UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM N-CSR CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES Investment Company Act file number 811-09845 Oppenheimer Emerging Technologies Fund (Exact name of registrant as specified in charter) 6803 South Tucson Way, Centennial, Colorado 80112-3924 (Address of principal executive offices) (Zip code) Robert G. Zack, Esq. OppenheimerFunds, Inc. Two World Financial Center, New York, New York 10281-1008 (Name and address of agent for service) Registrant's telephone number, including area code: (303) 768-3200 Date of fiscal year end: October 31 Date of reporting period: November 1, 2003 - October 31, 2004 ITEM 1. REPORTS TO STOCKHOLDERS. TOP HOLDINGS AND ALLOCATIONS - -------------------------------------------------------------------------------- TOP TEN COMMON STOCK HOLDINGS - -------------------------------------------------------------------------------- Mercury Interactive Corp. 2.7% - -------------------------------------------------------------------------------- Apple Computer, Inc. 2.5 - -------------------------------------------------------------------------------- Autodesk, Inc. 2.4 - -------------------------------------------------------------------------------- InfoSpace, Inc. 2.2 - -------------------------------------------------------------------------------- Macromedia, Inc. 2.1 - -------------------------------------------------------------------------------- Microsoft Corp. 2.0 - -------------------------------------------------------------------------------- Skyworks Solutions, Inc. 2.0 - -------------------------------------------------------------------------------- Marvell Technology Group Ltd. 2.0 - -------------------------------------------------------------------------------- Adobe Systems, Inc. 1.9 - -------------------------------------------------------------------------------- Sonic Solutions, Inc. 1.8 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 - -------------------------------------------------------------------------------- Communications Equipment 19.1% - -------------------------------------------------------------------------------- Software 18.6 - -------------------------------------------------------------------------------- Semiconductors & Semiconductor Equipment 18.2 - -------------------------------------------------------------------------------- Internet Software & Services 14.4 - -------------------------------------------------------------------------------- Computers & Peripherals 5.6 - -------------------------------------------------------------------------------- Electronic Equipment & Instruments 4.7 - -------------------------------------------------------------------------------- Biotechnology 4.1 - -------------------------------------------------------------------------------- IT Services 2.7 - -------------------------------------------------------------------------------- Pharmaceuticals 1.5 - -------------------------------------------------------------------------------- Office Electronics 1.4 Portfolio holdings and allocations are subject to change. Percentages are as of October 31, 2004, and are based on net assets. 7 | OPPENHEIMER EMERGING TECHNOLOGIES FUND TOP HOLDINGS AND ALLOCATIONS - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- SECTOR ALLOCATION [THE FOLLOWING TABLE WAS REPRESENTED BY A PIE CHART IN THE PRINTED MATERIAL.] Information Technology 89.4% Communications Equipment 20.3 Software 19.6 Semiconductors & Semiconductor Equipment 19.2 Internet Software & Services 15.2 Computers & Peripherals 5.9 Electronic Equipment & Instruments 5.0 IT Services 2.8 Office Electronics 1.4 Health Care 5.9 Industrials 1.6 Consumer Discretionary 1.3 Telecommunication Services 1.0 Financials 0.8 Portfolio holdings and allocations are subject to change. Percentages are as of October 31, 2004, and are based on common stocks. - -------------------------------------------------------------------------------- 8 | OPPENHEIMER EMERGING TECHNOLOGIES FUND FUND PERFORMANCE DISCUSSION - -------------------------------------------------------------------------------- HOW HAS THE FUND PERFORMED? BELOW IS A DISCUSSION BY OPPENHEIMERFUNDS, INC., OF THE FUND'S PERFORMANCE DURING ITS FISCAL YEAR ENDED 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. Despite relatively strong gains from several individual holdings, broadly based weakness in the kinds of aggressive, high-growth stocks on which the Fund focuses undermined returns. Despite the challenging environment, the Fund maintained its disciplined focus on investing in fast-growing technology-related companies that we believe have the potential to become leaders in their markets, regardless of their industry or market capitalization. This investment approach has historically tended to produce excellent returns in strong markets, and relatively weak returns in soft markets. Over the long term, we believe our strategy will reward the patient investor. The performance of several holdings in this area exemplified the difficult environment that prevailed for technology investors during the period. For example, most semiconductor manufacturers and equipment makers suffered declines, including those reporting strong revenue and earnings growth, such as a developer of mixed-signal integrated circuits. The Fund's performance was further undermined by declines in the stock prices of hardware and equipment holdings, such as ADTRAN, Inc., which suffered a short-term earnings disappointment; and Sierra Wireless, Inc., which reported good year-over-year earnings and revenue growth. On the other hand, many of the Fund's technology holdings bucked the negative trend, illustrating the value of diversification among technology-related industries. Security software company Symantec Corp. delivered strong gains, as did Internet service provider Yahoo!, Inc., which benefited from increased volumes of Internet traffic and advertising. Investments in several hardware companies contributed positively to the Fund's returns as well. Top performers included wireless product developer Research In Motion Ltd.; computing and entertainment device maker Apple Computer, Inc.; and semiconductor manufacturer Marvell Technology Group Ltd., which increased its market share. As of the end of the period, we continue to maintain our disciplined focus on growth-oriented technology stocks. As a result, we believe the Fund is well positioned to take advantage of historically low relative valuations in the sector. In particular, we are currently finding a number of attractive investment opportunities among stocks that we believe are poised to benefit from the build-out of networks for wireless data transmission. At the same time, we remain dedicated to our company-by-company stock selection process. 9 | OPPENHEIMER EMERGING TECHNOLOGIES FUND FUND PERFORMANCE DISCUSSION - -------------------------------------------------------------------------------- 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 Classes A, B, C and Y on April 25, 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 that of the S&P 500 Index and the Lipper Science & Technology Fund Index. The S&P 500 Index is a broad-based index of equity securities widely regarded as a general measure of the performance of the U.S. equity securities market. The Lipper Science & Technology Fund Index includes the top 30 market weighted funds within the Lipper Science & Technology Classification. The index includes funds that invest 65% of their equity portfolio in science and technology stocks, without considering sales charges. 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 TECHNOLOGIES FUND CLASS A SHARES COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN: Oppenheimer Emerging Technologies Fund (Class A) Lipper Science & Technology Fund Index S&P 500 Index [THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.] Oppenheimer Emerging Technologies Lipper Science & Technology Fund (Class A) Index S&P 500 Index 04/25/2000 $ 9,425 $10,000 $10,000 04/30/2000 10,056 10,000 10,000 07/31/2000 11,263 9,591 9,879 10/31/2000 10,594 8,826 9,897 01/31/2001 8,615 7,139 9,487 04/30/2001 5,709 5,385 8,703 07/31/2001 4,388 4,645 8,464 10/31/2001 3,312 3,676 7,434 01/31/2002 3,416 4,157 7,956 04/30/2002 2,538 3,462 7,605 07/31/2002 1,821 2,545 6,466 10/31/2002 1,717 2,463 6,311 01/31/2003 1,746 2,466 6,126 04/30/2003 1,982 2,705 6,594 07/31/2003 2,538 3,201 7,153 10/31/2003 2,963 3,680 7,623 01/31/2004 3,057 3,938 8,242 04/30/2004 2,557 3,532 8,101 07/31/2004 2,378 3,361 8,095 10/31/2004 2,538 3,566 8,341 AVERAGE ANNUAL TOTAL RETURNS OF CLASS A SHARES WITH SALES CHARGE OF THE FUND AT 10/31/04 1-Year -19.26% Since Inception (4/25/00) -26.18% 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 TECHNOLOGIES FUND FUND PERFORMANCE DISCUSSION - -------------------------------------------------------------------------------- CLASS B SHARES COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN: Oppenheimer Emerging Technologies Fund (Class B) Lipper Science & Technology Fund Index S&P 500 Index [THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.] Oppenheimer Emerging Technologies Lipper Science & Technology Fund (Class B) Index S&P 500 Index 04/25/2000 $10,000 $10,000 $10,000 04/30/2000 10,670 10,000 10,000 07/31/2000 11,930 9,591 9,879 10/31/2000 11,200 8,826 9,897 01/31/2001 9,090 7,139 9,487 04/30/2001 6,020 5,385 8,703 07/31/2001 4,610 4,645 8,464 10/31/2001 3,480 3,676 7,434 01/31/2002 3,580 4,157 7,956 04/30/2002 2,650 3,462 7,605 07/31/2002 1,900 2,545 6,466 10/31/2002 1,790 2,463 6,311 01/31/2003 1,810 2,466 6,126 04/30/2003 2,050 2,705 6,594 07/31/2003 2,630 3,201 7,153 10/31/2003 3,060 3,680 7,623 01/31/2004 3,150 3,938 8,242 04/30/2004 2,630 3,532 8,101 07/31/2004 2,450 3,361 8,095 10/31/2004 2,548 3,566 8,341 AVERAGE ANNUAL TOTAL RETURNS OF CLASS B SHARES WITH SALES CHARGE OF THE FUND AT 10/31/04 1-Year -19.28% Since Inception (4/25/00) -26.12% 12 | OPPENHEIMER EMERGING TECHNOLOGIES FUND CLASS C SHARES COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN: Oppenheimer Emerging Technologies Fund (Class C) Lipper Science & Technology Fund Index S&P 500 Index [THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.] Oppenheimer Emerging Technologies Lipper Science & Technology Fund (Class C) Index S&P 500 Index 04/25/2000 $10,000 $10,000 $10,000 04/30/2000 10,670 10,000 10,000 07/31/2000 11,930 9,591 9,879 10/31/2000 11,200 8,826 9,897 01/31/2001 9,090 7,139 9,487 04/30/2001 6,010 5,385 8,703 07/31/2001 4,610 4,645 8,464 10/31/2001 3,480 3,676 7,434 01/31/2002 3,580 4,157 7,956 04/30/2002 2,650 3,462 7,605 07/31/2002 1,900 2,545 6,466 10/31/2002 1,790 2,463 6,311 01/31/2003 1,810 2,466 6,126 04/30/2003 2,060 2,705 6,594 07/31/2003 2,630 3,201 7,153 10/31/2003 3,060 3,680 7,623 01/31/2004 3,150 3,938 8,242 04/30/2004 2,630 3,532 8,101 07/31/2004 2,450 3,361 8,095 10/31/2004 2,600 3,566 8,341 AVERAGE ANNUAL TOTAL RETURNS OF CLASS C SHARES WITH SALES CHARGE OF THE FUND AT 10/31/04 1-Year -15.88% Since Inception (4/25/00) -25.79% 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 TECHNOLOGIES FUND FUND PERFORMANCE DISCUSSION - -------------------------------------------------------------------------------- CLASS N SHARES COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN: Oppenheimer Emerging Technologies Fund (Class N) Lipper Science & Technology Fund Index S&P 500 Index [THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.] Oppenheimer Emerging Technologies Lipper Science & Technology Fund (Class N) Index S&P 500 Index 03/01/2001 $10,000 $10,000 $10,000 04/30/2001 9,165 10,201 10,094 07/31/2001 7,041 8,799 9,817 10/31/2001 5,311 6,963 8,621 01/31/2002 5,478 7,875 9,227 04/30/2002 4,067 6,559 8,821 07/31/2002 2,914 4,821 7,499 10/31/2002 2,747 4,665 7,320 01/31/2003 2,792 4,671 7,104 04/30/2003 3,171 5,124 7,647 07/31/2003 4,052 6,064 8,296 10/31/2003 4,734 6,971 8,841 01/31/2004 4,871 7,459 9,559 04/30/2004 4,067 6,691 9,396 07/31/2004 3,794 6,367 9,388 10/31/2004 4,036 6,756 9,674 AVERAGE ANNUAL TOTAL RETURNS OF CLASS N SHARES WITH SALES CHARGE OF THE FUND AT 10/31/04 1-Year -15.60% Since Inception (3/1/01) -21.92% 14 | OPPENHEIMER EMERGING TECHNOLOGIES FUND CLASS Y SHARES COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN: Oppenheimer Emerging Technologies Fund (Class Y) Lipper Science & Technology Fund Index S&P 500 Index [THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.] Oppenheimer Emerging Technologies Lipper Science & Technology Fund (Class Y) Index S&P 500 Index 04/25/2000 $10,000 $10,000 $10,000 04/30/2000 10,670 10,000 10,000 07/31/2000 11,960 9,591 9,879 10/31/2000 11,260 8,826 9,897 01/31/2001 9,172 7,139 9,487 04/30/2001 6,084 5,385 8,703 07/31/2001 4,691 4,645 8,464 10/31/2001 3,558 3,676 7,434 01/31/2002 3,669 4,157 7,956 04/30/2002 2,726 3,462 7,605 07/31/2002 1,955 2,545 6,466 10/31/2002 1,854 2,463 6,311 01/31/2003 1,895 2,466 6,126 04/30/2003 2,145 2,705 6,594 07/31/2003 2,757 3,201 7,153 10/31/2003 3,218 3,680 7,623 01/31/2004 3,328 3,938 8,242 04/30/2004 2,787 3,532 8,101 07/31/2004 2,596 3,361 8,095 10/31/2004 2,777 3,566 8,341 AVERAGE ANNUAL TOTAL RETURNS OF CLASS Y SHARES OF THE FUND AT 10/31/04 1-Year -13.71% Since Inception (4/25/00) -24.70% 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 TECHNOLOGIES FUND NOTES - -------------------------------------------------------------------------------- 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. Please remember that this Fund has a limited operating history. CLASS A shares of the Fund were first publicly offered on 4/25/00. 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 4/25/00. 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 4/25/00. 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 4/25/00. 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 TECHNOLOGIES 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 TECHNOLOGIES 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 $ 992.60 $ 8.60 - -------------------------------------------------------------------------------- Class A Hypothetical 1,000.00 1,016.54 8.70 - -------------------------------------------------------------------------------- Class B Actual 1,000.00 988.60 12.63 - -------------------------------------------------------------------------------- Class B Hypothetical 1,000.00 1,012.52 12.78 - -------------------------------------------------------------------------------- Class C Actual 1,000.00 988.60 12.22 - -------------------------------------------------------------------------------- Class C Hypothetical 1,000.00 1,012.92 12.37 - -------------------------------------------------------------------------------- Class N Actual 1,000.00 992.50 9.56 - -------------------------------------------------------------------------------- Class N Hypothetical 1,000.00 1,015.58 9.67 - -------------------------------------------------------------------------------- Class Y Actual 1,000.00 996.40 5.18 - -------------------------------------------------------------------------------- Class Y Hypothetical 1,000.00 1,019.96 5.24 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 1.71% - ---------------------------- Class B 2.51 - ---------------------------- Class C 2.43 - ---------------------------- Class N 1.90 - ---------------------------- Class Y 1.03 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 TECHNOLOGIES FUND STATEMENT OF INVESTMENTS October 31, 2004 - -------------------------------------------------------------------------------- VALUE SHARES SEE NOTE 1 - -------------------------------------------------------------------------------- COMMON STOCKS--94.7% - -------------------------------------------------------------------------------- CONSUMER DISCRETIONARY--1.2% - -------------------------------------------------------------------------------- HOTELS, RESTAURANTS & LEISURE--0.5% Ctrip.com International Ltd., ADR 1 19,500 $ 779,415 - -------------------------------------------------------------------------------- LEISURE EQUIPMENT & PRODUCTS--0.7% Shanda Interactive Entertainment Ltd., ADR 1 40,000 1,215,560 - -------------------------------------------------------------------------------- FINANCIALS--0.7% - -------------------------------------------------------------------------------- CAPITAL MARKETS--0.7% Harris & Harris Group, Inc. 1 100,000 1,189,000 - -------------------------------------------------------------------------------- HEALTH CARE--5.6% - -------------------------------------------------------------------------------- BIOTECHNOLOGY--4.1% Amgen, Inc. 1 22,400 1,272,320 - -------------------------------------------------------------------------------- Genzyme Corp. (General Division) 1 29,400 1,542,618 - -------------------------------------------------------------------------------- Gilead Sciences, Inc. 1 44,000 1,523,720 - -------------------------------------------------------------------------------- Martek Biosciences Corp. 1 49,100 2,310,450 ----------- 6,649,108 - -------------------------------------------------------------------------------- PHARMACEUTICALS--1.5% MGI Pharma, Inc. 1 94,200 2,512,314 - -------------------------------------------------------------------------------- INDUSTRIALS--1.6% - -------------------------------------------------------------------------------- COMMERCIAL SERVICES & SUPPLIES--0.7% 51job, Inc., ADR 1 42,200 1,139,400 - -------------------------------------------------------------------------------- ELECTRICAL EQUIPMENT--0.9% Color Kinetics, Inc. 1 46,900 752,276 - -------------------------------------------------------------------------------- Vicor Corp. 70,000 650,300 ----------- 1,402,576 - -------------------------------------------------------------------------------- INFORMATION TECHNOLOGY--84.7% - -------------------------------------------------------------------------------- COMMUNICATIONS EQUIPMENT--19.1% ADTRAN, Inc. 65,400 1,412,640 - -------------------------------------------------------------------------------- Airspan Networks, Inc. 1 149,300 915,209 - -------------------------------------------------------------------------------- Andrew Corp. 1 187,100 2,615,658 - -------------------------------------------------------------------------------- Arris Group, Inc. 1 182,300 847,695 - -------------------------------------------------------------------------------- Audiocodes Ltd. 1 222,700 2,935,186 - -------------------------------------------------------------------------------- VALUE SHARES SEE NOTE 1 - -------------------------------------------------------------------------------- COMMUNICATIONS EQUIPMENT--Continued Cisco Systems, Inc. 1 77,700 $ 1,492,617 - -------------------------------------------------------------------------------- Corning, Inc. 1 254,900 2,918,605 - -------------------------------------------------------------------------------- Ditech Communications Corp. 1 95,700 2,195,358 - -------------------------------------------------------------------------------- F5 Networks, Inc. 1 65,600 2,620,720 - -------------------------------------------------------------------------------- Ixia 1 126,100 1,610,297 - -------------------------------------------------------------------------------- Packeteer, Inc. 1 93,200 1,150,088 - -------------------------------------------------------------------------------- Plantronics, Inc. 50,000 2,175,000 - -------------------------------------------------------------------------------- Polycom, Inc. 1 56,400 1,164,660 - -------------------------------------------------------------------------------- QUALCOMM, Inc. 54,400 2,274,464 - -------------------------------------------------------------------------------- Research in Motion Ltd. 1 25,800 2,275,560 - -------------------------------------------------------------------------------- Sierra Wireless, Inc. 1 62,000 1,057,720 - -------------------------------------------------------------------------------- Tekelec 1 80,000 1,785,600 ----------- 31,447,077 - -------------------------------------------------------------------------------- COMPUTERS & PERIPHERALS--5.6% Apple Computer, Inc. 1 78,600 4,128,858 - -------------------------------------------------------------------------------- Avid Technology, Inc. 1 28,200 1,494,036 - -------------------------------------------------------------------------------- Network Engines, Inc. 1 331,200 616,032 - -------------------------------------------------------------------------------- PalmOne, Inc. 1 100,000 2,897,000 ----------- 9,135,926 - -------------------------------------------------------------------------------- ELECTRONIC EQUIPMENT & INSTRUMENTS--4.7% Aeroflex, Inc. 1 190,100 2,110,110 - -------------------------------------------------------------------------------- AU Optronics Corp., ADR 119,570 1,255,485 - -------------------------------------------------------------------------------- Cogent, Inc. 1 6,000 114,804 - -------------------------------------------------------------------------------- FLIR Systems, Inc. 1 40,100 2,133,721 - -------------------------------------------------------------------------------- Komag, Inc. 1 90,000 1,527,750 - -------------------------------------------------------------------------------- WJ Communications, Inc. 1 327,600 645,372 ----------- 7,787,242 19 | OPPENHEIMER EMERGING TECHNOLOGIES FUND STATEMENT OF INVESTMENTS Continued - -------------------------------------------------------------------------------- VALUE SHARES SEE NOTE 1 - -------------------------------------------------------------------------------- INTERNET SOFTWARE & SERVICES--14.4% Aladdin Knowledge Systems Ltd. 1 89,700 $ 2,255,955 - -------------------------------------------------------------------------------- eCollege.com, Inc. 1 110,700 1,015,119 - -------------------------------------------------------------------------------- eLong, Inc., Sponsored ADR 1 11,400 155,040 - -------------------------------------------------------------------------------- FindWhat.com 1 91,200 1,828,560 - -------------------------------------------------------------------------------- InfoSpace, Inc. 1 70,000 3,675,000 - -------------------------------------------------------------------------------- j2 Global Communications, Inc. 1 64,800 1,953,720 - -------------------------------------------------------------------------------- Jupitermedia Corp. 1 89,200 1,769,282 - -------------------------------------------------------------------------------- MarketWatch, Inc. 1 95,100 1,260,551 - -------------------------------------------------------------------------------- National Information Consortium, Inc. 1 221,200 931,252 - -------------------------------------------------------------------------------- Netease.com, Inc., ADR 1 41,300 1,920,863 - -------------------------------------------------------------------------------- Shopping.com Ltd. 1 4,100 110,577 - -------------------------------------------------------------------------------- SINA Corp. 1 64,600 2,164,100 - -------------------------------------------------------------------------------- SupportSoft, Inc. 1 228,600 1,159,002 - -------------------------------------------------------------------------------- VeriSign, Inc. 1 49,500 1,328,085 - -------------------------------------------------------------------------------- Yahoo!, Inc. 1 59,800 2,164,162 ----------- 23,691,268 - -------------------------------------------------------------------------------- IT SERVICES--2.7% Cognizant Technology Solutions Corp. 1 48,200 1,638,800 - -------------------------------------------------------------------------------- Infosys Technologies Ltd., Sponsored ADR 28,800 1,915,200 - -------------------------------------------------------------------------------- NAVTEQ Corp. 1 20,400 822,324 ----------- 4,376,324 - -------------------------------------------------------------------------------- OFFICE ELECTRONICS--1.4% Zebra Technologies Corp., Cl. A 1 42,200 2,236,178 VALUE SHARES SEE NOTE 1 - -------------------------------------------------------------------------------- SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT--18.2% AMIS Holdings, Inc. 1 73,300 1,114,160 - -------------------------------------------------------------------------------- Analog Devices, Inc. 73,400 2,955,084 - -------------------------------------------------------------------------------- ATI Technologies, Inc. 1 102,100 1,842,905 - -------------------------------------------------------------------------------- ATMI, Inc. 1 33,900 791,565 - -------------------------------------------------------------------------------- Cypress Semiconductor Corp. 1 106,200 1,118,286 - -------------------------------------------------------------------------------- Integrated Device Technology, Inc. 1 100,000 1,182,000 - -------------------------------------------------------------------------------- Intel Corp. 119,000 2,648,940 - -------------------------------------------------------------------------------- Linear Technology Corp. 39,000 1,477,320 - -------------------------------------------------------------------------------- Marvell Technology Group Ltd. 1 113,700 3,248,409 - -------------------------------------------------------------------------------- Microchip Technology, Inc. 59,900 1,811,975 - -------------------------------------------------------------------------------- Microsemi Corp. 1 130,200 2,023,308 - -------------------------------------------------------------------------------- ON Semiconductor Corp. 1 375,000 1,350,000 - -------------------------------------------------------------------------------- Sigmatel, Inc. 1 88,000 2,596,000 - -------------------------------------------------------------------------------- Silicon Laboratories, Inc. 1 16,800 503,496 - -------------------------------------------------------------------------------- Silicon Storage Technology, Inc. 1 115,400 859,730 - -------------------------------------------------------------------------------- Skyworks Solutions, Inc. 1 368,700 3,277,743 - -------------------------------------------------------------------------------- TranSwitch Corp. 1 242,800 252,512 - -------------------------------------------------------------------------------- Trident Microsystems, Inc. 1 60,000 791,400 ----------- 29,844,833 - -------------------------------------------------------------------------------- SOFTWARE--18.6% Adobe Systems, Inc. 55,000 3,081,650 - -------------------------------------------------------------------------------- Autodesk, Inc. 74,000 3,903,500 - -------------------------------------------------------------------------------- JAMDAT Mobile, Inc. 1 51,700 1,514,810 - -------------------------------------------------------------------------------- Macromedia, Inc. 1 125,300 3,400,642 - -------------------------------------------------------------------------------- Macrovision Corp. 1 101,500 2,744,560 20 | OPPENHEIMER EMERGING TECHNOLOGIES FUND VALUE SHARES SEE NOTE 1 - -------------------------------------------------------------------------------- SOFTWARE Continued Mercury Interactive Corp. 1 102,100 $ 4,434,203 - -------------------------------------------------------------------------------- Microsoft Corp. 119,200 3,336,408 - -------------------------------------------------------------------------------- Sonic Solutions, Inc. 1 152,200 3,021,170 - -------------------------------------------------------------------------------- Symantec Corp. 1 49,900 2,841,306 - -------------------------------------------------------------------------------- Verint Systems, Inc. 1 38,200 1,485,216 - -------------------------------------------------------------------------------- Witness Systems, Inc. 1 45,100 701,755 ------------ 30,465,220 - -------------------------------------------------------------------------------- TELECOMMUNICATION SERVICES--0.9% - -------------------------------------------------------------------------------- WIRELESS TELECOMMUNICATION SERVICES--0.9% SpectraSite, Inc. 1 30,000 1,539,000 ------------ Total Common Stocks (Cost $136,409,072) 155,410,441 - -------------------------------------------------------------------------------- PREFERRED STOCKS--0.2% - -------------------------------------------------------------------------------- Axsun Technologies, Inc., Cv., Series C 1,2,3 685,519 224,713 - -------------------------------------------------------------------------------- Blaze Network Products, Inc., 8% Cv., Series D 1,2,3 166,836 -- - -------------------------------------------------------------------------------- BroadBand Office, Inc., Cv., Series C 1,2 52,909 -- - -------------------------------------------------------------------------------- Centerpoint Broadband Technologies, Inc.: Cv., Series D 1,2 463,822 -- Cv., Series Z 1,2 37,491 -- - -------------------------------------------------------------------------------- MicroPhotonix Integration Corp., Cv., Series C 1,2,3 316,691 -- - -------------------------------------------------------------------------------- Multiplex, Inc., Cv., Series C 1,2 387,138 29,384 - -------------------------------------------------------------------------------- Questia Media, Inc., Cv., Series B 1,2 258,859 93,785 ------------ Total Preferred Stocks (Cost $21,917,070) 347,882 PRINCIPAL VALUE AMOUNT SEE NOTE 1 - -------------------------------------------------------------------------------- JOINT REPURCHASE AGREEMENTS--4.1% - -------------------------------------------------------------------------------- Undivided interest of 1.14% in joint repurchase agreement (Principal Amount/Value $595,058,000, with a maturity value of $595,147,755) with UBS Warburg LLC, 1.81%, dated 10/29/04, to be repurchased at $6,778,022 on 11/1/04, collateralized by Federal National Mortgage Assn., 5.50%, 1/1/34--4/1/34, with a value of $607,720,116 (Cost $6,777,000) $6,777,000 $ 6,777,000 - -------------------------------------------------------------------------------- TOTAL INVESTMENTS, AT VALUE (COST $165,103,142) 99.0% 162,535,323 - -------------------------------------------------------------------------------- OTHER ASSETS NET OF LIABILITIES 1.0 1,616,309 ------------------------- NET ASSETS 100.0% $164,151,632 ========================= 21 | OPPENHEIMER EMERGING TECHNOLOGIES FUND STATEMENT OF INVESTMENTS Continued - -------------------------------------------------------------------------------- FOOTNOTES TO STATEMENT OF INVESTMENTS 1. Non-income producing security. 2. Illiquid or restricted security. See Note 5 of Notes to Financial Statements. 3. Affiliated company. Represents ownership of at least 5% of the voting securities of the issuer, and is or was an affiliate, as defined in the Investment Company Act of 1940, at or during the period ended October 31, 2004. The aggregate fair value of securities of affiliated companies held by the Fund as of October 31, 2004 amounts to $224,713. Transactions during the period in which the issuer was an affiliate are as follows: SHARES SHARES OCTOBER 31, GROSS GROSS OCTOBER 31, UNREALIZED DIVIDEND 2003 ADDITIONS REDUCTIONS 2004 DEPRECIATION INCOME - ------------------------------------------------------------------------------------------------------------ PREFERRED STOCKS Axsun Technologies, Inc., Cv., Series C 685,519 -- -- 685,519 $ 7,775,294 $-- Blaze Network Products, Inc., 8% Cv., Series D 166,836 -- -- 166,836 1,067,750 -- MicroPhotonix Integration Corp., Cv., Series C 316,691 -- -- 316,691 1,999,999 -- ---------------------- $10,843,043 $-- ====================== SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 22 | OPPENHEIMER EMERGING TECHNOLOGIES FUND STATEMENT OF ASSETS AND LIABILITIES October 31, 2004 - -------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------- ASSETS - ---------------------------------------------------------------------------------- Investments, at value--see accompanying statement of investments: Unaffiliated companies (cost $154,035,386) $ 162,310,610 Affiliated companies (cost $11,067,756) 224,713 -------------- 162,535,323 - ---------------------------------------------------------------------------------- Cash 1,666,500 - ---------------------------------------------------------------------------------- Receivables and other assets: Investments sold 6,630,309 Shares of beneficial interest sold 175,552 Interest and dividends 29,676 Other 7,763 -------------- Total assets 171,045,123 - ---------------------------------------------------------------------------------- LIABILITIES - ---------------------------------------------------------------------------------- Payables and other liabilities: Investments purchased 6,191,868 Shares of beneficial interest redeemed 457,699 Shareholder communications 88,911 Trustees' compensation 47,874 Transfer and shareholder servicing agent fees 45,682 Distribution and service plan fees 32,842 Other 28,615 -------------- Total liabilities 6,893,491 - ---------------------------------------------------------------------------------- NET ASSETS $ 164,151,632 ============== - ---------------------------------------------------------------------------------- COMPOSITION OF NET ASSETS - ---------------------------------------------------------------------------------- Paid-in capital $ 636,515,811 - ---------------------------------------------------------------------------------- Accumulated net investment loss (1,390,678) - ---------------------------------------------------------------------------------- Accumulated net realized loss on investments (468,405,682) - ---------------------------------------------------------------------------------- Net unrealized depreciation on investments (2,567,819) - ---------------------------------------------------------------------------------- NET ASSETS $ 164,151,632 ============== 23 | OPPENHEIMER EMERGING TECHNOLOGIES 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 $79,082,816 and 29,400,687 shares of beneficial interest outstanding) $2.69 Maximum offering price per share (net asset value plus sales charge of 5.75% of offering price) $2.85 - -------------------------------------------------------------------------------------------------- Class B Shares: Net asset value, redemption price (excludes applicable contingent deferred sales charge) and offering price per share (based on net assets of $56,512,598 and 21,708,106 shares of beneficial interest outstanding) $2.60 - -------------------------------------------------------------------------------------------------- Class C Shares: Net asset value, redemption price (excludes applicable contingent deferred sales charge) and offering price per share (based on net assets of $22,777,006 and 8,746,101 shares of beneficial interest outstanding) $2.60 - -------------------------------------------------------------------------------------------------- Class N Shares: Net asset value, redemption price (excludes applicable contingent deferred sales charge) and offering price per share (based on net assets of $3,528,472 and 1,324,245 shares of beneficial interest outstanding) $2.66 - -------------------------------------------------------------------------------------------------- Class Y Shares: Net asset value, redemption price and offering price per share (based on net assets of $2,250,740 and 812,816 shares of beneficial interest outstanding) $2.77 SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 24 | OPPENHEIMER EMERGING TECHNOLOGIES FUND STATEMENT OF OPERATIONS For the Year Ended October 31, 2004 - -------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------- INVESTMENT INCOME - ----------------------------------------------------------------------------------- Dividends (net of foreign withholding taxes of $19,535) $ 233,315 - ----------------------------------------------------------------------------------- Interest 26,094 ------------- Total investment income 259,409 - ----------------------------------------------------------------------------------- EXPENSES - ----------------------------------------------------------------------------------- Management fees 1,840,255 - ----------------------------------------------------------------------------------- Distribution and service plan fees: Class A 215,120 Class B 633,292 Class C 251,339 Class N 17,679 - ----------------------------------------------------------------------------------- Transfer and shareholder servicing agent fees: Class A 698,176 Class B 643,122 Class C 174,697 Class N 23,018 Class Y 161 - ----------------------------------------------------------------------------------- Shareholder communications: Class A 47,520 Class B 53,211 Class C 7,375 - ----------------------------------------------------------------------------------- Custodian fees and expenses 26,939 - ----------------------------------------------------------------------------------- Trustees' compensation 8,686 - ----------------------------------------------------------------------------------- Other 36,223 ------------- Total expenses 4,676,813 Less reduction to custodian expenses (255) Less payments and waivers of expenses (895,186) ------------- Net expenses 3,781,372 - ----------------------------------------------------------------------------------- NET INVESTMENT LOSS (3,521,963) - ----------------------------------------------------------------------------------- REALIZED AND UNREALIZED GAIN (LOSS) - ----------------------------------------------------------------------------------- Net realized gain on: Investments 1,456,482 Net increase from payment by affiliate 29,259 ------------- Net realized gain 1,485,741 - ----------------------------------------------------------------------------------- Net change in unrealized appreciation (depreciation) on investments (29,273,792) - ----------------------------------------------------------------------------------- NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS $(31,310,014) ============= SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 25 | OPPENHEIMER EMERGING TECHNOLOGIES FUND STATEMENTS OF CHANGES IN NET ASSETS - -------------------------------------------------------------------------------- YEAR ENDED OCTOBER 31, 2004 2003 - ------------------------------------------------------------------------------------------------- OPERATIONS - ------------------------------------------------------------------------------------------------- Net investment loss $ (3,521,963) $ (2,504,324) - ------------------------------------------------------------------------------------------------- Net realized gain 1,485,741 16,569,327 - ------------------------------------------------------------------------------------------------- Net change in unrealized appreciation (depreciation) (29,273,792) 61,490,896 ------------------------------- Net increase (decrease) in net assets resulting from operations (31,310,014) 75,555,899 - ------------------------------------------------------------------------------------------------- BENEFICIAL INTEREST TRANSACTIONS - ------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from beneficial interest transactions: Class A 484,458 13,775,737 Class B (2,633,340) 5,478,583 Class C 966,798 2,313,751 Class N (305,271) 1,269,615 Class Y 236,530 744,204 - ------------------------------------------------------------------------------------------------- NET ASSETS - ------------------------------------------------------------------------------------------------- Total increase (decrease) (32,560,839) 99,137,789 - ------------------------------------------------------------------------------------------------- Beginning of period 196,712,471 97,574,682 ------------------------------- End of period (including accumulated net investment loss of $1,390,678 and $43,429, respectively) $ 164,151,632 $ 196,712,471 =============================== SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS 26 | OPPENHEIMER EMERGING TECHNOLOGIES FUND FINANCIAL HIGHLIGHTS - -------------------------------------------------------------------------------- CLASS A YEAR ENDED OCTOBER 31, 2004 2003 2002 2001 2000 1 - ------------------------------------------------------------------------------------------------------------------ PER SHARE OPERATING DATA Net asset value, beginning of period $ 3.14 $ 1.82 $ 3.51 $ 11.24 $ 10.00 - ------------------------------------------------------------------------------------------------------------------ Income (loss) from investment operations: Net investment income (loss) (.04) 2 (.04) (.04) (.01) .01 Net realized and unrealized gain (loss) (.41) 1.36 (1.65) (7.71) 1.23 --------------------------------------------------------------- Total from investment operations (.45) 1.32 (1.69) (7.72) 1.24 - ------------------------------------------------------------------------------------------------------------------ Dividends and/or distributions to shareholders: Dividends from net investment income -- -- -- (.01) -- - ------------------------------------------------------------------------------------------------------------------ Net asset value, end of period $ 2.69 $ 3.14 $ 1.82 $ 3.51 $ 11.24 =============================================================== - ------------------------------------------------------------------------------------------------------------------ TOTAL RETURN, AT NET ASSET VALUE 3 (14.33)% 72.53% (48.15)% (68.74)% 12.40% - ------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------ RATIOS/SUPPLEMENTAL DATA - ------------------------------------------------------------------------------------------------------------------ Net assets, end of period (in thousands) $79,083 $93,886 $44,150 $ 91,220 $253,471 - ------------------------------------------------------------------------------------------------------------------ Average net assets (in thousands) $89,415 $62,832 $68,695 $158,376 $149,623 - ------------------------------------------------------------------------------------------------------------------ Ratios to average net assets: 4 Net investment income (loss) (1.55)% (1.51)% (1.61)% (0.23)% 0.25% Total expenses 2.11% 2.70% 3.11% 2.08% 1.65% Expenses after payments and waivers and reduction to custodian expenses 1.69% 1.71% 2.10% 2.04% N/A 5 - ------------------------------------------------------------------------------------------------------------------ Portfolio turnover rate 157% 219% 159% 85% 6% 1. For the period from April 25, 2000 (commencement of operations) to October 31, 2000. 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 net asset value calculated on the last business day of the fiscal period. Sales charges are not reflected in the total returns. Total returns are not annualized for periods of less than one full year. Returns do not reflect the deduction of taxes that a shareholder would pay on Fund dIstributions or the redemption of Fund shares. 4. Annualized for periods of less than one full year. 5. Reduction to custodian expenses less than 0.01%. SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 27 | OPPENHEIMER EMERGING TECHNOLOGIES FUND FINANCIAL HIGHLIGHTS Continued - -------------------------------------------------------------------------------- CLASS B YEAR ENDED OCTOBER 31, 2004 2003 2002 2001 2000 1 - ------------------------------------------------------------------------------------------------------------------ PER SHARE OPERATING DATA - ------------------------------------------------------------------------------------------------------------------ Net asset value, beginning of period $ 3.06 $ 1.79 $ 3.48 $ 11.20 $ 10.00 - ------------------------------------------------------------------------------------------------------------------ Income (loss) from investment operations: Net investment loss (.07) 2 (.04) (.07) (.06) (.01) Net realized and unrealized gain (loss) (.39) 1.31 (1.62) (7.66) 1.21 --------------------------------------------------------------- Total from investment operations (.46) 1.27 (1.69) (7.72) 1.20 - ------------------------------------------------------------------------------------------------------------------ Dividends and/or distributions to shareholders: Dividends from net investment income -- -- -- -- -- - ------------------------------------------------------------------------------------------------------------------ Net asset value, end of period $ 2.60 $ 3.06 $ 1.79 $ 3.48 $ 11.20 =============================================================== - ------------------------------------------------------------------------------------------------------------------ TOTAL RETURN, AT NET ASSET VALUE 3 (15.03)% 70.95% (48.56)% (68.93)% 12.00% - ------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------ RATIOS/SUPPLEMENTAL DATA - ------------------------------------------------------------------------------------------------------------------ Net assets, end of period (in thousands) $56,513 $69,789 $36,813 $ 75,336 $200,251 - ------------------------------------------------------------------------------------------------------------------ Average net assets (in thousands) $63,321 $48,920 $58,029 $128,540 $106,620 - ------------------------------------------------------------------------------------------------------------------ Ratios to average net assets: 4 Net investment loss (2.34)% (2.23)% (2.40)% (0.99)% (0.48)% Total expenses 3.14% 3.82% 3.95% 2.84% 2.39% Expenses after payments and waivers and reduction to custodian expenses 2.48% 2.42% 2.94% 2.80% N/A 5 - ------------------------------------------------------------------------------------------------------------------ Portfolio turnover rate 157% 219% 159% 85% 6% 1. For the period from April 25, 2000 (commencement of operations) to October 31, 2000. 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 net asset value calculated on the last business day of the fiscal period. Sales charges are not reflected in the total returns. Total returns are not annualized for periods of less than one full year. Returns do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. 4. Annualized for periods of less than one full year. 5. Reduction to custodian expenses less than 0.01%. SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 28 | OPPENHEIMER EMERGING TECHNOLOGIES FUND CLASS C YEAR ENDED OCTOBER 31, 2004 2003 2002 2001 2000 1 - ------------------------------------------------------------------------------------------------------------------ PER SHARE OPERATING DATA - ------------------------------------------------------------------------------------------------------------------ Net asset value, beginning of period $ 3.06 $ 1.79 $ 3.48 $ 11.20 $ 10.00 - ------------------------------------------------------------------------------------------------------------------ Income (loss) from investment operations: Net investment loss (.06) 2 (.04) (.05) (.05) (.01) Net realized and unrealized gain (loss) (.40) 1.31 (1.64) (7.67) 1.21 --------------------------------------------------------------- Total from investment operations (.46) 1.27 (1.69) (7.72) 1.20 - ------------------------------------------------------------------------------------------------------------------ Dividends and/or distributions to shareholders: Dividends from net investment income -- -- -- -- -- - ------------------------------------------------------------------------------------------------------------------ Net asset value, end of period $ 2.60 $ 3.06 $ 1.79 $ 3.48 $ 11.20 =============================================================== - ------------------------------------------------------------------------------------------------------------------ TOTAL RETURN, AT NET ASSET VALUE 3 (15.03)% 70.95% (48.56)% (68.93)% 12.00% - ------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------ RATIOS/SUPPLEMENTAL DATA - ------------------------------------------------------------------------------------------------------------------ Net assets, end of period (in thousands) $22,777 $26,112 $14,143 $ 23,121 $ 56,597 - ------------------------------------------------------------------------------------------------------------------ Average net assets (in thousands) $25,126 $17,266 $17,800 $ 38,049 $ 28,193 - ------------------------------------------------------------------------------------------------------------------ Ratios to average net assets: 4 Net investment loss (2.28)% (2.29)% (2.36)% (1.00)% (0.47)% Total expenses 2.77% 3.40% 3.84% 2.84% 2.39% Expenses after payments and waivers and reduction to custodian expenses 2.43% 2.48% 2.83% 2.80% N/A 5 - ------------------------------------------------------------------------------------------------------------------ Portfolio turnover rate 157% 219% 159% 85% 6% 1. For the period from April 25, 2000 (commencement of operations) to October 31, 2000. 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 net asset value calculated on the last business day of the fiscal period. Sales charges are not reflected in the total returns. Total returns are not annualized for periods of less than one full year. Returns do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. 4. Annualized for periods of less than one full year. 5. Reduction to custodian expenses less than 0.01%. SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 29 | OPPENHEIMER EMERGING TECHNOLOGIES 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 $ 3.12 $ 1.81 $ 3.50 $ 6.59 - --------------------------------------------------------------------------------------------------- Income (loss) from investment operations: Net investment loss (.05) 2 (.05) (.04) (.03) Net realized and unrealized gain (loss) (.41) 1.36 (1.65) (3.06) ------------------------------------------------ Total from investment operations (.46) 1.31 (1.69) (3.09) - --------------------------------------------------------------------------------------------------- Dividends and/or distributions to shareholders: Dividends from net investment income -- -- -- -- - --------------------------------------------------------------------------------------------------- Net asset value, end of period $ 2.66 $ 3.12 $ 1.81 $ 3.50 ================================================ - --------------------------------------------------------------------------------------------------- TOTAL RETURN, AT NET ASSET VALUE 3 (14.74)% 72.38% (48.29)% (46.89)% - --------------------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA - --------------------------------------------------------------------------------------------------- Net assets, end of period (in thousands) $ 3,528 $ 4,445 $ 1,582 $ 1,450 - --------------------------------------------------------------------------------------------------- Average net assets (in thousands) $ 3,548 $ 2,698 $ 1,547 $ 1,287 - -------------------------------------------------------------------------------------------------- Ratios to average net assets: 4 Net investment loss (1.74)% (1.89)% (1.80)% (1.24)% Total expenses 2.18% 2.30% 3.05% 2.61% Expenses after payments and waivers and reduction to custodian expenses 1.88% 2.10% 2.04% 2.57% - --------------------------------------------------------------------------------------------------- Portfolio turnover rate 157% 219% 159% 85% 1. For the period from March 1, 2001 (commencement of operations) 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 net asset value calculated on the last business day of the fiscal period. Sales charges are not reflected in the total returns. Total returns are not annualized for periods of less than one full year. Returns do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. 4. Annualized for periods of less than one full year. SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 30 | OPPENHEIMER EMERGING TECHNOLOGIES FUND CLASS Y YEAR ENDED OCTOBER 31, 2004 2003 2002 2001 2000 1 - ------------------------------------------------------------------------------------------------------------------ PER SHARE OPERATING DATA - ------------------------------------------------------------------------------------------------------------------ Net asset value, beginning of period $ 3.21 $ 1.85 $ 3.55 $ 11.26 $ 10.00 - ------------------------------------------------------------------------------------------------------------------ Income (loss) from investment operations: Net investment income (loss) (.03) 2 (.04) (.03) -- 3 .02 Net realized and unrealized gain (loss) (.41) 1.40 (1.67) (7.69) 1.24 --------------------------------------------------------------- Total from investment operations (.44) 1.36 (1.70) (7.69) 1.26 - ------------------------------------------------------------------------------------------------------------------ Dividends and/or distributions to shareholders: Dividends from net investment income -- -- -- (.02) -- - ------------------------------------------------------------------------------------------------------------------ Net asset value, end of period $ 2.77 $ 3.21 $ 1.85 $ 3.55 $ 11.26 =============================================================== - ------------------------------------------------------------------------------------------------------------------ TOTAL RETURN, AT NET ASSET VALUE 4 (13.71)% 73.51% (47.89)% (68.40)% 12.60% - ------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------ RATIOS/SUPPLEMENTAL DATA - ------------------------------------------------------------------------------------------------------------------ Net assets, end of period (in thousands) $ 2,251 $ 2,480 $ 887 $ 1,236 $ 1 - ------------------------------------------------------------------------------------------------------------------ Average net assets (in thousands) $ 2,593 $ 1,492 $ 1,057 $ 331 $ 1 - ------------------------------------------------------------------------------------------------------------------ Ratios to average net assets: 5 Net investment income (loss) (0.86)% (1.05)% (1.03)% (0.08)% 0.33% Total expenses 1.00% 1.26% 1.57% 1.33% 1.42% Expenses after payments and waivers and reduction to custodian expenses N/A 6 N/A 6 1.53% 1.23% N/A 6 - ------------------------------------------------------------------------------------------------------------------ Portfolio turnover rate 157% 219% 159% 85% 6% 1. For the period from April 25, 2000 (commencement of operations) to October 31, 2000. 2. Per share amounts calculated based on the average shares outstanding during the period. 3. Less than $0.005 per share. 4. Assumes an investment on the business day before the first day of the fiscal period, with all dividends and distributions reinvested in additional shares on the reinvestment date, and redemption at the net asset value calculated on the last business day of the fiscal period. Sales charges are not reflected in the total returns. Total returns are not annualized for periods of less than one full year. Returns do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. 5. Annualized for periods of less than one full year. 6. Reduction to custodian expenses less than 0.01%. SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 31 | OPPENHEIMER EMERGING TECHNOLOGIES FUND NOTES TO FINANCIAL STATEMENTS - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 1. SIGNIFICANT ACCOUNTING POLICIES Oppenheimer Emerging Technologies Fund (the Fund) is a non-diversified, open-end management investment company registered under the Investment Company Act of 1940, as amended. The Fund's investment objective is to seek long-term capital appreciation. The Fund's investment advisor is OppenheimerFunds, Inc. (the Manager). The Fund offers Class A, Class B, Class C, Class N and Class Y shares. Class A shares are sold at their offering price, which is normally net asset value plus a front-end sales charge. Class B, Class C and Class N shares are sold without a front-end sales charge but may be subject to a contingent deferred sales charge (CDSC). Class N shares are sold only through retirement plans. Retirement plans that offer Class N shares may impose charges on those accounts. Class Y shares are sold to certain institutional investors without either a front-end sales charge or a CDSC, 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 assets are valued but after the close of their respective exchanges will be fair valued. Fair 32 | OPPENHEIMER EMERGING TECHNOLOGIES FUND value is determined in good faith using consistently applied procedures under the supervision of the Board of Trustees. Short-term "money market type" debt securities with remaining maturities of sixty days or less are valued at amortized cost (which approximates market value). - -------------------------------------------------------------------------------- FOREIGN CURRENCY TRANSLATION. The Fund's accounting records are maintained in U.S. dollars. Prices of securities denominated in foreign currencies are translated into U.S. dollars as of the close of The New York Stock Exchange (the Exchange), normally 4:00 P.M. Eastern time, on each day the Exchange is open for business. Amounts related to the purchase and sale of foreign securities and investment income are translated at the rates of exchange prevailing on the respective dates of such transactions. Foreign exchange rates may be valued primarily using dealer supplied valuations or a portfolio pricing service authorized by the Board of Trustees. Reported net realized foreign exchange gains or losses arise from sales of portfolio securities, sales and maturities of short-term securities, sales of foreign currencies, currency gains or losses realized between the trade and settlement dates on securities trans- actions, and the difference between the amounts of dividends, interest, and foreign withholding taxes recorded on the Fund's books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign exchange gains and losses arise from changes in the values of assets and liabilities, including investments in securities at fiscal period end, resulting from changes in exchange rates. The effect of changes in foreign currency exchange rates on investments is separately identified from the fluctuations arising from changes in market values of securities held and reported with all other foreign currency gains and losses in the Fund's Statement of Operations. - -------------------------------------------------------------------------------- JOINT REPURCHASE AGREEMENTS. Pursuant to an Exemptive Order issued by the Securities and Exchange Commission, the Fund, along with other affiliated funds advised by the Manager, may transfer uninvested cash balances into joint trading accounts on a daily basis. These balances are invested in one or more repurchase agreements. Securities pledged as collateral for repurchase agreements are held by a custodian bank until the agreements mature. Each agreement requires that the market value of the collateral be sufficient to cover payments of interest and principal. In the event of default by the other party to the agreement, retention of the collateral may be subject to legal proceedings. - -------------------------------------------------------------------------------- ALLOCATION OF INCOME, EXPENSES, GAINS AND LOSSES. Income, expenses (other than those attributable to a specific class), gains and losses are allocated on a daily basis to each class of shares based upon the relative proportion of net assets represented by such class. Operating expenses directly attributable to a specific class are charged against the operations of that class. 33 | OPPENHEIMER EMERGING TECHNOLOGIES FUND NOTES TO FINANCIAL STATEMENTS Continued - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 1. SIGNIFICANT ACCOUNTING POLICIES Continued 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 DEPRECIATION 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 ------------------------------------------------------------------------ $239,491 $-- $466,614,783 $5,890,441 1. As of October 31, 2004, the Fund had $466,614,783 of net capital loss carryforwards available to offset future realized capital gains, if any, and thereby reduce future taxable gain distributions. As of October 31, 2004, details of the capital loss carryforwards were as follows: EXPIRING -------------------- 2009 $268,287,393 2010 197,770,478 2012 556,912 ------------ Total $466,614,783 ============ 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 $14,755,514 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 ACCUMULATED NET REALIZED LOSS INVESTMENT LOSS ON INVESTMENTS ---------------------------------------- $2,174,714 $2,174,714 34 | OPPENHEIMER EMERGING TECHNOLOGIES FUND 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 $ 168,425,764 ============= Gross unrealized appreciation $ 28,311,299 Gross unrealized depreciation (34,201,740) ------------- Net unrealized depreciation $ (5,890,441) ============= - -------------------------------------------------------------------------------- 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 $3,007 and payments of $2,419 were made to retired trustees, resulting in an accumulated liability of $44,018 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 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. 35 | OPPENHEIMER EMERGING TECHNOLOGIES FUND NOTES TO FINANCIAL STATEMENTS Continued - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 1. SIGNIFICANT ACCOUNTING POLICIES Continued CUSTODIAN FEES. Custodian Fees and Expenses in the Statement of Operations may include interest expense incurred by the Fund on any cash overdrafts of its custodian account during the period. The Fund pays interest to its custodian on such cash overdrafts at a rate equal to the Federal Funds Rate plus 0.50%. The Reduction to Custodian Expenses line item, if applicable, represents earnings on cash balances maintained by the Fund during the period. Such interest expense and other custodian fees may be paid with these earnings. - -------------------------------------------------------------------------------- SECURITY TRANSACTIONS. Security transactions are recorded on the trade date. Realized gains and losses on securities sold are determined on the basis of identified cost. - -------------------------------------------------------------------------------- OTHER. The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates. - -------------------------------------------------------------------------------- 2. SHARES OF 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 11,592,831 $ 35,423,156 19,269,973 $ 45,613,174 Redeemed (12,096,376) (34,938,698) 1 (13,652,915) (31,837,437) -------------------------------------------------------------- Net increase (decrease) (503,545) $ 484,458 5,617,058 $ 13,775,737 ============================================================== - ----------------------------------------------------------------------------------------- CLASS B Sold 4,976,711 $ 14,409,345 7,985,412 $ 18,868,771 Redeemed (6,055,457) (17,042,685) 1 (5,813,163) (13,390,188) -------------------------------------------------------------- Net increase (decrease) (1,078,746) $ (2,633,340) 2,172,249 $ 5,478,583 ============================================================== - ----------------------------------------------------------------------------------------- CLASS C Sold 2,529,733 $ 7,407,325 5,703,935 $ 12,775,516 Redeemed (2,310,500) (6,440,527) 1 (5,092,014) (10,461,765) -------------------------------------------------------------- Net increase 219,233 $ 966,798 611,921 $ 2,313,751 ============================================================== - ----------------------------------------------------------------------------------------- CLASS N Sold 972,340 $ 2,841,359 773,300 $ 1,791,741 Redeemed (1,074,403) (3,146,630) 1 (219,846) (522,126) -------------------------------------------------------------- Net increase (decrease) (102,063) $ (305,271) 553,454 $ 1,269,615 ============================================================== 1. Net of redemption fees of $2,126, $1,506, $597, $84 and $62 for Class A, Class B, Class C, Class N and Class Y, respectively. 36 | OPPENHEIMER EMERGING TECHNOLOGIES FUND YEAR ENDED OCTOBER 31, 2004 YEAR ENDED OCTOBER 31, 2003 SHARES AMOUNT SHARES AMOUNT - ------------------------------------------------------------------------- CLASS Y Sold 664,396 $ 2,055,630 1,072,410 $ 2,688,989 Redeemed (624,248) (1,819,100) 1 (779,149) (1,944,785) ------------------------------------------------------- Net increase 40,148 $ 236,530 293,261 $ 744,204 ======================================================= 1. Net of redemption fees of $2,126, $1,506, $597, $84 and $62 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 $288,559,107 and $304,373,286, respectively. - -------------------------------------------------------------------------------- 4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES Management Fees. Management fees paid to the Manager were in accordance with the investment advisory agreement with the Fund. Effective January 1, 2004, the agreement provides for a fee at an annual rate of 1.00% of the first $200 million of average annual net assets, 0.95% of the next $200 million, 0.90% of the next $200 million and 0.85% of average net assets over $600 million. Prior to January 1, 2004, the Fund paid the Manager an advisory fee at an annual rate of 1.00% of average annual net assets. - -------------------------------------------------------------------------------- TRANSFER AGENT FEES. OppenheimerFunds Services (OFS), a division of the Manager, acts as the transfer and shareholder servicing agent for the Fund. The Fund pays OFS a per account fee. For the year ended October 31, 2004, the Fund paid $654,737 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. 37 | OPPENHEIMER EMERGING TECHNOLOGIES FUND NOTES TO FINANCIAL STATEMENTS Continued - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES Continued 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 $9,383,413, $941,081 and $81,619, respectively. Fees incurred by the Fund under the plans are detailed in the Statement of Operations. - -------------------------------------------------------------------------------- SALES CHARGES. Front-end sales charges and contingent deferred sales charges (CDSC) do not represent expenses of the Fund. They are deducted from the proceeds of sales of Fund shares prior to investment or from redemption proceeds prior to remittance, as applicable. The sales charges retained by the Distributor from the sale of shares and the CDSC retained by the Distributor on the redemption of shares is shown in the table below for the period indicated. CLASS A CLASS B CLASS C CLASS N CLASS A CONTINGENT CONTINGENT CONTINGENT CONTINGENT FRONT-END DEFERRED DEFERRED DEFERRED DEFERRED SALES CHARGES SALES CHARGES SALES CHARGES SALES CHARGES SALES CHARGES RETAINED BY RETAINED BY RETAINED BY RETAINED BY RETAINED BY YEAR ENDED DISTRIBUTOR DISTRIBUTOR DISTRIBUTOR DISTRIBUTOR DISTRIBUTOR - ----------------------------------------------------------------------------------------------------------------- October 31, 2004 $125,639 $426 $191,404 $9,480 $1,061 - -------------------------------------------------------------------------------- PAYMENTS AND WAIVERS OF EXPENSES. Following a review of its use of brokerage commissions for sales that is permitted under its investment advisory agreement, the Fund's Manager terminated that practice in July 2003. Subsequently, the Manager paid the Fund $29,259, an amount equivalent to certain of such commissions incurred in prior years. OFS has voluntarily agreed to limit transfer and shareholder servicing agent fees for all classes to 0.35% of average annual net assets per class. During the year ended October 31, 2004, OFS waived $380,838, $418,397, $85,525, and $10,426 for Class A, Class B, Class C, and Class N shares, respectively. This undertaking may be amended or withdrawn at any time. 38 | OPPENHEIMER EMERGING TECHNOLOGIES FUND - -------------------------------------------------------------------------------- 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 $347,882, which represents 0.21% 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 DATES COST OCT. 31, 2004 DEPRECIATION - -------------------------------------------------------------------------------------------------------------- STOCKS AND/OR WARRANTS Axsun Technologies, Inc., Cv., Series C 12/13/00 $8,000,007 $ 224,713 $7,775,294 Blaze Network Products, Inc., 8% Cv., Series D 10/17/00 1,067,750 -- 1,067,750 BroadBand Office, Inc., Cv., Series C 8/28/00 999,980 -- 999,980 Centerpoint Broadband Technologies, Inc., Cv., Series D 10/23/00 5,000,001 -- 5,000,001 Centerpoint Broadband Technologies, Inc., Cv., Series Z 5/26/00 999,999 -- 999,999 MicroPhotonix Integration Corp., Cv., Series C 7/6/00 1,999,999 -- 1,999,999 Multiplex, Inc., Cv., Series C 2/9/01 2,849,336 29,384 2,819,952 Questia Media, Inc., Cv., Series B 8/18/00 999,998 93,785 906,214 - -------------------------------------------------------------------------------- 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. 39 | OPPENHEIMER EMERGING TECHNOLOGIES FUND NOTES TO FINANCIAL STATEMENTS Continued - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 6. LITIGATION Continued 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. 40 | OPPENHEIMER EMERGING TECHNOLOGIES FUND REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- THE BOARD OF TRUSTEES AND SHAREHOLDERS OF OPPENHEIMER EMERGING TECHNOLOGIES FUND: We have audited the accompanying statement of assets and liabilities of Oppenheimer Emerging Technologies 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 four years in the period then ended and the period from April 25, 2000 (commencement of operations) to October 31, 2000. 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 Technologies 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 four years in the period then ended and the period from April 25, 2000 (commencement of operations) to October 31, 2000, in conformity with U.S. generally accepted accounting principles. KPMG LLP Denver, Colorado December 16, 2004 41 | OPPENHEIMER EMERGING TECHNOLOGIES FUND FEDERAL INCOME TAX INFORMATION Unaudited - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- In early 2005, if applicable, shareholders of record will receive information regarding all dividends and distributions paid to them by the Fund during calendar year 2004. Regulations of the U.S. Treasury Department require the Fund to report this information to the Internal Revenue Service. Dividends, if any, paid by the Fund during the fiscal year ended October 31, 2004 which are not designated as capital gain distributions should be multiplied by 64.76% to arrive at the amount eligible for the corporate dividend-received deduction. A portion, if any, of the dividends paid by the Fund during the fiscal year ended October 31, 2004 which are not designated as capital gain distributions are eligible for lower individual income tax rates to the extent that the Fund has received qualified dividend income as stipulated by recent tax legislation. $241,431 of the Fund's fiscal year taxable income may be eligible for the lower individual income tax rates. In early 2005, shareholders of record will receive information regarding the percentage of distributions that are eligible for lower individual income tax rates. The foregoing information is presented to assist shareholders in reporting distributions received from the Fund to the Internal Revenue Service. Because of the complexity of the federal regulations which may affect your individual tax return and the many variations in state and local tax regulations, we recommend that you consult your tax advisor for specific guidance. 42 | OPPENHEIMER EMERGING TECHNOLOGIES FUND PORTFOLIO PROXY VOTING POLICIES AND PROCEDURES; UPDATES TO STATEMENTS OF INVESTMENTS Unaudited - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- The Fund has adopted Portfolio Proxy Voting Policies and Procedures under which the Fund votes proxies relating to securities ("portfolio proxies") held by the Fund. A description of the Fund's Portfolio Proxy Voting Policies and Procedures is available (i) without charge, upon request, by calling the Fund toll-free at 1.800.525.7048, (ii) on the Fund's website at www.oppenheimerfunds.com, and (iii) on the SEC's website at www.sec.gov. In addition, the Fund is required to file new Form N-PX, with its complete proxy voting record for the 12 months ended June 30th, no later than August 31st of each year. The Fund's Form N-PX filing is available (i) without charge, upon request, by calling the Fund toll-free at 1.800.525.7048, and (ii) on the SEC's website at www.sec.gov. The Fund files its complete schedule of portfolio holdings with the SEC for the first quarter and the third quarter of each fiscal year on Form N-Q. The Fund's Form N-Q filings are available on the SEC's website at www.sec.gov. Those forms may be reviewed and copied at the SEC's Public Reference Room in Washington D.C. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. 43 | OPPENHEIMER EMERGING TECHNOLOGIES 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. 44 | OPPENHEIMER EMERGING TECHNOLOGIES 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 House Age: 72 (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. - -------------------------------------------------------------------------------------------------------------------------- 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 Vice President and Portfolio in the OppenheimerFunds complex. Formerly a portfolio manager at Fortis Manager (since 2002) Advisors (July 1998-October 2000). Age: 44 45 | OPPENHEIMER EMERGING TECHNOLOGIES FUND TRUSTEES AND OFFICERS Unaudited / Continued - -------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------------- 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. 46 | OPPENHEIMER EMERGING TECHNOLOGIES FUND ITEM 2. CODE OF ETHICS The registrant has adopted a code of ethics that applies to the registrant's principal executive officer, principal financial officer, principal accounting officer or controller or persons performing similar functions. ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT The Board of Trustees of the registrant has determined that 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 $17,000 in fiscal 2003. (b) Audit-Related Fees The principal accountant for the audit of the registrant's annual financial statements billed no such fees during the last two fiscal years. The principal accountant for the audit of the registrant's annual financial statements billed $39,500 in fiscal 2004 and no such fees in fiscal 2003 to the registrant's investment adviser or any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the registrant. Such fees include, among others: internal control reviews. (c) Tax Fees The principal accountant for the audit of the registrant's annual financial statements billed no such fees to the registrant during the last two fiscal years. The principal accountant for the audit of the registrant's annual financial statements billed $6,000 in fiscal 2004 and $5,000 in fiscal 2003 to the registrant's investment adviser or any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the registrant. Such fees include, among others: tax compliance, tax planning and tax advice. Tax compliance generally involves preparation of original and amended tax returns, claims for a refund and tax payment-planning services. Tax planning and tax advice includes assistance with tax audits and appeals, tax advice related to mergers and acquisitions and requests for rulings or technical advice from taxing authorities. (d) All Other Fees The principal accountant for the audit of the registrant's annual financial statements billed no such fees in fiscal 2004 and $26 in fiscal 2003. The principal accountant for the audit of the registrant's annual financial statements billed no such fees during the last two fiscal years to the registrant's investment adviser or any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the registrant. Such fees include consultations regarding the registrant's retirement plan with respect to its 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 $5,026 in fiscal 2003 to the registrant and the registrant's investment adviser or any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the registrant related to non-audit fees. Those billings did not include any prohibited non-audit services as defined by the Securities Exchange Act of 1934. (h) The registrant's audit committee of the board of 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)