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 811-10071
Oppenheimer Emerging Growth 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.
TOP HOLDINGS AND ALLOCATIONS
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TOP TEN COMMON STOCK HOLDINGS
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Shuffle Master, Inc. 2.2%
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InfoSpace, Inc. 2.0
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EGL, Inc. 1.9
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Central European Media Enterprises Ltd., Cl. A 1.8
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Macrovision Corp. 1.8
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Landstar System, Inc. 1.8
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Jupitermedia Corp. 1.7
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FLIR Systems, Inc. 1.7
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Scientific Games Corp., Cl. A 1.6
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Skyworks Solutions, Inc. 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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Internet Software & Services 12.2%
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Communications Equipment 8.5
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Software 7.1
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Semiconductors & Semiconductor Equipment 6.4
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Hotels, Restaurants & Leisure 5.4
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Biotechnology 5.3
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Health Care Providers & Services 4.6
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Pharmaceuticals 4.6
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Health Care Equipment & Supplies 4.6
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Specialty Retail 4.3
Portfolio holdings and allocations are subject to change. Percentages are as of
October 31, 2004, and are based on net assets.
7 | OPPENHEIMER EMERGING GROWTH FUND
TOP HOLDINGS AND ALLOCATIONS
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SECTOR ALLOCATION
[THE FOLLOWING TABLE WAS REPRESENTED BY A PIE CHART IN THE PRINTED MATERIAL.]
Information Technology 45.3%
Internet Software & Services 12.4
Communications Equipment 8.6
Software 7.1
Semiconductors & Semiconductor Equipment 6.5
Electronic Equipment & Instruments 4.3
IT Services 3.1
Computers & Peripherals 1.9
Office Electronics 1.4
Health Care 19.3
Consumer Discretionary 16.6
Industrials 10.8
Energy 3.3
Financials 3.0
Materials 1.7
Portfolio holdings and allocations are subject to change. Percentages are as of
October 31, 2004, and are based on common stocks.
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8 | OPPENHEIMER EMERGING GROWTH FUND
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. Over the 12-month period ended
October 31, 2004, the Fund's performance trailed that of its benchmarks. The
Fund saw disappointing results from individual stock selections, particularly in
technology and health care, which dragged relatively stronger performance from
individual holdings in several other sectors.
The Fund's investment strategy employs rigorous, in-depth analysis of
individual companies to identify those we believe offer the greatest potential
to emerge as leaders in their field, or are best poised to benefit from
favorable product cycles. To try to moderate the risks associated with small
company stocks, we diversify investments among a variety of high-potential
companies in different industries, constructing a portfolio with sector
weightings that, to some degree, reflect the Fund's benchmark.
Our consistent, aggressive style of investing in small-cap growth stocks
we believe should generally position the Fund to perform well versus its
benchmark in strong markets, while possibly underperforming in weak ones. Such
proved the case during the second half of the reporting period, when small-cap
growth stocks lost significantly more ground then their large-cap and
value-oriented counterparts. This trend was most apparent in the technology
sector, an area in which the Fund generally finds a relatively large number of
attractive investments. For example, many semiconductor holdings, such as
OmniVision Technologies, Inc., declined sharply in response to short-term
earnings weakness despite solid, longer-term fundamentals. Some other technology
holdings, such as a Chinese Internet service provider and hardware developer
Performance Technologies, Inc., also suffered in this harsh environment.
However, the Fund cushioned these losses with positions in several strong
technology stocks, such as FLIR Systems, Inc., a maker of defense and home
security products; an online information provider; and Aladdin Knowledge Systems
Ltd., a software security company.
Other areas that undermined the Fund's relative performance included
health care and education. In health care, risk-averse investor sentiment drove
stock prices sharply lower for companies facing earnings or product-related
concerns, such as Digene Corp.; as well as a hearing aid manufacturer; and a
maker of migraine treatments. We compensated for these disappointments to a
degree with some relatively good health care investments, including Palomar
Medical Technologies, Inc. In the education area, several of the Fund's best
performers in 2003 were among its greatest disappointments in 2004 when the
group came under pressure amid rumors and investigations regarding
9 | OPPENHEIMER EMERGING GROWTH FUND
FUND PERFORMANCE DISCUSSION
- --------------------------------------------------------------------------------
corporate governance issues. Although most of the questions regarding such
stocks were resolved, holdings such as Corinthian Colleges, Inc. and
eCollege.com, Inc. failed to fully recover before the end of the period, thereby
undermining the Fund's performance.
On a more positive note, the Fund identified some relatively strong
performers in the consumer cyclical area. For example, Urban Outfitters, Inc.,
rose as a result of sales growth among its Anthropologie stores; and Deckers
Outdoor Corp. capitalized on the popularity of its UGG and Simple lines of
footwear.
As of the end of the period, we continue to maintain our disciplined focus
on small-cap growth investing. As a result, we believe the Fund is well
positioned to take advantage of historically low relative valuations in the
sector.
The Fund's portfolio holdings, allocations and strategies are subject to
change.
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. Performance is measured from the inception of
Class A, B, C, and Y on November 1, 2000. 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 Russell 2000
Index and the Russell 2000 Growth Index, unmanaged indices of small cap issuers
and small cap issuers with above-average growth characteristics, respectively.
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.
10 | OPPENHEIMER EMERGING GROWTH FUND
CLASS A SHARES
COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN:
Oppenheimer Emerging Growth Fund (Class A)
Russell 2000 Index
Russell 2000 Growth Index
[THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.]
Oppenheimer Emerging
Growth Fund Russell 2000 Russell 2000
Date (Class A) Index Growth Index
11/01/2000 9,425 10,000 10,000
01/31/2001 9,863 10,251 9,388
04/30/2001 8,350 9,823 8,266
07/31/2001 8,983 9,848 7,947
10/31/2001 7,990 8,730 6,850
01/31/2002 8,860 9,883 7,603
04/30/2002 7,716 10,479 7,562
07/31/2002 5,683 8,080 5,515
10/31/2002 5,522 7,720 5,373
01/31/2003 5,711 7,721 5,349
04/30/2003 6,439 8,303 5,785
07/31/2003 8,435 9,946 7,057
10/31/2003 9,740 11,068 7,874
01/31/2004 10,231 12,201 8,596
04/30/2004 8,889 11,792 8,190
07/31/2004 8,359 11,643 7,856
10/31/2004 9,049 12,366 8,309
AVERAGE ANNUAL TOTAL RETURNS OF CLASS A SHARES WITH SALES CHARGE OF THE FUND AT
10/31/04
1-Year -12.43% Since Inception (11/1/00) -2.47%
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 3% (SINCE INCEPTION); AND
FOR CLASS C AND N SHARES, THE CONTINGENT 1% DEFERRED SALES CHARGE FOR THE 1-YEAR
PERIOD. THERE IS NO SALES CHARGE FOR CLASS Y SHARES. SEE PAGE 16 FOR FURTHER
INFORMATION.
11 | OPPENHEIMER EMERGING GROWTH FUND
FUND PERFORMANCE DISCUSSION
- --------------------------------------------------------------------------------
CLASS B SHARES
COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN:
Oppenheimer Emerging Growth Fund (Class B)
Russell 2000 Index
Russell 2000 Growth Index
[THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.]
Oppenheimer Emerging
Growth Fund Russell 2000 Russell 2000
Date (Class B) Index Growth Index
11/01/2000 10,000 10,000 10,000
01/31/2001 10,439 10,251 9,388
04/30/2001 8,815 9,823 8,266
07/31/2001 9,466 9,848 7,947
10/31/2001 8,403 8,730 6,850
01/31/2002 9,296 9,883 7,603
04/30/2002 8,083 10,479 7,562
07/31/2002 5,937 8,080 5,515
10/31/2002 5,756 7,720 5,373
01/31/2003 5,937 7,721 5,349
04/30/2003 6,689 8,303 5,785
07/31/2003 8,744 9,946 7,057
10/31/2003 10,078 11,068 7,874
01/31/2004 10,559 12,201 8,596
04/30/2004 9,156 11,792 8,190
07/31/2004 8,594 11,643 7,856
10/31/2004 9,008 12,366 8,309
AVERAGE ANNUAL TOTAL RETURNS OF CLASS B SHARES WITH SALES CHARGE OF THE FUND AT
10/31/04
1-Year -12.47% Since Inception (11/1/00) -2.58%
12 | OPPENHEIMER EMERGING GROWTH FUND
CLASS C SHARES
COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN:
Oppenheimer Emerging Growth Fund (Class C)
Russell 2000 Index
Russell 2000 Growth Index
[THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.]
Oppenheimer Emerging
Growth Fund Russell 2000 Russell 2000
Date (Class C) Index Growth Index
11/01/2000 10,000 10,000 10,000
01/31/2001 10,448 10,251 9,388
04/30/2001 8,823 9,823 8,266
07/31/2001 9,475 9,848 7,947
10/31/2001 8,412 8,730 6,850
01/31/2002 9,295 9,883 7,603
04/30/2002 8,091 10,479 7,562
07/31/2002 5,946 8,080 5,515
10/31/2002 5,765 7,720 5,373
01/31/2003 5,946 7,721 5,349
04/30/2003 6,698 8,303 5,785
07/31/2003 8,753 9,946 7,057
10/31/2003 10,087 11,068 7,874
01/31/2004 10,578 12,201 8,596
04/30/2004 9,164 11,792 8,190
07/31/2004 8,603 11,643 7,856
10/31/2004 9,295 12,366 8,309
AVERAGE ANNUAL TOTAL RETURNS OF CLASS C SHARES WITH SALES CHARGE OF THE FUND AT
10/31/04
1-Year -8.77% Since Inception (11/1/00) -1.81%
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 3% (SINCE INCEPTION); AND
FOR CLASS C AND N SHARES, THE CONTINGENT 1% DEFERRED SALES CHARGE FOR THE 1-YEAR
PERIOD. THERE IS NO SALES CHARGE FOR CLASS Y SHARES. SEE PAGE 16 FOR FURTHER
INFORMATION.
13 | OPPENHEIMER EMERGING GROWTH FUND
FUND PERFORMANCE DISCUSSION
- --------------------------------------------------------------------------------
CLASS N SHARES
COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN:
Oppenheimer Emerging Growth Fund (Class N)
Russell 2000 Index
Russell 2000 Growth Index
[THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.]
Oppenheimer Emerging
Growth Fund Russell 2000 Russell 2000
Date (Class N) Index Growth Index
03/01/2001 10,000 10,000 10,000
04/30/2001 10,652 10,255 10,204
07/31/2001 11,449 10,281 9,810
10/31/2001 10,181 9,114 8,455
01/31/2002 11,268 10,317 9,385
04/30/2002 9,807 10,940 9,334
07/31/2002 7,222 8,435 6,807
10/31/2002 7,017 8,060 6,632
01/31/2003 7,246 8,061 6,602
04/30/2003 8,164 8,668 7,141
07/31/2003 10,676 10,384 8,711
10/31/2003 12,331 11,555 9,719
01/31/2004 12,935 12,738 10,611
04/30/2004 11,232 12,310 10,109
07/31/2004 10,556 12,155 9,697
10/31/2004 11,413 12,910 10,256
AVERAGE ANNUAL TOTAL RETURNS OF CLASS N SHARES WITH SALES CHARGE OF THE FUND AT
10/31/04
1-Year -8.37% Since Inception (3/1/01) 3.67%
14 | OPPENHEIMER EMERGING GROWTH FUND
CLASS Y SHARES
COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN:
Oppenheimer Emerging Growth Fund (Class Y)
Russell 2000 Index
Russell 2000 Growth Index
[THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.]
Oppenheimer Emerging
Growth Fund Russell 2000 Russell 2000
Date (Class Y) Index Growth Index
11/01/2000 10,000 10,000 10,000
01/31/2001 10,468 10,251 9,388
04/30/2001 8,862 9,823 8,266
07/31/2001 9,545 9,848 7,947
10/31/2001 8,501 8,730 6,850
01/31/2002 9,424 9,883 7,603
04/30/2002 8,220 10,479 7,562
07/31/2002 6,062 8,080 5,515
10/31/2002 5,901 7,720 5,373
01/31/2003 6,112 7,721 5,349
04/30/2003 6,905 8,303 5,785
07/31/2003 9,053 9,946 7,057
10/31/2003 10,468 11,068 7,874
01/31/2004 11,010 12,201 8,596
04/30/2004 9,575 11,792 8,190
07/31/2004 9,023 11,643 7,856
10/31/2004 9,786 12,366 8,309
AVERAGE ANNUAL TOTAL RETURNS OF CLASS Y SHARES OF THE FUND AT 10/31/04
1-Year -6.52% Since Inception (11/1/00) -0.54%
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 3% (SINCE INCEPTION); AND
FOR CLASS C AND N SHARES, THE CONTINGENT 1% DEFERRED SALES CHARGE FOR THE 1-YEAR
PERIOD. THERE IS NO SALES CHARGE FOR CLASS Y SHARES. SEE PAGE 16 FOR FURTHER
INFORMATION.
15 | OPPENHEIMER EMERGING GROWTH FUND
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 11/1/00. 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 11/1/00.Unless
otherwise noted, Class B returns include the applicable contingent deferred
sales charge of 5% (1-year) and 3% (since inception). 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 11/1/00. 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.
CLASS Y shares of the Fund were first publicly offered on 11/1/00. Class Y
shares are offered only to certain institutional investors under special
agreement with the Distributor.
An explanation of the calculation of performance is in the Fund's Statement of
Additional Information.
16 | OPPENHEIMER EMERGING GROWTH FUND
FUND EXPENSES
- --------------------------------------------------------------------------------
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), redemption fees, or a $12.00 fee
imposed annually on accounts valued at less than $500.00 (subject to
17 | OPPENHEIMER EMERGING GROWTH FUND
FUND EXPENSES
- --------------------------------------------------------------------------------
exceptions described in 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 $1,018.10 $ 8.92
- --------------------------------------------------------------------------------
Class A Hypothetical 1,000.00 1,016.34 8.91
- --------------------------------------------------------------------------------
Class B Actual 1,000.00 1,014.20 13.35
- --------------------------------------------------------------------------------
Class B Hypothetical 1,000.00 1,011.97 13.34
- --------------------------------------------------------------------------------
Class C Actual 1,000.00 1,014.20 12.94
- --------------------------------------------------------------------------------
Class C Hypothetical 1,000.00 1,012.37 12.93
- --------------------------------------------------------------------------------
Class N Actual 1,000.00 1,016.10 10.29
- --------------------------------------------------------------------------------
Class N Hypothetical 1,000.00 1,014.98 10.28
- --------------------------------------------------------------------------------
Class Y Actual 1,000.00 1,022.00 5.66
- --------------------------------------------------------------------------------
Class Y Hypothetical 1,000.00 1,019.56 5.65
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 1.75%
- -------------------------
Class B 2.62
- -------------------------
Class C 2.54
- -------------------------
Class N 2.02
- -------------------------
Class Y 1.11
The expense ratios reflect voluntary waivers or reimbursements of expenses by
the Fund's 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 EMERGING GROWTH FUND
STATEMENT OF INVESTMENTS October 31, 2004
- --------------------------------------------------------------------------------
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
COMMON STOCKS--98.8%
- --------------------------------------------------------------------------------
CONSUMER DISCRETIONARY--16.4%
- --------------------------------------------------------------------------------
DISTRIBUTORS--0.5%
Design Within
Reach, Inc. 1 31,000 $ 497,550
- --------------------------------------------------------------------------------
HOTELS, RESTAURANTS & LEISURE--5.4%
P.F. Chang's China
Bistro, Inc. 1 15,000 762,600
- --------------------------------------------------------------------------------
Scientific Games
Corp., Cl. A 1 80,900 1,713,462
- --------------------------------------------------------------------------------
Shuffle Master, Inc. 1 55,200 2,323,368
- --------------------------------------------------------------------------------
Texas Roadhouse,
Inc., Cl. A 1 36,100 831,022
----------
5,630,452
- --------------------------------------------------------------------------------
LEISURE EQUIPMENT & PRODUCTS--0.9%
Shanda Interactive
Entertainment
Ltd., ADR 1 30,000 911,670
- --------------------------------------------------------------------------------
MEDIA--3.3%
Central European
Media Enterprises
Ltd., Cl. A 1 54,000 1,911,060
- --------------------------------------------------------------------------------
DreamWorks
Animation SKG, Inc. 1 2,700 105,435
- --------------------------------------------------------------------------------
Navarre Corp. 1 67,300 1,009,500
- --------------------------------------------------------------------------------
TiVo, Inc. 1 60,400 406,190
----------
3,432,185
- --------------------------------------------------------------------------------
SPECIALTY RETAIL--4.3%
American Eagle
Outfitters, Inc. 25,300 1,034,264
- --------------------------------------------------------------------------------
Build-A-Bear-
Workshop, Inc. 1 4,300 104,963
- --------------------------------------------------------------------------------
Guess?, Inc. 1 55,400 925,180
- --------------------------------------------------------------------------------
Guitar Center, Inc. 1 15,000 669,450
- --------------------------------------------------------------------------------
Pacific Sunwear
of California, Inc. 1 37,100 869,624
- --------------------------------------------------------------------------------
Urban Outfitters,
Inc. 1 23,300 955,300
----------
4,558,781
- --------------------------------------------------------------------------------
TEXTILES, APPAREL & LUXURY GOODS--2.0%
Deckers Outdoor
Corp. 1 36,700 1,389,462
- --------------------------------------------------------------------------------
Quicksilver, Inc. 1 28,000 763,000
----------
2,152,462
- --------------------------------------------------------------------------------
ENERGY--3.2%
- --------------------------------------------------------------------------------
ENERGY EQUIPMENT & SERVICES--1.3%
Atwood Oceanics,
Inc. 1 15,000 719,250
- --------------------------------------------------------------------------------
FMC Technologies,
Inc. 1 20,000 604,600
----------
1,323,850
- --------------------------------------------------------------------------------
OIL & GAS--1.9%
Frontline Ltd. 10,000 500,800
- --------------------------------------------------------------------------------
General Maritime
Corp. 1 40,000 1,520,000
- --------------------------------------------------------------------------------
Ship Finance
International Ltd. 1,700 34,170
----------
2,054,970
- --------------------------------------------------------------------------------
FINANCIALS--3.0%
- --------------------------------------------------------------------------------
COMMERCIAL BANKS--0.6%
Westcorp 15,400 614,768
- --------------------------------------------------------------------------------
CONSUMER FINANCE--0.9%
First Marblehead
Corp. (The) 1 17,000 911,200
- --------------------------------------------------------------------------------
REAL ESTATE--0.5%
Redwood Trust, Inc. 8,600 517,376
- --------------------------------------------------------------------------------
THRIFTS & MORTGAGE FINANCE--1.0%
Commercial Capital
Bancorp, Inc. 46,800 1,049,724
- --------------------------------------------------------------------------------
HEALTH CARE--19.1%
- --------------------------------------------------------------------------------
BIOTECHNOLOGY--5.3%
Gen-Probe, Inc. 1 21,500 753,360
- --------------------------------------------------------------------------------
LifeCell Corp. 1 129,400 1,149,072
- --------------------------------------------------------------------------------
Martek Biosciences
Corp. 1 34,200 1,609,315
- --------------------------------------------------------------------------------
Pharmacyclics, Inc. 1 62,200 728,362
- --------------------------------------------------------------------------------
Pharmion Corp. 1 13,400 615,730
- --------------------------------------------------------------------------------
VaxGen, Inc. 1 61,700 715,720
----------
5,571,559
19 | OPPENHEIMER EMERGING GROWTH FUND
STATEMENT OF INVESTMENTS Continued
- --------------------------------------------------------------------------------
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
HEALTH CARE EQUIPMENT & SUPPLIES--4.6%
Animas Corp. 1 28,400 $ 405,268
- --------------------------------------------------------------------------------
Biosite, Inc. 1 15,000 732,150
- --------------------------------------------------------------------------------
Immucor, Inc. 1 32,500 1,002,625
- --------------------------------------------------------------------------------
Inamed Corp. 1 26,000 1,381,900
- --------------------------------------------------------------------------------
IntraLase Corp. 1 9,100 174,993
- --------------------------------------------------------------------------------
Palomar Medical
Technologies, Inc. 1 25,900 530,691
- --------------------------------------------------------------------------------
VNUS Medical
Technologies, Inc. 1 35,800 538,074
----------
4,765,701
- --------------------------------------------------------------------------------
HEALTH CARE PROVIDERS & SERVICES--4.6%
Amedisys, Inc. 1 46,600 1,408,718
- --------------------------------------------------------------------------------
HealthExtras, Inc. 1 30,900 440,943
- --------------------------------------------------------------------------------
Psychiatric Solutions,
Inc. 1 22,000 559,900
- --------------------------------------------------------------------------------
VCA Antech, Inc. 1 44,600 999,932
- --------------------------------------------------------------------------------
Ventiv Health, Inc. 1 83,400 1,442,820
----------
4,852,313
- --------------------------------------------------------------------------------
PHARMACEUTICALS--4.6%
Able Laboratories,
Inc. 1 35,000 758,625
- --------------------------------------------------------------------------------
DOV Pharmaceutical,
Inc. 1 41,800 688,864
- --------------------------------------------------------------------------------
First Horizon
Pharmaceutical Corp. 1 54,500 1,339,610
- --------------------------------------------------------------------------------
MGI Pharma, Inc. 1 31,000 826,770
- --------------------------------------------------------------------------------
Salix Pharmaceuticals
Ltd. 1 40,000 641,200
- --------------------------------------------------------------------------------
Theravance, Inc. 1 33,100 561,707
----------
4,816,776
- --------------------------------------------------------------------------------
INDUSTRIALS--10.7%
- --------------------------------------------------------------------------------
AIR FREIGHT & LOGISTICS--1.9%
EGL, Inc. 1 62,600 2,001,948
- --------------------------------------------------------------------------------
COMMERCIAL SERVICES & SUPPLIES--1.9%
51job, Inc., ADR 1 20,900 564,300
- --------------------------------------------------------------------------------
Huron Consulting
Group, Inc. 1 9,400 183,300
Resources
Connection, Inc. 1 30,000 1,259,400
----------
2,007,000
- --------------------------------------------------------------------------------
ELECTRICAL EQUIPMENT--1.4%
Color Kinetics, Inc. 1 30,100 482,804
- --------------------------------------------------------------------------------
Intermagnetics
General Corp. 1 37,800 963,522
----------
1,446,326
- --------------------------------------------------------------------------------
MACHINERY--0.8%
Ceradyne, Inc. 1 20,000 857,800
- --------------------------------------------------------------------------------
MARINE--1.3%
UTI Worldwide, Inc. 20,000 1,300,000
- --------------------------------------------------------------------------------
ROAD & RAIL--3.4%
Landstar System, Inc. 1 27,000 1,834,380
- --------------------------------------------------------------------------------
Overnite Corp. 30,000 970,800
- --------------------------------------------------------------------------------
Yellow Roadway
Corp. 1 16,600 796,634
----------
3,601,814
- --------------------------------------------------------------------------------
INFORMATION TECHNOLOGY--44.7%
- --------------------------------------------------------------------------------
COMMUNICATIONS EQUIPMENT--8.5%
ADTRAN, Inc. 24,600 531,360
- --------------------------------------------------------------------------------
Airspan Networks,
Inc. 1 91,500 560,895
- --------------------------------------------------------------------------------
Andrew Corp. 1 45,400 634,692
- --------------------------------------------------------------------------------
Audiocodes Ltd.1 79,900 1,053,082
- --------------------------------------------------------------------------------
Ditech
Communications
Corp. 1 52,800 1,211,232
- --------------------------------------------------------------------------------
F5 Networks, Inc. 1 39,800 1,590,010
- --------------------------------------------------------------------------------
IxiA 1 77,200 985,844
- --------------------------------------------------------------------------------
Plantronics, Inc. 22,000 957,000
- --------------------------------------------------------------------------------
Sierra Wireless, Inc. 1 32,600 556,156
- --------------------------------------------------------------------------------
Tekelec 1 35,000 781,200
----------
8,861,471
- --------------------------------------------------------------------------------
COMPUTERS & PERIPHERALS--1.8%
Avid Technology, Inc. 1 18,000 953,640
- --------------------------------------------------------------------------------
PalmOne, Inc. 1 34,200 990,774
----------
1,944,414
20 | OPPENHEIMER EMERGING GROWTH FUND
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
ELECTRONIC EQUIPMENT & INSTRUMENTS--4.2%
Aeroflex, Inc. 1 114,800 $ 1,274,280
- --------------------------------------------------------------------------------
Cogent, Inc. 1 3,900 74,623
- --------------------------------------------------------------------------------
FLIR Systems, Inc. 1 33,400 1,777,214
- --------------------------------------------------------------------------------
Trimble Navigation
Ltd. 1 16,800 481,992
- --------------------------------------------------------------------------------
Veeco Instruments,
Inc. 1 21,200 414,248
- --------------------------------------------------------------------------------
WJ Communications,
Inc. 1 205,600 405,032
------------
4,427,389
- --------------------------------------------------------------------------------
INTERNET SOFTWARE & SERVICES--12.2%
Aladdin Knowledge
Systems Ltd. 1 59,100 1,486,365
- --------------------------------------------------------------------------------
Blackboard, Inc. 1 24,000 427,440
- --------------------------------------------------------------------------------
eCollege.com, Inc. 1 66,700 611,639
- --------------------------------------------------------------------------------
eLong, Inc.,
Sponsored ADR 1 7,500 102,000
- --------------------------------------------------------------------------------
FindWhat.com 1 52,600 1,054,630
- --------------------------------------------------------------------------------
InfoSpace, Inc. 1 40,000 2,100,000
- --------------------------------------------------------------------------------
j2 Global
Communications,
Inc. 1 34,300 1,034,145
- --------------------------------------------------------------------------------
Jupitermedia Corp. 1 90,600 1,797,051
- --------------------------------------------------------------------------------
MarketWatch, Inc. 1 50,100 664,076
- --------------------------------------------------------------------------------
National Information
Consortium, Inc. 1 166,600 701,386
- --------------------------------------------------------------------------------
Netease.com, Inc.,
ADR 1 25,900 1,204,609
- --------------------------------------------------------------------------------
Shopping.com Ltd. 1 2,600 70,122
- --------------------------------------------------------------------------------
SINA Corp. 1 24,900 834,150
- --------------------------------------------------------------------------------
VeriSign, Inc. 1 26,200 702,946
------------
12,790,559
- --------------------------------------------------------------------------------
IT SERVICES--3.1%
Aquantive, Inc. 1 64,300 575,485
- --------------------------------------------------------------------------------
Global Payments, Inc. 15,000 821,400
- --------------------------------------------------------------------------------
NAVTEQ Corp. 1 13,300 536,123
- --------------------------------------------------------------------------------
SRA International,
Inc., Cl. A 1 24,000 1,290,240
------------
3,223,248
- --------------------------------------------------------------------------------
OFFICE ELECTRONICS--1.4%
Metrologic
Instruments, Inc. 1 77,600 $ 1,447,240
- --------------------------------------------------------------------------------
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT--6.4%
AMIS Holdings, Inc. 1 34,900 530,480
- --------------------------------------------------------------------------------
ATMI, Inc. 1 20,400 476,340
- --------------------------------------------------------------------------------
Integrated Device
Technology, Inc. 1 52,400 619,368
- --------------------------------------------------------------------------------
Microsemi Corp. 1 68,100 1,058,274
- --------------------------------------------------------------------------------
ON Semiconductor
Corp. 1 193,200 695,520
- --------------------------------------------------------------------------------
Sigmatel, Inc. 1 40,800 1,203,600
- --------------------------------------------------------------------------------
Skyworks Solutions,
Inc. 1 185,400 1,648,206
- --------------------------------------------------------------------------------
Trident
Microsystems, Inc. 1 38,600 509,134
------------
6,740,922
- --------------------------------------------------------------------------------
SOFTWARE--7.1%
JAMDAT Mobile, Inc. 1 38,600 1,130,980
- --------------------------------------------------------------------------------
Macromedia, Inc. 1 55,000 1,492,700
- --------------------------------------------------------------------------------
Macrovision Corp. 1 69,400 1,876,576
- --------------------------------------------------------------------------------
Sonic Solutions, Inc. 1 82,100 1,629,685
- --------------------------------------------------------------------------------
Verint Systems, Inc. 1 20,800 808,704
- --------------------------------------------------------------------------------
Witness Systems, Inc. 1 29,100 452,796
------------
7,391,441
- --------------------------------------------------------------------------------
MATERIALS--1.7%
- --------------------------------------------------------------------------------
CHEMICALS--1.7%
Headwaters, Inc. 1 20,000 630,000
- --------------------------------------------------------------------------------
Olin Corp. 6,300 117,809
- --------------------------------------------------------------------------------
Symyx Technologies,
Inc. 1 40,000 978,600
------------
1,726,409
------------
Total Common Stocks
(Cost $89,737,104) 103,429,318
21 | OPPENHEIMER EMERGING GROWTH FUND
STATEMENT OF INVESTMENTS Continued
- --------------------------------------------------------------------------------
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
RIGHTS, WARRANTS AND CERTIFICATES--0.0%
- --------------------------------------------------------------------------------
Discovery Laboratories,
Inc. Wts., Exp. 9/20/10 1,2
(Cost $0) 6,800 $ 28,736
- --------------------------------------------------------------------------------
TOTAL INVESTMENTS,
AT VALUE
(COST $89,737,104) 98.8% 103,458,054
- --------------------------------------------------------------------------------
OTHER ASSETS
NET OF LIABILITIES 1.2 1,232,966
------------------------
NET ASSETS 100.0% $104,691,020
========================
FOOTNOTES TO STATEMENT OF INVESTMENTS
1. Non-income producing security.
2. Illiquid or restricted security. See Note 5 of Notes to
Financial Statements.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
22 | OPPENHEIMER EMERGING GROWTH FUND
STATEMENT OF ASSETS AND LIABILITIES October 31, 2004
- --------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------
ASSETS
- ----------------------------------------------------------------------------------------------------
Investments, at value (cost $89,737,104)--see accompanying statement of investments $ 103,458,054
- ----------------------------------------------------------------------------------------------------
Cash 267,897
- ----------------------------------------------------------------------------------------------------
Receivables and other assets:
Investments sold 3,835,690
Shares of beneficial interest sold 154,105
Interest and dividends 2,057
Other 2,788
--------------
Total assets 107,720,591
- ----------------------------------------------------------------------------------------------------
LIABILITIES
- ----------------------------------------------------------------------------------------------------
Payables and other
liabilities:
Investments purchased 2,527,147
Shares of beneficial interest redeemed 380,851
Shareholder communications 26,810
Transfer and shareholder servicing agent fees 26,368
Distribution and service plan fees 20,735
Trustees' compensation 4,278
Other 43,382
--------------
Total liabilities 3,029,571
- ----------------------------------------------------------------------------------------------------
NET ASSETS $ 104,691,020
==============
- ----------------------------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS
- ----------------------------------------------------------------------------------------------------
Paid-in capital $ 101,371,911
- ----------------------------------------------------------------------------------------------------
Accumulated net investment loss (3,951)
- ----------------------------------------------------------------------------------------------------
Accumulated net realized loss on investments (10,397,890)
- ----------------------------------------------------------------------------------------------------
Net unrealized appreciation on investments 13,720,950
--------------
NET ASSETS $ 104,691,020
==============
23 | OPPENHEIMER EMERGING GROWTH 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 $59,818,600 and
6,250,609 shares of beneficial interest outstanding) $ 9.57
Maximum offering price per share (net asset value plus sales charge of 5.75% of offering price) $10.15
- ----------------------------------------------------------------------------------------------------------
Class B Shares:
Net asset value, redemption price (excludes applicable contingent deferred sales charge)
and offering price per share (based on net assets of $21,669,325 and 2,340,977 shares
of beneficial interest outstanding) $ 9.26
- ----------------------------------------------------------------------------------------------------------
Class C Shares:
Net asset value, redemption price (excludes applicable contingent deferred sales charge)
and offering price per share (based on net assets of $15,814,462 and 1,705,755 shares
of beneficial interest outstanding) $ 9.27
- ----------------------------------------------------------------------------------------------------------
Class N Shares:
Net asset value, redemption price (excludes applicable contingent deferred sales charge)
and offering price per share (based on net assets of $4,569,891 and 483,353 shares of
beneficial interest outstanding) $ 9.45
- ----------------------------------------------------------------------------------------------------------
Class Y Shares:
Net asset value, redemption price and offering price per share (based on net assets
of $2,818,742 and 289,179 shares of beneficial interest outstanding) $ 9.75
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
24 | OPPENHEIMER EMERGING GROWTH FUND
STATEMENT OF OPERATIONS For the Year Ended October 31, 2004
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
INVESTMENT INCOME
- --------------------------------------------------------------------------------
Dividends $ 110,909
- --------------------------------------------------------------------------------
Interest 2,980
------------
Total investment income 113,889
- --------------------------------------------------------------------------------
EXPENSES
- --------------------------------------------------------------------------------
Management fees 1,077,811
- --------------------------------------------------------------------------------
Distribution and service plan fees:
Class A 150,070
Class B 223,381
Class C 160,725
Class N 16,843
- --------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees:
Class A 194,703
Class B 106,978
Class C 64,525
Class N 17,745
Class Y 106
- --------------------------------------------------------------------------------
Shareholder communications:
Class A 30,445
Class B 24,885
Class C 9,688
Class N 1,943
- --------------------------------------------------------------------------------
Custodian fees and expenses 49,351
- --------------------------------------------------------------------------------
Trustees' compensation 4,593
- --------------------------------------------------------------------------------
Other 36,651
------------
Total expenses 2,170,443
Less reduction to custodian expenses (115)
Less payments and waivers of expenses (46,085)
------------
Net expenses 2,124,243
- --------------------------------------------------------------------------------
NET INVESTMENT LOSS (2,010,354)
- --------------------------------------------------------------------------------
REALIZED AND UNREALIZED (LOSS)
- --------------------------------------------------------------------------------
Net realized loss on investments (763,978)
- --------------------------------------------------------------------------------
Net change in unrealized appreciation on investments (7,205,129)
- --------------------------------------------------------------------------------
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS $(9,979,461)
============
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
25 | OPPENHEIMER EMERGING GROWTH FUND
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
YEAR ENDED OCTOBER 31, 2004 2003
- ------------------------------------------------------------------------------------------------
OPERATIONS
- ------------------------------------------------------------------------------------------------
Net investment loss $ (2,010,354) $ (833,591)
- ------------------------------------------------------------------------------------------------
Net realized gain (loss) (763,978) 5,534,053
- ------------------------------------------------------------------------------------------------
Net change in unrealized appreciation (depreciation) (7,205,129) 23,236,139
------------------------------
Net increase (decrease) in net assets resulting from operations (9,979,461) 27,936,601
- ------------------------------------------------------------------------------------------------
BENEFICIAL INTEREST TRANSACTIONS
- ------------------------------------------------------------------------------------------------
Net increase in net assets resulting from beneficial interest
transactions:
Class A 5,932,164 23,540,294
Class B 3,314,059 8,157,568
Class C 3,668,832 5,135,955
Class N 2,369,888 1,182,442
Class Y 244,257 1,354,893
- ------------------------------------------------------------------------------------------------
NET ASSETS
- ------------------------------------------------------------------------------------------------
Total increase 5,549,739 67,307,753
- ------------------------------------------------------------------------------------------------
Beginning of period 99,141,281 31,833,528
------------------------------
End of period (including accumulated net investment loss
of $3,951 and $1,695, respectively) $ 104,691,020 $ 99,141,281
==============================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
26 | OPPENHEIMER EMERGING GROWTH FUND
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
CLASS A YEAR ENDED OCTOBER 31, 2004 2003 2002 2001 1
- ---------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- ---------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 10.30 $ 5.84 $ 8.45 $ 10.00
- ---------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment loss (.15) 2 (.08) (.10) (.03)
Net realized and unrealized gain (loss) (.58) 4.54 (2.51) (1.49)
------------------------------------------------
Total from investment operations (.73) 4.46 (2.61) (1.52)
- ---------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income -- -- -- (.03)
- ---------------------------------------------------------------------------------------------------
Net asset value, end of period $ 9.57 $ 10.30 $ 5.84 $ 8.45
================================================
- ---------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 3 (7.09)% 76.37% (30.89)% (15.22)%
- ---------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ---------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $59,819 $59,396 $19,310 $20,392
- ---------------------------------------------------------------------------------------------------
Average net assets (in thousands) $62,749 $28,386 $24,497 $16,941
- ---------------------------------------------------------------------------------------------------
Ratios to average net assets: 4
Net investment loss (1.57)% (1.48)% (1.35)% (0.57)%
Total expenses 1.68% 1.77% 1.85% 1.58%
Expenses after payments and waivers and
reduction to custodian expenses 1.67% 1.72% 1.78% N/A 5
- ---------------------------------------------------------------------------------------------------
Portfolio turnover rate 212% 204% 263% 214%
1. For the period from November 1, 2000 (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 distributions reinvested in additional shares on
the reinvestment date, and redemption at the 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%.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
27 | OPPENHEIMER EMERGING GROWTH FUND
FINANCIAL HIGHLIGHTS Continued
- --------------------------------------------------------------------------------
CLASS B YEAR ENDED OCTOBER 31, 2004 2003 2002 2001 1
- ---------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- ---------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 10.05 $ 5.74 $ 8.38 $ 10.00
- ---------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment loss (.23) 2 (.09) (.12) (.07)
Net realized and unrealized gain (loss) (.56) 4.40 (2.52) (1.52)
------------------------------------------------
Total from investment operations (.79) 4.31 (2.64) (1.59)
- ---------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income -- -- -- (.03)
- ---------------------------------------------------------------------------------------------------
Net asset value, end of period $ 9.26 $ 10.05 $ 5.74 $ 8.38
================================================
- ---------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 3 (7.86)% 75.09% (31.50)% (15.96)%
- ---------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ---------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $21,669 $20,520 $ 6,395 $ 3,866
- ---------------------------------------------------------------------------------------------------
Average net assets (in thousands) $22,359 $10,544 $ 6,979 $ 2,256
- ---------------------------------------------------------------------------------------------------
Ratios to average net assets: 4
Net investment loss (2.44)% (2.20)% (2.22)% (1.78)%
Total expenses 2.67% 2.83% 2.74% 2.47%
Expenses after payments and waivers and
reduction to custodian expenses 2.55% 2.44% 2.67% N/A 5
- ---------------------------------------------------------------------------------------------------
Portfolio turnover rate 212% 204% 263% 214%
1. For the period from November 1, 2000 (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 distributions reinvested in additional shares on
the reinvestment date, and redemption at the 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%.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
28 | OPPENHEIMER EMERGING GROWTH FUND
CLASS C YEAR ENDED OCTOBER 31, 2004 2003 2002 2001 1
- ---------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- ---------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 10.06 $ 5.75 $ 8.39 $ 10.00
- ---------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment loss (.23) 2 (.11) (.08) (.04)
Net realized and unrealized gain (loss) (.56) 4.42 (2.56) (1.54)
------------------------------------------------
Total from investment operations (.79) 4.31 (2.64) (1.58)
- ---------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income -- -- -- (.03)
- ---------------------------------------------------------------------------------------------------
Net asset value, end of period $ 9.27 $ 10.06 $ 5.75 $ 8.39
================================================
- ---------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 3 (7.85)% 74.96% (31.47)% (15.88)%
- ---------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ---------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $15,814 $13,887 $ 4,877 $ 2,356
- ---------------------------------------------------------------------------------------------------
Average net assets (in thousands) $16,085 $ 6,649 $ 3,061 $ 1,022
- ---------------------------------------------------------------------------------------------------
Ratios to average net assets: 4
Net investment loss (2.39)% (2.22)% (2.25)% (1.76)%
Total expenses 2.55% 2.65% 2.72% 2.46%
Expenses after payments and waivers and
reduction to custodian expenses 2.50% 2.47% 2.65% N/A 5
- ---------------------------------------------------------------------------------------------------
Portfolio turnover rate 212% 204% 263% 214%
1. For the period from November 1, 2000 (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 distributions reinvested in additional shares on
the reinvestment date, and redemption at the 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%.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
29 | OPPENHEIMER EMERGING GROWTH FUND
FINANCIAL HIGHLIGHTS Continued
- --------------------------------------------------------------------------------
CLASS N YEAR ENDED OCTOBER 31, 2004 2003 2002 2001 1
- ---------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- ---------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 10.21 $ 5.81 $ 8.43 $ 8.28
- ---------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment loss (.18) 2 (.10) (.08) (.05)
Net realized and unrealized gain (loss) (.58) 4.50 (2.54) .20
------------------------------------------------
Total from investment operations (.76) 4.40 (2.62) .15
- ---------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income -- -- -- --
- ---------------------------------------------------------------------------------------------------
Net asset value, end of period $ 9.45 $ 10.21 $ 5.81 $ 8.43
================================================
- ---------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 3 (7.44)% 75.73% (31.08)% 1.81%
- ---------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ---------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 4,570 $ 2,425 $ 594 $ 34
- ---------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 3,375 $ 1,125 $ 412 $ 16
- ---------------------------------------------------------------------------------------------------
Ratios to average net assets: 4
Net investment loss (1.88)% (1.76)% (1.63)% (1.69)%
Total expenses 2.17% 2.14% 2.18% 2.03%
Expenses after payments and waivers and
reduction to custodian expenses 2.00% 2.00% 2.11% N/A 5
- ---------------------------------------------------------------------------------------------------
Portfolio turnover rate 212% 204% 263% 214%
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 distributions reinvested in additional shares on
the reinvestment date, and redemption at the 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%.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
30 | OPPENHEIMER EMERGING GROWTH FUND
CLASS Y YEAR ENDED OCTOBER 31, 2004 2003 2002 2001 1
- ---------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- ---------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 10.43 $ 5.88 $ 8.47 $ 10.00
- ---------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss) (.10) 2 (.09) (.08) .02
Net realized and unrealized gain (loss) (.58) 4.64 (2.51) (1.51)
------------------------------------------------
Total from investment operations (.68) 4.55 (2.59) (1.49)
- ---------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income -- -- -- (.04)
- ---------------------------------------------------------------------------------------------------
Net asset value, end of period $ 9.75 $ 10.43 $ 5.88 $ 8.47
================================================
- ---------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 3 (6.52)% 77.38% (30.58)% (14.99)%
- ---------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ---------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 2,819 $ 2,913 $ 657 $ 232
- ---------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 3,182 $ 1,449 $ 532 $ 30
- ---------------------------------------------------------------------------------------------------
Ratios to average net assets: 4
Net investment loss (0.98)% (0.92)% (0.84)% (0.97)%
Total expenses 1.08% 1.15% 1.48% 3.87%
Expenses after payments and waivers and
reduction to custodian expenses N/A 5,6 N/A 5 1.29% 1.28%
- ---------------------------------------------------------------------------------------------------
Portfolio turnover rate 212% 204% 263% 214%
1. For the period from November 1, 2000 (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 distributions reinvested in additional shares on
the reinvestment date, and redemption at the value calculated on the last
business day of the fiscal period. Sales charges are not reflected in the total
returns. Total returns are not annualized for periods of less than one full
year. Returns do not reflect the deduction of taxes that a shareholder would pay
on Fund distributions or the redemption of Fund shares.
4. Annualized for periods of less than one full year.
5. Reduction to custodian expenses less than 0.01%.
6. Voluntary waiver of transfer agent fees less than 0.01%.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
31 | OPPENHEIMER EMERGING GROWTH FUND
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
Oppenheimer Emerging Growth Fund (the Fund) is an open-end management investment
company registered under the Investment Company Act of 1940, as amended. The
Fund's investment objective is to seek capital appreciation. The Fund's
investment advisor is OppenheimerFunds, Inc. (the Manager).
The Fund offers Class A, Class B, Class C, Class N and Class Y shares.
Class A shares are sold at their offering price, which is normally net asset
value plus a front-end sales charge. Class B, Class C and Class N shares are
sold without a front-end sales charge but may be subject to a contingent
deferred sales charge (CDSC). Class N shares are sold only through retirement
plans. Retirement plans that offer Class N shares may impose charges on those
accounts. Class Y shares are sold to certain institutional investors without
either a front-end sales charge or a CDSC, however, the institutional investor
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. No such plan has been adopted for
Class Y shares. Class B shares will automatically convert to Class A shares six
years after the date of purchase. The Fund assesses a 2% fee on the proceeds of
fund shares that are redeemed (either by selling or exchanging to another
Oppenheimer fund) within 30 days of their purchase. The fee, which is retained
by the Fund, is accounted for as an addition to paid-in capital.
The following is a summary of significant accounting policies consistently
followed by the Fund.
- --------------------------------------------------------------------------------
SECURITIES VALUATION. The Fund calculates the net asset value of its shares as
of the close of The New York Stock Exchange (the Exchange), normally 4:00 P.M.
Eastern time, on each day the Exchange is open for business. Securities listed
or traded on National Stock Exchanges or other domestic or foreign exchanges are
valued based on the last sale price of the security traded on that exchange
prior to the time when the Fund's assets are valued. Securities traded on NASDAQ
are valued based on the closing price provided by NASDAQ prior to the time when
the Fund's assets are valued. In the absence of a sale, the security is valued
at the last sale price on the prior trading day, if it is within the spread of
the closing bid and asked prices, and if not, at the closing bid price.
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 Trustees. 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
32 | OPPENHEIMER EMERGING GROWTH FUND
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 Trustees. Short-term "money
market type" debt securities with remaining maturities of sixty days or less are
valued at amortized cost (which approximates market value).
- --------------------------------------------------------------------------------
JOINT REPURCHASE AGREEMENTS. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission, the Fund, along with other affiliated funds
advised by the Manager, may transfer uninvested cash balances into joint trading
accounts on a daily basis. These balances are invested in one or more repurchase
agreements. Securities pledged as collateral for repurchase agreements are held
by a custodian bank until the agreements mature. Each agreement requires that
the market value of the collateral be sufficient to cover payments of interest
and principal. In the event of default by the other party to the agreement,
retention of the collateral may be subject to legal proceedings.
- --------------------------------------------------------------------------------
ALLOCATION OF INCOME, EXPENSES, GAINS AND LOSSES. Income, expenses (other than
those attributable to a specific class), gains and losses are allocated on a
daily basis to each class of shares based upon the relative proportion of net
assets represented by such class. Operating expenses directly attributable to a
specific class are charged against the operations of that class.
- --------------------------------------------------------------------------------
FEDERAL TAXES. The Fund intends to comply with provisions of the Internal
Revenue Code applicable to regulated investment companies and to distribute
substantially all of its investment company taxable income, including any net
realized gain on investments not offset by capital loss carryforwards, if any,
to shareholders, therefore, no federal income or excise tax provision is
required.
The tax components of capital shown in the table below represent distribution
requirements the Fund must satisfy under the income tax regulations, losses the
Fund may be able to offset against income and gains realized in future years and
unrealized appreciation or depreciation of securities and other investments for
federal income tax purposes.
NET UNREALIZED
APPRECIATION
BASED ON COST OF
SECURITIES AND
UNDISTRIBUTED UNDISTRIBUTED ACCUMULATED OTHER INVESTMENTS
NET INVESTMENT LONG-TERM LOSS FOR FEDERAL INCOME
INCOME GAIN CARRYFORWARD 1,2,3 TAX PURPOSES
----------------------------------------------------------------------
$-- $-- $10,009,724 $13,332,784
1. As of October 31, 2004, the Fund had $10,009,724 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:
33 | OPPENHEIMER EMERGING GROWTH FUND
NOTES TO FINANCIAL STATEMENTS Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES Continued
EXPIRING
----------------------
2010 $ 9,570,101
2012 439,623
-----------
Total $10,009,724
===========
2. During the fiscal year ended October 31, 2004, the Fund did not utilize any
capital loss carryforward.
3. During the fiscal year ended October 31, 2003,the Fund utilized $5,140,037 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
REDUCTION TO ACCUMULATED NET
REDUCTION TO ACCUMULATED NET REALIZED LOSS
PAID-IN CAPITAL INVESTMENT LOSS ON INVESTMENTS
--------------------------------------------------------------
$1,982,579 $2,008,098 $25,519
No distributions were paid during the years ended October 31, 2004 and October
31, 2003.
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 $ 90,125,270
============
Gross unrealized appreciation $ 17,177,943
Gross unrealized depreciation (3,845,159)
------------
Net unrealized appreciation $ 13,332,784
============
- --------------------------------------------------------------------------------
TRUSTEES' COMPENSATION. The Fund has adopted an unfunded retirement plan for the
Fund's independent trustees. Benefits are based on years of service and fees
paid to each trustee during the years of service. During the year ended October
31, 2004, the Fund's projected benefit obligations were increased by $1,264 and
payments of $188 were made to retired trustees, resulting in an accumulated
liability of $2,770 as of October 31, 2004.
The Board of Trustees has adopted a deferred compensation plan for
independent trustees that enables trustees to elect to defer receipt of all or a
portion of the annual
34 | OPPENHEIMER EMERGING GROWTH FUND
compensation they are entitled to receive from the Fund. For purposes of
determining the amount owed to the Trustee under the plan, deferred amounts are
treated as though equal dollar amounts had been invested in shares of the Fund
or in other Oppenheimer funds selected by the Trustee. The Fund purchases shares
of the funds selected for deferral by the Trustee in amounts equal to his or her
deemed investment, resulting in a Fund asset equal to the deferred compensation
liability. Such assets are included as a component of "Other" within the asset
section of the Statement of Assets and Liabilities. Deferral of trustees' fees
under the plan will not affect the net assets of the Fund, and will not
materially affect the Fund's assets, liabilities or net investment income per
share. Amounts will be deferred until distributed in accordance to the Plan.
- --------------------------------------------------------------------------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS. Dividends and distributions to
shareholders, which are determined in accordance with income tax regulations,
are recorded on the ex-dividend date. Income and capital gain distributions, if
any, are declared and paid annually.
- --------------------------------------------------------------------------------
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.
- --------------------------------------------------------------------------------
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 over- drafts 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.
35 | OPPENHEIMER EMERGING GROWTH FUND
NOTES TO FINANCIAL STATEMENTS Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
2. SHARES OF BENEFICIAL INTEREST
The Fund has authorized an unlimited number of no par value shares of beneficial
interest of each class. Transactions in shares of beneficial interest were as
follows:
YEAR ENDED OCTOBER 31, 2004 YEAR ENDED OCTOBER 31, 2003
SHARES AMOUNT SHARES AMOUNT
- -------------------------------------------------------------------------------
CLASS A
Sold 4,305,878 $43,615,219 6,075,182 $ 51,242,510
Redeemed (3,821,601) (37,683,055) 1 (3,613,483) (27,702,216)
----------------------------------------------------------------
Net increase 484,277 $ 5,932,164 2,461,699 $ 23,540,294
================================================================
- -------------------------------------------------------------------------------
CLASS B
Sold 1,221,405 $12,077,340 1,756,252 $ 14,456,517
Redeemed (922,186) (8,763,281) 1 (828,442) (6,298,949)
----------------------------------------------------------------
Net increase 299,219 $ 3,314,059 927,810 $ 8,157,568
================================================================
- -------------------------------------------------------------------------------
CLASS C
Sold 1,238,512 $12,254,407 1,820,923 $ 15,186,788
Redeemed (913,001) (8,585,575) 1 (1,289,240) (10,050,833)
----------------------------------------------------------------
Net increase 325,511 $ 3,668,832 531,683 $ 5,135,955
================================================================
- -------------------------------------------------------------------------------
CLASS N
Sold 404,222 $ 3,857,777 264,715 $ 2,110,308
Redeemed (158,395) (1,487,889) 1 (129,515) (927,866)
----------------------------------------------------------------
Net increase 245,827 $ 2,369,888 135,200 $ 1,182,442
================================================================
- -------------------------------------------------------------------------------
CLASS Y
Sold 210,509 $ 2,200,135 274,183 $ 2,217,398
Redeemed (200,672) (1,955,878) 1 (106,636) (862,505)
----------------------------------------------------------------
Net increase 9,837 $ 244,257 167,547 $ 1,354,893
================================================================
1. Net of redemption fees of $7,306, $2,603, $1,873, $393 and $371 for Class A,
Class B, Class C, Class N and Class Y, respectively.
- --------------------------------------------------------------------------------
3. PURCHASES AND SALES OF SECURITIES
The aggregate cost of purchases and proceeds from sales of securities, other
than short-term obligations, for the year ended October 31, 2004, were
$244,713,553 and $231,247,072, respectively.
- --------------------------------------------------------------------------------
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES
MANAGEMENT FEES. Management fees paid to the Manager were in accordance with the
investment advisory agreement with the Fund. Effective January 1, 2004, the
agreement provides for a fee at an annual rate of 1.00% of the first $200
million of average net assets, 0.95% of the next $200 million, 0.90% of the next
$200 million, and 0.85% of average annual net assets over $600 million. Prior to
January 1, 2004, the Fund pays the Manager an advisory fee at an annual rate
with slightly different breakpoints, as follows:
36 | OPPENHEIMER EMERGING GROWTH FUND
1.00% of the first $500 million of average annual net assets, 0.90% of the next
$500 million and 0.85% of average annual net assets over $1 billion.
- --------------------------------------------------------------------------------
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
$333,384 to OFS for services to the Fund.
Additionally, Class Y shares are subject to minimum fees of $10,000 for
assets of $10 million or more. The Class Y shares are subject to the minimum
fees in the event that the per account fee does not equal or exceed the
applicable minimum fees. OFS may voluntarily waive the minimum fees.
- --------------------------------------------------------------------------------
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 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 Trustees and its independent trustees must
determine whether the Distributor shall be entitled to payment from the Fund of
all or a portion of the service fee and/or asset-based sales charge in respect
to shares sold prior to the effective date of such termination. The
Distributor's aggregate uncompensated expenses under the plan at October 31,
2004 for Class B, Class C and Class N shares were $375,864, $192,465 and
$54,498, 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,
37 | OPPENHEIMER EMERGING GROWTH FUND
NOTES TO FINANCIAL STATEMENTS Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES Continued
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 $184,515 $-- $57,364 $11,777 $5,051
- --------------------------------------------------------------------------------
PAYMENTS AND WAIVERS OF EXPENSES. 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 $4,865,
$27,625, $7,823, $5,768 and $4 for Class A, Class B, Class C, Class N and Class
Y shares, respectively. This undertaking may be amended or withdrawn at any
time.
- --------------------------------------------------------------------------------
5. 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 Trustees as reflecting fair value. A security may also be considered
illiquid if it lacks a readily available market or if its valuation has not
changed for a certain period of time. The Fund will not invest more than 15% 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 $28,736, which represents 0.03% of the
Fund's net assets, all of which is considered restricted. Information concerning
restricted securities is as follows:
ACQUISITION VALUATION AS OF UNREALIZED
SECURITY DATE COST OCTOBER 31, 2004 APPRECIATION
- ------------------------------------------------------------------------------------------------
STOCKS AND/OR WARRANTS
Discovery Laboratories, Inc. Wts.,
Exp. 9/20/10 6/18/03 $-- $28,736 $28,736
38 | OPPENHEIMER EMERGING GROWTH FUND
- --------------------------------------------------------------------------------
6. 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.
39 | OPPENHEIMER EMERGING GROWTH FUND
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
THE BOARD OF TRUSTEES AND SHAREHOLDERS OF OPPENHEIMER EMERGING GROWTH FUND:
We have audited the accompanying statement of assets and liabilities of
Oppenheimer Emerging Growth Fund, 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 three years in
the period then ended and the period from November 1, 2000 (commencement of
operations) to October 31, 2001. 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 Emerging Growth 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 three years in the period then ended and the period from November 1, 2000
(commencement of operations) to October 31, 2001, in conformity with U.S.
generally accepted accounting principles.
KPMG LLP
Denver, Colorado
December 16, 2004
40 | OPPENHEIMER EMERGING GROWTH 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.
The foregoing information is presented to assist shareholders in reporting
distributions received from the Fund to the Internal Revenue Service. Because of
the complexity of the federal regulations which may affect your individual tax
return and the many variations in state and local tax regulations, we recommend
that you consult your tax advisor for specific guidance.
PORTFOLIO PROXY VOTING POLICIES AND PROCEDURES;
UPDATES TO STATEMENTS OF INVESTMENTS Unaudited
FEDERAL INCOME TAX INFORMATION 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.
41 | OPPENHEIMER EMERGING GROWTH FUND
TRUSTEES AND OFFICERS Unaudited
- --------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------
NAME, POSITION(S) HELD WITH PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS; OTHER TRUSTEESHIPS/DIRECTORSHIPS HELD
FUND, LENGTH OF SERVICE, AGE BY TRUSTEE; NUMBER OF PORTFOLIOS IN FUND COMPLEX CURRENTLY OVERSEEN BY TRUSTEE
INDEPENDENT THE ADDRESS OF EACH TRUSTEE IN THE CHART BELOW IS 6803 S. TUCSON WAY, CENTENNIAL,
TRUSTEES CO 80112-3924. EACH TRUSTEE 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
Chairman of the Board 2002) of Danielson Holding Corp. Formerly a director of Weyerhaeuser Corp.
of Trustees (since 2003); (1999-April 2004), Caterpillar, Inc. (1993-December 2002), ConAgra Foods
Trustee (since 2000) (1993-2001), Texas Instruments (1993-2001) and FMC Corporation (1993-2001).
Age: 73 Oversees 25 portfolios in the OppenheimerFunds complex.
ROBERT G. GALLI, A trustee or director of other Oppenheimer funds. Oversees 35 portfolios in the
Trustee (since 2000) OppenheimerFunds complex.
Age: 71
PHILLIP A. GRIFFITHS, A director (since 1991) of the Institute for Advanced Study, Princeton, N.J.,
Trustee (since 2000) a director (since 2001) of GSI Lumonics, a trustee (since 1983) of Woodward
Age: 66 Academy, a Senior Advisor (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
Trustee (since 2004) Company (July 1998-February 2003). Member of Trustees of the American
Age: 62 Symphony Orchestra (October 1998 to present). Oversees 25 portfolios in
the OppenheimerFunds complex.
JOEL W. MOTLEY, Director (since January 2002) Columbia Equity Financial Corp. (privately-held
Trustee (since 2002) financial adviser); Managing Director (since January 2002) Carmona Motley, Inc.
Age: 52 (privately-held 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
Trustee (since 2000) holding company); formerly a director of Prime Retail, Inc. (real estate
Age: 77 investment trust) and 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
Trustee (since 2000) director of OffitBank; formerly Trustee, Financial Accounting Foundation (FASB
Age: 74 and GASB), Senior Fellow 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.
42 | OPPENHEIMER EMERGING GROWTH FUND
RUSSELL S. REYNOLDS, JR., Chairman (since 1993) of The Directorship Search Group, Inc. (corporate
Trustee (since 2000) governance consulting and executive recruiting); a Life Trustee of International
Age: 72 House (non-profit educational organization); a former trustee of The Historical
Society of the Town of Greenwich. Oversees 25 portfolios in the OppenheimerFunds
complex.
- -------------------------------------------------------------------------------------------------------------------------
INTERESTED TRUSTEE THE ADDRESS OF MR. MURPHY IN THE CHART BELOW IS TWO WORLD FINANCIAL CENTER,
AND OFFICER 225 LIBERTY STREET, 11TH FLOOR, 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
President and Trustee (since September 2000) of the Manager; President and a director or trustee
(since 2001) of other Oppenheimer funds; President and a director (since July 2001) of
Age: 55 Oppenheimer Acquisition Corp. (the 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.
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OFFICERS THE ADDRESS OF THE OFFICERS IN THE CHART BELOW IS AS FOLLOWS: FOR MS. GRANGER AND
MR. 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 OR HER EARLIER
RESIGNATION, DEATH OR REMOVAL.
LAURA GRANGER, Vice President of the Manager since October 2000; an officer of 3 portfolios in
Vice President and Portfolio the OppenheimerFunds complex. Formerly a portfolio manager at Fortis
Manager (since 2000) Advisors (July 1998-October 2000).
Age: 44
43 | OPPENHEIMER EMERGING GROWTH FUND
TRUSTEES AND OFFICERS Unaudited / Continued
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BRIAN W. WIXTED, Senior Vice President and Treasurer (since March 1999) of the Manager;
Treasurer (since 1999) Treasurer of HarbourView Asset Management Corporation, Shareholder Financial
Age: 45 Services, Inc., Shareholder 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
Secretary (since 2001) February 2002) of the Manager; General Counsel and a director (since November
Age: 56 2001) of the Distributor; General 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.
MARK S. VANDEHEY, Senior Vice President and Chief Compliance Officer (since March 2004) of the
Vice President and Manager; Vice President (since June 1983) of OppenheimerFunds Distributor,
Chief Compliance Officer Inc., Centennial Asset Management Corporation and Shareholder Services, Inc.
(since 2004) Formerly (until February 2004) Vice President and Director of Internal Audit of
Age: 54 the Manager. An officer of 84 portfolios in the OppenheimerFunds complex.
THE FUND'S STATEMENT OF ADDITIONAL INFORMATION CONTAINS ADDITIONAL INFORMATION
ABOUT THE FUND'S TRUSTEES AND IS AVAILABLE WITHOUT CHARGE UPON REQUEST, BY
CALLING 1.800.525.7048.
44 | OPPENHEIMER EMERGING GROWTH FUND
ITEM 2. CODE OF ETHICS
The registrant has adopted a code of ethics that applies to the
registrant's principal executive officer, principal financial officer, principal
accounting officer or controller or persons performing similar functions.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT
The Board of Trustees of the registrant has determined that Edward 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" Trustee pursuant to
paragraph (a)(2) of Item 3 to Form N-CSR.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES
(a) Audit Fees
The principal accountant for the audit of the registrant's annual
financial statements billed $18,000 in fiscal 2004 and $15,000 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 $8 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 trustees.
(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 $5,008 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 trustees has
considered whether the provision of non-audit services that were
rendered to the registrant's investment adviser, and any entity
controlling, controlled by, or under common control with the
investment adviser that provides ongoing services to the registrant
that were not pre-approved pursuant to paragraph (c)(7)(ii) of Rule
2-01 of Regulation S-X is compatible with maintaining the principal
account's independence. No such services were rendered.
ITEM 5. NOT APPLICABLE
ITEM 6. SCHEDULE OF INVESTMENTS
Not applicable
ITEM 7. NOT APPLICABLE
ITEM 8. NOT APPLICABLE
ITEM 9. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
At a meeting of the Board of Trustees 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 trustees, 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)