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 811-21208
Oppenheimer Select Value 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: April 30
Date of reporting period: May 1, 2004 - October 31, 2004
ITEM 1. REPORTS TO STOCKHOLDERS.
TOP HOLDINGS AND ALLOCATIONS
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TOP TEN COMMON STOCK INDUSTRIES
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Diversified Financial Services 9.9%
- --------------------------------------------------------------------------------
Media 8.7
- --------------------------------------------------------------------------------
Oil & Gas 8.6
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Aerospace & Defense 7.8
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Commercial Banks 7.3
- --------------------------------------------------------------------------------
Industrial Conglomerates 6.0
- --------------------------------------------------------------------------------
Software 5.7
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Insurance 5.6
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Tobacco 4.9
- --------------------------------------------------------------------------------
Diversified Telecommunication Services 4.6
Portfolio holdings and allocations are subject to change. Percentages are as of
October 31, 2004, and are based on net assets.
TOP TEN COMMON STOCK HOLDINGS
- --------------------------------------------------------------------------------
Altria Group, Inc. 4.9%
- --------------------------------------------------------------------------------
UnitedGlobalCom, Inc., Cl. A 4.8
- --------------------------------------------------------------------------------
Raytheon Co. 4.8
- --------------------------------------------------------------------------------
BP plc, ADR 4.7
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Take-Two Interactive Software, Inc. 4.2
- --------------------------------------------------------------------------------
Cendant Corp. 4.0
- --------------------------------------------------------------------------------
Bank of America Corp. 4.0
- --------------------------------------------------------------------------------
Liberty Media Corp., Cl. A 3.9
- --------------------------------------------------------------------------------
General Electric Co. 3.8
- --------------------------------------------------------------------------------
Prudential Financial, Inc. 3.2
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.
- --------------------------------------------------------------------------------
SECTOR ALLOCATION
Financials 25.6%
Diversified Financial Services 10.0
Commercial Banks 7.4
Insurance 5.7
Thrifts & Mortgage Finance 2.5
Industrials 18.0
Consumer Discretionary 11.5
Information Technology 11.4
Energy 10.3
Health Care 6.1
Consumer Staples 5.0
Telecommunication Services 4.7
Utilities 4.6
Materials 2.8
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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6 | OPPENHEIMER SELECT VALUE FUND
NOTES
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Total returns include changes in share price and reinvestment of dividends and
capital gains distributions in a hypothetical investment for the periods shown.
Cumulative total returns are not annualized. 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 this Fund has a limited operating history.
CLASS A shares of the Fund were first offered on 11/26/02. 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 2/27/04. Unless
otherwise noted, Class B returns include the applicable contingent deferred
sales charge of 5% (1-year). 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 2/27/04. 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 2/27/04. 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 0.75% asset-based sales charge.
CLASS Y shares of the Fund were first publicly offered on 2/27/04. 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.
7 | OPPENHEIMER SELECT VALUE 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), or a $12.00 fee imposed annually
on accounts valued at less than $500.00 (subject to 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.
8 | OPPENHEIMER SELECT VALUE FUND
BEGINNING ENDING
ACCOUNT ACCOUNT EXPENSES PAID
VALUE VALUE DURING 6 MONTHS
(5/1/04) (10/31/04) ENDED OCTOBER 31, 2004
- --------------------------------------------------------------------------------
Class A Actual $1,000.00 $1,051.00 $ 6.20
- --------------------------------------------------------------------------------
Class A Hypothetical 1,000.00 1,019.10 6.11
- --------------------------------------------------------------------------------
Class B Actual 1,000.00 1,045.90 11.64
- --------------------------------------------------------------------------------
Class B Hypothetical 1,000.00 1,013.83 11.45
- --------------------------------------------------------------------------------
Class C Actual 1,000.00 1,045.10 11.63
- --------------------------------------------------------------------------------
Class C Hypothetical 1,000.00 1,013.83 11.45
- --------------------------------------------------------------------------------
Class N Actual 1,000.00 1,048.80 8.58
- --------------------------------------------------------------------------------
Class N Hypothetical 1,000.00 1,016.79 8.45
- --------------------------------------------------------------------------------
Class Y Actual 1,000.00 1,051.70 6.10
- --------------------------------------------------------------------------------
Class Y Hypothetical 1,000.00 1,019.20 6.01
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 1.20%
- -------------------------------
Class B 2.25
- -------------------------------
Class C 2.25
- -------------------------------
Class N 1.66
- -------------------------------
Class Y 1.18
The expense ratios reflect voluntary waivers or reimbursements of expenses by
the Fund's Manager and Transfer Agent that can be terminated at any time,
without advance notice. The "Financial Highlights" tables in the Fund's
financial statements, included in this report, also show the gross expense
ratios, without such waivers or reimbursements.
9 | OPPENHEIMER SELECT VALUE FUND
STATEMENT OF INVESTMENTS October 31, 2004 / Unaudited
- --------------------------------------------------------------------------------
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
COMMON STOCKS--98.6%
- --------------------------------------------------------------------------------
CONSUMER DISCRETIONARY--11.3%
- --------------------------------------------------------------------------------
HOTELS, RESTAURANTS & LEISURE--2.6%
McDonald's Corp. 13,800 $ 402,270
- --------------------------------------------------------------------------------
MEDIA--8.7%
Liberty Media Corp., Cl. A 1 65,300 582,476
- --------------------------------------------------------------------------------
UnitedGlobalCom, Inc., Cl. A 1 96,990 725,485
----------
1,307,961
- --------------------------------------------------------------------------------
CONSUMER STAPLES--4.9%
- --------------------------------------------------------------------------------
TOBACCO--4.9%
Altria Group, Inc. 15,300 741,438
- --------------------------------------------------------------------------------
ENERGY--10.1%
- --------------------------------------------------------------------------------
ENERGY EQUIPMENT & SERVICES--1.5%
Halliburton Co. 2,100 77,784
- --------------------------------------------------------------------------------
Pride International, Inc. 8,200 151,536
----------
229,320
- --------------------------------------------------------------------------------
OIL & GAS--8.6%
BP plc, ADR 12,100 704,825
- --------------------------------------------------------------------------------
Energy Partners Ltd. 1 8,300 145,748
- --------------------------------------------------------------------------------
Frontier Oil Corp. 4,500 110,610
- --------------------------------------------------------------------------------
Kinder Morgan, Inc. 1,500 96,555
- --------------------------------------------------------------------------------
LUKOIL, Sponsored ADR 1,900 237,025
----------
1,294,763
- --------------------------------------------------------------------------------
FINANCIALS--25.3%
- --------------------------------------------------------------------------------
COMMERCIAL BANKS--7.3%
Bank of America Corp. 13,464 603,053
- --------------------------------------------------------------------------------
Commerce Bancorp, Inc. 1,500 88,860
- --------------------------------------------------------------------------------
Wells Fargo & Co. 6,800 406,096
----------
1,098,009
- --------------------------------------------------------------------------------
DIVERSIFIED FINANCIAL SERVICES--9.9%
Assured Guaranty Ltd. 8,400 137,928
- --------------------------------------------------------------------------------
Citigroup, Inc. 10,200 452,574
- --------------------------------------------------------------------------------
Franklin Resources, Inc. 7,700 466,774
- --------------------------------------------------------------------------------
Lehman Brothers Holdings, Inc. 5,300 435,395
----------
1,492,671
- --------------------------------------------------------------------------------
INSURANCE--5.6%
Aspen Insurance Holdings Ltd. 3,200 73,600
- --------------------------------------------------------------------------------
Genworth Financial, Inc., Cl. A 5,800 138,388
- --------------------------------------------------------------------------------
Platinum Underwriters Holdings Ltd. 3,600 105,300
- --------------------------------------------------------------------------------
Prudential Financial, Inc. 10,300 478,641
- --------------------------------------------------------------------------------
UnumProvident Corp. 3,300 45,078
----------
841,007
- --------------------------------------------------------------------------------
THRIFTS & MORTGAGE FINANCE--2.5%
Freddie Mac 5,600 372,960
- --------------------------------------------------------------------------------
HEALTH CARE--6.0%
- --------------------------------------------------------------------------------
BIOTECHNOLOGY--3.5%
MedImmune, Inc. 1 7,800 221,676
- --------------------------------------------------------------------------------
Wyeth 7,700 305,305
----------
526,981
- --------------------------------------------------------------------------------
HEALTH CARE PROVIDERS & SERVICES--1.3%
Manor Care, Inc. 5,800 189,892
- --------------------------------------------------------------------------------
PHARMACEUTICALS--1.2%
Watson Pharmaceuticals, Inc. 1 6,600 184,998
- --------------------------------------------------------------------------------
INDUSTRIALS--17.8%
- --------------------------------------------------------------------------------
AEROSPACE & DEFENSE--7.8%
Empresa Brasileira de
Aeronautica SA, ADR 8,800 233,552
- --------------------------------------------------------------------------------
Orbital Sciences Corp. 1 20,700 214,245
- --------------------------------------------------------------------------------
Raytheon Co. 19,800 722,304
----------
1,170,101
- --------------------------------------------------------------------------------
COMMERCIAL SERVICES & SUPPLIES--4.0%
Cendant Corp. 29,400 605,346
- --------------------------------------------------------------------------------
INDUSTRIAL CONGLOMERATES--6.0%
General Electric Co. 16,900 576,628
- --------------------------------------------------------------------------------
Tyco International Ltd. 10,400 323,960
----------
900,588
- --------------------------------------------------------------------------------
INFORMATION TECHNOLOGY--11.2%
- --------------------------------------------------------------------------------
COMPUTERS & PERIPHERALS--2.0%
International Business Machines Corp. 3,300 296,175
- --------------------------------------------------------------------------------
INTERNET SOFTWARE & SERVICES--0.5%
Net2Phone, Inc. 1 20,200 70,094
- --------------------------------------------------------------------------------
IT SERVICES--1.5%
CSG Systems International, Inc. 1 13,800 231,978
- --------------------------------------------------------------------------------
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT--1.5%
National Semiconductor Corp. 1 13,400 223,780
- --------------------------------------------------------------------------------
SOFTWARE--5.7%
Compuware Corp. 1 26,900 155,751
- --------------------------------------------------------------------------------
Novell, Inc. 1 10,400 74,776
- --------------------------------------------------------------------------------
Take-Two Interactive Software, Inc. 1 19,300 636,128
----------
866,655
- --------------------------------------------------------------------------------
MATERIALS--2.8%
- --------------------------------------------------------------------------------
CHEMICALS--1.3%
Dow Chemical Co. 1,200 53,928
- --------------------------------------------------------------------------------
Praxair, Inc. 3,400 143,480
----------
197,408
10 | OPPENHEIMER SELECT VALUE FUND
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
METALS & MINING--1.5%
Alcan, Inc. 2,100 $ 97,272
- --------------------------------------------------------------------------------
Inco Ltd. 1 3,500 123,900
-----------
221,172
- --------------------------------------------------------------------------------
TELECOMMUNICATION SERVICES--4.6%
- --------------------------------------------------------------------------------
DIVERSIFIED TELECOMMUNICATION SERVICES--4.6%
IDT Corp., Cl. B1 26,600 367,612
- --------------------------------------------------------------------------------
SBC Communications, Inc. 7,500 189,450
- --------------------------------------------------------------------------------
Verizon Communications, Inc. 3,500 136,850
-----------
693,912
- --------------------------------------------------------------------------------
UTILITIES--4.6%
- --------------------------------------------------------------------------------
ELECTRIC UTILITIES--3.6%
AES Corp. (The) 1 35,600 388,040
- --------------------------------------------------------------------------------
PG&E Corp. 1 4,600 147,384
-----------
535,424
- --------------------------------------------------------------------------------
GAS UTILITIES--1.0%
Sempra Energy 4,600 154,284
-----------
Total Common Stocks (Cost $13,648,408) 14,849,187
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
JOINT REPURCHASE AGREEMENTS--1.8%
- --------------------------------------------------------------------------------
Undivided interest of 0.47% in joint repurchase
agreement (Principal Amount/Value $57,987,000,
with a maturity value of $57,995,553) with Zions
Bank/Capital Markets Group, 1.77%, dated 10/29/04,
to be repurchased at $275,041 on 11/1/04,
collateralized by U.S. Treasury Nts., 2.375%,
8/15/06, with a value of $59,191,443
(Cost $275,000) $275,000 $ 275,000
- --------------------------------------------------------------------------------
TOTAL INVESTMENTS, AT VALUE
(COST $13,923,408) 100.4% 15,124,187
- --------------------------------------------------------------------------------
LIABILITIES IN EXCESS OF OTHER ASSETS (0.4) (61,635)
---------------------------
NET ASSETS 100.0% $15,062,552
===========================
FOOTNOTE TO STATEMENT OF INVESTMENTS
1. Non-income producing security.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
11 | OPPENHEIMER SELECT VALUE FUND
STATEMENT OF ASSETS AND LIABILITIES Unaudited
- --------------------------------------------------------------------------------
October 31, 2004
- ------------------------------------------------------------------------------------------------------------------------------------
ASSETS
- ------------------------------------------------------------------------------------------------------------------------------------
Investments, at value (cost $13,923,408)--see accompanying statement of investments $15,124,187
- ------------------------------------------------------------------------------------------------------------------------------------
Cash 201,084
- ------------------------------------------------------------------------------------------------------------------------------------
Receivables and other assets:
Shares of beneficial interest sold 92,840
Interest and dividends 13,696
Other 1,589
------------
Total assets 15,433,396
- ------------------------------------------------------------------------------------------------------------------------------------
LIABILITIES
- ------------------------------------------------------------------------------------------------------------------------------------
Payables and other liabilities:
Investments purchased 284,254
Shares of beneficial interest redeemed 57,941
Shareholder communications 13,445
Distribution and service plan fees 1,745
Transfer and shareholder servicing agent fees 1,028
Trustees' compensation 402
Other 12,029
------------
Total liabilities 370,844
- ------------------------------------------------------------------------------------------------------------------------------------
NET ASSETS $15,062,552
============
- ------------------------------------------------------------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS
- ------------------------------------------------------------------------------------------------------------------------------------
Par value of shares of beneficial interest $ 1,061
- ------------------------------------------------------------------------------------------------------------------------------------
Additional paid-in capital 13,252,632
- ------------------------------------------------------------------------------------------------------------------------------------
Accumulated net investment income 10,344
- ------------------------------------------------------------------------------------------------------------------------------------
Accumulated net realized gain on investments 597,736
- ------------------------------------------------------------------------------------------------------------------------------------
Net unrealized appreciation on investments 1,200,779
------------
NET ASSETS $15,062,552
============
- ------------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE PER SHARE
- ------------------------------------------------------------------------------------------------------------------------------------
Class A Shares:
Net asset value and redemption price per share (based on net assets of $11,378,549 and 800,572 shares of beneficial
interest outstanding) $14.21
Maximum offering price per share (net asset value plus sales charge of 5.75% of offering price) $15.08
- ------------------------------------------------------------------------------------------------------------------------------------
Class B Shares:
Net asset value, redemption price (excludes applicable contingent deferred sales charge) and offering price per share
(based on net assets of $919,259 and 65,059 shares of beneficial interest outstanding) $14.13
- ------------------------------------------------------------------------------------------------------------------------------------
Class C Shares:
Net asset value, redemption price (excludes applicable contingent deferred sales charge) and offering price per share
(based on net assets of $2,132,695 and 150,926 shares of beneficial interest outstanding) $14.13
- ------------------------------------------------------------------------------------------------------------------------------------
Class N Shares:
Net asset value, redemption price (excludes applicable contingent deferred sales charge) and offering price per share
(based on net assets of $473,441 and 33,395 shares of beneficial interest outstanding) $14.18
- ------------------------------------------------------------------------------------------------------------------------------------
Class Y Shares:
Net asset value, redemption price and offering price per share (based on net assets of $158,608 and 11,146 shares of
beneficial interest outstanding) $14.23
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
12 | OPPENHEIMER SELECT VALUE FUND
STATEMENT OF OPERATIONS Unaudited
- --------------------------------------------------------------------------------
For the Six Months Ended October 31, 2004
- --------------------------------------------------------------------------------
INVESTMENT INCOME
- --------------------------------------------------------------------------------
Dividends (net of foreign withholding taxes of $751) $ 84,909
- --------------------------------------------------------------------------------
Interest 2,987
----------
Total investment income 87,896
- --------------------------------------------------------------------------------
EXPENSES
- --------------------------------------------------------------------------------
Management fees 42,758
- --------------------------------------------------------------------------------
Distribution and service plan fees:
Class A 4,531
Class B 2,171
Class C 5,647
Class N 515
- --------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees:
Class A 2,653
Class B 651
Class C 1,020
Class N 140
Class Y 16
- --------------------------------------------------------------------------------
Shareholder communications:
Class A 3,545
Class B 2,328
Class C 2,562
Class N 260
Class Y 115
- --------------------------------------------------------------------------------
Legal, auditing and other professional fees 7,215
- --------------------------------------------------------------------------------
Trustees' compensation 3,856
- --------------------------------------------------------------------------------
Custodian fees and expenses 68
- --------------------------------------------------------------------------------
Other 3,525
----------
Total expenses 83,576
Less reduction to custodian expenses (66)
Less payments and waivers of expenses (5,958)
----------
Net expenses 77,552
- --------------------------------------------------------------------------------
NET INVESTMENT INCOME 10,344
- --------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN
- --------------------------------------------------------------------------------
Net realized gain on investments 157,347
- --------------------------------------------------------------------------------
Net change in unrealized appreciation on investments 476,949
- --------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 644,640
==========
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
13 | OPPENHEIMER SELECT VALUE FUND
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
SIX MONTHS YEAR
ENDED ENDED
OCTOBER 31, 2004 APRIL 30,
(UNAUDITED) 2004
- -------------------------------------------------------------------------------------------------------------------------------
OPERATIONS
- -------------------------------------------------------------------------------------------------------------------------------
Net investment income (loss) $ 10,344 $ (2,268)
- -------------------------------------------------------------------------------------------------------------------------------
Net realized gain 157,347 725,042
- -------------------------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation 476,949 501,924
-----------------------------
Net increase in net assets resulting from operations 644,640 1,224,698
- -------------------------------------------------------------------------------------------------------------------------------
DIVIDENDS AND/OR DISTRIBUTIONS TO SHAREHOLDERS
- -------------------------------------------------------------------------------------------------------------------------------
Distributions from net realized gain:
Class A -- (136,971)
Class B -- --
Class C -- --
Class N -- --
Class Y -- --
- -------------------------------------------------------------------------------------------------------------------------------
BENEFICIAL INTEREST TRANSACTIONS
- -------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets resulting from beneficial interest transactions:
Class A 4,146,197 2,199,702
Class B 777,100 119,224
Class C 1,891,182 177,747
Class N 447,437 7,000
Class Y 152,252 1,000
- -------------------------------------------------------------------------------------------------------------------------------
NET ASSETS
- -------------------------------------------------------------------------------------------------------------------------------
Total increase 8,058,808 3,592,400
- -------------------------------------------------------------------------------------------------------------------------------
Beginning of period 7,003,744 3,411,344
-----------------------------
End of period (including accumulated net investment income of $10,344 at October 31, 2004) $15,062,552 $ 7,003,744
=============================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
14 | OPPENHEIMER SELECT VALUE FUND
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
SIX MONTHS YEAR
ENDED ENDED
OCT. 31, 2004 APRIL 30,
CLASS A (UNAUDITED) 2004 2003 1
- ----------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- ----------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 13.52 $10.17 $10.00
- ----------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss) .02 -- 2 (.03)
Net realized and unrealized gain .67 3.75 .20
------------------------------------
Total from investment operations .69 3.75 .17
- ----------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Distributions from net realized gain -- (.40) --
- ----------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 14.21 $13.52 $10.17
====================================
- ----------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 3 5.10% 37.02% 1.70%
- ----------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ----------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $11,379 $6,706 $3,411
- ----------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 9,471 $4,706 $3,151
- ----------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 4
Net investment income (loss) 0.34% (0.04)% (0.85)%
Total expenses 1.24% 1.96% 2.60%
Expenses after payments and waivers and reduction to custodian expenses 1.20% 1.50% 2.35%
- ----------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 40% 102% 66%
1. For the period from November 26, 2002 (commencement of operations) to April
30, 2003.
2. Less than $0.005 per share.
3. Assumes an investment at net asset value 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 return. 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.
15 | OPPENHEIMER SELECT VALUE FUND
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
CLASS B CLASS C
SIX MONTHS PERIOD SIX MONTHS PERIOD
ENDED ENDED ENDED ENDED
OCT. 31, 2004 APRIL 30, OCT. 31, 2004 APRIL 30,
(UNAUDITED) 2004 1 (UNAUDITED) 2004 1
- -----------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- -----------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $13.51 $14.19 $13.52 $14.19
- -----------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment loss (.02) (.01) (.03) (.01)
Net realized and unrealized gain/(loss) .64 (.67) .64 (.66)
--------------------------------------------------------
Total from investment operations .62 (.68) .61 (.67)
- -----------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Distributions from net realized gain -- -- -- --
- -----------------------------------------------------------------------------------------------------------------
Net asset value, end of period $14.13 $13.51 $14.13 $13.52
========================================================
- -----------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2 4.59% (4.79)% 4.51% (4.72)%
- -----------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- -----------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 919 $ 116 $2,133 $ 174
- -----------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 448 $ 44 $1,141 $ 51
- -----------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment loss (0.76)% (1.19)% (0.75)% (1.01)%
Total expenses 3.19% 5.71% 2.51% 5.48%
Expenses after payments and waivers and reduction
to custodian expenses 2.25% 2.25% 2.25% 2.25%
- -----------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 40% 102% 40% 102%
1. For the period from February 27, 2004 (inception of offering) to April 30,
2004.
2. Assumes an investment at net asset value 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 return. Total returns are not annualized for
periods of less than one full year. Returns do not reflect the deduction of
taxes that a shareholder would pay on Fund distributions or the redemption of
Fund shares.
3. Annualized for periods of less than one full year.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
16 | OPPENHEIMER SELECT VALUE FUND
CLASS N CLASS Y
SIX MONTHS PERIOD SIX MONTHS PERIOD
ENDED ENDED ENDED ENDED
OCT. 31, 2004 APRIL 30, OCT. 31, 2004 APRIL 30,
(UNAUDITED) 2004 1 (UNAUDITED) 2004 1
- -----------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $13.52 $14.19 $13.53 $14.19
- -----------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss) -- (.01) .01 .01
Net realized and unrealized gain/(loss) .66 (.66) .69 (.67)
---------------------------------------------------
Total from investment operations .66 (.67) .70 (.66)
- -----------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Distributions from net realized gain -- -- -- --
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $14.18 $13.52 $14.23 $13.53
===================================================
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2 4.88% (4.72)% 5.17% (4.65)%
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- -----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 473 $ 7 $ 159 $ 1
- -----------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 231 $ 3 $ 93 $ 1
- -----------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income (loss) (0.12)% (0.73)% 0.32% 0.26%
Total expenses 1.68% 4.96% 1.18% 4.47%
Expenses after payments and waivers and reduction to custodian expenses 1.66% 1.75% N/A 4,5 1.25%
- -----------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 40% 102% 40% 102%
1. For the period from February 27, 2004 (inception of offering) to April 30,
2004.
2. Assumes an investment at net asset value 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 return. 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. 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.
3. Annualized for periods of less than one full year.
4. Reduction to custodian expenses less than 0.01%.
5. Voluntary waiver of management fees less than 0.01%.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
17 | OPPENHEIMER SELECT VALUE FUND
NOTES TO FINANCIAL STATEMENTS Unaudited
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
Oppenheimer Select Value Fund (the Fund), is registered under the Investment
Company Act of 1940, as amended, as an open-end management investment company.
The Fund's investment objective is to seek capital appreciation over the
long-term. 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. As of October 31, 2004, the Manager owned 36% of the
Fund's shares. 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 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 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 transactions, and the difference between the
amounts of dividends, interest, and foreign withholding taxes recorded on the
Fund's books and the U.S. dollar equivalent of the amounts actually received or
paid. Net unrealized foreign exchange gains and losses arise from changes in the
values of assets and liabilities, including investments in securities at
fiscal period end, resulting from changes in exchange rates.
18 | OPPENHEIMER SELECT VALUE FUND
The effect of changes in foreign currency exchange rates on investments is
separately identified from the fluctuations arising from changes in market
values of securities held and reported with all other foreign currency gains and
losses in the Fund's Statement of Operations.
- --------------------------------------------------------------------------------
JOINT REPURCHASE AGREEMENTS. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission, the Fund, along with other affiliated funds
advised by the Manager, may transfer uninvested cash balances into joint trading
accounts on a daily basis. These balances are invested in one or more repurchase
agreements. Securities pledged as collateral for repurchase agreements are held
by a custodian bank until the agreements mature. Each agreement requires that
the market value of the collateral be sufficient to cover payments of interest
and principal. In the event of default by the other party to the agreement,
retention of the collateral may be subject to legal proceedings.
- --------------------------------------------------------------------------------
ALLOCATION OF INCOME, EXPENSES, GAINS AND LOSSES. Income, expenses (other than
those attributable to a specific class), gains and losses are allocated on a
daily basis to each class of shares based upon the relative proportion of net
assets represented by such class. Operating expenses directly attributable to a
specific class are charged against the operations of that class.
- --------------------------------------------------------------------------------
FEDERAL TAXES. The Fund intends to comply with provisions of the Internal
Revenue Code applicable to regulated investment companies and to distribute
substantially all of its investment company taxable income, including any net
realized gain on investments not offset by capital loss carryforwards, if any,
to shareholders, therefore, no federal income or excise tax provision is
required.
Net investment income (loss) and net realized gain (loss) may differ for
financial statement and tax purposes. The character of dividends and
distributions made during the fiscal year from net investment income or net
realized gains may differ from their ultimate characterization for federal
income tax purposes. Also, due to timing of dividends and distributions, the
fiscal year in which amounts are distributed may differ from the fiscal year in
which the income or net realized gain was recorded by the Fund.
As of October 31, 2004, the Fund had no capital loss carryforward
available for federal income tax purposes. During the year ended April 30, 2004,
the Fund had no capital loss carryforward to offset realized capital gains.
- --------------------------------------------------------------------------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS. Dividends and distributions to
shareholders, which are determined in accordance with income tax regulations,
are recorded on the ex-dividend date. Income and capital gain distributions, if
any, are declared and paid annually.
- --------------------------------------------------------------------------------
INVESTMENT INCOME. Dividend income is recorded on the ex-dividend date or upon
ex-dividend notification in the case of certain foreign dividends where the
ex-dividend date may have passed. Non-cash dividends included in dividend
income, if any, are recorded at the fair market value of the securities
received. Interest income, which includes accretion of discount and amortization
of premium, is accrued as earned.
- --------------------------------------------------------------------------------
CUSTODIAN FEES. Custodian Fees and Expenses in the Statement of Operations may
include interest expense incurred by the Fund on any cash overdrafts of its
custodian account during the period. The Fund pays interest to its custodian on
such cash 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.
19 | OPPENHEIMER SELECT VALUE FUND
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
2. SHARES OF BENEFICIAL INTEREST
The Fund has authorized an unlimited number of $0.001 par value shares of
beneficial interest of each class. Transactions in shares of beneficial interest
were as follows:
SIX MONTHS ENDED OCTOBER 31, 2004 YEAR ENDED APRIL 30, 2004 1
SHARES AMOUNT SHARES AMOUNT
- -------------------------------------------------------------------------------------------------------------------
CLASS A
Sold 332,989 $ 4,540,798 161,601 $ 2,215,782
Dividends and/or distributions reinvested -- -- 1,077 13,920
Redeemed (28,293) (394,601) (2,370) (30,000)
-----------------------------------------------------------------
Net increase 304,696 $ 4,146,197 160,308 $ 2,199,702
=================================================================
- -------------------------------------------------------------------------------------------------------------------
CLASS B
Sold 57,395 $ 789,375 8,561 $ 119,314
Dividends and/or distributions reinvested -- -- -- --
Redeemed (891) (12,275) (6) (90)
-----------------------------------------------------------------
Net increase 56,504 $ 777,100 8,555 $ 119,224
=================================================================
- -------------------------------------------------------------------------------------------------------------------
CLASS C
Sold 139,630 $ 1,913,222 12,907 $ 177,747
Dividends and/or distributions reinvested -- -- -- --
Redeemed (1,611) (22,040) -- --
-----------------------------------------------------------------
Net increase 138,019 $ 1,891,182 12,907 $ 177,747
=================================================================
- -------------------------------------------------------------------------------------------------------------------
CLASS N
Sold 32,902 $ 447,437 493 $ 7,000
Dividends and/or distributions reinvested -- -- -- --
Redeemed -- -- -- --
-----------------------------------------------------------------
Net increase 32,902 $ 447,437 493 $ 7,000
=================================================================
- -------------------------------------------------------------------------------------------------------------------
CLASS Y
Sold 11,173 $ 153,614 70 $ 1,000
Dividends and/or distributions reinvested -- -- -- --
Redeemed (97) (1,362) -- --
-----------------------------------------------------------------
Net increase 11,076 $ 152,252 70 $ 1,000
=================================================================
1. For the year ended April 30, 2004 for Class A and for the period February 27,
2004 (inception of offering) to April 30, 2004 for Class B, Class C, Class N and
Class Y.
- --------------------------------------------------------------------------------
3. PURCHASES AND SALES OF SECURITIES
The aggregate cost of purchases and proceeds from sales of securities, other
than U.S. government obligations and short-term obligations, for the six months
ended October 31, 2004, were $11,717,493 and $4,346,900, 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 which provides for a fee at an
annual rate of 0.75% of the first $200 million of average annual net assets of
the Fund, 0.72% of the next $200 million, 0.69% of the next $200 million, 0.66%
of the next $200 million, and 0.60% of average annual net assets in excess of
$800 million.
20 | OPPENHEIMER SELECT VALUE FUND
- --------------------------------------------------------------------------------
TRANSFER AGENT FEES. OppenheimerFunds Services (OFS), a division of the Manager,
acts as the transfer and shareholder servicing agent for the Fund. The Fund pays
OFS a per account fee. For the six months ended October 31, 2004, the Fund paid
$3,503 to OFS for services to the Fund.
Additionally, Class Y shares are subject to minimum fees of $10,000 for
assets of $10 million or more. The Class Y shares are subject to the minimum
fees in the event that the per account fee does not equal or exceed the
applicable minimum fees. OFS may voluntarily waive the minimum fees.
- --------------------------------------------------------------------------------
DISTRIBUTION AND SERVICE PLAN (12B-1) FEES. Under its General Distributor's
Agreement with the Fund, OppenheimerFunds Distributor, Inc. (the Distributor)
acts as the Fund's principal underwriter in the continuous public offering of
the Fund's classes of shares.
- --------------------------------------------------------------------------------
SERVICE PLAN FOR CLASS A SHARES. The Fund has adopted a Service Plan for Class A
shares. It reimburses the Distributor for a portion of its costs incurred for
services provided to accounts that hold Class A shares. Reimbursement is made
quarterly at an annual rate of up to 0.25% of the average annual net assets of
Class A shares of the Fund. The Distributor currently uses all of those fees to
pay dealers, brokers, banks and other financial institutions quarterly for
providing personal services and maintenance of accounts of their customers that
hold Class A shares. Any unreimbursed expenses the Distributor incurs with
respect to Class A shares in any fiscal year cannot be recovered in subsequent
years. Fees incurred by the Fund under the Plan are detailed in the Statement of
Operations.
- --------------------------------------------------------------------------------
DISTRIBUTION AND SERVICE PLANS FOR CLASS B, CLASS C AND CLASS N SHARES. The Fund
has adopted Distribution and Service Plans for Class B, Class C and Class N
shares to compensate the Distributor for its services in connection with the
distribution of those shares and servicing accounts. Under the plans, the Fund
pays the Distributor an annual asset-based sales charge of 0.75% per year on
Class B and Class C shares and 0.25% per year on Class N shares. The Distributor
also receives a service fee of up to 0.25% per year under each plan. If either
the Class B, Class C or Class N plan is terminated by the Fund or by the
shareholders of a class, the Board of Trustees and its independent trustees must
determine whether the Distributor shall be entitled to payment from the Fund of
all or a portion of the service fee and/or asset-based sales charge in respect
to shares sold prior to the effective date of such termination. The
Distributor's aggregate uncompensated expenses under the plan at October 31,
2004 for Class B and Class C shares were $14,547 and $31,045, 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 A CLASS B CLASS C CLASS N
FRONT-END CONTINGENT CONTINGENT CONTINGENT CONTINGENT
SALES CHARGES DEFERRED SALES DEFERRED SALES DEFERRED SALES DEFERRED SALES
RETAINED BY RETAINED BY RETAINED BY RETAINED BY RETAINED BY
SIX MONTHS ENDED DISTRIBUTOR DISTRIBUTOR DISTRIBUTOR DISTRIBUTOR DISTRIBUTOR
- ----------------------------------------------------------------------------------------------------------------------
October 31, 2004 $5,046 $-- $43 $-- $--
- --------------------------------------------------------------------------------
PAYMENTS AND WAIVERS OF EXPENSES. Effective February 27, 2004, the Manager has
voluntarily undertaken to reimburse the Fund for total annual operating expenses
exceeding the following limits: 1.50% for Class A shares, 2.25% for Class B
shares, 2.25% for Class C shares, 1.75% for Class N shares and 1.25% for Class Y
shares. During the six months ended October 31, 2004, the Manager reimbursed the
Fund $2,339, $2,096, $1,487, $13 and $4 for Class A, Class B, Class C, Class N
and Class Y shares, respectively. That voluntary undertaking may be revised or
terminated by the Manager at any time without notice to shareholders.
21 | OPPENHEIMER SELECT VALUE FUND
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES Continued
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 six months ended October 31, 2004, OFS waived $19 for Class B shares.
This undertaking may be amended or withdrawn at any time.
- --------------------------------------------------------------------------------
5. 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") excluding this Fund,
and nine Directors/Trustees of certain of the Funds other than this Fund
(collectively, the "Directors/Trustees"). The complaints allege that the Manager
charged excessive fees for distribution and other costs, improperly used assets
of the Funds in the form of directed brokerage commissions and 12b-1 fees to pay
brokers to promote sales of the Funds, and failed to properly disclose the use
of Fund assets to make those payments in violation of the Investment Company Act
of 1940 and the Investment Advisers Act of 1940. The complaints further allege
that by permitting and/or participating in those actions, the Directors/Trustees
breached their fiduciary duties to Fund shareholders under the Investment
Company Act of 1940 and at common law. By order dated October 27, 2004, these
six actions, and future related actions, were consolidated by the U.S. District
Court for the Southern District of New York into a single consolidated
proceeding in contemplation of the filing of a superseding consolidated and
amended complaint.
OppenheimerFunds believes that it is premature to render any opinion as to
the likelihood of an outcome unfavorable to them, the Funds or the
Directors/Trustees and that no estimate can yet be made with any degree of
certainty as to the amount or range of any potential loss. However,
OppenheimerFunds, the Funds and the Directors/Trustees believe that the
allegations contained in the complaints are without merit and intend to defend
these lawsuits vigorously.
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.
22 | OPPENHEIMER SELECT VALUE FUND
ITEM 2. CODE OF ETHICS
Not applicable to semiannual reports.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT
Not applicable to semiannual reports.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES
Not applicable to semiannual reports.
ITEM 5. NOT APPLICABLE
ITEM 6. SCHEDULE OF INVESTMENTS
Not applicable
ITEM 7. NOT APPLICABLE
ITEM 8. NOT APPLICABLE
ITEM 9. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The Board is responsible for approving nominees for election as trustees.
To assist in this task, the Board has designated the Audit Committee as the
nominating committee for the Board. It reviews and recommends nominees to the
Board. The Committee is comprised entirely of disinterested trustees as defined
in Section 2(a)(19) of the Investment Company Act of 1940.
The Audit Committee charter describes the responsibilities of the
Committee in nominating candidates for election as independent Trustees of the
Registrant. The Registrant's Board has adopted a written charter for the
Committee. A current copy of the Audit Committee charter is available to
shareholders on the OppenheimerFunds website at WWW.OPPENHEIMERFUNDS.COM.
Under the current policy, if the Board determines that a vacancy exists or
is likely to exist on the Board, the Audit Committee of the Board will consider
candidates for Board membership including recommended by Registrant
shareholders. The Audit Committee will consider nominees recommended by
independent Board members or recommended by any other Board members including
Board members affiliated with the Registrant's investment advisors. The
Committee may, upon Board approval, retain an executive search firm to assist in
screening potential candidates. Upon Board approval, the Audit Committee may
also use the services of legal, financial, or other external counsel that it
deems necessary or desirable in the screening process. Shareholders wishing to
submit a nominee for election to the Board may do so by mailing their submission
to the offices of OppenheimerFunds, Inc., 6803 South Tucson Way, Centennial, CO
80112, to the attention of the Board of Trustees of the named Registrant, c/o
the Secretary of the Registrant.
The Committee's process for identifying and evaluating nominees for
trustees includes a number of factors. In screening candidates for board
membership, whether the candidate is suggested by Board members, shareholders or
others, the Committee considers the candidate's professional experience,
soundness of judgment, integrity, ability to make independent, analytical
inquiries, collegiality, willingness and ability to devote the time required to
perform Board activities adequately, ability to represent the interests of all
shareholders of the Registrant, and diversity relative to the board's
composition. Candidates are expected to provide a mix of attributes, experience,
perspective and skills necessary to effectively advance the interests of
shareholders.
ITEM 10. CONTROLS AND PROCEDURES
(a) Based on their evaluation of registrant's disclosure controls and
procedures (as defined in rule 30a-2(c) under the Investment Company
Act of 1940 (17 CFR 270.30a-2(c)) as of 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)