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
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TOP TEN COMMON STOCK HOLDINGS
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Mercury Interactive Corp. 2.7%
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Apple Computer, Inc. 2.5
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Autodesk, Inc. 2.4
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InfoSpace, Inc. 2.2
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Macromedia, Inc. 2.1
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Microsoft Corp. 2.0
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Skyworks Solutions, Inc. 2.0
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Marvell Technology Group Ltd. 2.0
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Adobe Systems, Inc. 1.9
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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
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Communications Equipment 19.1%
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Software 18.6
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Semiconductors & Semiconductor Equipment 18.2
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Internet Software & Services 14.4
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Computers & Peripherals 5.6
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Electronic Equipment & Instruments 4.7
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Biotechnology 4.1
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IT Services 2.7
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Pharmaceuticals 1.5
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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
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- --------------------------------------------------------------------------------
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.
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8 | OPPENHEIMER EMERGING TECHNOLOGIES FUND
FUND PERFORMANCE DISCUSSION
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HOW HAS THE FUND PERFORMED? BELOW IS A DISCUSSION BY OPPENHEIMERFUNDS, INC., OF
THE FUND'S PERFORMANCE DURING ITS FISCAL YEAR ENDED OCTOBER 31, 2004, FOLLOWED
BY A GRAPHICAL COMPARISON OF THE FUND'S PERFORMANCE TO APPROPRIATE BROAD-BASED
MARKET INDICES.
MANAGEMENT'S DISCUSSION OF FUND PERFORMANCE. Over the 12-month period ended
October 31, 2004, the Fund's performance trailed that of its benchmarks. 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
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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
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Total returns and the ending account values in the graphs include changes in
share price and reinvestment of dividends and capital gains distributions in a
hypothetical investment for the periods shown. The Fund's total returns shown do
not reflect the deduction of income taxes on an individual's investment. Taxes
may reduce your actual investment returns on income or gains paid by the Fund or
any gains you may realize if you sell your shares.
Investors should consider the Fund's investment objectives, risks, and other
charges and expenses carefully before investing. The Fund's prospectus contains
this and other information about the Fund, and may be obtained by asking your
financial advisor, calling us at 1.800.525.7048 or visiting our website at
www.oppenheimerfunds.com. Read the prospectus carefully before investing.
The Fund's investment strategy and focus can change over time. The mention of
specific fund holdings does not constitute a recommendation by OppenheimerFunds,
Inc.
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
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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.
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INTERESTED TRUSTEE THE ADDRESS OF MR. MURPHY IN THE CHART BELOW IS TWO WORLD FINANCIAL CENTER,
AND OFFICER 225 LIBERTY STREET, 11TH FLOOR, NEW YORK, NY 10281-1008. MR. MURPHY SERVES FOR
AN INDEFINITE TERM, UNTIL HIS RESIGNATION, DEATH OR REMOVAL.
JOHN V. MURPHY, Chairman, Chief Executive Officer and director (since June 2001) and President
President and Trustee (since September 2000) of the Manager; President and a director or trustee
(since 2001) of other Oppenheimer funds; President and a director (since July 2001) of
Age: 55 Oppenheimer Acquisition Corp. (the Manager's parent holding company) and
of Oppenheimer Partnership Holdings, Inc. (a holding company subsidiary of the
Manager); a director (since November 2001) of OppenheimerFunds Distributor,
Inc. (a subsidiary of the Manager); Chairman and a director (since July 2001) of
Shareholder Services, Inc. and of Shareholder Financial Services, Inc. (transfer
agent subsidiaries of the Manager); President and a director (since July 2001) of
OppenheimerFunds Legacy Program (a charitable trust program established by the
Manager); a director of the following investment advisory subsidiaries of the
Manager: OFI Institutional Asset Management, Inc., Centennial Asset Management
Corporation, Trinity Investment Management Corporation and Tremont Capital
Management, Inc. (since November 2001), HarbourView Asset Management Corporation
and OFI Private Investments, Inc. (since July 2001); President (since November 1,
2001) and a director (since July 2001) of Oppenheimer Real Asset Management, Inc.;
Executive Vice President (since February 1997) of Massachusetts Mutual Life
Insurance Company (the Manager's parent company); a director (since June 1995) of
DLB Acquisition Corporation (a holding company that owns the shares of Babson
Capital Management LLC); a member of the Investment Company Institute's Board of
Governors (elected to serve from October 3, 2003 through September 30, 2006).
Formerly, Chief Operating Officer (September 2000-June 2001) of the Manager;
President and trustee (November 1999-November 2001) of MML Series Investment Fund
and MassMutual Institutional Funds (open-end investment companies); a director
(September 1999-August 2000) of C.M. Life Insurance Company; President, Chief
Executive Officer and director (September 1999-August 2000) of MML Bay State Life
Insurance Company; a director (June 1989-June 1998) of Emerald Isle Bancorp and
Hibernia Savings Bank (a wholly-owned subsidiary of Emerald Isle Bancorp). Oversees
63 portfolios as Trustee/Director and 21 additional portfolios as Officer in the
OppenheimerFunds complex.
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OFFICERS THE ADDRESS OF THE OFFICERS IN THE CHART BELOW IS AS FOLLOWS: FOR MS. GRANGER AND
MR. ZACK, TWO WORLD FINANCIAL CENTER, 225 LIBERTY STREET, 11TH FLOOR, NEW YORK, NY
10281-1008, AND FOR MR. WIXTED AND MR. VANDEHEY, 6803 S. TUCSON WAY, CENTENNIAL,
CO 80112-3924. EACH OFFICER SERVES FOR AN INDEFINITE TERM OR UNTIL HIS OR HER EARLIER
RESIGNATION, DEATH OR REMOVAL.
LAURA GRANGER, Vice President of the Manager since October 2000; an officer of 3 portfolios
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
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BRIAN W. WIXTED, Senior Vice President and Treasurer (since March 1999) of the Manager;
Treasurer (since 1999) Treasurer of HarbourView Asset Management Corporation, Shareholder Financial
Age: 45 Services, Inc., Shareholder Services, Inc., Oppenheimer Real Asset Management
Corporation, and Oppenheimer Partnership Holdings, Inc. (since March 1999),
of OFI Private Investments, Inc. (since March 2000), of OppenheimerFunds
International Ltd. and OppenheimerFunds plc (since May 2000), of OFI Institutional
Asset Management, Inc. (since November 2000), and of OppenheimerFunds
Legacy Program (a Colorado non-profit corporation) (since June 2003); Treasurer
and Chief Financial Officer (since May 2000) of OFI Trust Company (a trust
company subsidiary of the Manager); Assistant Treasurer (since March 1999) of
Oppenheimer Acquisition Corp. Formerly Assistant Treasurer of Centennial Asset
Management Corporation (March 1999-October 2003) and OppenheimerFunds
Legacy Program (April 2000-June 2003); Principal and Chief Operating Officer
(March 1995-March 1999) at Bankers Trust Company-Mutual Fund Services
Division. An officer of 84 portfolios in the OppenheimerFunds complex.
ROBERT G. ZACK, Executive Vice President (since January 2004) and General Counsel (since
Secretary (since 2001) February 2002) of the Manager; General Counsel and a director (since November
Age: 56 2001) of the Distributor; General Counsel (since November 2001) of Centennial
Asset Management Corporation; Senior Vice President and General Counsel
(since November 2001) of HarbourView Asset Management Corporation;
Secretary and General Counsel (since November 2001) of Oppenheimer
Acquisition Corp.; Assistant Secretary and a director (since October 1997) of
OppenheimerFunds International Ltd. and OppenheimerFunds plc; Vice President
and a director (since November 2001) of Oppenheimer Partnership Holdings,
Inc.; a director (since November 2001) of Oppenheimer Real Asset Management,
Inc.; Senior Vice President, General Counsel and a director (since November 2001)
of Shareholder Financial Services, Inc., Shareholder Services, Inc., OFI Private
Investments, Inc. and OFI Trust Company; Vice President (since November 2001)
of OppenheimerFunds Legacy Program; Senior Vice President and General
Counsel (since November 2001) of OFI Institutional Asset Management, Inc.; a
director (since June 2003) of OppenheimerFunds (Asia) Limited. Formerly Senior
Vice President (May 1985-December 2003), Acting General Counsel (November
2001-February 2002) and Associate General Counsel (May 1981-October 2001)
of the Manager; Assistant Secretary of Shareholder Services, Inc. (May 1985-
November 2001), Shareholder Financial Services, Inc. (November 1989-November
2001); and OppenheimerFunds International Ltd. (October 1997-November
2001). An officer of 84 portfolios in the OppenheimerFunds complex.
MARK S. VANDEHEY, Senior Vice President and Chief Compliance Officer (since March 2004) of the
Vice President and Manager; Vice President (since June 1983) of OppenheimerFunds Distributor,
Chief Compliance Officer Inc., Centennial Asset Management Corporation and Shareholder Services, Inc.
(since 2004) Formerly (until February 2004) Vice President and Director of Internal Audit of
Age: 54 the Manager. An officer of 84 portfolios in the OppenheimerFunds complex.
THE FUND'S STATEMENT OF ADDITIONAL INFORMATION CONTAINS ADDITIONAL INFORMATION
ABOUT THE FUND'S TRUSTEES AND IS AVAILABLE WITHOUT CHARGE UPON REQUEST, BY
CALLING 1.800.525.7048.
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)