shares.
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.
The Fund's investment strategy and focus can change over time. The mention of
specific fund holdings does not constitute a recommendation by OppenheimerFunds,
Inc.
CLASS A shares of the Fund were first publicly offered on 9/16/85. 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 10/2/95. Unless
otherwise noted, Class B returns include the applicable contingent deferred
sales charge of 5% (1-year) and 2% (5-year). Because Class B shares convert to
Class A shares 72 months after purchase, the "since inception" return for Class
B uses Class A performance for the period after conversion. 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 5/1/96. 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 3/1/01. Class N shares
are offered only through retirement plans. Unless otherwise noted, Class N
returns include the contingent deferred sales charge of 1% for the 1-year
period. Class N shares are subject to an annual 0.25% asset-based sales charge.
An explanation of the calculation of performance is in the Fund's Statement of
Additional Information.
16 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
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FUND EXPENSES
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FUND EXPENSES. As a shareholder of the Fund, you incur two types of costs: (1)
transaction costs, which may include sales charges (loads) on purchase payments,
contingent deferred sales charges on redemptions; and redemption fees, if any;
and (2) ongoing costs, including management fees; distribution and service fees;
and other Fund expenses. These examples are intended to help you understand your
ongoing costs (in dollars) of investing in the Fund and to compare these costs
with the ongoing costs of investing in other mutual funds.
The examples are based on an investment of $1,000.00 invested at the beginning
of the period and held for the entire 6-month period ended October 31, 2004.
ACTUAL EXPENSES. The "actual" lines of the table provide information about
actual account values and actual expenses. You may use the information on this
line for the class of shares you hold, together with the amount you invested, to
estimate the expense that you paid over the period. Simply divide your account
value by $1,000.00 (for example, an $8,600.00 account value divided by $1,000.00
= 8.60), then multiply the result by the number in the "actual" line under the
heading entitled "Expenses Paid During Period" to estimate the expenses you paid
on your account during this period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES. The "hypothetical" lines of the
table provide information about hypothetical account values and hypothetical
expenses based on the Fund's actual expense ratio for each class of shares, and
an assumed rate of return of 5% per year before expenses, which is not the
Fund's actual return. The hypothetical account values and expenses may not be
used to estimate the actual ending account balance or expenses you paid for the
period. You may use this information to compare the ongoing costs of investing
in the Fund and other funds. To do so, compare this 5% hypothetical example for
the class of shares you hold with the 5% hypothetical examples that appear in
the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs, such as front-end
or contingent deferred sales charges (loads), or a $12.00 fee imposed annually
on accounts valued at less than $500.00 (subject to exceptions described in
17 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
- --------------------------------------------------------------------------------
FUND EXPENSES
- --------------------------------------------------------------------------------
the Statement of Additional Information). Therefore, the "hypothetical" lines of
the table are useful in comparing ongoing costs only, and will not help you
determine the relative total costs of owning different funds. In addition, if
these transactional costs were included, your costs would have been higher.
- --------------------------------------------------------------------------------
BEGINNING ENDING EXPENSES
ACCOUNT ACCOUNT PAID DURING
VALUE VALUE 6 MONTHS ENDED
(5/1/04) (10/31/04) OCTOBER 31, 2004
- --------------------------------------------------------------------------------
Class A Actual $1,000.00 $1,027.60 $ 5.72
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Class A Hypothetical 1,000.00 1,019.51 5.70
- --------------------------------------------------------------------------------
Class B Actual 1,000.00 1,022.60 10.32
- --------------------------------------------------------------------------------
Class B Hypothetical 1,000.00 1,014.98 10.28
- --------------------------------------------------------------------------------
Class C Actual 1,000.00 1,022.90 10.27
- --------------------------------------------------------------------------------
Class C Hypothetical 1,000.00 1,015.03 10.23
- --------------------------------------------------------------------------------
Class N Actual 1,000.00 1,025.80 7.92
- --------------------------------------------------------------------------------
Class N Hypothetical 1,000.00 1,017.34 7.89
Hypothetical assumes 5% annual return before expenses.
Expenses are equal to the Fund's annualized expense ratio for that class,
multiplied by the average account value over the period, multiplied by 184/366
(to reflect the one-half year period). Those annualized expense ratios based on
the 6-month period ended October 31, 2004 are as follows:
CLASS EXPENSE RATIOS
- ------------------------
Class A 1.12%
- ------------------------
Class B 2.02
- ------------------------
Class C 2.01
- ------------------------
Class N 1.55
The expense ratios reflect voluntary waivers or reimbursements of expenses by
the Fund's Manager and Transfer Agent that can be terminated at any time,
without advance notice. The "Financial Highlights" tables in the Fund's
financial statements, included in this report, also show the gross expense
ratios, without such waivers or reimbursements.
- --------------------------------------------------------------------------------
18 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
- --------------------------------------------------------------------------------
STATEMENT OF INVESTMENTS OCTOBER 31, 2004
- --------------------------------------------------------------------------------
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------------------------------
COMMON STOCKS--53.3%
- --------------------------------------------------------------------------------------------------------
CONSUMER DISCRETIONARY--8.0%
- --------------------------------------------------------------------------------------------------------
AUTO COMPONENTS--0.1%
TRW Automotive Holdings Corp. 1 5,600 $ 102,816
- --------------------------------------------------------------------------------------------------------
HOTELS, RESTAURANTS & Leisure--0.8%
McDonald's Corp. 33,900 988,185
- --------------------------------------------------------------------------------------------------------
HOUSEHOLD DURABLES--0.3%
WCI Communities, Inc. 1 16,600 391,760
- --------------------------------------------------------------------------------------------------------
INTERNET & CATALOG RETAIL--0.8%
IAC/InterActiveCorp 1 49,000 1,059,380
- --------------------------------------------------------------------------------------------------------
MEDIA--6.0%
EchoStar Communications Corp., Cl. A 1 24,400 771,528
- --------------------------------------------------------------------------------------------------------
Liberty Media Corp., Cl. A 1 247,300 2,205,916
- --------------------------------------------------------------------------------------------------------
Liberty Media International, Inc., A Shares 1 13,938 502,465
- --------------------------------------------------------------------------------------------------------
UnitedGlobalCom, Inc., Cl. A 1 534,150 3,995,442
------------
7,475,351
- --------------------------------------------------------------------------------------------------------
CONSUMER STAPLES--3.1%
- --------------------------------------------------------------------------------------------------------
BEVERAGES--0.6%
Constellation Brands, Inc., Cl. A 1 17,200 674,756
- --------------------------------------------------------------------------------------------------------
FOOD & STAPLES RETAILING--0.8%
Wal-Mart Stores, Inc. 18,600 1,002,912
- --------------------------------------------------------------------------------------------------------
TOBACCO--1.7%
Altria Group, Inc. 44,600 2,161,316
- --------------------------------------------------------------------------------------------------------
ENERGY--4.0%
- --------------------------------------------------------------------------------------------------------
ENERGY EQUIPMENT & SERVICES--0.7%
Halliburton Co. 20,400 755,616
- --------------------------------------------------------------------------------------------------------
Talisman Energy, Inc. 6,300 169,281
------------
924,897
- --------------------------------------------------------------------------------------------------------
OIL & GAS--3.3%
BP plc, ADR 39,800 2,318,350
- --------------------------------------------------------------------------------------------------------
Kinder Morgan, Inc. 7,700 495,649
- --------------------------------------------------------------------------------------------------------
LUKOIL, Sponsored ADR 10,400 1,297,400
------------
4,111,399
- --------------------------------------------------------------------------------------------------------
FINANCIALS--10.8%
- --------------------------------------------------------------------------------------------------------
COMMERCIAL BANKS--3.2%
Bank of America Corp. 43,202 1,935,018
- --------------------------------------------------------------------------------------------------------
Commerce Bancorp, Inc. 7,800 462,072
- --------------------------------------------------------------------------------------------------------
SouthTrust Corp. 19,200 836,544
- --------------------------------------------------------------------------------------------------------
Wells Fargo & Co. 12,800 764,416
------------
3,998,050
19 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
- --------------------------------------------------------------------------------
STATEMENT OF INVESTMENTS Continued
- --------------------------------------------------------------------------------
VALUE
SHARES SEE NOTE 1
- ---------------------------------------------------------------------------------------------------------
DIVERSIFIED FINANCIAL SERVICES--4.0%
Assured Guaranty Ltd. 40,500 $ 665,010
- --------------------------------------------------------------------------------------------------------
Citigroup, Inc. 45,277 2,008,940
- --------------------------------------------------------------------------------------------------------
JPMorgan Chase & Co. 19,500 752,700
- --------------------------------------------------------------------------------------------------------
Lehman Brothers Holdings, Inc. 12,000 985,800
- --------------------------------------------------------------------------------------------------------
Morgan Stanley 10,400 531,336
------------
4,943,786
- --------------------------------------------------------------------------------------------------------
INSURANCE--2.8%
Aspen Insurance Holdings Ltd. 14,500 333,500
- --------------------------------------------------------------------------------------------------------
Genworth Financial, Inc., Cl. A 59,400 1,417,284
- --------------------------------------------------------------------------------------------------------
Prudential Financial, Inc. 30,500 1,417,335
- --------------------------------------------------------------------------------------------------------
UnumProvident Corp. 27,200 371,552
------------
3,539,671
- --------------------------------------------------------------------------------------------------------
THRIFTS & MORTGAGE FINANCE--0.8%
Freddie Mac 14,900 992,340
- --------------------------------------------------------------------------------------------------------
HEALTH CARE--6.8%
- --------------------------------------------------------------------------------------------------------
BIOTECHNOLOGY--2.0%
MedImmune, Inc. 1 38,300 1,088,486
- --------------------------------------------------------------------------------------------------------
Wyeth 36,100 1,431,365
------------
2,519,851
- --------------------------------------------------------------------------------------------------------
HEALTH CARE EQUIPMENT & SUPPLIES--0.6%
Boston Scientific Corp. 1 22,600 797,780
- --------------------------------------------------------------------------------------------------------
HEALTH CARE PROVIDERS & SERVICES--1.6%
Manor Care, Inc. 10,600 347,044
- --------------------------------------------------------------------------------------------------------
PacifiCare Health Systems, Inc. 1 14,300 509,366
- --------------------------------------------------------------------------------------------------------
Tenet Healthcare Corp. 1 108,900 1,167,408
------------
2,023,818
- --------------------------------------------------------------------------------------------------------
PHARMACEUTICALS--2.6%
Pfizer, Inc. 45,900 1,328,805
- --------------------------------------------------------------------------------------------------------
Schering-Plough Corp. 44,800 811,328
- --------------------------------------------------------------------------------------------------------
Watson Pharmaceuticals, Inc. 1 38,000 1,065,140
------------
3,205,273
- --------------------------------------------------------------------------------------------------------
INDUSTRIALS--7.5%
- --------------------------------------------------------------------------------------------------------
AEROSPACE & DEFENSE--3.4%
Orbital Sciences Corp. 1 131,300 1,358,955
- --------------------------------------------------------------------------------------------------------
Raytheon Co. 81,300 2,965,824
------------
4,324,779
20 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------------------------------
COMMERCIAL SERVICES & SUPPLIES--2.1%
Cendant Corp. 124,300 $ 2,559,337
- --------------------------------------------------------------------------------------------------------
INDUSTRIAL CONGLOMERATES--2.0%
General Electric Co. 24,500 835,940
- --------------------------------------------------------------------------------------------------------
Tyco International Ltd. 53,000 1,650,950
------------
2,486,890
- --------------------------------------------------------------------------------------------------------
INFORMATION TECHNOLOGY--8.2%
- --------------------------------------------------------------------------------------------------------
COMMUNICATIONS EQUIPMENT--0.0%
Geotek Communications, Inc., Series B, Escrow Shares 1,2,3 100 --
- --------------------------------------------------------------------------------------------------------
COMPUTERS & PERIPHERALS--2.0%
Dell, Inc. 1 23,500 823,910
- --------------------------------------------------------------------------------------------------------
Hewlett-Packard Co. 86,300 1,610,358
------------
2,434,268
- --------------------------------------------------------------------------------------------------------
ELECTRONIC EQUIPMENT & INSTRUMENTS--0.4%
Flextronics International Ltd. 1 44,700 538,635
- --------------------------------------------------------------------------------------------------------
INTERNET SOFTWARE & SERVICES--0.3%
Net2Phone, Inc. 1 118,500 411,195
- --------------------------------------------------------------------------------------------------------
IT SERVICES--0.4%
CSG Systems International, Inc. 1 27,900 468,999
- --------------------------------------------------------------------------------------------------------
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT--1.1%
Freescale Semiconductor, Inc., Cl. A 1 62,500 971,250
- --------------------------------------------------------------------------------------------------------
Intel Corp. 19,300 429,618
------------
1,400,868
- --------------------------------------------------------------------------------------------------------
SOFTWARE--4.0%
Compuware Corp. 1 60,800 352,032
- --------------------------------------------------------------------------------------------------------
Microsoft Corp. 63,300 1,771,767
- --------------------------------------------------------------------------------------------------------
Oracle Corp. 1 47,100 596,286
- --------------------------------------------------------------------------------------------------------
Take-Two Interactive Software, Inc. 1 68,400 2,254,464
------------
4,974,549
- --------------------------------------------------------------------------------------------------------
MATERIALS--1.4%
- --------------------------------------------------------------------------------------------------------
CHEMICALS--0.8%
Dow Chemical Co. 9,800 440,412
- --------------------------------------------------------------------------------------------------------
Praxair, Inc. 14,300 603,460
------------
1,043,872
- --------------------------------------------------------------------------------------------------------
METALS & MINING--0.3%
GrafTech International Ltd. 1 41,100 380,586
- --------------------------------------------------------------------------------------------------------
PAPER & FOREST PRODUCTS--0.3%
Bowater, Inc. 8,100 298,404
21 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
- --------------------------------------------------------------------------------
STATEMENT OF INVESTMENTS Continued
- --------------------------------------------------------------------------------
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------------------------------
TELECOMMUNICATION SERVICES--1.6%
- --------------------------------------------------------------------------------------------------------
DIVERSIFIED TELECOMMUNICATION SERVICES--1.6%
IDT Corp., Cl. B 1 141,400 $ 1,954,148
- --------------------------------------------------------------------------------------------------------
UTILITIES--1.9%
- --------------------------------------------------------------------------------------------------------
ELECTRIC UTILITIES--1.5%
AES Corp. (The) 1 115,200 1,255,680
- --------------------------------------------------------------------------------------------------------
PG&E Corp. 1 19,500 624,780
------------
1,880,460
- --------------------------------------------------------------------------------------------------------
GAS UTILITIES--0.4%
Sempra Energy 12,800 429,312
------------
Total Common Stocks (Cost $59,837,209) 66,499,643
PRINCIPAL
AMOUNT
- --------------------------------------------------------------------------------------------------------
ASSET-BACKED SECURITIES--7.3%
Bank One Auto Securitization Trust, Automobile Receivable Certificates,
Series 2003-1, Cl. A2, 1.29%, 8/21/06 $117,526 117,294
- --------------------------------------------------------------------------------------------------------
BMW Vehicle Owner Trust, Automobile Loan Certificates, Series 2004-A,
Cl. A2, 1.88%, 10/25/06 270,000 269,447
- --------------------------------------------------------------------------------------------------------
Capital Auto Receivables Asset Trust, Automobile Mtg.-Backed Nts.,
Series 2002-3, Cl. A2A, 3.05%, 9/15/05 53,125 53,210
- --------------------------------------------------------------------------------------------------------
Centex Home Equity Co. LLC, Home Equity Loan Asset-Backed Certificates:
Series 2003-C, Cl. AF1, 2.14%, 7/25/18 103,679 103,550
Series 2004-A, Cl. AF1, 2.03%, 6/25/19 97,391 97,206
Series 2004-D, Cl. AF1, 2.98%, 4/25/20 2 127,796 127,818
- --------------------------------------------------------------------------------------------------------
Chase Funding Mortgage Loan Asset-Backed Certificates, Home Equity
Mtg. Obligations:
Series 2002-4, Cl. 1A3, 3.44%, 4/25/23 58,050 58,152
Series 2003-1, Cl. 1A3, 3.14%, 7/25/23 141,543 141,629
Series 2003-3, Cl. 1A1, 2.013%, 8/25/17 4 8,272 8,277
Series 2003-4, Cl. 1A1, 2.053%, 9/25/17 4 70,868 70,910
Series 2003-4, Cl. 1A2, 2.138%, 7/25/18 100,000 99,716
Series 2004-1, Cl. 2A1, 2.043%, 9/25/21 4 300,943 301,105
- --------------------------------------------------------------------------------------------------------
Chase Manhattan Auto Owner Trust, Automobile Loan
Pass-Through Certificates:
Series 2002-A, Cl. A4, 4.24%, 9/15/08 57,555 58,152
Series 2003-A, Cl. A2, 1.26%, 1/16/06 13,494 13,497
Series 2003-B, Cl. A2, 1.28%, 3/15/06 47,129 47,109
- --------------------------------------------------------------------------------------------------------
CIT Equipment Collateral, Equipment Receivable-Backed Nts.,
Series 2004-DFS, Cl. A2, 2.66%, 11/20/06 2 190,000 189,970
- --------------------------------------------------------------------------------------------------------
Citibank Credit Card Issuance Trust, Credit Card Receivable Nts.,
Series 2002-A3, Cl. A3, 4.40%, 5/15/07 200,000 202,282
22 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------------------------------
ASSET-BACKED SECURITIES Continued
CitiFinancial Mortgage Securities, Inc., Home Equity Collateralized
Mtg. Obligations:
Series 2003-2, Cl. AF1, 2.033%, 5/25/33 4 $ 26,326 $ 26,340
Series 2003-3, Cl. AF1, 2.053%, 8/25/33 4 70,534 70,577
- --------------------------------------------------------------------------------------------------------
Citigroup Mortgage Loan Trust, Inc., Home Equity Mtg. Obligations,
Series 2004-OPT1, Cl. A1B, 2.388%, 9/1/34 2 305,000 305,000
- --------------------------------------------------------------------------------------------------------
DaimlerChrysler Auto Trust, Automobile Loan Pass-Through Certificates:
Series 2002-A, Cl. A3, 3.85%, 4/6/06 104,599 104,812
Series 2003-A, Cl. A2, 1.52%, 12/8/05 147,828 147,838
Series 2003-B, Cl. A2, 1.61%, 7/10/06 381,030 380,657
Series 2004-B, Cl. A2, 2.48%, 2/8/07 2 100,000 100,074
- --------------------------------------------------------------------------------------------------------
Ford Credit Auto Owner Trust, Automobile Loan Pass-Through Certificates:
Series 2003-A, Cl. A2A, 1.62%, 8/15/05 4,075 4,077
Series 2004-A, Cl. A2, 2.13%, 10/15/06 350,000 349,526
- --------------------------------------------------------------------------------------------------------
Harley-Davidson Motorcycle Trust, Motorcycle Receivable Nts.:
Series 2002-2, Cl. A1, 1.91%, 4/15/07 2 15,804 15,804
Series 2003-3, Cl. A1, 1.50%, 1/15/08 180,522 180,060
- --------------------------------------------------------------------------------------------------------
Honda Auto Receivables Owner Trust, Automobile Receivable Obligations:
Series 2003-3, Cl. A2, 1.52%, 4/21/06 238,047 237,796
Series 2003-4, Cl. A2, 1.58%, 7/17/06 292,488 292,063
- --------------------------------------------------------------------------------------------------------
Litigation Settlement Monetized Fee Trust, Asset-Backed Certificates,
Series 2001-1A, Cl. A1, 8.33%, 4/25/31 2 694,719 712,087
- --------------------------------------------------------------------------------------------------------
M&I Auto Loan Trust, Automobile Loan Certificates:
Series 2002-1, Cl. A3, 2.49%, 10/22/07 127,079 127,266
Series 2003-1, Cl. A2, 1.60%, 7/20/06 373,342 373,017
- --------------------------------------------------------------------------------------------------------
National City Auto Receivables Trust, Automobile Receivable Obligations,
Series 2004-A, Cl. A2, 1.50%, 2/15/07 190,000 189,516
- --------------------------------------------------------------------------------------------------------
Nissan Auto Lease Trust, Automobile Lease Obligations:
Series 2003-A, Cl. A2, 1.69%, 12/15/05 97,642 97,689
Series 2004-A, Cl. A2, 2.55%, 1/15/07 180,000 179,876
- --------------------------------------------------------------------------------------------------------
Nissan Auto Receivables Owner Trust, Automobile Receivable Nts.:
Series 2002-A, Cl. A4, 4.28%, 10/16/06 49,730 50,119
Series 2003-C, Cl. A2, 1.62%, 4/17/06 91,227 91,164
Series 2004-A, Cl. A2, 1.40%, 7/17/06 210,000 209,361
- --------------------------------------------------------------------------------------------------------
Option One Mortgage Loan Trust, Home Equity Mtg. Obligations,
Series 2004-3, Cl. A2, 1.99%, 11/25/34 2,4 130,000 130,081
- --------------------------------------------------------------------------------------------------------
Toyota Auto Receivables Owner Trust, Automobile Mtg.-Backed Obligations:
Series 2002-B, Cl. A3, 3.76%, 6/15/06 27,268 27,363
Series 2003-B, Cl. A2, 1.43%, 2/15/06 124,975 124,935
- --------------------------------------------------------------------------------------------------------
USAA Auto Owner Trust, Automobile Loan Asset-Backed Nts.:
Series 2002-1, Cl. A3, 2.41%, 10/16/06 57,082 57,154
Series 2003-1, Cl. A2, 1.22%, 4/17/06 25,805 25,811
Series 2004-1, Cl. A2, 1.43%, 9/15/06 510,000 508,710
Series 2004-2, Cl. A2, 2.41%, 2/15/07 210,000 210,016
23 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
- --------------------------------------------------------------------------------
STATEMENT OF INVESTMENTS Continued
- --------------------------------------------------------------------------------
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------------------------------
ASSET-BACKED SECURITIES Continued
Volkswagen Auto Lease Trust, Automobile Lease Asset-Backed Securities,
Series 2004-A, Cl. A2, 2.47%, 1/22/07 $220,000 $ 219,785
- --------------------------------------------------------------------------------------------------------
Volkswagen Auto Loan Enhanced Trust, Automobile Loan
Receivable Certificates:
Series 2003-1, Cl. A2, 1.11%, 12/20/05 41,367 41,352
Series 2003-2, Cl. A2, 1.55%, 6/20/06 169,374 169,149
- --------------------------------------------------------------------------------------------------------
Wachovia Auto Owner Trust, Automobile Receivable Nts., Series 2004-B,
Cl. A2, 2.40%, 5/21/07 160,000 159,904
- --------------------------------------------------------------------------------------------------------
Wells Fargo Home Equity Trust, Collateralized Mtg. Obligations,
Series 2004-2, Cl. AI1B, 2.94%, 9/25/18 344,996 344,625
- --------------------------------------------------------------------------------------------------------
Whole Auto Loan Trust, Automobile Loan Receivable Certificates:
Series 2002-1, Cl. A3, 2.60%, 8/15/06 315,155 315,742
Series 2003-1, Cl. A2A, 1.40%, 4/15/06 293,040 292,701
Series 2004-1, Cl. A2A, 2.59%, 5/15/07 5 230,000 230,000
-----------
Total Asset-Backed Securities (Cost $9,054,365) 9,061,371
- --------------------------------------------------------------------------------------------------------
MORTGAGE-BACKED OBLIGATIONS--29.7%
- --------------------------------------------------------------------------------------------------------
GOVERNMENT AGENCY--26.5%
- --------------------------------------------------------------------------------------------------------
FHLMC/FNMA/SPONSORED--26.1%
Federal Home Loan Mortgage Corp.:
5%, 12/1/34 5 2,584,000 2,570,274
5.50%, 1/1/34 132,810 135,475
5.50%, 11/1/34-12/1/34 5 1,842,000 1,873,515
6.50%, 11/1/28 142,417 150,189
7%, 11/1/32-9/1/33 314,888 335,314
7%, 3/1/31-11/1/34 5 1,994,736 2,118,469
8%, 4/1/16 124,929 132,962
9%, 8/1/22-5/1/25 35,916 40,300
- --------------------------------------------------------------------------------------------------------
Federal Home Loan Mortgage Corp., Collateralized Mtg. Obligations,
Structured Pass-Through Securities, Series T-42, Cl. A2, 5.50%, 2/25/42 2 10 10
- --------------------------------------------------------------------------------------------------------
Federal Home Loan Mortgage Corp., Gtd. Real Estate Mtg. Investment
Conduit Multiclass Pass-Through Certificates:
Series 1669, Cl. G, 6.50%, 2/15/23 65,339 66,023
Series 2034, Cl. Z, 6.50%, 2/15/28 102,367 106,602
Series 2053, Cl. Z, 6.50%, 4/15/28 117,457 122,581
Series 2055, Cl. ZM, 6.50%, 5/15/28 161,566 168,551
Series 2075, Cl. D, 6.50%, 8/15/28 317,190 331,205
Series 2080, Cl. Z, 6.50%, 8/15/28 101,467 104,981
Series 2387, Cl. PD, 6%, 4/15/30 218,090 226,318
Series 2466, Cl. PD, 6.50%, 4/15/30 89,209 89,919
Series 2498, Cl. PC, 5.50%, 10/15/14 32,683 33,056
Series 2500, Cl. FD, 2.37%, 3/15/32 4 58,890 59,049
Series 2526, Cl. FE, 2.27%, 6/15/29 4 68,850 69,293
Series 2551, Cl. FD, 2.27%, 1/15/33 4 56,364 56,695
Series 2551, Cl. TA, 4.50%, 2/15/18 83,324 83,360
24 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------------------------------
FHLMC/FNMA/SPONSORED Continued
Federal Home Loan Mortgage Corp., Interest-Only Stripped Mtg.-Backed Security:
Series 176, Cl. IO, (2.40)%, 6/1/26 6 $ 99,372 $ 18,587
Series 183, Cl. IO, (3.043)%, 4/1/27 6 159,976 29,563
Series 184, Cl. IO, (0.737)%, 12/1/26 6 160,042 30,633
Series 192, Cl. IO, 1.541%, 2/1/28 6 47,091 8,179
Series 200, Cl. IO, 0.982%, 1/1/29 6 57,162 10,064
Series 2130, Cl. SC, 14.971%, 3/15/29 6 129,117 13,094
Series 2796, Cl. SD, 23.275%, 7/15/26 6 166,021 15,402
- --------------------------------------------------------------------------------------------------------
Federal Home Loan Mortgage Corp., Principal-Only Stripped
Mtg.-Backed Security, Series 176, Cl. PO, 7.358%, 6/1/26 7 55,484 49,361
- --------------------------------------------------------------------------------------------------------
Federal National Mortgage Assn.:
4.50%, 11/1/19 5 1,138,000 1,141,200
5%, 6/1/17-7/1/17 741,789 758,487
5%, 11/1/34 5 854,000 851,064
5.50%, 3/1/33-9/1/34 1,725,599 1,760,844
5.50%, 11/1/19-11/1/34 5 6,437,000 6,630,363
6%, 11/1/34 5 168,000 174,195
6.50%, 3/1/26-10/1/30 126,104 133,083
6.50%, 11/1/34 5 390,000 410,109
7%, 2/25/22-8/1/34 2,493,213 2,641,061
7%, 11/1/34 5 6,297,000 6,686,627
7.50%, 1/1/08-6/1/08 36,517 38,298
8.50%, 7/1/32 15,268 16,614
- --------------------------------------------------------------------------------------------------------
Federal National Mortgage Assn., Collateralized Mtg. Obligations, Gtd.
Real Estate Mtg. Investment Conduit Pass-Through Certificates:
Trust 1993-87, Cl. Z, 6.50%, 6/25/23 263,549 277,713
Trust 1996-35, Cl. Z, 7%, 7/25/26 408,101 428,811
Trust 1998-63, Cl. PG, 6%, 3/25/27 63,421 63,853
Trust 2001-50, Cl. NE, 6%, 8/25/30 123,068 124,305
Trust 2001-70, Cl. LR, 6%, 9/25/30 111,284 113,722
Trust 2001-72, Cl. NH, 6%, 4/25/30 96,125 99,187
Trust 2001-74, Cl. PD, 6%, 5/25/30 38,272 38,882
Trust 2002-50, Cl. PD, 6%, 9/25/27 109,713 110,063
Trust 2002-77, Cl. WF, 2.289%, 12/18/32 4 91,653 92,075
Trust 2002-94, Cl. MA, 4.50%, 8/25/09 175,986 176,678
- --------------------------------------------------------------------------------------------------------
Federal National Mortgage Assn., Gtd. Real Estate Mtg. Investment Conduit
Pass-Through Certificates, Interest-Only Stripped Mtg.-Backed Security:
Trust 319, Cl. 2, (1.708)%, 2/1/32 6 110,812 20,290
Trust 2002-38, Cl. SO, 27.335%, 4/25/32 6 141,484 10,440
Trust 2002-47, Cl. NS, 16.262%, 4/25/32 6 217,654 21,102
Trust 2002-51, Cl. S, 16.591%, 8/25/32 6 199,954 19,389
Trust 2002-77, Cl. IS, 21.643%, 12/18/32 6 241,046 22,674
- --------------------------------------------------------------------------------------------------------
Federal National Mortgage Assn., Interest-Only Stripped Mtg.-Backed Security:
Trust 222, Cl. 2, (5.431)%, 6/1/23 6 319,335 56,837
Trust 240, Cl. 2, (3.008)%, 9/1/23 6 491,331 92,007
Trust 252, Cl. 2, (3.173)%, 11/1/23 6 243,866 48,175
Trust 254, Cl. 2, (0.384)%, 1/1/24 6 118,308 23,065
Trust 273, Cl. 2, (2.295)%, 7/1/26 6 71,697 12,580
25 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
- --------------------------------------------------------------------------------
STATEMENT OF INVESTMENTS Continued
- --------------------------------------------------------------------------------
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------------------------------
FHLMC/FNMA/SPONSORED Continued
Federal National Mortgage Assn., Interest-Only Stripped Mtg.-Backed
Security: Continued
Trust 321, Cl. 2, (7.333)%, 3/1/32 5,6 $1,083,192 $ 201,166
Trust 333, Cl. 2, 1.99%, 3/1/33 6 156,148 33,096
Trust 334, Cl. 17, (36.239)%, 2/1/33 6 179,118 30,910
Trust 1993-223, Cl. PM, 0.823%, 10/25/23 6 96,073 10,041
Trust 2001-81, Cl. S, 22.192%, 1/25/32 6 112,431 11,935
Trust 2002-9, Cl. MS, 17.603%, 3/25/32 6 155,737 16,046
Trust 2002-52, Cl. SD, 13.708%, 9/25/32 6 256,703 23,915
Trust 2002-77, Cl. SH, 24.146%, 12/18/32 6 138,911 14,231
Trust 2004-54, Cl. DS, 25.719%, 11/25/30 6 215,379 18,655
- --------------------------------------------------------------------------------------------------------
Federal National Mortgage Assn., Principal-Only Stripped Mtg.-Backed
Security, Trust 1993-184, Cl. M, 10.518%, 9/25/23 7 101,525 89,787
------------
32,592,599
- --------------------------------------------------------------------------------------------------------
GNMA/GUARANTEED--0.4%
Government National Mortgage Assn.:
7%, 4/15/09-2/15/24 168,830 180,418
7.50%, 3/15/09 92,131 98,270
8%, 5/15/17 57,086 62,907
8.50%, 8/15/17-12/15/17 43,649 48,205
- --------------------------------------------------------------------------------------------------------
Government National Mortgage Assn. , Interest-Only Stripped
Mtg.-Backed Security:
Series 2001-21, Cl. SB, 16.854%, 1/16/27 6 303,162 27,292
Series 2002-76, Cl. SY, 11.456%, 12/16/26 6 404,593 40,706
Series 2004-11, Cl. SM, 13.01%, 1/17/30 6 164,085 15,249
------------
473,047
- --------------------------------------------------------------------------------------------------------
PRIVATE--3.2%
- --------------------------------------------------------------------------------------------------------
COMMERCIAL--3.2%
Bank of America Mortgage Securities, Inc., Collateralized Mtg.
Obligations Pass-Through Certificates:
Series 2004-E, Cl. 2A9, 3.712%, 6/25/34 216,744 217,117
Series 2004-G, Cl. 2A1, 2.469%, 8/25/34 199,697 199,257
Series 2004-2, Cl. 2A1, 6.50%, 7/20/32 360,877 375,788
Series 2004-8, Cl. 5A1, 6.50%, 9/25/34 306,406 317,609
- --------------------------------------------------------------------------------------------------------
Countrywide Alternative Loan Trust, Collateralized Mtg. Obligations,
Series 2004-J9, Cl. 1A1, 2.113%, 10/25/34 4 307,413 307,292
- --------------------------------------------------------------------------------------------------------
First Union National Bank/Lehman Brothers/Bank of America Commercial
Mtg. Trust, Pass-Through Certificates, Series 1998-C2, Cl. A2, 6.56%, 11/18/35 140,000 152,400
- --------------------------------------------------------------------------------------------------------
GMAC Commercial Mortgage Securities, Inc., Mtg. Pass-Through
Certificates, Series 1997-C1, Cl. A3, 6.869%, 7/15/29 101,870 109,691
- --------------------------------------------------------------------------------------------------------
GSR Mortgage Loan Trust, Collateralized Mtg. Obligations, Series 04-12,
Cl. 3A1, 4.593%, 12/25/34 520,000 520,000
- --------------------------------------------------------------------------------------------------------
MASTR Asset Securitization Trust, Pass-Through Collateralized Mtg.
Obligations, Series 2004-9, Cl. A3, 4.70%, 8/25/34 543,496 546,019
26 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------------------------------
COMMERCIAL Continued
Nomura Asset Securities Corp., Commercial Mtg. Pass-Through Certificates,
Series 1998-D6, Cl. A1B, 6.59%, 3/15/30 $160,000 $ 175,328
- --------------------------------------------------------------------------------------------------------
Prudential Mortgage Capital Co. II LLC, Commercial Mtg. Pass-Through
Certificates, Series PRU-HTG 2000-C1, Cl. A2, 7.306%, 10/6/15 192,000 224,195
- --------------------------------------------------------------------------------------------------------
Washington Mutual Mortgage Securities Corp., Collateralized Mtg.
Pass-Through Certificates, Series 2003-AR12, Cl. A2, 2.446%, 2/25/34 4 168,984 169,126
- --------------------------------------------------------------------------------------------------------
Wells Fargo Mortgage Backed Securities Trust, Collateralized Mtg. Obligations:
Series 2004-N, Cl. A10, 3.803%, 8/25/34 2 390,239 391,336
Series 2004-W, Cl. A2, 4.641%, 11/25/34 270,000 271,086
------------
3,976,244
- --------------------------------------------------------------------------------------------------------
OTHER--0.0%
CIT Equipment Collateral, Equipment Receivable-Backed Nts.,
Series 2003-EF1, Cl. A2, 1.49%, 12/20/05 47,451 47,447
------------
Total Mortgage-Backed Obligations (Cost $36,931,368) 37,089,337
- --------------------------------------------------------------------------------------------------------
U.S. GOVERNMENT OBLIGATIONS--6.2%
Federal Home Loan Bank Unsec. Bonds, 2.75%, 10/15/06 520,000 519,891
- --------------------------------------------------------------------------------------------------------
Federal Home Loan Mortgage Corp. Unsec. Nts.:
2.375%, 4/15/06 545,000 543,414
6.625%, 9/15/09 470,000 532,628
- --------------------------------------------------------------------------------------------------------
Federal National Mortgage Assn. Unsec. Nts.:
4.25%, 7/15/07 1,010,000 1,043,294
7.25%, 5/15/30 245,000 313,274
7.25%, 1/15/10 8 1,350,000 1,574,656
- --------------------------------------------------------------------------------------------------------
Tennessee Valley Authority Bonds:
5.375%, 11/13/08 122,000 130,926
7.125%, 5/1/30 128,000 160,881
Series A, 6.79%, 5/23/12 910,000 1,057,758
Series C, 4.75%, 8/1/13 15,000 15,405
Series C, 6%, 3/15/13 15,000 16,771
- --------------------------------------------------------------------------------------------------------
U.S. Treasury Bonds:
5.375%, 2/15/31 104,000 112,990
STRIPS, 2.99%, 2/15/10 9 125,000 104,260
STRIPS, 3.37%, 2/15/11 9 101,000 80,153
STRIPS, 4.96%, 2/15/16 9 171,000 103,243
- --------------------------------------------------------------------------------------------------------
U.S. Treasury Nts., 2.50%, 9/30/06 1,370,000 1,369,305
------------
Total U.S. Government Obligations (Cost $7,627,336) 7,678,849
- --------------------------------------------------------------------------------------------------------
FOREIGN GOVERNMENT OBLIGATIONS--0.1%
United Mexican States Nts., 7.50%, 1/14/12 (Cost $110,961) 110,000 125,235
27 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
- --------------------------------------------------------------------------------
STATEMENT OF INVESTMENTS Continued
- --------------------------------------------------------------------------------
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------------------------------
NON-CONVERTIBLE CORPORATE BONDS AND NOTES--12.3%
Aetna, Inc., 7.375% Sr. Unsec. Nts., 3/1/06 $250,000 $ 263,623
- --------------------------------------------------------------------------------------------------------
Allied Waste North America, Inc., 8.875% Sr. Nts., Series B, 4/1/08 110,000 117,150
- --------------------------------------------------------------------------------------------------------
Allstate Financial Global Funding LLC, 4.25% Nts., 9/10/08 10 50,000 51,079
- --------------------------------------------------------------------------------------------------------
Allstate Life Global Funding II, 3.50% Nts., 7/30/07 65,000 65,413
- --------------------------------------------------------------------------------------------------------
American Express Centurion Bank, 4.375% Nts., 7/30/09 250,000 256,826
- --------------------------------------------------------------------------------------------------------
American Honda Finance Corp., 3.85% Nts., 11/6/08 10 60,000 60,598
- --------------------------------------------------------------------------------------------------------
AT&T Wireless Services, Inc., 7.50% Sr. Unsec. Nts., 5/1/07 175,000 193,014
- --------------------------------------------------------------------------------------------------------
AXA, 8.60% Unsec. Sub. Nts., 12/15/30 190,000 248,597
- --------------------------------------------------------------------------------------------------------
Bank of America Corp., 4.875% Sr. Unsec. Nts., 1/15/13 3,000 3,069
- --------------------------------------------------------------------------------------------------------
Bankers Trust Corp., 7.375% Unsec. Sub. Nts., 5/1/08 20,000 22,524
- --------------------------------------------------------------------------------------------------------
Beazer Homes USA, Inc., 8.625% Sr. Unsec. Nts., 5/15/11 115,000 126,500
- --------------------------------------------------------------------------------------------------------
Boeing Capital Corp., 5.65% Sr. Unsec. Nts., 5/15/06 19,000 19,827
- --------------------------------------------------------------------------------------------------------
British Telecommunications plc:
7.875% Nts., 12/15/05 155,000 163,777
8.125% Nts., 12/15/10 85,000 103,271
- --------------------------------------------------------------------------------------------------------
Canadian National Railway Co., 4.25% Nts., 8/1/09 32,000 32,597
- --------------------------------------------------------------------------------------------------------
CenterPoint Energy, Inc.:
5.875% Sr. Nts., 6/1/08 135,000 142,274
8.125% Unsec. Nts., Series B, 7/15/05 60,000 62,232
- --------------------------------------------------------------------------------------------------------
Chesapeake Energy Corp., 7.50% Sr. Nts., 6/15/14 120,000 134,100
- --------------------------------------------------------------------------------------------------------
CIGNA Corp., 7.40% Unsec. Nts., 5/15/07 295,000 321,595
- --------------------------------------------------------------------------------------------------------
CIT Group, Inc., 7.75% Sr. Unsec. Unsub. Nts., 4/2/12 120,000 143,055
- --------------------------------------------------------------------------------------------------------
Citizens Communications Co., 9.25% Sr. Nts., 5/15/11 60,000 69,300
- --------------------------------------------------------------------------------------------------------
Clear Channel Communications, Inc., 8% Sr. Unsec. Nts., 11/1/08 230,000 261,718
- --------------------------------------------------------------------------------------------------------
ConAgra Foods, Inc., 6% Nts., 9/15/06 130,000 136,953
- --------------------------------------------------------------------------------------------------------
Conectiv, Inc., 5.30% Unsec. Unsub. Nts., Series B, 6/1/05 33,000 33,437
- --------------------------------------------------------------------------------------------------------
Cox Communications, Inc., 6.40% Sr. Unsec. Nts., 8/1/08 165,000 177,592
- --------------------------------------------------------------------------------------------------------
CSX Corp., 6.25% Unsec. Nts., 10/15/08 120,000 130,755
- --------------------------------------------------------------------------------------------------------
D.R. Horton, Inc., 9.375% Sr. Unsec. Sub. Nts., 3/15/11 105,000 117,338
- --------------------------------------------------------------------------------------------------------
DaimlerChrysler North America Holding Corp., 4.75% Unsec. Nts., 1/15/08 235,000 242,290
- --------------------------------------------------------------------------------------------------------
Delphi Automotive Systems Corp., 6.50% Nts., 5/1/09 130,000 136,351
- --------------------------------------------------------------------------------------------------------
Deutsche Telekom International Finance BV, 8.50% Unsub. Nts., 6/15/10 155,000 186,952
- --------------------------------------------------------------------------------------------------------
Dominion Resources, Inc., 8.125% Sr. Unsub. Nts., 6/15/10 135,000 160,885
- --------------------------------------------------------------------------------------------------------
DTE Energy Co., 6.45% Sr. Unsub. Nts., 6/1/06 120,000 126,104
- --------------------------------------------------------------------------------------------------------
Duke Capital LLC, 5.668% Nts., 8/15/14 135,000 140,052
- --------------------------------------------------------------------------------------------------------
Federated Department Stores, Inc., 6.625% Sr. Unsec. Nts., 9/1/08 160,000 176,423
- --------------------------------------------------------------------------------------------------------
FedEx Corp., 2.65% Unsec. Nts., 4/1/07 275,000 271,770
28 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------------------------------
NON-CONVERTIBLE CORPORATE BONDS AND NOTES Continued
FirstEnergy Corp.:
5.50% Sr. Unsub. Nts., Series A, 11/15/06 $105,000 $ 109,308
7.375% Sr. Unsub. Nts., Series C, 11/15/31 120,000 137,159
- --------------------------------------------------------------------------------------------------------
Food Lion, Inc., 7.55% Nts., 4/15/07 165,000 179,289
- --------------------------------------------------------------------------------------------------------
Ford Holdings, Inc., 9.30% Unsec. Unsub. Debs., 3/1/30 95,000 107,903
- --------------------------------------------------------------------------------------------------------
Ford Motor Co., 8.90% Unsec. Unsub. Debs., 1/15/32 65,000 72,889
- --------------------------------------------------------------------------------------------------------
France Telecom SA:
7.95% Sr. Unsec. Nts., 3/1/06 80,000 85,134
8.50% Sr. Unsec. Nts., 3/1/11 80,000 96,203
9.25% Sr. Unsec. Nts., 3/1/31 4 45,000 60,927
- --------------------------------------------------------------------------------------------------------
Franklin Resources, Inc., 3.70% Nts., 4/15/08 80,000 80,577
- --------------------------------------------------------------------------------------------------------
Gap, Inc. (The), 6.90% Nts., 9/15/07 2 100,000 109,000
- --------------------------------------------------------------------------------------------------------
General Mills, Inc., 3.875% Nts., 11/30/07 190,000 192,800
- --------------------------------------------------------------------------------------------------------
General Motors Acceptance Corp., 7.25% Nts., 3/2/11 340,000 361,479
- --------------------------------------------------------------------------------------------------------
General Motors Corp., 8.375% Sr. Unsec. Debs., 7/15/33 45,000 46,957
- --------------------------------------------------------------------------------------------------------
Hartford Financial Services Group, Inc. (The), 2.375% Nts., 6/1/06 70,000 68,955
- --------------------------------------------------------------------------------------------------------
Hertz Corp. (The), 6.35% Nts., 6/15/10 290,000 301,407
- --------------------------------------------------------------------------------------------------------
Hilton Hotels Corp., 7.95% Sr. Nts., 4/15/07 95,000 104,919
- --------------------------------------------------------------------------------------------------------
Hutchison Whampoa International Ltd., 7.45% Sr. Bonds, 11/24/33 10 100,000 104,973
- --------------------------------------------------------------------------------------------------------
IPALCO Enterprises, Inc., 8.375% Sr. Sec. Nts., 11/14/08 2,4 110,000 123,475
- --------------------------------------------------------------------------------------------------------
iStar Financial, Inc.:
4.875% Sr. Unsec. Nts., Series B, 1/15/09 115,000 117,509
8.75% Sr. Unsec. Nts., 8/15/08 85,000 98,692
- --------------------------------------------------------------------------------------------------------
J.C. Penney Co., Inc., 8% Nts., 3/1/10 240,000 276,000
- --------------------------------------------------------------------------------------------------------
John Hancock Global Funding II, 7.90% Nts., 7/2/10 10 111,000 131,861
- --------------------------------------------------------------------------------------------------------
Kinder Morgan, Inc., 6.50% Sr. Unsec. Nts., 9/1/12 150,000 166,400
- --------------------------------------------------------------------------------------------------------
Kraft Foods, Inc., 5.25% Nts., 6/1/07 300,000 314,432
- --------------------------------------------------------------------------------------------------------
Kroger Co. (The), 7.80% Sr. Nts., 8/15/07 180,000 200,363
- --------------------------------------------------------------------------------------------------------
Lear Corp.:
7.96% Sr. Unsec. Nts., Series B, 5/15/05 110,000 112,920
8.11% Sr. Unsec. Nts., Series B, 5/15/09 122,000 140,227
- --------------------------------------------------------------------------------------------------------
Lehman Brothers Holdings, Inc., 7% Nts., 2/1/08 165,000 182,353
- --------------------------------------------------------------------------------------------------------
Lehman Brothers, Inc., 6.625% Sr. Sub. Nts., 2/15/08 25,000 27,400
- --------------------------------------------------------------------------------------------------------
Lennar Corp., 5.95% Sr. Unsec. Nts., 3/1/13 125,000 132,963
- --------------------------------------------------------------------------------------------------------
Liberty Media Corp., 3.50% Nts., 9/25/06 110,000 110,159
- --------------------------------------------------------------------------------------------------------
Liberty Property Trust, 5.65% Sr. Nts., 8/15/14 130,000 134,382
- --------------------------------------------------------------------------------------------------------
Marsh & McLennan Cos., Inc., 5.375% Nts., 7/15/14 155,000 151,779
- --------------------------------------------------------------------------------------------------------
May Department Stores Co. (The), 3.95% Nts., 7/15/07 10 16,000 16,175
- --------------------------------------------------------------------------------------------------------
MBNA America Bank NA, 5.375% Nts., 1/15/08 185,000 195,076
- --------------------------------------------------------------------------------------------------------
McDonnell Douglas Corp., 6.875% Unsec. Unsub. Nts., 11/1/06 34,000 36,487
29 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
- --------------------------------------------------------------------------------
STATEMENT OF INVESTMENTS Continued
- --------------------------------------------------------------------------------
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------------------------------
NON-CONVERTIBLE CORPORATE BONDS AND NOTES Continued
Merrill Lynch & Co., Inc., 4.125% Nts., 9/10/09 $255,000 $ 256,971
- --------------------------------------------------------------------------------------------------------
MidAmerican Energy Holdings Co., 5.875% Sr. Unsec. Nts., 10/1/12 265,000 284,024
- --------------------------------------------------------------------------------------------------------
Morgan Stanley, 6.60% Nts., 4/1/12 155,000 174,953
- --------------------------------------------------------------------------------------------------------
National City Bank, 6.20% Sub. Nts., 12/15/11 17,000 18,881
- --------------------------------------------------------------------------------------------------------
Nationwide Financial Services, Inc., 5.90% Nts., 7/1/12 125,000 133,663
- --------------------------------------------------------------------------------------------------------
NiSource Finance Corp., 7.875% Sr. Unsec. Nts., 11/15/10 190,000 225,813
- --------------------------------------------------------------------------------------------------------
Northrop Grumman Corp., 7.125% Sr. Nts., 2/15/11 150,000 173,176
- --------------------------------------------------------------------------------------------------------
Petroleos Mexicanos, 9.50% Sr. Sub. Nts., 9/15/27 70,000 86,450
- --------------------------------------------------------------------------------------------------------
PF Export Receivables Master Trust, 3.748% Sr. Nts., Series B, 6/1/13 10 73,294 72,190
- --------------------------------------------------------------------------------------------------------
Prudential Holdings LLC, 8.695% Bonds, Series C, 12/18/23 10 195,000 251,773
- --------------------------------------------------------------------------------------------------------
Prudential Insurance Co. of America, 8.30% Nts., 7/1/25 10 260,000 329,523
- --------------------------------------------------------------------------------------------------------
PSEG Energy Holdings LLC, 7.75% Unsec. Nts., 4/16/07 115,000 123,625
- --------------------------------------------------------------------------------------------------------
Safeway, Inc.:
2.50% Nts., 11/1/05 75,000 74,779
4.80% Sr. Unsec. Nts., 7/16/07 170,000 175,738
- --------------------------------------------------------------------------------------------------------
Spieker Properties LP, 6.75% Unsec. Unsub. Nts., 1/15/08 195,000 213,556
- --------------------------------------------------------------------------------------------------------
Sprint Capital Corp.:
7.125% Sr. Unsec. Nts., 1/30/06 135,000 142,036
8.75% Nts., 3/15/32 100,000 131,432
- --------------------------------------------------------------------------------------------------------
Starwood Hotels & Resorts Worldwide, Inc., 7.375% Nts., 5/1/07 48,000 51,900
- --------------------------------------------------------------------------------------------------------
SunTrust Banks, Inc.:
4% Nts., 10/15/08 135,000 137,438
7.75% Unsec. Sub. Nts., 5/1/10 11,000 12,974
- --------------------------------------------------------------------------------------------------------
TCI Communications, Inc., 9.80% Sr. Unsec. Debs., 2/1/12 245,000 316,124
- --------------------------------------------------------------------------------------------------------
Telefonos de Mexico SA de CV, 4.50% Nts., 11/19/08 105,000 106,189
- --------------------------------------------------------------------------------------------------------
Texas Utilities Co., 6.375% Sr. Unsec. Nts., Series C, 1/1/08 105,000 113,806
- --------------------------------------------------------------------------------------------------------
Time Warner Cos., Inc., 9.125% Debs., 1/15/13 130,000 166,871
- --------------------------------------------------------------------------------------------------------
Time Warner Entertainment Co. LP, 10.15% Sr. Nts., 5/1/12 65,000 85,310
- --------------------------------------------------------------------------------------------------------
Toll Corp., 8.25% Sr. Sub. Nts., 12/1/11 115,000 129,375
- --------------------------------------------------------------------------------------------------------
Tyco International Group SA:
5.875% Unsec. Unsub. Nts., 11/1/04 25,000 25,000
6.375% Sr. Unsec. Unsub. Nts., 2/15/06 180,000 187,972
6.75% Sr. Unsub. Nts., 2/15/11 76,000 86,068
- --------------------------------------------------------------------------------------------------------
Univision Communications, Inc.:
2.875% Sr. Unsec. Nts., 10/15/06 32,000 31,721
3.50% Sr. Unsec. Nts., 10/15/07 165,000 164,451
- --------------------------------------------------------------------------------------------------------
Volkswagen Credit, Inc., 2.33% Nts., 7/21/05 4,10 245,000 245,027
- --------------------------------------------------------------------------------------------------------
Vornado Realty LP, 5.625% Sr. Unsec. Unsub. Nts., 6/15/07 245,000 257,492
- --------------------------------------------------------------------------------------------------------
Walt Disney Co. (The), 5.375% Sr. Unsec. Nts., 6/1/07 145,000 152,181
- --------------------------------------------------------------------------------------------------------
Waste Management, Inc., 7% Sr. Nts., 7/15/28 90,000 100,741
30 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------------------------------
NON-CONVERTIBLE CORPORATE BONDS AND NOTES Continued
Weyerhaeuser Co., 5.50% Unsec. Unsub. Nts., 3/15/05 $ 52,000 $ 52,548
- --------------------------------------------------------------------------------------------------------
Yum! Brands, Inc., 8.50% Sr. Unsec. Nts., 4/15/06 260,000 280,211
------------
Total Non-Convertible Corporate Bonds and Notes (Cost $14,762,823) 15,359,555
- --------------------------------------------------------------------------------------------------------
STRUCTURED NOTES--1.5%
Deutsche Bank AG, COUNTS Corp. Sec. Credit Linked Nts.,
Series 2003-1, 3.78%, 1/7/05 2,4 950,000 947,435
- --------------------------------------------------------------------------------------------------------
UBS AG, High Grade Credit Linked Nts., 3.503%, 12/10/04 2 950,000 954,940
------------
Total Structured Notes (Cost $1,900,000) 1,902,375
- --------------------------------------------------------------------------------------------------------
SHORT-TERM NOTES--2.1%
Federal Home Loan Bank,
1.69%, 11/1/04 (Cost $2,600,000) 2,600,000 2,600,000
- --------------------------------------------------------------------------------------------------------
JOINT REPURCHASE AGREEMENTS--5.5%
Undivided interest of 11.95% in joint repurchase agreement (Principal Amount/
Value $57,987,000, with a maturity value of $57,995,553) with Zions Bank/Capital
Markets Group, 1.77%, dated 10/29/04, to be repurchased at $6,929,022 on
11/1/04, collateralized by U.S. Treasury Nts., 2.375%, 8/15/06, with a value
of $59,191,443 (Cost $6,928,000) 6,928,000 6,928,000
- --------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS, AT VALUE (COST $139,752,062) 118.0% 147,244,365
- --------------------------------------------------------------------------------------------------------
LIABILITIES IN EXCESS OF OTHER ASSETS (18.0) (22,447,444)
-------------------------
NET ASSETS 100.0% $124,796,921
=========================
<FN>
FOOTNOTES TO STATEMENT OF INVESTMENTS
1. Non-income producing security.
2. Illiquid or restricted security. See Note 8 of Notes to Financial Statements.
3. Received as the result of issuer reorganization.
4. Represents the current interest rate for a variable or increasing rate
security.
5. When-issued security or forward commitment to be delivered and settled after
October 31, 2004. See Note 1 of Notes to Financial Statements.
6. Interest-Only Strips represent the right to receive the monthly interest
payments on an underlying pool of mortgage loans. These securities typically
decline in price as interest rates decline. Most other fixed income securities
increase in price when interest rates decline. The principal amount of the
underlying pool represents the notional amount on which current interest is
calculated. The price of these securities is typically more sensitive to changes
in prepayment rates than traditional mortgage-backed securities (for example,
GNMA pass-throughs). Interest rates disclosed represent current yields based
upon the current cost basis and estimated timing and amount of future cash
flows. These securities amount to $895,323 or 0.72% of the Fund's net assets as
of October 31, 2004.
</FN>
31 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
- --------------------------------------------------------------------------------
STATEMENT OF INVESTMENTS Continued
- --------------------------------------------------------------------------------
FOOTNOTES TO STATEMENT OF INVESTMENTS Continued
7. Principal-Only Strips represent the right to receive the monthly principal
payments on an underlying pool of mortgage loans. The value of these securities
generally increases as interest rates decline and prepayment rates rise. The
price of these securities is typically more volatile than that of coupon-bearing
bonds of the same maturity. Interest rates disclosed represent current yields
based upon the current cost basis and estimated timing of future cash flows.
These securities amount to $139,148 or 0.11% of the Fund's net assets as of
October 31, 2004.
8. All or a portion of the security is held in collateralized accounts to cover
initial margin requirements on open futures sales contracts with an aggregate
market value of $256,611. See Note 6 of Notes to Financial Statements.
9. Zero coupon bond reflects effective yield on the date of purchase.
10. Represents securities sold under Rule 144A, which are exempt from
registration under the Securities Act of 1933, as amended. These securities have
been determined to be liquid under guidelines established by the Board of
Directors. These securities amount to $1,263,199 or 1.01% of the Fund's net
assets as of October 31, 2004.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
32 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES October 31, 2004
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------
ASSETS
Investments, at value (cost $139,752,062)--see accompanying statement of investments $147,244,365
- --------------------------------------------------------------------------------------------------------
Cash 745,950
- --------------------------------------------------------------------------------------------------------
Unrealized appreciation on swap contracts 8,105
- --------------------------------------------------------------------------------------------------------
Receivables and other assets:
Investments sold (including $7,417,981 sold on a when-issued basis or forward commitment) 7,814,066
Interest, dividends and principal paydowns 474,478
Shares of capital stock sold 56,306
Futures margins 45,868
Other 5,316
-------------
Total assets 156,394,454
- --------------------------------------------------------------------------------------------------------
LIABILITIES
Payables and other liabilities:
Investments purchased (including $30,019,114
purchased on a when-issued basis or forward commitment) 31,413,780
Shareholder communications 39,595
Shares of capital stock redeemed 36,308
Directors' compensation 29,519
Distribution and service plan fees 26,098
Transfer and shareholder servicing agent fees 23,879
Other 28,354
-------------
Total liabilities 31,597,533
- --------------------------------------------------------------------------------------------------------
NET ASSETS $124,796,921
=============
- --------------------------------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS
Par value of shares of capital stock $ 9,005
- --------------------------------------------------------------------------------------------------------
Additional paid-in capital 128,257,222
- --------------------------------------------------------------------------------------------------------
Accumulated net investment income 388,283
- --------------------------------------------------------------------------------------------------------
Accumulated net realized loss on investments and foreign currency
transactions (11,589,213)
- --------------------------------------------------------------------------------------------------------
Net unrealized appreciation on investments and translation of assets and
liabilities denominated in foreign currencies 7,731,624
-------------
NET ASSETS $124,796,921
=============
33 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------
NET ASSET VALUE PER SHARE
Class A Shares:
Net asset value and redemption price per share (based on net assets of
$103,268,166 and 7,457,662 shares of capital stock outstanding) $13.85
Maximum offering price per share (net asset value plus sales charge of 5.75% of
offering price) $14.69
- --------------------------------------------------------------------------------------------------------
Class B Shares:
Net asset value, redemption price (excludes applicable contingent deferred
sales charge) and offering price per share (based on net assets of $13,618,529
and 969,909 shares of capital stock outstanding) $14.04
- --------------------------------------------------------------------------------------------------------
Class C Shares:
Net asset value, redemption price (excludes applicable contingent deferred
sales charge) and offering price per share (based on net assets of $6,421,873
and 469,979 shares of capital stock outstanding) $13.66
- --------------------------------------------------------------------------------------------------------
Class N Shares:
Net asset value, redemption price (excludes applicable contingent deferred
sales charge) and offering price per share (based on net assets of $1,488,353
and 107,886 shares of capital stock outstanding) $13.80
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
34 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS For the Year Ended October 31, 2004
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
INVESTMENT INCOME
Interest $ 1,585,957
- --------------------------------------------------------------------------------
Dividends (net of foreign withholding taxes of $6,582) 939,982
- --------------------------------------------------------------------------------
Fee income 822
------------
Total investment income 2,526,761
- --------------------------------------------------------------------------------
EXPENSES
Management fees 785,321
- --------------------------------------------------------------------------------
Distribution and service plan fees:
Class A 256,773
Class B 148,547
Class C 57,073
Class N 5,131
- --------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees:
Class A 212,136
Class B 41,636
Class C 16,887
Class N 3,747
- --------------------------------------------------------------------------------
Shareholder communications:
Class A 18,816
Class B 11,653
Class C 3,563
Class N 694
- --------------------------------------------------------------------------------
Accounting service fees 15,000
- --------------------------------------------------------------------------------
Directors' compensation 5,834
- --------------------------------------------------------------------------------
Custodian fees and expenses 3,220
- --------------------------------------------------------------------------------
Other 23,323
------------
Total expenses 1,609,354
Less reduction to custodian expenses (1,574)
Less payments and waivers of expenses (1,512)
------------
Net expenses 1,606,268
- --------------------------------------------------------------------------------
NET INVESTMENT INCOME 920,493
35 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS Continued
- --------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain on:
Investments $11,860,457
Closing of futures contracts 204,251
Foreign currency transactions 426
Swap contracts 46,324
Net increase from payment by affiliate 18,298
------------
Net realized gain 12,129,756
- -----------------------------------------------------------------------------------------
Net change in unrealized appreciation on:
Investments (5,131,630)
Translation of assets and liabilities denominated in foreign currencies (113)
Futures contracts 284,725
Swap contracts (13,491)
------------
Net change in unrealized appreciation (4,860,509)
- -----------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 8,189,740
============
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
36 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
YEAR ENDED OCTOBER 31, 2004 2003
- --------------------------------------------------------------------------------------------------------
OPERATIONS
Net investment income $ 920,493 $ 1,173,188
- --------------------------------------------------------------------------------------------------------
Net realized gain 12,129,756 1,451,451
- --------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation (4,860,509) 11,944,104
----------------------------
Net increase in net assets resulting from operations 8,189,740 14,568,743
- --------------------------------------------------------------------------------------------------------
DIVIDENDS AND/OR DISTRIBUTIONS TO SHAREHOLDERS
Dividends from net investment income:
Class A (888,024) (1,140,244)
Class B (1,401) (45,309)
Class C (3,750) (15,476)
Class N (4,892) (2,774)
- --------------------------------------------------------------------------------------------------------
CAPITAL STOCK TRANSACTIONS
Net increase (decrease) in net assets resulting from
capital stock transactions:
Class A (2,841,650) (4,085,561)
Class B (1,999,035) 1,001,740
Class C 1,447,054 1,212,712
Class N 1,061,292 109,096
- --------------------------------------------------------------------------------------------------------
NET ASSETS
Total increase 4,959,334 11,602,927
- --------------------------------------------------------------------------------------------------------
Beginning of period 119,837,587 108,234,660
----------------------------
End of period (including accumulated net investment income
of $388,283 and $170,158, respectively) $124,796,921 $119,837,587
============================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
37 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
CLASS A YEAR ENDED OCTOBER 31, 2004 2003 2002 2001 2000
- ------------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
Net asset value, beginning of period $ 13.04 $ 11.56 $ 12.54 $ 14.23 $ 15.03
- ------------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .12 1 .14 .22 .26 .44
Net realized and unrealized gain (loss) .81 1.48 (.94) (1.69) .68
--------------------------------------------------------------------
Total from investment operations .93 1.62 (.72) (1.43) 1.12
- ------------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.12) (.14) (.26) (.26) (.44)
Distributions from net realized gain -- -- -- -- (1.48)
--------------------------------------------------------------------
Total dividends and/or distributions
to shareholders (.12) (.14) (.26) (.26) (1.92)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 13.85 $ 13.04 $ 11.56 $ 12.54 $ 14.23
====================================================================
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2 7.12% 14.17% (5.86)% (10.12)% 8.27%
- ------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in thousands) $103,268 $100,032 $ 92,806 $112,864 $144,244
- ------------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $103,979 $ 94,811 $104,415 $128,477 $172,514
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income 0.88% 1.18% 1.73% 1.88% 2.88%
Total expenses 1.13% 4,5 1.26% 4,5 1.21% 4,5 1.19% 4 1.11% 4
- ------------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 79% 6 275% 193% 164% 34%
<FN>
1. Per share amounts calculated based on the average shares outstanding during the period.
2. Assumes an investment on the business day before the first day of the fiscal period, with all
dividends and distribu- tions reinvested in additional shares on the reinvestment date, and
redemption at the net asset value calculated on the last business day of the fiscal period.
Sales charges are not reflected in the total returns. Total returns are not annualized for
periods of less than one full year. Returns do not reflect the deduction of taxes that a
shareholder would pay on Fund distributions or the redemption of Fund shares.
3. Annualized for periods of less than one full year.
4. Reduction to custodian expenses less than 0.01%.
5. Voluntary waiver of transfer agent fees less than 0.01%.
6. The portfolio turnover rate excludes purchase and sales transactions of To Be Announced (TBA)
mortgage-related securities of $316,759,702 and $306,486,129, respectively.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
</FN>
38 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
CLASS B YEAR ENDED OCTOBER 31, 2004 2003 2002 2001 2000
- ------------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
Net asset value, beginning of period $ 13.23 $ 11.73 $ 12.72 $ 14.43 $ 15.20
- ------------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss) -- 1 .04 .11 .15 .30
Net realized and unrealized gain (loss) .81 1.50 (.94) (1.70) .73
--------------------------------------------------------------------
Total from investment operations .81 1.54 (.83) (1.55) 1.03
- ------------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income -- 2 (.04) (.16) (.16) (.32)
Distributions from net realized gain -- -- -- -- (1.48)
--------------------------------------------------------------------
Total dividends and/or distributions
to shareholders -- (.04) (.16) (.16) (1.80)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $14.04 $13.23 $11.73 $12.72 $14.43
====================================================================
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 3 6.13% 13.21% (6.61)% (10.79)% 7.48%
- ------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in thousands) $13,619 $14,747 $12,204 $14,770 $17,892
- ------------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $14,875 $12,776 $13,639 $16,569 $19,643
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 4
Net investment income (loss) (0.01)% 0.31% 0.94% 1.14% 2.12%
Total expenses 2.02% 2.15% 2.00% 1.94% 1.87%
Expenses after payments and waivers and
reduction to custodian expenses N/A 5 2.11% N/A 5,6 N/A 5 N/A 5
- ------------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 79% 7 275% 193% 164% 34%
<FN>
1. Per share amounts calculated based on the average shares outstanding during the period.
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%.
6. Voluntary waiver of transfer agent fees less than 0.01%.
7. The portfolio turnover rate excludes purchase and sales transactions of To Be Announced (TBA)
mortgage-related securities of $316,759,702 and $306,486,129, respectively.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
</FN>
39 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS Continued
- --------------------------------------------------------------------------------
CLASS C YEAR ENDED OCTOBER 31, 2004 2003 2002 2001 2000
- ------------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
Net asset value, beginning of period $ 12.88 $ 11.43 $ 12.41 $ 14.08 $ 14.88
- ------------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income -- 1 .07 .13 .13 .28
Net realized and unrealized gain (loss) .79 1.43 (.94) (1.64) .72
--------------------------------------------------------------------
Total from investment operations .79 1.50 (.81) (1.51) 1.00
- ------------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.01) (.05) (.17) (.16) (.32)
Distributions from net realized gain -- -- -- -- (1.48)
--------------------------------------------------------------------
Total dividends and/or distributions
to shareholders (.01) (.05) (.17) (.16) (1.80)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $13.66 $12.88 $11.43 $12.41 $14.08
====================================================================
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2 6.13% 13.18% (6.64)% (10.76)% 7.44%
- ------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in thousands) $6,422 $4,666 $2,984 $2,893 $3,931
- ------------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $5,726 $3,806 $2,961 $3,280 $4,255
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income 0.00% 0.29% 0.93% 1.14% 2.13%
Total expenses 2.02% 2.17% 2.00% 1.94% 1.86%
Expenses after payments and waivers and
reduction to custodian expenses N/A 4 2.12% N/A 4,5 N/A 4 N/A 4
- ------------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 79% 6 275% 193% 164% 34%
<FN>
1. Per share amounts calculated based on the average shares outstanding during the period.
2. Assumes an investment on the business day before the first day of the fiscal period, with all
dividends and distribu- tions reinvested in additional shares on the reinvestment date, and
redemption at the net asset value calculated on the last business day of the fiscal period.
Sales charges are not reflected in the total returns. Total returns are not annualized for
periods of less than one full year. Returns do not reflect the deduction of taxes that a
shareholder would pay on Fund distributions or the redemption of Fund shares.
3. Annualized for periods of less than one full year.
4. Reduction to custodian expenses less than 0.01%.
5. Voluntary waiver of transfer agent fees less than 0.01%.
6. The portfolio turnover rate excludes purchase and sales transactions of To Be Announced (TBA)
mortgage-related securities of $316,759,702 and $306,486,129, respectively.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
</FN>
40 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
CLASS N YEAR ENDED OCTOBER 31, 2004 2003 2002 2001 1
- -----------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
Net asset value, beginning of period $ 13.00 $ 11.52 $ 12.52 $ 13.74
- -----------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .06 2 .12 .16 .12
Net realized and unrealized gain (loss) .81 1.46 (.91) (1.20)
-------------------------------------------------------
Total from investment operations .87 1.58 (.75) (1.08)
- -----------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.07) (.10) (.25) (.14)
Distributions from net realized gain -- -- -- --
-------------------------------------------------------
Total dividends and/or distributions to shareholders (.07) (.10) (.25) (.14)
- -----------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $13.80 $13.00 $11.52 $12.52
=======================================================
- -----------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 3 6.68% 13.81% (6.17)% (7.90)%
- -----------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in thousands) $1,488 $392 $241 $2
- -----------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $1,030 $342 $160 $1
- -----------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 4
Net investment income 0.46% 0.79% 1.28% 1.04%
Total expenses 1.61% 2.04% 1.60% 1.68%
Expenses after payments and waivers and
reduction to custodian expenses 1.55% 1.58% N/A 5,6 N/A 5
- -----------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 79% 7 275% 193% 164%
<FN>
1. For the period from March 1, 2001 (inception of offering) to October 31, 2001.
2. Per share amounts calculated based on the average shares outstanding during the period.
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%.
6. Voluntary waiver of transfer agent fees less than 0.01%.
7. The portfolio turnover rate excludes purchase and sales transactions of To Be Announced (TBA)
mortgage-related securities of $316,759,702 and $306,486,129, respectively.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
</FN>
41 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
Oppenheimer Disciplined Allocation Fund (the Fund), a series of Oppenheimer
Series Fund, Inc. (the Company), is registered under the Investment Company Act
of 1940, as amended, as an open-end management investment company. The Fund's
investment objective is to seek to maximize total investment return (including
capital appreciation and income) principally by allocating its assets among
stocks, corporate bonds, U.S. government securities and money market
instruments, according to changing market conditions. The Fund's investment
advisor is OppenheimerFunds, Inc. (the Manager).
The Fund offers Class A, Class B, Class C and Class N shares. Class A shares
are sold at their offering price, which is normally net asset value plus a
front-end sales charge. Class B, Class C and Class N shares are sold without a
front-end sales charge but may be subject to a contingent deferred sales charge
(CDSC). Class N shares are sold only through retirement plans. Retirement plans
that offer Class N shares may impose charges on those accounts. All classes of
shares have identical rights and voting privileges with respect to the Fund in
general and exclusive voting rights on matters that affect that class alone.
Earnings, net assets and net asset value per share may differ due to each class
having its own expenses, such as transfer and shareholder servicing agent fees
and shareholder communications, directly attributable to that class. Class A,
B, C and N have separate distribution and/or service plans. Class B shares will
automatically convert to Class A shares six years after the date of purchase.
The following is a summary of significant accounting policies consistently
followed by the Fund.
- --------------------------------------------------------------------------------
SECURITIES VALUATION. The Fund calculates the net asset value of its shares as
of the close of The New York Stock Exchange (the Exchange), normally 4:00 P.M.
Eastern time, on each day the Exchange is open for business. Securities listed
or traded on National Stock Exchanges or other domestic or foreign exchanges
are valued based on the last sale price of the security traded on that exchange
prior to the time when the Fund's assets are valued. Securities traded on
NASDAQ are valued based on the closing price provided by NASDAQ prior to the
time when the Fund's assets are valued. In the absence of a sale, the security
is valued at the last sale price on the prior trading day, if it is within the
spread of the closing bid and asked prices, and if not, at the closing bid
price. Corporate, government and municipal debt instruments having a remaining
maturity in excess of 60 days and all mortgage-backed securities will be valued
at the mean between the "bid" and "asked" prices. Securities may be valued
primarily using dealer-supplied valuations or a portfolio pricing service
authorized by the Board of Directors. Securities (including restricted
securities) for which market quotations are not readily available are valued at
their fair value. Foreign and domestic 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 exchanges will be fair valued. Fair value is determined in good
faith using consistently applied procedures under the supervision of the Board
of Directors. Short-term "money market type" debt securities with
42 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
remaining maturities of sixty days or less are valued at amortized cost (which
approximates market value).
- --------------------------------------------------------------------------------
STRUCTURED NOTES. The Fund invests in structured notes whose market values,
interest rates and/or redemption prices are linked to the performance of
underlying foreign currencies, interest rate spreads, stock market indices,
prices of individual securities, commodities or other financial instruments or
the occurrence of other specific events. The structured notes are often
leveraged, increasing the volatility of each note's market value relative to
the change in the underlying linked financial element or event. Fluctuations in
value of these securities are recorded as unrealized gains and losses in the
accompanying financial statements. The Fund records a realized gain or loss
when a structured note is sold or matures. As of October 31, 2004, the market
value of these securities comprised 1.5% of the Fund's net assets and resulted
in unrealized cumulative gains of $2,375.
- --------------------------------------------------------------------------------
SECURITIES ON A WHEN-ISSUED BASIS OR FORWARD COMMITMENT. Delivery and payment
for securities that have been purchased by the Fund on a when-issued basis or
forward commitment can take place up to ten days or more after the trade date.
Normally the settlement date occurs within six months after the trade date;
however, the Fund may, from time to time, purchase securities whose settlement
date extends six months or more beyond trade date. During this period, such
securities do not earn interest, are subject to market fluctuation and may
increase or decrease in value prior to their delivery. The Fund maintains
internally designated assets with a market value equal to or greater than the
amount of its purchase commitments. The purchase of securities on a when-issued
basis or forward commitment may increase the volatility of the Fund's net asset
value to the extent the Fund executes such transactions while remaining
substantially fully invested. The Fund may also sell securities that it
purchased on a when-issued basis or forward commitment prior to settlement of
the original purchase. As of October 31, 2004, the Fund had purchased
$30,019,114 of securities on a when-issued basis or forward commitment and sold
$7,417,981 of securities issued on a when-issued basis or forward commitment.
In connection with its ability to purchase or sell securities on a
when-issued basis, the Fund may enter into forward roll transactions with
respect to mortgage-related securities. Forward roll transactions require the
sale of securities for delivery in the current month, and a simultaneous
agreement with the same counterparty to repurchase similar (same type, coupon
and maturity) but not identical securities on a specified future date. The Fund
records the incremental difference between the forward purchase and sale of
each forward roll as realized gain (loss) on investments or as fee income in
the case of such transactions that have an associated fee in lieu of a
difference in the forward purchase and sale price.
Risks of entering into forward roll transactions include the potential
inability of the counterparty to meet the terms of the agreement; the potential
of the Fund to receive inferior securities at redelivery as compared to the
securities sold to the counterparty; counterparty credit risk; and the
potential pay down speed variance between the mortgage-related pools.
43 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 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 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. 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. Foreign exchange rates
may be valued primarily using dealer supplied valuations or a portfolio pricing
service authorized by the Board of Directors.
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.
44 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
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 1,2,3,4 TAX PURPOSES
-----------------------------------------------------------------------
$565,546 $-- $11,266,279 $7,260,689
1. As of October 31, 2004, the Fund had $11,257,119 of net capital loss
carryforwards available to offset future realized capital gains, if any, and
thereby reduce future taxable gain distributions. As of October 31, 2004,
details of the capital loss carryforwards were as follows:
EXPIRING
--------
2009 $ 1,037,238
2010 10,219,881
-----------
Total $11,257,119
===========
2. The Fund had $9,160 of straddle losses which were deferred.
3. During the fiscal year ended October 31, 2004, the Fund utilized $11,697,830
of capital loss carryforward to offset capital gains realized in that fiscal
year.
4. During the fiscal year ended October 31, 2003, the Fund utilized
$1,129,404 of capital loss carryforward to offset capital gains realized in
that fiscal year.
Net investment income (loss) and net realized gain (loss) may differ for
financial statement and tax purposes. The character of dividends and
distributions made during the fiscal year from net investment income or net
realized gains may differ from their ultimate characterization for federal
income tax purposes. Also, due to timing of dividends and distributions, the
fiscal year in which amounts are distributed may differ from the fiscal year in
which the income or net realized gain was recorded by the Fund. Accordingly,
the following amounts have been reclassified for October 31, 2004. Net assets
of the Fund were unaffected by the reclassifications.
INCREASE TO INCREASE TO
ACCUMULATED ACCUMULATED NET
NET INVESTMENT REALIZED LOSS
INCOME ON INVESTMENTS
---------------------------------
$195,699 $195,699
The tax character of distributions paid during the years ended October 31, 2004
and October 31, 2003 was as follows:
YEAR ENDED YEAR ENDED
OCTOBER 31, 2004 OCTOBER 31, 2003
--------------------------------------------------------
Distributions paid from:
Ordinary income $898,067 $1,203,803
45 | OPPENHEIMER DISCIPLINED ALLOCATION 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 October 31, 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 $139,975,604
Federal tax cost of other investments (626,231)
------------
Total federal tax cost $139,349,373
============
Gross unrealized appreciation $ 10,216,319
Gross unrealized depreciation (2,955,630)
------------
Net unrealized appreciation $ 7,260,689
============
- --------------------------------------------------------------------------------
DIRECTORS' COMPENSATION. The Fund has adopted an unfunded retirement plan for
the Fund's independent directors. Benefits are based on years of service and
fees paid to each director during the years of service. During the year ended
October 31, 2004, the Fund's projected benefit obligations were increased by
$2,351 and payments of $1,482 were made to retired directors, resulting in an
accumulated liability of $24,909 as of October 31, 2004.
The Board of Directors has adopted a deferred compensation plan for
independent directors that enables directors to elect to defer receipt of all
or a portion of the annual compensation they are entitled to receive from the
Fund. For purposes of determining the amount owed to the under the plan,
deferred amounts are treated as though equal dollar amounts had been invested
in shares of the Fund or in other Oppenheimer funds selected by the Director.
The Fund purchases shares of the funds selected for deferral by the Director in
amounts equal to his or her deemed investment, resulting in a Fund asset equal
to the deferred compensation liability. Such assets are included as a component
of "Other" within the asset section of the Statement of Assets and Liabilities.
Deferral of directors' fees under the plan will not affect the net assets of
the Fund, and will not materially affect the Fund's assets, liabilities or net
investment income per share. Amounts will be deferred until distributed in
accordance to the Plan.
- --------------------------------------------------------------------------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS. Dividends and distributions to
shareholders, which are determined in accordance with income tax regulations,
are recorded on the ex-dividend date. Income distributions, if any, are
declared and paid quarterly. Capital gain distributions, if any, are declared
and paid annually.
- --------------------------------------------------------------------------------
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.
46 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
- --------------------------------------------------------------------------------
CUSTODIAN FEES. Custodian Fees and Expenses in the Statement of Operations may
include interest expense incurred by the Fund on any cash overdrafts of its
custodian account during the period. The Fund pays interest to its custodian on
such cash overdrafts at a rate equal to the Federal Funds Rate plus 0.50%. The
Reduction to Custodian Expenses line item, if applicable, represents earnings
on cash balances maintained by the Fund during the period. Such interest
expense and other custodian fees may be paid with these earnings.
- --------------------------------------------------------------------------------
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.
- --------------------------------------------------------------------------------
2. SHARES OF CAPITAL STOCK
The Fund has authorized 550 million shares of $0.001 par value capital stock.
Transactions in shares of capital stock were as follows:
YEAR ENDED OCTOBER 31, 2004 YEAR ENDED OCTOBER 31, 2003
SHARES AMOUNT SHARES AMOUNT
- ----------------------------------------------------------------------------------------
CLASS A
Sold 1,031,614 $ 14,122,521 999,373 $ 12,060,988
Dividends and/or
distributions reinvested 62,731 854,672 91,508 1,096,971
Redeemed (1,307,401) (17,818,843) (1,446,531) (17,243,520)
------------------------------------------------------------
Net decrease (213,056) $ (2,841,650) (355,650) $ (4,085,561)
============================================================
- ----------------------------------------------------------------------------------------
CLASS B
Sold 290,346 $ 4,026,294 443,368 $ 5,482,870
Dividends and/or
distributions reinvested 96 1,314 3,597 42,750
Redeemed (435,276) (6,026,643) (372,443) (4,523,880)
------------------------------------------------------------
Net increase (decrease) (144,834) $ (1,999,035) 74,522 $ 1,001,740
============================================================
- ----------------------------------------------------------------------------------------
CLASS C
Sold 221,557 $ 2,977,259 186,268 $ 2,221,285
Dividends and/or
distributions reinvested 267 3,610 1,273 14,766
Redeemed (114,094) (1,533,815) (86,326) (1,023,339)
------------------------------------------------------------
Net increase 107,730 $ 1,447,054 101,215 $ 1,212,712
============================================================
47 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
2. SHARES OF CAPITAL STOCK Continued
YEAR ENDED OCTOBER 31, 2004 YEAR ENDED OCTOBER 31, 2003
SHARES AMOUNT SHARES AMOUNT
- ----------------------------------------------------------------------------------------
Class N
Sold 85,506 $ 1,165,275 21,478 $ 261,761
Dividends and/or
distributions reinvested 357 4,887 230 2,766
Redeemed (8,146) (108,870) (12,426) (155,431)
------------------------------------------------------------
Net increase 77,717 $ 1,061,292 9,282 $ 109,096
============================================================
- --------------------------------------------------------------------------------
3. PURCHASES AND SALES OF SECURITIES
The aggregate cost of purchases and proceeds from sales of securities, other
than U.S. government obligations and short-term obligations, for the year ended
October 31, 2004, were $76,733,133 and $84,881,502, respectively. There were
purchases of $12,340,077 and sales of $8,930,209 of U.S. government and
government agency obligations for the year ended October 31, 2004. In addition,
there were purchases of $316,759,702 and sales of $306,486,129 of To Be
Announced (TBA) mortgage-related securities for the year ended October 31,
2004.
- --------------------------------------------------------------------------------
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES
MANAGEMENT FEES. Management fees paid to the Manager were in accordance with
the investment advisory agreement with the Fund which provides for a fee at an
annual rate of 0.625% of the first $300 million of average annual net assets of
the Fund, 0.50% of the next $100 million, and 0.45% of average annual net
assets in excess of $400 million.
- --------------------------------------------------------------------------------
ACCOUNTING FEES. The Manager acts as the accounting agent for the Fund at an
annual fee of $15,000, plus out-of-pocket costs and expenses reasonably
incurred.
- --------------------------------------------------------------------------------
TRANSFER AGENT FEES. OppenheimerFunds Services (OFS), a division of the
Manager, acts as the transfer and shareholder servicing agent for the Fund. The
Fund pays OFS a per account fee. For the year ended October 31, 2004, the Fund
paid $274,415 to OFS for services to the Fund.
- --------------------------------------------------------------------------------
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 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
- --------------------------------------------------------------------------------
48 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
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 and Class C shares and 0.25% per year on Class N shares. The
Distributor also receives a service fee of up to 0.25% per year under each
plan. If either the Class B, Class C or Class N plan is terminated by the Fund
or by the shareholders of a class, the Board of Directors and its independent
directors must determine whether the Distributor shall be entitled to payment
from the Fund of all or a portion of the service fee and/or asset-based sales
charge in respect to shares sold prior to the effective date of such
termination. The Distributor's aggregate uncompensated expenses under the plan
at October 31, 2004 for Class B, Class C and Class N shares were $428,108,
$131,782 and $15,505, 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
RETAINED BY RETAINED BY RETAINED BY RETAINED BY RETAINED BY
YEAR ENDED DISTRIBUTOR DISTRIBUTOR DISTRIBUTOR DISTRIBUTOR DISTRIBUTOR
- ------------------------------------------------------------------------------------------------
October 31, 2004 $68,502 $814 $40,394 $1,835 $601
- ------------------------------------------------------------------------------------------------
PAYMENTS AND WAIVERS OF EXPENSES. Following a review of its use of brokerage
commissions for sales that is permitted under its investment advisory
agreement, the Fund's Manager terminated that practice in July 2003.
Subsequently, the Manager paid the Fund $18,298, an amount equivalent to
certain of such commissions incurred in prior years.
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. During
the year ended October 31, 2004 OFS waived $941 and $571 for Class A and Class
N shares, respectively. This undertaking may be amended or withdrawn at any
time.
- --------------------------------------------------------------------------------
5. FOREIGN CURRENCY CONTRACTS
A foreign currency contract is a commitment to purchase or sell a foreign
currency at a future date, at a negotiated rate. The Fund may enter into
foreign currency contracts
49 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
5. FOREIGN CURRENCY CONTRACTS Continued
to settle specific purchases or sales of securities denominated in a foreign
currency and for protection from adverse exchange rate fluctuation. Risks to
the Fund include the potential inability of the counterparty to meet the terms
of the contract.
The net U.S. dollar value of foreign currency underlying all contractual
commitments held by the Fund and the resulting unrealized appreciation or
depreciation are determined using prevailing foreign currency exchange rates.
Unrealized appreciation and depreciation on foreign currency contracts are
reported in the Statement of Assets and Liabilities as a receivable or payable
and in the Statement of Operations with the change in unrealized appreciation
or depreciation.
The Fund may realize a gain or loss upon the closing or settlement of the
foreign transaction. Contracts closed or settled with the same broker are
recorded as net realized gains or losses. Such realized gains and losses are
reported with all other foreign currency gains and losses in the Statement of
Operations.
As of October 31, 2004, the Fund had no outstanding foreign currency
contracts.
- --------------------------------------------------------------------------------
6. FUTURES CONTRACTS
A futures contract is a commitment to buy or sell a specific amount of a
commodity or financial instrument at a negotiated price on a stipulated future
date. Futures contracts are traded on a commodity exchange. The Fund may buy
and sell futures contracts that relate to broadly based securities indices
(financial futures) or debt securities (interest rate futures) in order to gain
exposure to or protection from changes in market value of stocks and bonds or
interest rates. The Fund may also buy or write put or call options on these
futures contracts.
The Fund generally sells futures contracts as a hedge against increases in
interest rates and decreases in market value of portfolio securities. The Fund
may also purchase futures contracts to gain exposure to market changes as it
may be more efficient or cost effective than actually buying securities.
Upon entering into a futures contract, the Fund is required to deposit
either cash or securities (initial margin) in an amount equal to a certain
percentage of the contract value. Subsequent payments (variation margin) are
made or received by the Fund each day. The variation margin payments are equal
to the daily changes in the contract value and are recorded as unrealized gains
and losses. The Fund recognizes a realized gain or loss when the contract is
closed or has expired.
Cash held by the broker to cover initial margin requirements on open futures
contracts is noted in the Statement of Assets and Liabilities. Securities held
in collateralized accounts to cover initial margin requirements on open futures
contracts are noted in the Statement of Investments. The Statement of Assets
and Liabilities reflects a receivable and/or payable for the daily mark to
market for variation margin. Realized gains and losses are reported in the
Statement of Operations as the closing and expiration of futures contracts. The
net change in unrealized appreciation and depreciation is reported in the
Statement of Operations.
50 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
Risks of entering into futures contracts (and related options) include the
possibility that there may be an illiquid market and that a change in the value
of the contract or option may not correlate with changes in the value of the
underlying securities.
As of October 31, 2004, the Fund had outstanding futures contracts as follows:
UNREALIZED
EXPIRATION NUMBER OF VALUATION AS OF APPRECIATION
CONTRACT DESCRIPTION DATES CONTRACTS OCTOBER 31, 2004 (DEPRECIATION)
- --------------------------------------------------------------------------------------------------
CONTRACTS TO PURCHASE
U.S. Long Bonds 12/20/04 67 $7,627,531 $ 209,078
U.S. Treasury Nts., 10 yr. 12/20/04 55 6,245,938 92,365
-----------
301,443
-----------
CONTRACTS TO SELL
U.S. Treasury Nts., 2 yr. 12/30/04 27 5,717,672 969
U.S. Treasury Nts., 5 yr. 12/20/04 79 8,798,625 (71,617)
-----------
(70,648)
-----------
$ 230,795
===========
- --------------------------------------------------------------------------------
7. TOTAL RETURN SWAP CONTRACTS
The Fund may enter into a total return swap transaction to maintain a total
return on a particular investment, or portion of its portfolio, or for other
non-speculative purposes. Because the principal amount is not exchanged, it
represents neither an asset nor a liability to either counterparty, and is
referred to as notional. The Fund records an increase or decrease to unrealized
gain (loss), in the amount due to or owed by the Fund at termination or
settlement. Total return swaps are subject to risks (if the counterparty fails
to meet its obligations).
As of October 31, 2004, the Fund had entered into the following total return
swap agreements:
PAID BY RECEIVED BY
THE FUND AT THE FUND AT
SWAP NOTIONAL OCTOBER 31, OCTOBER 31, TERMINATION UNREALIZED
COUNTERPARTY AMOUNT 2004 2004 DATES APPRECIATION
- ---------------------------------------------------------------------------------------------------
Value of
One-Month total return of
LIBOR less 50 Lehman Brothers
Deutsche Bank AG $850,000 basis points CMBS Index 1/1/05 $4,200
Value of
One-Month total return of
Goldman Sachs LIBOR Lehman Brothers
Capital Markets LP 850,000 BBA Rate CMBS Index 3/31/05 3,905
------
$8,105
======
Index abbreviations are as follows:
CMBS Commercial Mortgage Backed Securities Markets
LIBOR London-Interbank Offered Rate
LIBOR BBA London-Interbank Offered Rate British Bankers Association
51 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
8. ILLIQUID OR RESTRICTED SECURITIES
As of October 31, 2004, investments in securities included issues that are
illiquid or restricted. Restricted securities are purchased in private
placement transactions, are not registered under the Securities Act of 1933,
may have contractual restrictions on resale, and are valued under methods
approved by the Board of Directors as reflecting fair value. A security may
also be considered illiquid if it lacks a readily available market or if its
valuation has not changed for a certain period of time. The Fund will not
invest more than 10% of its net assets (determined at the time of purchase and
reviewed periodically) in illiquid or restricted securities. Certain restricted
securities, eligible for resale to qualified institutional investors, are not
subject to that limitation. The aggregate value of illiquid or restricted
securities subject to this limitation as of October 31, 2004 was $4,107,030,
which represents 3.29% of the Fund's net assets. Information concerning
restricted securities is as follows:
ACQUISITION VALUATION AS OF UNREALIZED
SECURITY DATE COST OCTOBER 31, 2004 DEPRECIATION
- -------------------------------------------------------------------------------------------------
STOCKS AND/OR WARRANTS
Geotek Communications, Inc.,
Series B, Escrow Shares 1/4/01 $400 $-- $400
- -------------------------------------------------------------------------------------------------
9. LITIGATION
Six complaints have been filed as putative derivative and class actions against
the Manager, OFS and the Distributor (collectively, "OppenheimerFunds"), as
well as 51 of the Oppenheimer funds (collectively, the "Funds") including this
Fund, and nine Directors/ Trustees of certain of the Funds (collectively, the
"Directors/Trustees"). The complaints allege that the Manager charged excessive
fees for distribution and other costs, improperly used assets of the Funds in
the form of directed brokerage commissions and 12b-1 fees to pay brokers to
promote sales of the Funds, and failed to properly disclose the use of Fund
assets to make those payments in violation of the Investment Company Act of
1940 and the Investment Advisers Act of 1940. The complaints further allege
that by permitting and/or participating in those actions, the
Directors/Trustees breached their fiduciary duties to Fund shareholders under
the Investment Company Act of 1940 and at common law. By order dated October
27, 2004, these six actions, and future related actions, were consolidated by
the U.S. District Court for the Southern District of New York into a single
consolidated proceeding in contemplation of the filing of a superseding
consolidated and amended complaint.
OppenheimerFunds believes that it is premature to render any opinion as to
the likelihood of an outcome unfavorable to them, the Funds or the
Directors/Trustees and that no estimate can yet be made with any degree of
certainty as to the amount or range of any potential loss. However,
OppenheimerFunds, the Funds and the Directors/Trustees believe that the
allegations contained in the complaints are without merit and intend to defend
these lawsuits vigorously.
52 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
- --------------------------------------------------------------------------------
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
THE BOARD OF DIRECTORS AND SHAREHOLDERS OF OPPENHEIMER SERIES FUND, INC.:
We have audited the accompanying statement of assets and liabilities of
Oppenheimer Disciplined Allocation Fund, (one of the portfolios constituting
the Oppenheimer Series Fund, Inc.) including the statement of investments, as
of October 31, 2004, and the related statement of operations for the year then
ended, the statements of changes in net assets for each of the two years in the
period then ended, and the financial highlights for each of the five years in
the period then ended. 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 October 31, 2004, by
correspondence with the custodian and brokers or by other appropriate auditing
procedures where replies from brokers were not received. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of
Oppenheimer Disciplined Allocation Fund as of October 31, 2004, the results of
its operations for the year then ended, the changes in its net assets for each
of the two years in the period then ended, and the financial highlights for
each of the five years in the period then ended, in conformity with U.S.
generally accepted accounting principles.
KPMG LLP
Denver, Colorado
December 16, 2004
53 | OPPENHEIMER DISCIPLINED ALLOCATION 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.
Dividends, if any, paid by the Fund during the fiscal year ended October 31,
2004 which are not designated as capital gain distributions should be
multiplied by 61.93% 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 October 31, 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.
$945,027 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.
54 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
- --------------------------------------------------------------------------------
PORTFOLIO PROXY VOTING POLICIES AND PROCEDURES;
UPDATES TO STATEMENTS OF INVESTMENTS 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 1.800.525.7048, (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 is 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 Fund's Form N-PX filing is available (i) without charge, upon
request, by calling the Fund toll-free at 1.800.525.7048, and (ii) on the SEC's
website at www.sec.gov.
The Fund files its complete schedule of portfolio holdings with the SEC for
the first quarter and the third quarter of each fiscal year on Form N-Q. The
Fund's Form N-Q filings are available on the SEC's website at www.sec.gov.
Those forms may be reviewed and copied at the SEC's Public Reference Room in
Washington D.C. Information on the operation of the Public Reference Room may
be obtained by calling 1-800-SEC-0330.
55 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
- --------------------------------------------------------------------------------
DIRECTORS AND OFFICERS Unaudited
- --------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
NAME, POSITION(S) HELD WITH PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS; OTHER TRUSTEESHIPS/DIRECTORSHIPS HELD BY
FUND, LENGTH OF SERVICE, AGE DIRECTOR; NUMBER OF PORTFOLIOS IN FUND COMPLEX CURRENTLY OVERSEEN BY DIRECTOR
INDEPENDENT THE ADDRESS OF EACH DIRECTOR IN THE CHART BELOW IS 6803 S. TUCSON WAY, CENTENNIAL, CO
DIRECTORS 80112-3924. EACH DIRECTOR SERVES FOR AN INDEFINITE TERM, UNTIL HIS OR HER RESIGNATION,
RETIREMENT, DEATH OR REMOVAL.
CLAYTON K. YEUTTER, Of Counsel (since June 1993) Hogan & Hartson (a law firm); a director (since 2002) of
Chairman of the Board of Danielson Holding Corp. Formerly a director of Weyerhaeuser Corp. (1999-April 2004),
Directors (since 2003); Caterpillar, Inc. (1993-December 2002), ConAgra Foods (1993-2001), Texas Instruments
Director (since 1996) (1993-2001) and FMC Corporation (1993-2001). Oversees 25 portfolios in the OppenheimerFunds
Age: 73 complex.
ROBERT G. GALLI, A trustee or director of other Oppenheimer funds. Oversees 35 portfolios in the
Director (since 1996) OppenheimerFunds complex.
Age: 71
PHILLIP A. GRIFFITHS, A director (since 1991) of the Institute for Advanced Study, Princeton, N.J., a director
Director (since 1999) (since 2001) of GSI Lumonics, a trustee (since 1983) of Woodward Academy, a Senior Advisor
Age: 66 (since 2001) of The Andrew W. Mellon Foundation. A member of: the National Academy of
Sciences (since 1979), American Academy of Arts and Sciences (since 1995), American
Philosophical Society (since 1996) and Council on Foreign Relations (since 2002). Formerly a
director of Bankers Trust New York Corporation (1994-1999). Oversees 25 portfolios in the
OppenheimerFunds complex.
MARY F. MILLER, Formerly a Senior Vice President and General Auditor, American Express Company
Director (since 2004) (July 1998-February 2003). Member of Trustees of the American Symphony Orchestra
Age: 62 (October 1998 to present). Oversees 25 portfolios in the OppenheimerFunds complex.
JOEL W. MOTLEY, Director (since January 2002) Columbia Equity Financial Corp. (privately-held financial
Director (since 2002) adviser); Managing Director (since January 2002) Carmona Motley, Inc. (privately-held
Age: 52 financial adviser). Formerly a Managing Director of Carmona Motley Hoffman Inc.
(privately-held financial adviser) (January 1998-December 2001). Oversees 25 portfolios in
the OppenheimerFunds complex.
KENNETH A. RANDALL, A director (since February 1972) of Dominion Resources, Inc. (electric utility holding
Director (since 1996) company); formerly a director of Prime Retail, Inc. (real estate investment trust) and
Age: 77 Dominion Energy, Inc. (electric power and oil & gas producer), President and Chief Executive
Officer of The Conference Board, Inc. (international economic and business research) and a
director of Lumbermens Mutual Casualty Company, American Motorists Insurance Company and
American Manufacturers Mutual Insurance Company. Oversees 25 portfolios in the
OppenheimerFunds complex.
EDWARD V. REGAN, President, Baruch College, CUNY; a director of RBAsset (real estate manager); a director of
Director (since 1996) OffitBank; formerly Trustee, Financial Accounting Foundation (FASB and GASB), Senior Fellow
Age: 74 of Jerome Levy Economics Institute, Bard College, Chairman of Municipal Assistance
Corporation for the City of New York, New York State Comptroller and Trustee of New York
State and Local Retirement Fund. Oversees 25 investment companies in the OppenheimerFunds
complex.
56 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
RUSSELL S. REYNOLDS, JR., Chairman (since 1993) of The Directorship Search Group, Inc. (corporate governance consulting
Director (since 1996) and executive recruiting); a Life Trustee of International House (non-profit educational
Age: 72 a former trustee of The Historical Society of the Town of Greenwich. Oversees 25 portfolios
in the OppenheimerFunds complex.
- ------------------------------------------------------------------------------------------------------------------------------------
INTERESTED DIRECTOR THE ADDRESS OF MR. MURPHY IN THE CHART BELOW IS TWO WORLD FINANCIAL CENTER, 225 LIBERTY
AND OFFICER STREET NEW YORK, NY 10281-1008. MR. MURPHY SERVES FOR AN INDEFINITE TERM, UNTIL HIS
RESIGNATION, DEATH OR REMOVAL.
JOHN V. MURPHY, Chairman, Chief Executive Officer and director (since June 2001) and President (since
President and Director, September 2000) of the Manager; President and a director or trustee of other Oppenheimer
Director (since 2001) funds; President and a director (since July 2001) of Oppenheimer Acquisition Corp. (the
Age: 55 Manager's parent holding company) and of Oppenheimer Partnership Holdings, Inc. (a holding
company subsidiary of the Manager); a director (since November 2001) of OppenheimerFunds
Distributor, Inc. (a subsidiary of the Manager); Chairman and a director (since July 2001) of
Shareholder Services, Inc. and of Shareholder Financial Services, Inc. (transfer agent
subsidiaries of the Manager); President and a director (since July 2001) of OppenheimerFunds
Legacy Program (a charitable trust program established by the Manager); a director of the
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 Babson Capital Management LLC); 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-August 2000) of C.M. Life Insurance Company; President, Chief
Executive Officer and director (September 1999-August 2000) of MML Bay State Life Insurance
Company; a director (June 1989-June 1998) of Emerald Isle Bancorp and Hibernia Savings Bank
(a wholly-owned subsidiary of Emerald Isle Bancorp). Oversees 63 portfolios as
Trustee/Director and 21 additional portfolios as Officer in the OppenheimerFunds complex.
- ------------------------------------------------------------------------------------------------------------------------------------
OFFICERS THE ADDRESS OF THE OFFICERS IN THE CHART BELOW IS AS FOLLOWS: FOR MESSRS. FERREIRA, LEVY,
MANIOUDAKIS, AND ZACK, TWO WORLD FINANCIAL CENTER, 225 LIBERTY STREET, 11TH FLOOR, NEW YORK,
NY 10281-1008, AND FOR MR. WIXTED AND MR. VANDEHEY, 6803 S. TUCSON WAY, CENTENNIAL, CO
80112-3924. EACH OFFICER SERVES FOR AN INDEFINITE TERM OR UNTIL HIS EARLIER RESIGNATION,
DEATH OR REMOVAL.
EMMANUEL FERREIRA, Vice President of the Manager since January 2003. An officer of 4 portfolios in the
Vice President and Portfolio OppenheimerFunds complex. Formerly, Portfolio Manager at Lashire Investments (July
Manager (since 2003) 1999-December 2002), and a Senior Analyst at Mark Asset Management (July 1997-June 1999).
Age: 37
57 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
- --------------------------------------------------------------------------------
DIRECTORS AND OFFICERS Unaudited / Continued
- --------------------------------------------------------------------------------
CHRISTOPHER LEAVY, Senior Vice President of the Manager since September 2000; an officer of 7 portfolios in the
Vice President and Portfolio OppenheimerFunds complex. Formerly a portfolio manager of Morgan Stanley Dean Witter
Manager (since 2000) Investment Management (1997 - September 2000).
Age: 33
ANGELO MANIOUDAKIS, Senior Vice President of the Manager (since April 2002), of HarbourView Asset Management
Vice President and Corporation (since April, 2002 and of OFI Institutional Asset Management, Inc. (since June
Portfolio Manager 2002); an officer of 14 portfolios in the OppenheimerFunds complex. Formerly Executive
(since 2002) Director and portfolio manager for Miller, Anderson & Sherrerd, a division of Morgan Stanley
Age: 38 Investment Management (August 1993-April 2002).
BRIAN W. WIXTED, Senior Vice President and Treasurer (since March 1999) of the Manager; Treasurer of
Treasurer (since 1999) HarbourView Asset Management Corporation, Shareholder Financial Services, Inc., Shareholder
Age: 44 Services, Inc., Oppenheimer Real Asset Management Corporation, and Oppenheimer Partnership
Holdings, Inc. (since March 1999), of OFI Private Investments, Inc. (since March 2000), of
OppenheimerFunds International 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
84 portfolios in the OppenheimerFunds complex.
ROBERT G. ZACK, Executive Vice President (since January 2004) and General Counsel (since February 2002) of
Secretary (since 2001) the Manager; General Counsel and a director (since November 2001) of the Distributor; General
Age: 56 Counsel (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 84 portfolios
in the OppenheimerFunds complex.
58 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
MARK S. VANDEHEY, Senior Vice President and Chief Compliance Officer (since March 2004) of the Manager; Vice
Vice President and President (since June 1983) of OppenheimerFunds Distributor, Inc., Centennial Asset
Chief Compliance Officer Management Corporation and Shareholder Services, Inc. Formerly (until February 2004) Vice
(since 2004) President and Director of Internal Audit of the Manager. An officer of 84 portfolios in the
Age: 54 OppenheimerFunds complex.
THE FUND'S STATEMENT OF ADDITIONAL INFORMATION CONTAINS ADDITIONAL INFORMATION
ABOUT THE FUND'S DIRECTORS AND IS AVAILABLE WITHOUT CHARGE UPON REQUEST, BY
CALLING 1.800.525.7048.
59 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
ITEM 2. CODE OF ETHICS
The registrant has adopted a code of ethics that applies to the
registrant's principal executive officer, principal financial officer, principal
accounting officer or controller or persons performing similar functions.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT
The Board of Directors of the registrant has determined that Edward V.
Regan, the Chairman of the Board's Audit Committee, possesses the technical
attributes identified in Instruction 2(b) of Item 3 to Form N-CSR to qualify as
an "audit committee financial expert," and has designated Mr. Regan as the Audit
Committee's financial expert. Mr. Regan is an "independent" Director 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 billed $13,000 in fiscal 2004 and $10,000 in
fiscal 2003.
(b) Audit-Related Fees
The principal accountant for the audit of the registrant's annual
financial statements billed no such fees during the last two fiscal
years.
The principal accountant for the audit of the registrant's annual
financial statements billed $39,500 in fiscal 2004 and no such fees
in fiscal 2003 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 include, among others: internal control reviews.
(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 $6,000 in fiscal 2004 and $5,000 in
fiscal 2003 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 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 in fiscal 2004 and $26 in
fiscal 2003.
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 include consultations regarding the registrant's
retirement plan with respect to its directors.
(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 $45,500 in fiscal 2004 and $5,026 in
fiscal 2003 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 directors 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
At a meeting of the Board of Directors of the registrant held on February
18, 2004, the Board adopted (1) a policy that, should the Board determine that a
vacancy exists or is likely to exist on the Board, the Governance Committee of
the Board, which is comprised entirely of independent directors, shall consider
any candidates for Board membership recommended by the registrant's security
holders and (2) a policy that security holders wishing to submit a nominee for
election to the Board may do so by mailing their submission to the offices of
OppenheimerFunds, Inc., Two World Financial Center, 225 Liberty Street - 11th
Floor, New York, NY 10281-1008, to the attention of the Chair of the Governance
Committee. Prior to February 18, 2004, the Board did not have a formalized
policy with respect to consideration of security holder nominees or a procedure
by which security holders may make their submissions. In addition to security
holder nominees, the Governance Committee may also consider nominees recommended
by independent Board members or recommended by any other Board members and is
authorized under its Charter, upon Board approval, to retain an executive search
firm to assist in screening potential candidates. Upon Board approval, the
Governance Committee may also obtain legal, financial, or other external counsel
that may be necessary or desirable in the screening process.
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 October 31, 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)(NOT
APPLICABLE TO SEMIANNUAL REPORTS)
(B) EXHIBITS ATTACHED HERETO. (ATTACH CERTIFICATIONS AS EXHIBITS)