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 811-21268
OPPENHEIMER TOTAL RETURN BOND FUND
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(Exact name of registrant as specified in charter)
6803 SOUTH TUCSON WAY, CENTENNIAL, COLORADO 80112-3924
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(Address of principal executive offices) (Zip code)
Robert G. Zack, Esq.
OppenheimerFunds, Inc.
Two World Financial Center, New York, New York 10281-1008
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(Name and address of agent for service)
Registrant's telephone number, including area code: (303) 768-3200
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Date of fiscal year end: APRIL 30
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Date of reporting period: MAY 1, 2004 - APRIL 30, 2005
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ITEM 1. REPORTS TO STOCKHOLDERS.
TOP HOLDINGS AND ALLOCATIONS
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TOP FIVE HOLDINGS BY ISSUER
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Federal National Mortgage Assn. 37.8%
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Federal Home Loan Mortgage Corp. 9.2
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U.S. Treasury 7.5
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Tennessee Valley Authority 3.5
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Daimler Chrysler Auto Trust 1.1
Portfolio holdings and allocations are subject to change. Percentages are as of
April 30, 2005, and are based on total market value of investments.
CORPORATE BONDS & NOTES--TOP TEN INDUSTRIES
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Diversified Financial Services 3.3%
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Electric Utilities 3.0
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Media 2.3
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Automobiles 2.3
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Insurance 2.2
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Real Estate 1.7
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Diversified Telecommunication Services 1.6
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Food & Staples Retailing 1.3
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Health Care Providers & Services 1.1
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Food Products 0.9
Portfolio holdings and allocations are subject to change. Percentages are as of
April 30, 2005, and are based on net assets.
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CREDIT ALLOCATION
[THE FOLLOWING TABLE WAS REPRESENTED BY A PIE CHART IN THE PRINTED MATERIAL.]
Treasury 7.5%
Agency 44.3
AAA 22.0
AA 2.1
A 5.6
BBB 12.7
BB 1.5
Not Rated 4.3
Portfolio holdings and allocations are subject to change. Percentages are as of
April 30, 2005, and are based on total market value of investments.
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9 | OPPENHEIMER TOTAL RETURN BOND 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 APRIL 30, 2005, FOLLOWED BY
A GRAPHICAL COMPARISON OF THE FUND'S PERFORMANCE TO AN APPROPRIATE BROAD-BASED
MARKET INDEX.
MANAGEMENT'S DISCUSSION OF FUND PERFORMANCE. For its fiscal year ended April 30,
2005, Oppenheimer Total Return Bond Fund's competitive performance was driven by
several key factors. First, our exposure to the mortgage sector, particularly
from the beginning of the Fund's fiscal year through the end of 2004, was a
strong supporter of performance. For the bulk of the review period,
mortgage-related debt securities solidly outperformed comparable Treasuries
while offering a marginal yield advantage as well. As a result, our overall
exposure to this sector of the bond markets helped add to Fund performance for
the year.
In addition, our decision to emphasize higher-coupon mortgage securities
also worked in our favor. Although interest rates did not increase significantly
until very late in the period, a condition that typically favors higher-coupon
mortgages, these holdings fared quite well for the Fund's portfolio nonetheless,
due to investors' expectations for higher prepayment rates than what
materialized. Overall, our general exposure to and individual security selection
within the mortgage sector significantly added to returns for the fiscal year.
Another positive contributor to Fund performance for the year was our
active management of the Fund's interest-rate sensitivity, or duration. Going
into the period, we held a neutral interest-rate positioning versus our
benchmark, the Citigroup Broad Investment Grade Index. As our analysis
suggested, rate expectations embedded in the yield curve were in line with
economic fundamentals. Since there was virtually little or no room to profit
from any possible discrepancy between the market's expectations and the Fed's
moves, this neutral positioning in regard to our interest-rate sensitivity
benefited performance.
As the period progressed, we started reducing the Fund's interest-rate
exposure versus that of the benchmark. This came about as we observed levels of
market interest rates prevailing during most of the second half of 2005,
reflecting overly pessimistic market expectations about the U.S. economy. This
decision has made a small positive contribution to performance over the
reporting period. As the period ended, we maintained quite short duration.
In terms of our credit exposure, our decision to place our emphasis at the
shorter end of the maturity curve throughout the first several months of the
period boosted performance, since this area of the curve experienced relatively
less volatility than longer-dated issues at that time. Ironically, however, this
very positioning hurt us at the end of 2004
10 | OPPENHEIMER TOTAL RETURN BOND FUND
through the middle of the first quarter of 2005 as credit spreads tightened,
resulting in better performance by corporates with longer maturities. In the
final weeks of the Fund's fiscal year, the credit market suffered a downturn and
spreads widened. Fortunately, our risk management measures allowed only a
marginal exposure to shorter-dated credit securities, so the impact of this
event was minimal on Fund returns.
Similarly, while our exposure to high-yield bonds--which fared quite well
in 2004 relative to Treasuries--benefited performance for the first half of the
period, this allocation detracted from returns slightly in the last few months
of the fiscal year. The sharp reversal credit spreads experienced late in the
period unraveled the narrow spreads high-yield bonds enjoyed throughout 2003 and
2004. Since bond prices move in the opposite direction of the yields, as yield
spreads widened, the prices on many high-yield issues suffered. Consequently,
our general exposure to high-yield bonds mildly detracted from our returns late
in the period.
Moving forward, we intend to maintain our shorter duration positioning
versus the benchmark in preparation for rising interest rates. In terms of
mortgage securities, we plan to maintain our slightly underweighted exposure as
well as maintain an emphasis on higher coupon mortgages, where we perceive
greater intrinsic value relative to lower-coupon issues. Finally, we will
continue to focus on maintaining a low overall credit risk of the Fund's
portfolio, and place an emphasis on higher-quality corporate credits. We believe
these tactics will position the Fund favorably for the environment we expect in
the months ahead.
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 April 30, 2005. In the case of Class A, B, C, and N shares
performance is measured from the inception of each class on February 21, 2003.
The Fund's performance reflects the deduction of the maximum initial sales
charge on Class A shares, the applicable contingent deferred sales charge on
Class B, Class C and Class N shares, and reinvestments of all dividends and
capital gains distributions. Past performance cannot guarantee future results.
The Fund's performance is compared to the performance of the Citigroup
Broad Investment Grade Index, a market-capitalization weighted index that
includes fixed-rate Treasury, government-sponsored, corporate and mortgage
securities. 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 index.
11 | OPPENHEIMER TOTAL RETURN BOND FUND
FUND PERFORMANCE DISCUSSION
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CLASS A SHARES
COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN:
Oppenheimer Total Return Bond Fund (Class A)
Citigroup Broad Investment Grade Index
[THE FOLLOWING TABLE WAS REPRESENTED BY A LINE CHART IN THE PRINTED MATERIAL.]
Oppenheimer Total Return Citigroup Broad
Bond Fund (Class A) Investment Grade Index
02/21/2003 9,525 10,000
04/30/2003 9,633 10,079
07/31/2003 9,483 9,900
10/31/2003 9,716 10,135
01/31/2004 9,939 10,351
04/30/2004 9,888 10,268
07/31/2004 9,993 10,387
10/31/2004 10,265 10,713
01/31/2005 10,355 10,795
04/30/2005 10,371 10,822
AVERAGE ANNUAL TOTAL RETURNS OF CLASS A SHARES WITH SALES CHARGE OF THE FUND AT
4/30/05
1-Year -0.09% Since Inception (2/21/03) 1.68%
12 | OPPENHEIMER TOTAL RETURN BOND FUND
CLASS B SHARES
COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN:
Oppenheimer Total Return Bond Fund (Class B)
Citigroup Broad Investment Grade Index
[THE FOLLOWING TABLE WAS REPRESENTED BY A LINE CHART IN THE PRINTED MATERIAL.]
Oppenheimer Total Return Citigroup Broad
Bond Fund (Class B) Investment Grade Index
02/21/2003 10,000 10,000
04/30/2003 10,097 10,079
07/31/2003 9,915 9,900
10/31/2003 10,132 10,135
01/31/2004 10,342 10,351
04/30/2004 10,268 10,268
07/31/2004 10,355 10,387
10/31/2004 10,613 10,713
01/31/2005 10,684 10,795
04/30/2005 10,379 10,822
AVERAGE ANNUAL TOTAL RETURNS OF CLASS B SHARES WITH SALES CHARGE OF THE FUND AT
4/30/05
1-Year -1.00% Since Inception (2/21/03) 1.71%
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 4.75%; FOR CLASS B SHARES, THE
CONTINGENT DEFERRED SALES CHARGE OF 5% (1-YEAR) AND 2% (5-YEAR); AND FOR CLASS C
AND N SHARES, THE CONTINGENT 1% DEFERRED SALES CHARGE FOR THE 1-YEAR PERIOD. SEE
PAGE 16 FOR FURTHER INFORMATION.
13 | OPPENHEIMER TOTAL RETURN BOND FUND
FUND PERFORMANCE DISCUSSION
CLASS C SHARES
COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN:
Oppenheimer Total Return Bond Fund (Class C)
Citigroup Broad Investment Grade Index
[THE FOLLOWING TABLE WAS REPRESENTED BY A LINE CHART IN THE PRINTED MATERIAL.]
Oppenheimer Total Return Citigroup Broad
Bond Fund (Class C) Investment Grade Index
02/21/2003 10,000 10,000
04/30/2003 10,096 10,079
07/31/2003 9,917 9,900
10/31/2003 10,122 10,135
01/31/2004 10,342 10,351
04/30/2004 10,258 10,268
07/31/2004 10,355 10,387
10/31/2004 10,602 10,713
01/31/2005 10,683 10,795
04/30/2005 10,668 10,822
AVERAGE ANNUAL TOTAL RETURNS OF CLASS C SHARES WITH SALES CHARGE OF THE FUND AT
4/30/05
1-Year 2.99% Since Inception (2/21/03) 2.99%
14 | OPPENHEIMER TOTAL RETURN BOND FUND
CLASS N SHARES
COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN:
Oppenheimer Total Return Bond Fund (Class N)
Citigroup Broad Investment Grade Index
[THE FOLLOWING TABLE WAS REPRESENTED BY A LINE CHART IN THE PRINTED MATERIAL.]
Oppenheimer Total Return Citigroup Broad
Bond Fund (Class N) Investment Grade Index
02/21/2003 10,000 10,000
04/30/2003 10,108 10,079
07/31/2003 9,938 9,900
10/31/2003 10,168 10,135
01/31/2004 10,391 10,351
04/30/2004 10,331 10,268
07/31/2004 10,431 10,387
10/31/2004 10,703 10,713
01/31/2005 10,788 10,795
04/30/2005 10,797 10,822
AVERAGE ANNUAL TOTAL RETURNS OF CLASS N SHARES WITH SALES CHARGE OF THE FUND AT
4/30/05
1-Year 3.51% Since Inception (2/21/03) 3.56%
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 4.75%; FOR CLASS B SHARES, THE
CONTINGENT DEFERRED SALES CHARGE OF 5% (1-YEAR) AND 2% (5-YEAR); AND FOR CLASS C
AND N SHARES, THE CONTINGENT 1% DEFERRED SALES CHARGE FOR THE 1-YEAR PERIOD. SEE
PAGE 16 FOR FURTHER INFORMATION.
15 | OPPENHEIMER TOTAL RETURN BOND 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 this Fund has a limited operating history.
CLASS A shares of the Fund were first publicly offered on 2/21/03. Unless
otherwise noted, Class A returns include the current maximum initial sales
charge of 4.75%.
CLASS B shares of the Fund were first publicly offered on 2/21/03. Unless
otherwise noted, Class B returns include the applicable contingent deferred
sales charge of 5% (1-year) and 2% (5-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 2/21/03. 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 2/21/03. Class N
shares are offered only through retirement plans. Unless otherwise noted, Class
N returns include the contingent deferred sales charge of 1% for the 1-year
period. Class N shares are subject to an annual 0.25% asset-based sales charge.
An explanation of the calculation of performance is in the Fund's Statement of
Additional Information.
16 | OPPENHEIMER TOTAL RETURN BOND FUND
FUND EXPENSES
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FUND EXPENSES. As a shareholder of the Fund, you incur two types of costs: (1)
transaction costs, which may include sales charges (loads) on purchase payments,
contingent deferred sales charges on redemptions; and redemption fees, if any;
and (2) ongoing costs, including management fees; distribution and service fees;
and other Fund expenses. These examples are intended to help you understand your
ongoing costs (in dollars) of investing in the Fund and to compare these costs
with the ongoing costs of investing in other mutual funds.
The examples are based on an investment of $1,000.00 invested at the beginning
of the period and held for the entire 6-month period ended April 30, 2005.
ACTUAL EXPENSES. The "actual" lines of the table provide information about
actual account values and actual expenses. You may use the information on this
line for the class of shares you hold, together with the amount you invested, to
estimate the expense that you paid over the period. Simply divide your account
value by $1,000.00 (for example, an $8,600.00 account value divided by $1,000.00
= 8.60), then multiply the result by the number in the "actual" line under the
heading entitled "Expenses Paid During Period" to estimate the expenses you paid
on your account during this period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES. The "hypothetical" lines of the
table provide information about hypothetical account values and hypothetical
expenses based on the Fund's actual expense ratio for each class of shares, and
an assumed rate of return of 5% per year before expenses, which is not the
Fund's actual return. The hypothetical account values and expenses may not be
used to estimate the actual ending account balance or expenses you paid for the
period. You may use this information to compare the ongoing costs of investing
in the Fund and other funds. To do so, compare this 5% hypothetical example for
the class of shares you hold with the 5% hypothetical examples that appear in
the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs, such as front-end
or contingent deferred sales charges (loads), or a $12.00 fee imposed annually
on accounts valued at less than $500.00 (subject to exceptions described in
17 | OPPENHEIMER TOTAL RETURN BOND FUND
FUND EXPENSES
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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.
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BEGINNING ENDING EXPENSES
ACCOUNT ACCOUNT PAID DURING
VALUE VALUE 6 MONTHS ENDED
(11/1/04) (4/30/05) APRIL 30, 2005
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Class A Actual $1,000.00 $1,010.40 $4.05
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Class A Hypothetical 1,000.00 1,020.78 4.07
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Class B Actual 1,000.00 1,006.20 8.24
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Class B Hypothetical 1,000.00 1,016.61 8.28
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Class C Actual 1,000.00 1,006.20 8.24
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Class C Hypothetical 1,000.00 1,016.61 8.28
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Class N Actual 1,000.00 1,008.70 5.74
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Class N Hypothetical 1,000.00 1,019.09 5.77
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 181/365
(to reflect the one-half year period). Those annualized expense ratios based on
the 6-month period ended April 30, 2005 are as follows:
CLASS EXPENSE RATIOS
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Class A 0.81%
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Class B 1.65
- --------------------------
Class C 1.65
- --------------------------
Class N 1.15
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.
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18 | OPPENHEIMER TOTAL RETURN BOND FUND
STATEMENT OF INVESTMENTS April 30, 2005
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PRINICIPAL VALUE
AMOUNT SEE NOTE 1
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ASSET-BACKED SECURITIES--12.8%
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Aesop Funding II LLC, Automobile Asset-Backed Certificates,
Series 2005-1A, Cl. A2, 3.05%, 4/20/08 1,2 $ 70,000 $ 69,888
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Bank One Auto Securitization Trust, Automobile Receivable Certificates,
Series 2003-1, Cl. A2, 1.29%, 8/21/06 12,547 12,541
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BMW Vehicle Owner Trust, Automobile Loan Certificates:
Series 2004-A, Cl. A2, 1.88%, 10/25/06 112,202 111,917
Series 2005-A, Cl. A2, 3.65%, 12/26/07 270,000 269,875
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Capital Auto Receivables Asset Trust, Automobile Mtg.-Backed Nts.,
Series 2004-2, Cl. A3, 3.58%, 1/15/09 220,000 217,422
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Centex Home Equity Co. LLC, Home Equity Loan Asset-Backed Certificates:
Series 2004-A, Cl. AF1, 2.03%, 6/25/19 10,625 10,608
Series 2004-D, Cl. AF1, 2.98%, 4/25/20 1 80,510 80,085
Series 2005-B, Cl. AF1, 4.02%, 3/26/35 1 78,251 78,236
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Chase Funding Mortgage Loan Asset-Backed Certificates, Home Equity
Mtg. Obligations:
Series 2002-4, Cl. 1A3, 3.44%, 4/25/23 3,253 3,248
Series 2003-1, Cl. 1A3, 3.14%, 7/25/23 36,249 36,190
Series 2003-4, Cl. 1A2, 2.138%, 7/25/18 93,405 93,185
Series 2003-5, Cl. 1A2, 2.451%, 11/25/18 50,000 49,747
Series 2004-1, Cl. 1A2, 2.427%, 6/25/19 140,000 139,166
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Chase Manhattan Auto Owner Trust, Automobile Loan Pass-Through
Certificates, Series 2002-A, Cl. A4, 4.24%, 9/15/08 38,448 38,608
- -----------------------------------------------------------------------------------------------------------------------------
CIT Equipment Collateral, Equipment Receivable-Backed Nts.,
Series 2004-DFS, Cl. A2, 2.66%, 11/20/06 1 170,000 169,013
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CIT Group Home Equity Loan Trust, Home Equity Loan Asset-Backed
Certificates, Series 2003-1, Cl. A2, 2.35%, 4/20/27 38,447 38,349
- -----------------------------------------------------------------------------------------------------------------------------
Citibank Credit Card Issuance Trust, Credit Card Receivable Nts.:
Series 2001-A6, Cl. A6, 5.65%, 6/16/08 210,000 214,383
Series 2002-A3, Cl. A3, 4.40%, 5/15/07 160,000 160,185
Series 2003-C4, Cl. C4, 5%, 6/10/15 30,000 30,019
- -----------------------------------------------------------------------------------------------------------------------------
CitiFinancial Mortgage Securities, Inc., Home Equity Collateralized Mtg.
Obligations, Series 2003-3, Cl. AF1, 3.14%, 8/25/33 2 18,840 18,851
- -----------------------------------------------------------------------------------------------------------------------------
Citigroup Mortgage Loan Trust, Inc., Home Equity Mtg. Obligations,
Series 2004-OPT1, Cl. A1B, 2.388%, 9/1/34 1 28,411 28,376
- -----------------------------------------------------------------------------------------------------------------------------
Countrywide Asset-Backed Certificates, Inc., Home Equity Asset-Backed
Certificates, Series 2002-4, Cl. A1, 3.39%, 2/25/33 2 21,136 21,400
- -----------------------------------------------------------------------------------------------------------------------------
DaimlerChrysler Auto Trust, Automobile Loan Pass-Through Certificates:
Series 2001-D, Cl. A4, 3.78%, 2/6/07 36,892 36,948
Series 2002-A, Cl. A4, 4.49%, 10/6/08 82,626 83,004
Series 2003-B, Cl. A2, 1.61%, 7/10/06 67,996 67,973
Series 2004-B, Cl. A2, 2.48%, 2/8/07 1 75,709 75,548
Series 2004-C, Cl. A2, 2.62%, 6/8/07 310,000 308,907
Series 2005-A, Cl. A2, 3.17%, 9/8/07 1 270,000 269,374
- -----------------------------------------------------------------------------------------------------------------------------
Equity One ABS, Inc., Home Equity Mtg. Pass-Through Certificates,
Series 2004-3, Cl. AF2, 3.80%, 7/25/34 40,000 39,705
19 | OPPENHEIMER TOTAL RETURN BOND FUND
STATEMENT OF INVESTMENTS Continued
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PRINICIPAL VALUE
AMOUNT SEE NOTE 1
- -----------------------------------------------------------------------------------------------------------------------------
ASSET-BACKED SECURITIES Continued
- -----------------------------------------------------------------------------------------------------------------------------
Ford Credit Auto Owner Trust, Automobile Loan Pass-Through Certificates:
Series 2004-A, Cl. A2, 2.13%, 10/15/06 $ 243,984 $ 243,185
Series 2005-A, Cl. A3, 3.48%, 11/17/08 160,000 159,006
Series 2005-B, Cl. A2, 3.77%, 9/15/07 240,000 240,199
- -----------------------------------------------------------------------------------------------------------------------------
Harley-Davidson Motorcycle Trust, Motorcycle Receivable Nts.,
Series 2003-3, Cl. A1, 1.50%, 1/15/08 74,451 74,187
- -----------------------------------------------------------------------------------------------------------------------------
Honda Auto Receivables Owner Trust, Automobile Receivable Obligations:
Series 2003-1, Cl. A3, 1.92%, 11/20/06 94,856 94,612
Series 2003-3, Cl. A2, 1.52%, 4/21/06 14,636 14,629
Series 2003-4, Cl. A2, 1.58%, 7/17/06 74,875 74,775
Series 2005-1, Cl. A2, 3.21%, 5/21/07 1 110,000 109,783
- -----------------------------------------------------------------------------------------------------------------------------
Household Automotive Trust, Automobile Loan Certificates,
Series 2003-2, Cl. A2, 1.56%, 12/18/06 14,526 14,522
- -----------------------------------------------------------------------------------------------------------------------------
M&I Auto Loan Trust, Automobile Loan Certificates:
Series 2002-1, Cl. A3, 2.49%, 10/22/07 35,565 35,544
Series 2003-1, Cl. A2, 1.60%, 7/20/06 721 721
- -----------------------------------------------------------------------------------------------------------------------------
MBNA Credit Card Master Note Trust, Credit Card Receivables,
Series 2003-C7, Cl. C7, 4.304%, 3/15/16 2 310,000 328,973
- -----------------------------------------------------------------------------------------------------------------------------
National City Auto Receivables Trust, Automobile Receivable
Obligations, Series 2004-A, Cl. A2, 1.50%, 2/15/07 68,560 68,385
- -----------------------------------------------------------------------------------------------------------------------------
Nissan Auto Lease Trust, Automobile Lease Obligations, Series 2004-A,
Cl. A2, 2.55%, 1/15/07 150,000 149,404
- -----------------------------------------------------------------------------------------------------------------------------
Nissan Auto Receivables Owner Trust, Automobile Receivable Nts.:
Series 2002-A, Cl. A4, 4.28%, 10/16/06 22,623 22,662
Series 2002-C, Cl. A3, 2.60%, 8/15/06 29,789 29,788
Series 2003-C, Cl. A2, 1.62%, 4/17/06 7,784 7,784
Series 2004-A, Cl. A2, 1.40%, 7/17/06 77,605 77,367
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Option One Mortgage Loan Trust, Home Equity Mtg. Obligations,
Series 2004-3, Cl. A2, 3.17%, 11/25/34 1,2 55,616 55,657
- -----------------------------------------------------------------------------------------------------------------------------
Popular ABS Mortgage Pass-Through Trust, Home Equity
Pass-Through Certificates:
Series 2004-5, Cl. A F2, 3.735%, 11/10/34 1 60,000 59,494
Series 2005-1, Cl. A F2, 3.914%, 5/25/35 50,000 49,646
Series 2005-2, Cl. A F2, 4.415%, 4/25/35 1 80,000 80,000
- -----------------------------------------------------------------------------------------------------------------------------
Structured Asset Securities Corp., Collateralized Mtg. Obligations,
Mtg. Pass-Through Certificates, Series 2005-4XS, Cl. 3A1, 5.18%, 3/26/35 401,674 404,378
- -----------------------------------------------------------------------------------------------------------------------------
Toyota Auto Receivables Owner Trust, Automobile Mtg.-Backed
Obligations, Series 2002-B, Cl. A4, 4.39%, 5/15/09 341,967 343,263
- -----------------------------------------------------------------------------------------------------------------------------
USAA Auto Owner Trust, Automobile Loan Asset-Backed Nts.:
Series 2002-1, Cl. A3, 2.41%, 10/16/06 8,116 8,117
Series 2004-1, Cl. A2, 1.43%, 9/15/06 148,960 148,672
Series 2004-2, Cl. A2, 2.41%, 2/15/07 167,516 167,073
Series 2004-3, Cl. A2, 2.79%, 6/15/07 150,000 149,491
20 | OPPENHEIMER TOTAL RETURN BOND FUND
PRINICIPAL VALUE
AMOUNT SEE NOTE 1
- -----------------------------------------------------------------------------------------------------------------------------
ASSET-BACKED SECURITIES Continued
- -----------------------------------------------------------------------------------------------------------------------------
Volkswagen Auto Lease Trust, Automobile Lease Asset-Backed Securities:
Series 2004-A, Cl. A2, 2.47%, 1/22/07 $ 190,000 $ 189,206
Series 2005-A, Cl. A2, 3.52%, 4/20/07 200,000 199,873
- -----------------------------------------------------------------------------------------------------------------------------
Volkswagen Auto Loan Enhanced Trust, Automobile Loan Receivable
Certificates, Series 2003-2, Cl. A2, 1.55%, 6/20/06 31,971 31,940
- -----------------------------------------------------------------------------------------------------------------------------
Wachovia Auto Owner Trust, Automobile Receivable Nts., Series 2004-B,
Cl. A2, 2.40%, 5/21/07 140,000 139,517
- -----------------------------------------------------------------------------------------------------------------------------
Wells Fargo Home Equity Trust, Collateralized Mtg. Obligations,
Series 2004-2, Cl. AI1B, 2.94%, 9/25/18 237,056 235,408
- -----------------------------------------------------------------------------------------------------------------------------
Whole Auto Loan Trust, Automobile Loan Receivable Certificates:
Series 2002-1, Cl. A3, 2.60%, 8/15/06 105,410 105,332
Series 2003-1, Cl. A2A, 1.40%, 4/15/06 25,442 25,436
Series 2004-1, Cl. A2A, 2.59%, 5/15/07 190,000 189,151
-------------
Total Asset-Backed Securities (Cost $7,120,969) 7,099,931
- -----------------------------------------------------------------------------------------------------------------------------
MORTGAGE-BACKED OBLIGATIONS--69.2%
- -----------------------------------------------------------------------------------------------------------------------------
GOVERNMENT AGENCY--59.6%
- -----------------------------------------------------------------------------------------------------------------------------
FHLMC/FNMA/SPONSORED--59.4%
Fannie Mae Whole Loan, Collateralized Mtg. Obligations Pass-Through
Certificates, Trust 2004-W9, Cl. 2A2, 7%, 2/25/44 325,506 344,426
- -----------------------------------------------------------------------------------------------------------------------------
Federal Home Loan Mortgage Corp.:
6%, 9/1/34 1,722,185 1,769,308
6.50%, 4/1/18 3 132,173 137,701
6.50%, 7/1/28-4/1/34 216,081 225,298
7%, 7/1/21-3/1/33 1,424,035 1,503,753
7%, 5/1/35 3 480,000 506,550
- -----------------------------------------------------------------------------------------------------------------------------
Federal Home Loan Mortgage Corp., Collateralized Mtg. Obligations, Gtd.
Multiclass Mtg. Participation Certificates, Series 2046, Cl. G, 6.50%, 4/15/28 609,727 635,644
- -----------------------------------------------------------------------------------------------------------------------------
Federal Home Loan Mortgage Corp., Gtd. Real Estate Mtg. Investment
Conduit Multiclass Pass-Through Certificates:
Series 1669, Cl. G, 6.50%, 2/15/23 28,320 28,443
Series 2034, Cl. Z, 6.50%, 2/15/28 76,541 79,960
Series 2053, Cl. Z, 6.50%, 4/15/28 86,439 90,024
Series 2055, Cl. ZM, 6.50%, 5/15/28 97,016 100,771
Series 2075, Cl. D, 6.50%, 8/15/28 236,104 245,832
Series 2080, Cl. Z, 6.50%, 8/15/28 65,389 67,812
Series 2387, Cl. PD, 6%, 4/15/30 113,566 115,369
Series 2466, Cl. PD, 6.50%, 4/15/30 1,631 1,631
Series 2498, Cl. PC, 5.50%, 10/15/14 12,021 12,092
Series 2500, Cl. FD, 3.454%, 3/15/32 2 35,509 35,625
Series 2526, Cl. FE, 3.354%, 6/15/29 2 33,991 34,260
Series 2550, Cl. QK, 4.50%, 4/15/22 46,021 46,076
Series 2551, Cl. FD, 3.354%, 1/15/33 2 27,975 28,194
Series 2583, Cl. KA, 5.50%, 3/15/22 303,243 306,083
21 | OPPENHEIMER TOTAL RETURN BOND FUND
STATEMENT OF INVESTMENTS Continued
- --------------------------------------------------------------------------------
PRINICIPAL VALUE
AMOUNT SEE NOTE 1
- -----------------------------------------------------------------------------------------------------------------------------
FHLMC/FNMA/SPONSORED Continued
Federal Home Loan Mortgage Corp., Interest-Only Stripped
Mtg.-Backed Security:
Series 176, Cl. IO, 7.283%, 6/1/26 4 $ 65,196 $ 13,004
Series 183, Cl. IO, 4.66%, 4/1/27 4 104,481 20,588
Series 184, Cl. IO, 9.55%, 12/1/26 4 108,725 21,318
Series 192, Cl. IO, 10.921%, 2/1/28 4 29,543 5,557
Series 200, Cl. IO, 10.315%, 1/1/29 4 35,606 7,053
Series 2130, Cl. SC, 13.484%, 3/15/29 4 78,778 6,474
Series 2796, Cl. SD, 20.553%, 7/15/26 4 114,049 11,582
Series 2920, Cl. S, 30.158%, 1/15/35 4 769,753 46,579
- -----------------------------------------------------------------------------------------------------------------------------
Federal Home Loan Mortgage Corp., Principal-Only Stripped
Mtg.-Backed Security, Series 176, Cl. PO, 5.626%, 6/1/26 5 32,026 27,712
- -----------------------------------------------------------------------------------------------------------------------------
Federal National Mortgage Assn.:
5%, 6/1/18-3/1/34 1,590,353 1,590,583
5%, 5/1/20-5/1/35 3 4,856,000 4,853,643
5.50%, 5/1/20-5/12/35 3 6,601,000 6,688,820
5.50%, 3/1/33-1/1/34 1,334,725 1,349,695
6%, 5/1/20 3 728,000 754,390
6%, 3/1/23-8/1/24 1,319,918 1,354,529
6.50%, 10/1/30 40,572 42,335
6.50%, 5/14/31 3 4,699,000 4,886,960
7%, 5/1/20 330,000 347,325
7%, 5/1/31 3 1,636,000 1,727,515
7.50%, 3/1/30 75,690 81,216
8.50%, 7/1/32 6,160 6,705
- -----------------------------------------------------------------------------------------------------------------------------
Federal National Mortgage Assn., Collateralized Mtg. Obligations,
Gtd. Real Estate Mtg. Investment Conduit Pass-Through Certificates:
Trust 1993-87, Cl. Z, 6.50%, 6/25/23 181,804 189,808
Trust 1996-35, Cl. Z, 7%, 7/25/26 284,507 298,542
Trust 1998-63, Cl. PG, 6%, 3/25/27 27,113 27,164
Trust 2001-50, Cl. NE, 6%, 8/25/30 63,744 64,529
Trust 2001-70, Cl. LR, 6%, 9/25/30 64,293 65,418
Trust 2001-72, Cl. NH, 6%, 4/25/30 47,943 48,623
Trust 2001-74, Cl. PD, 6%, 5/25/30 20,729 20,954
Trust 2002-77, Cl. WF, 3.37%, 12/18/32 2 43,244 43,528
Trust 2002-94, Cl. MA, 4.50%, 8/25/09 69,596 69,599
Trust 2002-T1, Cl. A2, 7%, 11/25/31 239,526 253,449
Trust 2003-10, Cl. HP, 5%, 2/25/18 300,000 302,820
Trust 2003-21, Cl. FK, 3.25%, 3/25/33 2 76,880 77,398
Trust 2003-81, Cl. PA, 5%, 2/25/12 15,708 15,707
Trust 2004-101, Cl. BG, 5%, 1/25/20 186,000 188,152
- -----------------------------------------------------------------------------------------------------------------------------
Federal National Mortgage Assn., Collateralized Mtg. Obligations,
Gtd. Real Estate Mtg. Investment Conduit Pass-Through Certificates,
Interest-Only Stripped Mtg.-Backed Security:
Trust 319, Cl. 2, 5.122%, 2/1/32 4 72,862 14,339
Trust 2002-38, Cl. SO, 16.272%, 4/25/32 4 145,425 10,293
Trust 2002-47, Cl. NS, 12.53%, 4/25/32 4 141,188 14,231
Trust 2002-51, Cl. S, 12.782%, 8/25/32 4 129,654 13,071
Trust 2002-77, Cl. IS, 14.451%, 12/18/32 4 247,761 26,098
22 | OPPENHEIMER TOTAL RETURN BOND FUND
PRINICIPAL VALUE
AMOUNT SEE NOTE 1
- -----------------------------------------------------------------------------------------------------------------------------
FHLMC/FNMA/SPONSORED Continued
Federal National Mortgage Assn., Interest-Only Stripped Mtg.-Backed Security:
Trust 222, Cl. 2, 5.18%, 6/1/23 4 $ 214,280 $ 43,293
Trust 240, Cl. 2, 8.33%, 9/1/23 4 327,992 64,801
Trust 247, Cl. 2, 6.999%, 10/1/23 4 391,859 89,177
Trust 252, Cl. 2, (1.03)%, 11/1/23 4 595,872 121,275
Trust 254, Cl. 2, 4.379%, 1/1/24 4 84,715 17,415
Trust 273, Cl. 2, 7.477%, 7/1/26 4 47,130 9,304
Trust 321, Cl. 2, (0.37)%, 3/1/32 4 740,506 148,830
Trust 329, Cl. 2, 8.72%, 1/1/33 4 331,251 69,205
Trust 331, Cl. 9, (14.513)%, 12/1/32 4 223,584 44,115
Trust 333, Cl. 2, 9.64%, 3/1/33 4 512,476 108,397
Trust 334, Cl. 17, (6.827)%, 2/1/33 4 124,990 24,483
Trust 2001-81, Cl. S, 17.012%, 1/25/32 4 79,626 8,079
Trust 2002-9, Cl. MS, 14.102%, 3/25/32 4 94,052 9,960
Trust 2002-52, Cl. SD, 8.349%, 9/25/32 4 166,842 16,223
Trust 2002-77, Cl. SH, 22.46%, 12/18/32 4 98,625 9,924
Trust 2004-54, Cl. DS, 17.68%, 11/25/30 4 147,743 11,992
Trust 2005-6, Cl. SE, 27.136%, 2/25/35 4 528,507 33,632
Trust 2005-19, Cl. SA, 26.97%, 3/25/35 4 2,077,902 127,503
Trust 2005-40, Cl. SA, 27.355%, 5/25/35 4 515,000 30,263
- -----------------------------------------------------------------------------------------------------------------------------
Federal National Mortgage Assn., Principal-Only Stripped Mtg.-Backed
Security, Trust 1993-184, Cl. M, 7.641%, 9/25/23 5 69,692 59,574
-------------
32,949,603
- -----------------------------------------------------------------------------------------------------------------------------
GNMA/GUARANTEED--0.2%
Government National Mortgage Assn., Interest-Only Stripped
Mtg.-Backed Security:
Series 2001-21, Cl. SB, 9.217%, 1/16/27 4 256,562 24,656
Series 2002-15, Cl. SM, 5.223%, 2/16/32 4 257,438 23,933
Series 2002-76, Cl. SY, 6.698%, 12/16/26 4 304,222 31,290
Series 2004-11, Cl. SM, 4.425%, 1/17/30 4 117,291 9,863
-------------
89,742
- -----------------------------------------------------------------------------------------------------------------------------
NON-AGENCY--9.6%
- -----------------------------------------------------------------------------------------------------------------------------
COMMERCIAL--9.1%
Banc of America Commercial Mortgage, Inc., Commercial Mtg.
Pass-Through Certificates, Series 2004-6, Cl. A3, 4.512%, 12/10/42 170,000 168,542
- -----------------------------------------------------------------------------------------------------------------------------
Bank of America Mortgage Securities, Inc., Collateralized Mtg. Obligations
Pass-Through Certificates:
Series 2004-E, Cl. 2A9, 3.712%, 6/25/34 115,164 115,200
Series 2004-G, Cl. 2A1, 2.469%, 8/25/34 2 43,657 43,610
Series 2004-2, Cl. 2A1, 6.50%, 7/20/32 242,858 247,101
Series 2004-8, Cl. 5A1, 6.50%, 5/25/32 197,961 203,900
- -----------------------------------------------------------------------------------------------------------------------------
Bear Stearns Commercial Mortgage Securities, Inc.,
Commercial Mtg. Obligations:
Series 2003-T10, Cl. A1, 4%, 3/13/40 239,813 235,649
Series 2005-PWR7, Cl. A2, 4.945%, 2/11/41 90,000 91,308
23 | OPPENHEIMER TOTAL RETURN BOND FUND
STATEMENT OF INVESTMENTS Continued
- --------------------------------------------------------------------------------
PRINICIPAL VALUE
AMOUNT SEE NOTE 1
- -----------------------------------------------------------------------------------------------------------------------------
COMMERCIAL Continued
Countrywide Alternative Loan Trust, Collateralized Mtg. Obligations,
Series 2004-J9, Cl. 1A1, 3.20%, 10/25/34 2 $ 162,122 $ 162,298
- -----------------------------------------------------------------------------------------------------------------------------
First Union National Bank/Lehman Brothers/Bank of America Commercial
Mtg. Trust, Pass-Through Certificates, Series 1998-C2, Cl. A2, 6.56%, 11/18/35 110,000 116,098
- -----------------------------------------------------------------------------------------------------------------------------
GE Capital Commercial Mortgage Corp., Commercial Mtg. Obligations:
Series 2003-C1, Cl. A2, 4.093%, 1/10/38 215,000 212,437
Series 2004-C3, Cl. A2, 4.433%, 7/10/39 120,000 120,043
Series 2005-C1, Cl. A3, 4.578%, 6/10/48 80,000 79,699
- -----------------------------------------------------------------------------------------------------------------------------
GMAC Commercial Mortgage Securities, Inc., Commercial Mtg. Obligations,
Series 2004-C3, Cl. A4, 4.547%, 12/10/41 110,000 109,307
- -----------------------------------------------------------------------------------------------------------------------------
GMAC Commercial Mortgage Securities, Inc., Commercial Mtg.
Pass-Through Certificates, Series 1997-C1, Cl. A3, 6.869%, 7/15/29 80,230 84,067
- -----------------------------------------------------------------------------------------------------------------------------
Greenwich Capital Commercial Funding Corp., Commercial Mtg.
Pass-Through Certificates, Series 2005-GG3, Cl. A2, 4.305%, 8/10/42 150,000 149,119
- -----------------------------------------------------------------------------------------------------------------------------
GS Mortgage Securities Corp. II, Commercial Mtg. Pass-Through Certificates:
Series 2004-C1, Cl. A1, 3.659%, 10/10/28 118,740 116,200
Series 2004-GG2, Cl. A3, 4.602%, 8/10/38 70,000 70,423
- -----------------------------------------------------------------------------------------------------------------------------
GSR Mortgage Loan Trust, Collateralized Mtg. Obligations, Series 04-12,
Cl. 3A1, 4.504%, 12/25/34 1,2 220,459 220,078
- -----------------------------------------------------------------------------------------------------------------------------
J.P. Morgan Chase Commercial Mortgage Securities Corp., Commercial
Mtg. Pass-Through Certificates, Series 2003-ML1A, Cl. A1, 3.972%, 3/12/39 148,949 146,334
- -----------------------------------------------------------------------------------------------------------------------------
Mastr Alternative Loan Trust, Pass-Through Collateralized Mtg. Obligations,
Series 2004-6, Cl. 10A1, 6%, 7/25/34 300,339 308,631
- -----------------------------------------------------------------------------------------------------------------------------
Mastr Asset Securitization Trust, Pass-Through Collateralized Mtg.
Obligations, Series 2004-9, Cl. A3, 4.70%, 8/25/34 2 251,558 251,869
- -----------------------------------------------------------------------------------------------------------------------------
Nomura Asset Securities Corp., Commercial Mtg. Pass-Through Certificates,
Series 1998-D6, Cl. A1B, 6.59%, 3/15/30 130,000 138,084
- -----------------------------------------------------------------------------------------------------------------------------
Prudential Mortgage Capital Co. II LLC, Commercial Mtg. Pass-Through
Certificates, Series PRU-HTG 2000-C1, Cl. A2, 7.306%, 10/6/15 182,000 206,436
- -----------------------------------------------------------------------------------------------------------------------------
Wachovia Bank Commercial Mortgage Trust, Commercial Mtg. Obligations:
Series 2005-C16, Cl. A2, 4.38%, 10/15/41 230,000 229,073
Series 2005-C17, Cl. A2, 4.763%, 3/15/42 270,000 273,064
- -----------------------------------------------------------------------------------------------------------------------------
Washington Mutual Mortgage Securities Corp., Collateralized Mtg.
Pass-Through Certificates, Series 2005-AR5, Cl. A1, 4.852%, 4/25/35 330,000 331,371
- -----------------------------------------------------------------------------------------------------------------------------
Wells Fargo Mortgage-Backed Securities Trust, Collateralized Mtg. Obligations:
Series 2004-DD, Cl. 2 A1, 4.544%, 1/25/35 2 324,917 326,267
Series 2004-N, Cl. A10, 3.803%, 8/25/34 1 214,437 214,836
Series 2004-W, Cl. A2, 4.616%, 11/25/34 2 108,537 108,424
-------------
5,079,468
- -----------------------------------------------------------------------------------------------------------------------------
RESIDENTIAL--0.5%
Countrywide Alternative Loan Trust, Collateralized Mtg. Obligations,
Series 2005-J1, Cl. 3A1, 6.50%, 8/25/32 279,573 284,049
-------------
Total Mortgage-Backed Obligations (Cost $38,338,926) 38,402,862
24 | OPPENHEIMER TOTAL RETURN BOND FUND
PRINICIPAL VALUE
AMOUNT SEE NOTE 1
- -----------------------------------------------------------------------------------------------------------------------------
U.S. GOVERNMENT OBLIGATIONS--18.6%
- -----------------------------------------------------------------------------------------------------------------------------
Federal Home Loan Mortgage Corp. Unsec. Nts.:
3.625%, 9/15/06 $ 370,000 $ 369,416
6.875%, 9/15/10 300,000 337,118
- -----------------------------------------------------------------------------------------------------------------------------
Federal National Mortgage Assn. Unsec. Nts.:
3.75%, 5/17/07 530,000 527,835
4.25%, 7/15/07 6 365,000 367,742
7.25%, 1/15/10-5/15/30 430,000 513,269
- -----------------------------------------------------------------------------------------------------------------------------
Tennessee Valley Authority Bonds:
7.125%, 5/1/30 60,000 78,972
Series A, 6.79%, 5/23/12 2,193,000 2,507,636
- -----------------------------------------------------------------------------------------------------------------------------
U.S. Treasury Bonds:
4.375%, 8/15/12 60,000 61,397
5.375%, 2/15/31 249,000 281,312
5.50%, 8/15/28 165,000 185,844
6.875%, 8/15/25 1,310,000 1,698,191
STRIPS, 1.65%, 2/15/11 7 555,000 442,088
STRIPS, 3.86%, 2/15/13 7 1,089,000 787,911
- -----------------------------------------------------------------------------------------------------------------------------
U.S. Treasury Nts.:
2.50%, 9/30/06-10/31/06 1,310,000 1,291,380
3%, 2/15/08 870,000 853,620
-------------
Total U.S. Government Obligations (Cost $10,299,248) 10,303,731
- -----------------------------------------------------------------------------------------------------------------------------
FOREIGN GOVERNMENT OBLIGATIONS--0.2%
- -----------------------------------------------------------------------------------------------------------------------------
United Mexican States Nts., 7.50%, 1/14/12 (Cost $81,883) 75,000 83,438
- -----------------------------------------------------------------------------------------------------------------------------
CORPORATE BONDS AND NOTES--28.9%
- -----------------------------------------------------------------------------------------------------------------------------
CONSUMER DISCRETIONARY--8.0%
- -----------------------------------------------------------------------------------------------------------------------------
AUTO COMPONENTS--0.5%
Delphi Corp., 6.55% Nts., 6/15/06 130,000 122,200
- -----------------------------------------------------------------------------------------------------------------------------
Lear Corp., 8.11% Sr. Unsec. Nts., Series B, 5/15/09 165,000 166,818
-------------
289,018
- -----------------------------------------------------------------------------------------------------------------------------
AUTOMOBILES--2.3%
American Honda Finance Corp., 3.85% Nts., 11/6/08 8 150,000 147,423
- -----------------------------------------------------------------------------------------------------------------------------
DaimlerChrysler NA Holdings Corp., 7.20% Unsec. Nts., 9/1/09 230,000 243,982
- -----------------------------------------------------------------------------------------------------------------------------
Ford Holdings, Inc., 9.30% Unsec. Unsub. Debs., 3/1/30 45,000 43,127
- -----------------------------------------------------------------------------------------------------------------------------
Ford Motor Credit Co.:
6.50% Unsec. Nts., 1/25/07 160,000 160,048
7.375% Nts., 10/28/09 45,000 43,330
- -----------------------------------------------------------------------------------------------------------------------------
General Motors Acceptance Corp.:
7.25% Nts., 3/2/11 220,000 197,547
8% Bonds, 11/1/31 180,000 151,829
- -----------------------------------------------------------------------------------------------------------------------------
Hertz Corp. (The), 6.35% Nts., 6/15/10 275,000 269,340
-------------
1,256,626
25 | OPPENHEIMER TOTAL RETURN BOND FUND
STATEMENT OF INVESTMENTS Continued
- --------------------------------------------------------------------------------
PRINICIPAL VALUE
AMOUNT SEE NOTE 1
- -----------------------------------------------------------------------------------------------------------------------------
HOTELS, RESTAURANTS & LEISURE--0.9%
Hilton Hotels Corp., 7.95% Sr. Nts., 4/15/07 $ 75,000 $ 80,024
- -----------------------------------------------------------------------------------------------------------------------------
Starwood Hotels & Resorts Worldwide, Inc., 7.375% Nts., 5/1/07 175,000 182,000
- -----------------------------------------------------------------------------------------------------------------------------
Yum! Brands, Inc., 8.50% Sr. Unsec. Nts., 4/15/06 195,000 203,215
-------------
465,239
- -----------------------------------------------------------------------------------------------------------------------------
HOUSEHOLD DURABLES--0.7%
Beazer Homes USA, Inc., 8.625% Sr. Unsec. Nts., 5/15/11 90,000 95,850
- -----------------------------------------------------------------------------------------------------------------------------
D.R. Horton, Inc., 6.125% Nts., 1/15/14 90,000 91,176
- -----------------------------------------------------------------------------------------------------------------------------
Lennar Corp., 5.95% Sr. Unsec. Nts., 3/1/13 105,000 110,152
- -----------------------------------------------------------------------------------------------------------------------------
Toll Corp., 8.25% Sr. Sub. Nts., 12/1/11 90,000 96,638
-------------
393,816
- -----------------------------------------------------------------------------------------------------------------------------
MEDIA--2.3%
Chancellor Media CCU, 8% Sr. Unsec. Nts., 11/1/08 205,000 221,654
- -----------------------------------------------------------------------------------------------------------------------------
Cox Communications, Inc., 7.875% Unsec. Nts., 8/15/09 25,000 27,874
- -----------------------------------------------------------------------------------------------------------------------------
Cox Enterprises, Inc., 7.375% Unsec. Debs., 6/15/09 8 115,000 124,258
- -----------------------------------------------------------------------------------------------------------------------------
Liberty Media Corp., 5.70% Sr. Unsec. Nts., 5/15/13 130,000 123,118
- -----------------------------------------------------------------------------------------------------------------------------
TCI Communications, Inc., 9.80% Sr. Unsec. Debs., 2/1/12 220,000 280,666
- -----------------------------------------------------------------------------------------------------------------------------
Time Warner Cos., Inc., 9.125% Debs., 1/15/13 150,000 188,588
- -----------------------------------------------------------------------------------------------------------------------------
Univision Communications, Inc.:
2.875% Sr. Unsec. Nts., 10/15/06 29,000 28,494
3.50% Sr. Unsec. Nts., 10/15/07 155,000 152,028
- -----------------------------------------------------------------------------------------------------------------------------
Walt Disney Co. (The), 5.375% Sr. Unsec. Nts., 6/1/07 125,000 127,805
-------------
1,274,485
- -----------------------------------------------------------------------------------------------------------------------------
MULTILINE RETAIL--0.9%
Federated Department Stores, Inc., 6.625% Sr. Unsec. Nts., 9/1/08 150,000 159,377
- -----------------------------------------------------------------------------------------------------------------------------
J. C. Penney Co., Inc., 7.40% Nts., 4/1/37 165,000 165,000
- -----------------------------------------------------------------------------------------------------------------------------
May Department Stores Co.:
3.95% Nts., 7/15/07 95,000 94,133
7.90% Unsec. Debs., 10/15/07 90,000 96,638
-------------
515,148
- -----------------------------------------------------------------------------------------------------------------------------
SPECIALTY RETAIL--0.4%
Gap, Inc. (The):
6.90% Nts., 9/15/07 1 185,000 192,730
10.05% Unsub. Nts., 12/15/08 2 23,000 26,599
-------------
219,329
26 | OPPENHEIMER TOTAL RETURN BOND FUND
PRINICIPAL VALUE
AMOUNT SEE NOTE 1
- -----------------------------------------------------------------------------------------------------------------------------
CONSUMER STAPLES--2.2%
- -----------------------------------------------------------------------------------------------------------------------------
FOOD & STAPLES RETAILING--1.3%
Albertson's, Inc.:
8% Sr. Unsec. Debs., 5/1/31 $ 110,000 $ 128,633
8.70% Sr. Unsec. Debs., 5/1/30 56,000 70,018
- -----------------------------------------------------------------------------------------------------------------------------
Delhaize America, Inc., 9% Unsub. Debs., 4/15/31 100,000 118,323
- -----------------------------------------------------------------------------------------------------------------------------
Kroger Co. (The), 7.80% Sr. Nts., 8/15/07 135,000 144,640
- -----------------------------------------------------------------------------------------------------------------------------
Safeway, Inc., 4.80% Sr. Unsec. Nts., 7/16/07 245,000 246,565
-------------
708,179
- -----------------------------------------------------------------------------------------------------------------------------
FOOD PRODUCTS--0.9%
ConAgra Foods, Inc., 6% Nts., 9/15/06 110,000 112,715
- -----------------------------------------------------------------------------------------------------------------------------
General Mills, Inc., 3.875% Nts., 11/30/07 170,000 168,533
- -----------------------------------------------------------------------------------------------------------------------------
Kraft Foods, Inc., 5.25% Nts., 6/1/07 230,000 234,521
-------------
515,769
- -----------------------------------------------------------------------------------------------------------------------------
ENERGY--0.6%
- -----------------------------------------------------------------------------------------------------------------------------
OIL & GAS--0.6%
Chesapeake Energy Corp., 7.50% Sr. Nts., 6/15/14 105,000 110,513
- -----------------------------------------------------------------------------------------------------------------------------
Kinder Morgan, Inc., 6.50% Sr. Unsec. Nts., 9/1/12 90,000 98,475
- -----------------------------------------------------------------------------------------------------------------------------
Pemex Project Funding Master Trust, 7.875% Unsec. Unsub. Nts., 2/1/09 65,000 70,688
- -----------------------------------------------------------------------------------------------------------------------------
PF Export Receivables Master Trust, 3.748% Sr. Nts., Series B, 6/1/13 8 60,515 58,003
-------------
337,679
- -----------------------------------------------------------------------------------------------------------------------------
FINANCIALS--8.9%
- -----------------------------------------------------------------------------------------------------------------------------
CAPITAL MARKETS--0.5%
Bankers Trust Corp., 7.375% Unsec. Sub. Nts., 5/1/08 15,000 16,344
- -----------------------------------------------------------------------------------------------------------------------------
Credit Suisse First Boston (USA), Inc., 5.50% Nts., 8/15/13 250,000 261,376
-------------
277,720
- -----------------------------------------------------------------------------------------------------------------------------
COMMERCIAL BANKS--0.7%
Bank of America Corp., 4.875% Sr. Unsec. Nts., 1/15/13 3,000 3,033
- -----------------------------------------------------------------------------------------------------------------------------
Mellon Bank NA, 4.75% Unsec. Sub. Nts., 12/15/14 210,000 208,385
- -----------------------------------------------------------------------------------------------------------------------------
National City Bank, 6.20% Sub. Nts., 12/15/11 15,000 16,291
- -----------------------------------------------------------------------------------------------------------------------------
SunTrust Banks, Inc.:
4% Nts., 10/15/08 115,000 114,360
7.75% Unsec. Sub. Nts., 5/1/10 10,000 11,474
-------------
353,543
- -----------------------------------------------------------------------------------------------------------------------------
CONSUMER FINANCE--0.5%
HSBC Finance Corp., 4.75% Sr. Unsec. Nts., 7/15/13 265,000 262,523
27 | OPPENHEIMER TOTAL RETURN BOND FUND
STATEMENT OF INVESTMENTS Continued
- --------------------------------------------------------------------------------
PRINICIPAL VALUE
AMOUNT SEE NOTE 1
- -----------------------------------------------------------------------------------------------------------------------------
DIVERSIFIED FINANCIAL SERVICES--3.3%
AIG SunAmerica Global Financing II, 7.60% Sr. Sec. Nts., 6/15/05 8 $ 80,000 $ 80,376
- -----------------------------------------------------------------------------------------------------------------------------
American Express Centurion Bank, 4.375% Nts., 7/30/09 250,000 250,413
- -----------------------------------------------------------------------------------------------------------------------------
CIT Group, Inc., 7.75% Sr. Unsec. Unsub. Nts., 4/2/12 175,000 204,341
- -----------------------------------------------------------------------------------------------------------------------------
Citigroup, Inc., 6.625% Unsec. Sub. Nts., 6/15/32 230,000 265,326
- -----------------------------------------------------------------------------------------------------------------------------
Franklin Resources, Inc., 3.70% Nts., 4/15/08 50,000 49,522
- -----------------------------------------------------------------------------------------------------------------------------
Goldman Sachs Group, Inc. (The), 5.70% Sr. Unsec. Nts., 9/1/12 245,000 257,241
- -----------------------------------------------------------------------------------------------------------------------------
Lehman Brothers Holdings, Inc., 7% Nts., 2/1/08 140,000 150,189
- -----------------------------------------------------------------------------------------------------------------------------
Lehman Brothers, Inc., 6.625% Sr. Sub. Nts., 2/15/08 20,000 21,221
- -----------------------------------------------------------------------------------------------------------------------------
MBNA Corp., 7.50% Sr. Nts., Series F, 3/15/12 200,000 227,854
- -----------------------------------------------------------------------------------------------------------------------------
Merrill Lynch & Co., Inc., 5% Sr. Unsub. Nts., Series C, 2/3/14 260,000 261,720
- -----------------------------------------------------------------------------------------------------------------------------
Morgan Stanley, 6.60% Nts., 4/1/12 70,000 76,764
-------------
1,844,967
- -----------------------------------------------------------------------------------------------------------------------------
INSURANCE--2.2%
Allstate Financial Global Funding LLC, 4.25% Nts., 9/10/08 8 40,000 39,857
- -----------------------------------------------------------------------------------------------------------------------------
Allstate Life Global Funding II, 3.50% Nts., 7/30/07 60,000 59,266
- -----------------------------------------------------------------------------------------------------------------------------
AXA, 8.60% Unsec. Sub. Nts., 12/15/30 90,000 120,499
- -----------------------------------------------------------------------------------------------------------------------------
Hartford Financial Services Group, Inc. (The), 2.375% Nts., 6/1/06 50,000 49,017
- -----------------------------------------------------------------------------------------------------------------------------
John Hancock Global Funding II, 7.90% Nts., 7/2/10 8 145,000 167,735
- -----------------------------------------------------------------------------------------------------------------------------
Marsh & McLennan Cos., Inc., 5.375% Sr. Unsec. Nts., 3/15/07 150,000 152,689
- -----------------------------------------------------------------------------------------------------------------------------
Nationwide Financial Services, Inc., 5.90% Nts., 7/1/12 110,000 117,757
- -----------------------------------------------------------------------------------------------------------------------------
Prudential Holdings LLC, 8.695% Bonds, Series C, 12/18/23 8 105,000 136,615
- -----------------------------------------------------------------------------------------------------------------------------
Prudential Insurance Co. of America, 8.30% Nts., 7/1/25 145,000 194,204
- -----------------------------------------------------------------------------------------------------------------------------
Travelers Property Casualty Corp., 3.75% Sr. Unsec. Nts., 3/15/08 190,000 186,715
-------------
1,224,354
- -----------------------------------------------------------------------------------------------------------------------------
REAL ESTATE--1.7%
EOP Operating LP:
6.763% Sr. Unsec. Nts., 6/15/07 98,000 102,667
8.10% Unsec. Nts., 8/1/10 95,000 109,138
- -----------------------------------------------------------------------------------------------------------------------------
iStar Financial, Inc., 4.875% Sr. Unsec. Nts., Series B, 1/15/09 205,000 203,385
- -----------------------------------------------------------------------------------------------------------------------------
Liberty Property Trust, 5.65% Sr. Nts., 8/15/14 115,000 118,764
- -----------------------------------------------------------------------------------------------------------------------------
Simon Property Group LP:
5.45% Unsec. Nts., 3/15/13 102,000 104,240
5.625% Unsec. Unsub. Nts., 8/15/14 100,000 102,507
- -----------------------------------------------------------------------------------------------------------------------------
Vornado Realty LP, 5.625% Sr. Unsec. Unsub. Nts., 6/15/07 195,000 200,615
-------------
941,316
28 | OPPENHEIMER TOTAL RETURN BOND FUND
PRINICIPAL VALUE
AMOUNT SEE NOTE 1
- -----------------------------------------------------------------------------------------------------------------------------
HEALTH CARE--1.5%
- -----------------------------------------------------------------------------------------------------------------------------
HEALTH CARE PROVIDERS & SERVICES--1.1%
Aetna, Inc., 7.375% Sr. Unsec. Nts., 3/1/06 $ 190,000 $ 195,234
- -----------------------------------------------------------------------------------------------------------------------------
CIGNA Corp., 7.40% Unsec. Nts., 5/15/07 225,000 238,064
- -----------------------------------------------------------------------------------------------------------------------------
HCA Healthcare Corp., 6.91% Sr. Sub. Nts., 6/15/05 81,000 81,286
- -----------------------------------------------------------------------------------------------------------------------------
HCA, Inc., 7.125% Sr. Unsec. Nts., 6/1/06 60,000 61,870
- -----------------------------------------------------------------------------------------------------------------------------
UnitedHealth Group, Inc., 4.875% Bonds, 3/15/15 65,000 65,349
-------------
641,803
- -----------------------------------------------------------------------------------------------------------------------------
PHARMACEUTICALS--0.4%
Merck & Co., Inc., 4.726% Nts., 2/22/06 8 210,000 211,179
- -----------------------------------------------------------------------------------------------------------------------------
INDUSTRIALS--2.2%
- -----------------------------------------------------------------------------------------------------------------------------
AEROSPACE & DEFENSE--0.6%
Boeing Capital Corp., 5.75% Sr. Nts., 2/15/07 17,000 17,471
- -----------------------------------------------------------------------------------------------------------------------------
Lockheed Martin Corp., 7.65% Unsec. Unsub. Debs., 5/1/16 82,000 99,774
- -----------------------------------------------------------------------------------------------------------------------------
McDonnell Douglas Corp., 6.875% Unsec. Unsub. Nts., 11/1/06 26,000 27,008
- -----------------------------------------------------------------------------------------------------------------------------
Northrop Grumman Corp., 7.125% Sr. Nts., 2/15/11 135,000 152,022
- -----------------------------------------------------------------------------------------------------------------------------
Raytheon Co., 6.50% Unsec. Nts., 7/15/05 32,000 32,186
-------------
328,461
- -----------------------------------------------------------------------------------------------------------------------------
AIR FREIGHT & LOGISTICS--0.4%
FedEx Corp., 2.65% Unsec. Nts., 4/1/07 215,000 209,048
- -----------------------------------------------------------------------------------------------------------------------------
COMMERCIAL SERVICES & SUPPLIES--0.6%
Allied Waste North America, Inc., 8.875% Sr. Nts., Series B, 4/1/08 85,000 87,763
- -----------------------------------------------------------------------------------------------------------------------------
Waste Management, Inc.:
7% Sr. Nts., 7/15/28 70,000 79,994
7.125% Sr. Unsec. Nts., 10/1/07 145,000 154,194
-------------
321,951
- -----------------------------------------------------------------------------------------------------------------------------
INDUSTRIAL CONGLOMERATES--0.3%
Tyco International Group SA:
6.375% Sr. Unsec. Unsub. Nts., 2/15/06 135,000 137,603
6.75% Sr. Unsub. Nts., 2/15/11 61,000 67,050
-------------
204,653
- -----------------------------------------------------------------------------------------------------------------------------
ROAD & RAIL--0.3%
Canadian National Railway Co., 4.25% Nts., 8/1/09 29,000 28,897
- -----------------------------------------------------------------------------------------------------------------------------
CSX Corp., 6.25% Unsec. Nts., 10/15/08 140,000 148,263
-------------
177,160
29 | OPPENHEIMER TOTAL RETURN BOND FUND
STATEMENT OF INVESTMENTS Continued
- --------------------------------------------------------------------------------
PRINICIPAL VALUE
AMOUNT SEE NOTE 1
- -----------------------------------------------------------------------------------------------------------------------------
TELECOMMUNICATION SERVICES--2.0%
- -----------------------------------------------------------------------------------------------------------------------------
DIVERSIFIED TELECOMMUNICATION SERVICES--1.6%
British Telecommunications plc, 8.625% Bonds, 12/15/30 $ 115,000 $ 157,512
- -----------------------------------------------------------------------------------------------------------------------------
Citizens Communications Co., 9.25% Sr. Nts., 5/15/11 34,000 36,975
- -----------------------------------------------------------------------------------------------------------------------------
Deutsche Telekom International Finance BV, 8.50% Unsub. Nts., 6/15/10 125,000 145,122
- -----------------------------------------------------------------------------------------------------------------------------
France Telecom SA:
8% Sr. Unsec. Nts., 3/1/11 2 125,000 144,226
8.75% Sr. Unsec. Nts., 3/1/31 2 45,000 61,108
- -----------------------------------------------------------------------------------------------------------------------------
Sprint Capital Corp.:
6% Sr. Unsec. Nts., 1/15/07 100,000 102,692
8.75% Nts., 3/15/32 80,000 107,906
- -----------------------------------------------------------------------------------------------------------------------------
Telefonos de Mexico SA de CV, 4.75% Nts., 1/27/10 8 130,000 127,895
-------------
883,436
- -----------------------------------------------------------------------------------------------------------------------------
WIRELESS TELECOMMUNICATION SERVICES--0.4%
AT&T Wireless Services, Inc., 8.125% Sr. Unsec. Nts., 5/1/12 180,000 213,103
- -----------------------------------------------------------------------------------------------------------------------------
UTILITIES--3.5%
- -----------------------------------------------------------------------------------------------------------------------------
ELECTRIC UTILITIES--3.0%
CenterPoint Energy, Inc.:
5.875% Sr. Nts., 6/1/08 105,000 108,748
8.125% Unsec. Nts., Series B, 7/15/05 50,000 50,472
- -----------------------------------------------------------------------------------------------------------------------------
Conectiv, Inc., 5.30% Unsec. Unsub. Nts., Series B, 6/1/05 26,000 26,032
- -----------------------------------------------------------------------------------------------------------------------------
Constellation Energy Group, Inc., 7% Unsec. Nts., 4/1/12 180,000 202,152
- -----------------------------------------------------------------------------------------------------------------------------
Dominion Resources, Inc., 8.125% Sr. Unsub. Nts., 6/15/10 80,000 92,239
- -----------------------------------------------------------------------------------------------------------------------------
DTE Energy Co., 6.45% Sr. Unsub. Nts., 6/1/06 100,000 102,546
- -----------------------------------------------------------------------------------------------------------------------------
Duke Capital LLC, 5.668% Nts., 8/15/14 120,000 123,639
- -----------------------------------------------------------------------------------------------------------------------------
FirstEnergy Corp.:
5.50% Sr. Unsub. Nts., Series A, 11/15/06 90,000 91,698
7.375% Sr. Unsub. Nts., Series C, 11/15/31 105,000 124,140
- -----------------------------------------------------------------------------------------------------------------------------
IPALCO Enterprises, Inc., 8.375% Sr. Sec. Nts., 11/14/08 1,2 100,000 108,000
- -----------------------------------------------------------------------------------------------------------------------------
MidAmerican Energy Holdings Co., 5.875% Sr. Unsec. Nts., 10/1/12 130,000 137,145
- -----------------------------------------------------------------------------------------------------------------------------
Portland General Electric Co., 8.125% First Mortgage Nts., 2/1/10 8 120,000 133,636
- -----------------------------------------------------------------------------------------------------------------------------
PSE&G Power LLC, 6.875% Sr. Unsec. Nts., 4/15/06 105,000 107,802
- -----------------------------------------------------------------------------------------------------------------------------
PSE&G Energy Holdings LLC, 7.75% Unsec. Nts., 4/16/07 1 95,000 97,850
- -----------------------------------------------------------------------------------------------------------------------------
TECO Energy, Inc., 10.50% Sr. Unsec. Nts., 12/1/07 65,000 73,450
- -----------------------------------------------------------------------------------------------------------------------------
TXU Corp., 4.80% Nts., 11/15/09 8 95,000 93,216
-------------
1,672,765
30 | OPPENHEIMER TOTAL RETURN BOND FUND
PRINICIPAL VALUE
AMOUNT SEE NOTE 1
- -----------------------------------------------------------------------------------------------------------------------------
GAS UTILITIES--0.5%
NiSource Finance Corp.:
3.20% Nts., 11/1/06 $ 30,000 $ 29,608
7.875% Sr. Unsec. Nts., 11/15/10 125,000 144,501
- -----------------------------------------------------------------------------------------------------------------------------
Sempra Energy, 7.95% Sr. Unsec. Unsub. Nts., 3/1/10 103,000 117,191
-------------
291,300
-------------
Total Corporate Bonds and Notes (Cost $16,175,874) 16,034,570
- -----------------------------------------------------------------------------------------------------------------------------
JOINT REPURCHASE AGREEMENTS--4.8%
- -----------------------------------------------------------------------------------------------------------------------------
Undivided interest of 0.20% in joint repurchase agreement (Principal Amount/Value
$1,318,039,000, with a maturity value of $1,318,355,329) with UBS Warburg LLC, 2.88%,
dated 4/29/05, to be repurchased at $2,688,645 on 5/2/05, collateralized by Federal
National Mortgage Assn., 5%--6%, 3/1/34--8/1/34, with a value of
$1,345,611,059 (Cost $2,688,000) 2,688,000 2,688,000
- -----------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS, AT VALUE (COST $74,704,900) 134.5% 74,612,532
- -----------------------------------------------------------------------------------------------------------------------------
LIABILITIES IN EXCESS OF OTHER ASSETS (34.5) (19,151,429)
---------------------------------
NET ASSETS 100.0% $ 55,461,103
=================================
FOOTNOTES TO STATEMENT OF INVESTMENTS
1. Illiquid security. The aggregate value of illiquid securities as of April 30,
2005 was $1,908,948, which represents 3.44% of the Fund's net assets. See Note 6
of Notes to Financial Statements.
2. Represents the current interest rate for a variable or increasing rate
security.
3. When-issued security or forward commitment to be delivered and settled after
April 30, 2005. See Note 1 of Notes to Financial Statements.
4. Interest-Only Strips represent the right to receive the monthly interest
payments on an underlying pool of mortgage loans. These securities typically
decline in price as interest rates decline. Most other fixed income securities
increase in price when interest rates decline. The principal amount of the
underlying pool represents the notional amount on which current interest is
calculated. The price of these securities is typically more sensitive to changes
in prepayment rates than traditional mortgage-backed securities (for example,
GNMA pass-throughs). Interest rates disclosed represent current yields based
upon the current cost basis and estimated timing and amount of future cash
flows. These securities amount to $1,287,800 or 2.32% of the Fund's net assets
as of April 30, 2005.
5. Principal-Only Strips represent the right to receive the monthly principal
payments on an underlying pool of mortgage loans. The value of these securities
generally increases as interest rates decline and prepayment rates rise. The
price of these securities is typically more volatile than that of coupon-bearing
bonds of the same maturity. Interest rates disclosed represent current yields
based upon the current cost basis and estimated timing of future cash flows.
These securities amount to $87,286 or 0.16% of the Fund's net assets as of April
30, 2005.
6. All or a portion of the security is held in collateralized accounts to cover
initial margin requirements on open futures sales contracts. The collateralized
portion has an aggregate market value of $302,254. See Note 5 of Notes to
Financial Statements.
7. Zero coupon bond reflects effective yield on the date of purchase.
8. Represents securities sold under Rule 144A, which are exempt from
registration under the Securities Act of 1933, as amended. These securities have
been determined to be liquid under guidelines established by the Board of
Trustees. These securities amount to $1,320,193 or 2.38% of the Fund's net
assets as of April 30, 2005.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
31 | OPPENHEIMER TOTAL RETURN BOND FUND
STATEMENT OF ASSETS AND LIABILITIES April 30, 2005
- --------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------
ASSETS
- ---------------------------------------------------------------------------------------------------------
Investments, at value (cost $74,704,900)--see accompanying statement of investments $ 74,612,532
- ---------------------------------------------------------------------------------------------------------
Cash 200,744
- ---------------------------------------------------------------------------------------------------------
Receivables and other assets:
Interest, dividends and principal paydowns 536,230
Investments sold on a when-issued basis or forward commitment 333,415
Shares of beneficial interest sold 156,234
Futures margins 22,074
Other 3,637
-------------
Total assets 75,864,866
- ---------------------------------------------------------------------------------------------------------
LIABILITIES
- ---------------------------------------------------------------------------------------------------------
Payables and other liabilities:
Investments purchased (including $19,785,237 purchased on a when-issued basis
or forward commitment) 20,222,925
Dividends 83,153
Shares of beneficial interest redeemed 46,411
Shareholder communications 18,588
Transfer and shareholder servicing agent fees 6,641
Distribution and service plan fees 5,800
Trustees' compensation 225
Other 20,020
-------------
Total liabilities 20,403,763
- ---------------------------------------------------------------------------------------------------------
NET ASSETS $ 55,461,103
=============
- ---------------------------------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS
- ---------------------------------------------------------------------------------------------------------
Par value of shares of beneficial interest $ 5,527
- ---------------------------------------------------------------------------------------------------------
Additional paid-in capital 55,519,994
- ---------------------------------------------------------------------------------------------------------
Accumulated net investment income 96,126
- ---------------------------------------------------------------------------------------------------------
Accumulated net realized loss on investments (123,217)
- ---------------------------------------------------------------------------------------------------------
Net unrealized depreciation on investments (37,327)
-------------
NET ASSETS $ 55,461,103
=============
32 | OPPENHEIMER TOTAL RETURN BOND FUND
- ---------------------------------------------------------------------------------------------------------
NET ASSET VALUE PER SHARE
- ---------------------------------------------------------------------------------------------------------
Class A Shares:
Net asset value and redemption price per share (based on net assets of $41,647,660 and
4,150,188 shares of beneficial interest outstanding) $10.04
Maximum offering price per share (net asset value plus sales charge of 4.75% of offering price) $10.54
- ---------------------------------------------------------------------------------------------------------
Class B Shares:
Net asset value, redemption price (excludes applicable contingent deferred sales charge)
and offering price per share (based on net assets of $4,244,435 and 422,922 shares of
beneficial interest outstanding) $10.04
- ---------------------------------------------------------------------------------------------------------
Class C Shares:
Net asset value, redemption price (excludes applicable contingent deferred sales charge)
and offering price per share (based on net assets of $6,757,125 and 673,574 shares of
beneficial interest outstanding) $10.03
- ---------------------------------------------------------------------------------------------------------
Class N Shares:
Net asset value, redemption price (excludes applicable contingent deferred sales charge)
and offering price per share (based on net assets of $2,811,883 and 280,171 shares of
beneficial interest outstanding) $10.04
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
33 | OPPENHEIMER TOTAL RETURN BOND FUND
STATEMENT OF OPERATIONS For the Year Ended April 30, 2005
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
INVESTMENT INCOME
- --------------------------------------------------------------------------------
Interest $ 1,644,789
- --------------------------------------------------------------------------------
Fee income 463,463
-------------
Total investment income 2,108,252
- --------------------------------------------------------------------------------
EXPENSES
- --------------------------------------------------------------------------------
Management fees 241,713
- --------------------------------------------------------------------------------
Distribution and service plan fees:
Class A 31,747
Class B 35,992
Class C 46,234
Class N 8,964
- --------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees:
Class A 27,622
Class B 16,266
Class C 15,081
Class N 5,160
- --------------------------------------------------------------------------------
Shareholder communications:
Class A 5,684
Class B 12,103
Class C 10,022
Class N 1,629
- --------------------------------------------------------------------------------
Legal, auditing and other professional fees 37,326
- --------------------------------------------------------------------------------
Trustees' compensation 8,360
- --------------------------------------------------------------------------------
Custodian fees and expenses 2,032
- --------------------------------------------------------------------------------
Other 14,811
-------------
Total expenses 520,746
Less reduction to custodian expenses (1,583)
Less waivers and reimbursements of expenses (58,795)
-------------
Net expenses 460,368
- --------------------------------------------------------------------------------
NET INVESTMENT INCOME 1,647,884
34 | OPPENHEIMER TOTAL RETURN BOND FUND
- --------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
- --------------------------------------------------------------------------------
Net realized gain (loss) on:
Investments $ (45,736)
Closing of futures contracts 172,301
Swap contracts (2,677)
-------------
Net realized gain 123,888
- --------------------------------------------------------------------------------
Net change in unrealized appreciation on:
Investments 316,373
Futures contracts 90,170
Swap contracts 24,851
-------------
Net change in unrealized depreciation 431,394
- --------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 2,203,166
=============
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
35 | OPPENHEIMER TOTAL RETURN BOND FUND
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
YEAR ENDED APRIL 30, 2005 2004
- -------------------------------------------------------------------------------------------------------------------
OPERATIONS
- -------------------------------------------------------------------------------------------------------------------
Net investment income $ 1,647,884 $ 995,619
- -------------------------------------------------------------------------------------------------------------------
Net realized gain 123,888 526,743
- -------------------------------------------------------------------------------------------------------------------
Net change in unrealized depreciation 431,394 (695,353)
---------------------------------
Net increase in net assets resulting from operations 2,203,166 827,009
- -------------------------------------------------------------------------------------------------------------------
DIVIDENDS AND/OR DISTRIBUTIONS TO SHAREHOLDERS
- -------------------------------------------------------------------------------------------------------------------
Dividends from net investment income:
Class A (1,371,124) (937,199)
Class B (97,975) (49,017)
Class C (126,494) (34,611)
Class N (58,268) (9,716)
- -------------------------------------------------------------------------------------------------------------------
Distributions from net realized gain:
Class A (321,230) (179,397)
Class B (31,264) (14,472)
Class C (43,977) (10,826)
Class N (18,161) (2,729)
- -------------------------------------------------------------------------------------------------------------------
BENEFICIAL INTEREST TRANSACTIONS
- -------------------------------------------------------------------------------------------------------------------
Net increase in net assets resulting from beneficial interest transactions:
Class A 5,992,710 8,253,430
Class B 1,339,849 2,136,318
Class C 3,818,993 2,587,144
Class N 1,982,293 821,065
- -------------------------------------------------------------------------------------------------------------------
NET ASSETS
- -------------------------------------------------------------------------------------------------------------------
Total increase 13,268,518 13,386,999
- -------------------------------------------------------------------------------------------------------------------
Beginning of period 42,192,585 28,805,586
---------------------------------
End of period (including accumulated net investment income
of $96,126 and $7,543, respectively) $ 55,461,103 $ 42,192,585
=================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
36 | OPPENHEIMER TOTAL RETURN BOND FUND
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
CLASS A YEAR ENDED APRIL 30, 2005 2004 2003 1
- ---------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- ---------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 10.00 $ 10.08 $ 10.00
- ---------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .36 2 .28 .03
Net realized and unrealized gain (loss) .12 (.02) .08
-------------------------------------------------
Total from investment operations .48 .26 .11
- ---------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.36) (.29) (.03)
Distributions from net realized gain (.08) (.05) --
-------------------------------------------------
Total dividends and/or distributions to shareholders (.44) (.34) (.03)
- ---------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 10.04 $ 10.00 $ 10.08
=================================================
- ---------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 3 4.89% 2.64% 1.14%
- ---------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ---------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 41,648 $ 35,522 $ 27,598
- ---------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 38,411 $ 32,578 $ 26,027
- ---------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 4
Net investment income 3.56% 2.78% 1.77%
Total expenses 0.80% 0.79% 1.29%
Expenses after payments and waivers and
reduction to custodian expenses 0.79% 0.73% 0.90%
- ---------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 86% 5 131% 5 77%
1. For the period from February 21, 2003 (commencement of operations) to April
30, 2003.
2. Per share amounts calculated based on the average shares outstanding during
the period.
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 returns. Total returns are not annualized for
periods of less than one full year. Returns do not reflect the deduction of
taxes a shareholder would pay on Fund distributions or the redemption of Fund
shares.
4. Annualized for periods of less than one full year.
5. The portfolio turnover rate excludes purchases and sales of To Be Announced
(TBA) mortgage-related securities as follows:
PURCHASE TRANSACTIONS SALE TRANSACTIONS
- ----------------------------------------------------------------
April 30, 2005 $280,759,754 $281,155,514
April 30, 2004 198,777,129 189,672,219
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
37 | OPPENHEIMER TOTAL RETURN BOND FUND
FINANCIAL HIGHLIGHTS Continued
- --------------------------------------------------------------------------------
CLASS B YEAR ENDED APRIL 30, 2005 2004 2003 1
- ---------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- ---------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 10.00 $ 10.08 $ 10.00
- ---------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .27 2 .19 .02
Net realized and unrealized gain (loss) .12 (.02) .08
-------------------------------------------------
Total from investment operations .39 .17 .10
- ---------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.27) (.20) (.02)
Distributions from net realized gain (.08) (.05) --
-------------------------------------------------
Total dividends and/or distributions to shareholders (.35) (.25) (.02)
- ---------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 10.04 $ 10.00 $ 10.08
=================================================
- ---------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 3 4.00% 1.69% 0.97%
- ---------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ---------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 4,244 $ 2,896 $ 798
- ---------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 3,610 $ 2,444 $ 340
- ---------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 4
Net investment income 2.70% 1.91% 0.85%
Total expenses 2.41% 2.20% 2.36%
Expenses after payments and waivers and reduction
to custodian expenses 1.65% 1.65% 1.65%
- ---------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 86% 5 131% 5 77%
1. For the period from February 21, 2003 (commencement of operations) to April
30, 2003.
2. Per share amounts calculated based on the average shares outstanding during
the period.
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 returns. Total returns are not annualized for
periods of less than one full year. Returns do not reflect the deduction of
taxes a shareholder would pay on Fund distributions or the redemption of Fund
shares.
4. Annualized for periods of less than one full year.
5. The portfolio turnover rate excludes purchases and sales of To Be Announced
(TBA) mortgage-related securities as follows:
PURCHASE TRANSACTIONS SALE TRANSACTIONS
- ----------------------------------------------------------------
April 30, 2005 $280,759,754 $281,155,514
April 30, 2004 198,777,129 189,672,219
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
38 | OPPENHEIMER TOTAL RETURN BOND FUND
CLASS C YEAR ENDED APRIL 30, 2005 2004 2003 1
- ---------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- ---------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 9.99 $ 10.08 $ 10.00
- ---------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .27 2 .19 .02
Net realized and unrealized gain (loss) .12 (.03) .08
-------------------------------------------------
Total from investment operations .39 .16 .10
- ---------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.27) (.20) (.02)
Distributions from net realized gain (.08) (.05) --
-------------------------------------------------
Total dividends and/or distributions to shareholders (.35) (.25) (.02)
- ---------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 10.03 $ 9.99 $ 10.08
=================================================
- ---------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 3 3.99% 1.60% 0.96%
- ---------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ---------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 6,757 $ 2,943 $ 388
- ---------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 4,641 $ 1,679 $ 126
- ---------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 4
Net investment income 2.71% 1.95% 0.59%
Total expenses 2.17% 2.12% 2.28%
Expenses after payments and waivers and reduction
to custodian expenses 1.65% 1.65% 1.65%
- ---------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 86% 5 131% 5 77%
1. For the period from February 21, 2003 (commencement of operations) to April
30, 2003.
2. Per share amounts calculated based on the average shares outstanding during
the period.
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 returns. Total returns are not annualized for
periods of less than one full year. Returns do not reflect the deduction of
taxes a shareholder would pay on Fund distributions or the redemption of Fund
shares.
4. Annualized for periods of less than one full year.
5. The portfolio turnover rate excludes purchases and sales of To Be Announced
(TBA) mortgage-related securities as follows:
PURCHASE TRANSACTIONS SALE TRANSACTIONS
- ----------------------------------------------------------------
April 30, 2005 $280,759,754 $281,155,514
April 30, 2004 198,777,129 189,672,219
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
39 | OPPENHEIMER TOTAL RETURN BOND FUND
FINANCIAL HIGHLIGHTS Continued
- --------------------------------------------------------------------------------
CLASS N YEAR ENDED APRIL 30, 2005 2004 2003 1
- ---------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- ---------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 10.00 $ 10.08 $ 10.00
- ---------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .32 2 .24 .03
Net realized and unrealized gain (loss) .12 (.02) .08
-------------------------------------------------
Total from investment operations .44 .22 .11
- ---------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.32) (.25) (.03)
Distributions from net realized gain (.08) (.05) --
-------------------------------------------------
Total dividends and/or distributions to shareholders (.40) (.30) (.03)
- ---------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 10.04 $ 10.00 $ 10.08
=================================================
- ---------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 3 4.51% 2.20% 1.08%
- ---------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ---------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 2,812 $ 831 $ 22
- ---------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 1,802 $ 386 $ 6
- ---------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 4
Net investment income 3.22% 2.40% 1.50%
Total expenses 1.51% 1.34% 2.63%
Expenses after payments and waivers and reduction
to custodian expenses 1.15% 1.15% 1.15%
- ---------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 86% 5 131% 5 77%
1. For the period from February 21, 2003 (commencement of operations) to April
30, 2003.
2. Per share amounts calculated based on the average shares outstanding during
the period.
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 returns. Total returns are not annualized for
periods of less than one full year. Returns do not reflect the deduction of
taxes a shareholder would pay on Fund distributions or the redemption of Fund
shares.
4. Annualized for periods of less than one full year.
5. The portfolio turnover rate excludes purchases and sales of To Be Announced
(TBA) mortgage-related securities as follows:
PURCHASE TRANSACTIONS SALE TRANSACTIONS
- ----------------------------------------------------------------
April 30, 2005 $280,759,754 $281,155,514
April 30, 2004 198,777,129 189,672,219
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
40 | OPPENHEIMER TOTAL RETURN BOND FUND
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
Oppenheimer Total Return Bond 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 to maximize total return through both
capital appreciation and income. As a secondary objective, it emphasizes
preservation of capital. The Fund's investment advisor is OppenheimerFunds, Inc.
(the Manager).
The Fund offers Class A, Class B, Class C and Class N shares. Class A
shares are sold at their offering price, which is normally net asset value plus
a front-end sales charge. As of April 30, 2005, the Manager owned 45% 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. All classes of shares
have identical rights and voting privileges with respect to the Fund in general
and exclusive voting rights on matters that affect that class alone. Earnings,
net assets and net asset value per share may differ due to each class having its
own expenses, such as transfer and shareholder servicing agent fees and
shareholder communications, directly attributable to that class. Class A, B, C
and N have separate distribution and/or service plans. Class B shares will
automatically convert to Class A shares six years after the date of purchase.
The following is a summary of significant accounting policies consistently
followed by the Fund.
- --------------------------------------------------------------------------------
SECURITIES VALUATION. The Fund calculates the net asset value of its shares as
of the close of The New York Stock Exchange (the Exchange), normally 4:00 P.M.
Eastern time, on each day the Exchange is open for business. Securities listed
or traded on National Stock Exchanges or other domestic or foreign exchanges are
valued based on the last sale price of the security traded on that exchange
prior to the time when the Fund's assets are valued. Securities traded on NASDAQ
are valued based on the closing price provided by NASDAQ prior to the time when
the Fund's assets are valued. In the absence of a sale, the security is valued
at the last sale price on the prior trading day, if it is within the spread of
the closing "bid" and "asked" prices, and if not, at the closing bid price.
Corporate, government and municipal debt instruments having a remaining maturity
in excess of sixty days and all mortgage-backed securities will be valued at the
mean between the "bid" and "asked" prices. Futures contracts traded on a
commodities or futures exchange will be valued at the final settlement price or
official closing price on the principal exchange as reported by such principal
exchange at its trading session ending at, or most recently prior to, the time
when the Fund's assets are valued. 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
41 | OPPENHEIMER TOTAL RETURN BOND FUND
NOTES TO FINANCIAL STATEMENTS Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES Continued
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).
- --------------------------------------------------------------------------------
SECURITIES ON A WHEN-ISSUED BASIS OR FORWARD COMMITMENT. Delivery and payment
for securities that have been purchased by the Fund on a when-issued basis or
forward commitment can take place up to ten days or more after the trade date.
Normally the settlement date occurs within six months after the trade date;
however, the Fund may, from time to time, purchase securities whose settlement
date extends six months or more beyond trade date. During this period, such
securities do not earn interest, are subject to market fluctuation and may
increase or decrease in value prior to their delivery. The Fund maintains
internally designated assets with a market value equal to or greater than the
amount of its purchase commitments. The purchase of securities on a when-issued
basis or forward commitment may increase the volatility of the Fund's net asset
value to the extent the Fund executes such transactions while remaining
substantially fully invested. The Fund may also sell securities that it
purchased on a when-issued basis or forward commitment prior to settlement of
the original purchase. As of April 30, 2005, the Fund had purchased $19,785,237
of securities issued on a when-issued basis or forward commitment and sold
$333,415 of securities issued on a when-issued basis or forward commitment.
In connection with its ability to purchase or sell securities on a
when-issued basis, the Fund may enter into forward roll transactions with
respect to mortgage-related securities. Forward roll transactions require the
sale of securities for delivery in the current month, and a simultaneous
agreement with the same counterparty to repurchase similar (same type, coupon
and maturity) but not identical securities on a specified future date. The Fund
records the incremental difference between the forward purchase and sale of each
forward roll as realized gain (loss) on investments or as fee income in the case
of such transactions that have an associated fee in lieu of a difference in the
forward purchase and sale price.
Risks of entering into forward roll transactions include the potential
inability of the counterparty to meet the terms of the agreement; the potential
of the Fund to receive inferior securities at redelivery as compared to the
securities sold to the counterparty; counterparty credit risk; and the potential
pay down speed variance between the mortgage-related pools.
- --------------------------------------------------------------------------------
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
42 | OPPENHEIMER TOTAL RETURN BOND FUND
sufficient to cover payments of interest and principal. In the event of default
by the other party to the agreement, retention of the collateral may be subject
to legal proceedings.
- --------------------------------------------------------------------------------
ALLOCATION OF INCOME, EXPENSES, GAINS AND LOSSES. Income, expenses (other than
those attributable to a specific class), gains and losses are allocated on a
daily basis to each class of shares based upon the relative proportion of net
assets represented by such class. Operating expenses directly attributable to a
specific class are charged against the operations of that class.
- --------------------------------------------------------------------------------
FEDERAL TAXES. The Fund intends to comply with provisions of the Internal
Revenue Code applicable to regulated investment companies and to distribute
substantially all of its investment company taxable income, including any net
realized gain on investments not offset by capital loss carryforwards, if any,
to shareholders, therefore, no federal income or excise tax provision is
required.
The tax components of capital shown in the table below represent distribution
requirements the Fund must satisfy under the income tax regulations, losses the
Fund may be able to offset against income and gains realized in future years and
unrealized appreciation or depreciation of securities and other investments for
federal income tax purposes.
NET UNREALIZED
DEPRECIATION
BASED ON COST OF
SECURITIES AND
UNDISTRIBUTED UNDISTRIBUTED ACCUMULATED OTHER INVESTMENTS
NET INVESTMENT LONG-TERM LOSS FOR FEDERAL INCOME
INCOME GAIN CARRYFORWARD 1,2,3,4 TAX PURPOSES
------------------------------------------------------------------------------
$109,345 $ -- $81,399 $92,368
1. As of April 30, 2005, the Fund had $67,482 of post-October losses available
to offset future realized capital gains, if any. Such losses, if unutilized,
will expire in 2014.
2. The Fund had $13,917 of straddle losses which were deferred.
3. During the fiscal year ended April 30, 2005, the Fund did not utilize any
capital loss carryforward.
4. During the fiscal year ended April 30, 2004, the Fund did not utilize any
capital loss carryforward.
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 April 30, 2005. Net assets of the
Fund were unaffected by the reclassifications.
INCREASE TO INCREASE TO
ACCUMULATED ACCUMULATED NET
NET INVESTMENT REALIZED LOSS
INCOME ON INVESTMENTS
---------------------------------------------
$94,560 $94,560
43 | OPPENHEIMER TOTAL RETURN BOND FUND
NOTES TO FINANCIAL STATEMENTS Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES Continued
The tax character of distributions paid during the years ended April 30, 2005
and April 30, 2004 was as follows:
YEAR ENDED YEAR ENDED
APRIL 30, 2005 APRIL 30, 2004
-----------------------------------------------------------------
Distributions paid from:
Ordinary income $ 2,009,882 $ 1,099,958
Long-term capital gain 58,611 138,009
----------------------------------
Total $ 2,068,493 $ 1,237,967
==================================
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 April 30, 2005 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 $ 74,704,900
Federal tax cost of other investments (12,934,048)
-------------
Total federal tax cost $ 61,770,852
=============
Gross unrealized appreciation $ 469,710
Gross unrealized depreciation (562,078)
-------------
Net unrealized depreciation $ (92,368)
=============
- --------------------------------------------------------------------------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS. Dividends and distributions to
shareholders, which are determined in accordance with income tax regulations,
are recorded on the ex-dividend date. Income distributions, if any, are declared
daily and paid monthly. 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. Such cash overdrafts may result from the
effects of failed trades in portfolio securities and from cash outflows
resulting from unanticipated shareholder redemption activity. 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.
44 | OPPENHEIMER TOTAL RETURN BOND FUND
- --------------------------------------------------------------------------------
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 APRIL 30, 2005 YEAR ENDED APRIL 30, 2004
SHARES AMOUNT SHARES AMOUNT
- ------------------------------------------------------------------------------------------------
CLASS A
Sold 1,066,067 $ 10,715,419 1,097,321 $ 11,099,906
Dividends and/or
distributions reinvested 54,023 543,541 23,011 231,801
Redeemed (523,711) (5,266,250) (304,660) (3,078,277)
-------------------------------------------------------------
Net increase 596,379 $ 5,992,710 815,672 $ 8,253,430
=============================================================
- ------------------------------------------------------------------------------------------------
CLASS B
Sold 248,698 $ 2,501,568 338,504 $ 3,425,891
Dividends and/or
distributions reinvested 11,443 115,136 5,465 55,025
Redeemed (126,951) (1,276,855) (133,432) (1,344,598)
-------------------------------------------------------------
Net increase 133,190 $ 1,339,849 210,537 $ 2,136,318
=============================================================
- ------------------------------------------------------------------------------------------------
CLASS C
Sold 458,302 $ 4,615,150 299,731 $ 3,028,348
Dividends and/or
distributions reinvested 16,060 161,543 4,441 44,736
Redeemed (95,285) (957,700) (48,158) (485,940)
-------------------------------------------------------------
Net increase 379,077 $ 3,818,993 256,014 $ 2,587,144
=============================================================
- ------------------------------------------------------------------------------------------------
CLASS N
Sold 218,611 $ 2,199,418 97,335 $ 983,787
Dividends and/or
distributions reinvested 7,583 76,293 1,242 12,515
Redeemed (29,185) (293,418) (17,548) (175,237)
-------------------------------------------------------------
Net increase 197,009 $ 1,982,293 81,029 $ 821,065
=============================================================
45 | OPPENHEIMER TOTAL RETURN BOND FUND
NOTES TO FINANCIAL STATEMENTS Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
3. PURCHASES AND SALES OF SECURITIES
The aggregate cost of purchases and proceeds from sales of securities, other
than U.S. government obligations and short-term obligations, for the year ended
April 30, 2005, were $44,859,618 and $25,833,181, respectively. There were
purchases of $9,916,152 and sales of $10,466,880 of U.S. government and
government agency obligations for the year ended April 30, 2005. In addition,
there were purchases of $280,759,754 and sales of $281,155,514 of To Be
Announced (TBA) mortgage-related securities for the year ended April 30, 2005.
- --------------------------------------------------------------------------------
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 0.50% of the first $250 million of average annual net assets of
the Fund, 0.475% of the next $500 million, and 0.45% of average annual net
assets in excess of $750 million.
- --------------------------------------------------------------------------------
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 April 30, 2005, the Fund paid $56,737
to OFS for services to the Fund.
- --------------------------------------------------------------------------------
DISTRIBUTION AND SERVICE PLAN (12b-1) FEES. Under its General Distributor's
Agreement with the Fund, OppenheimerFunds Distributor, Inc. (the Distributor)
acts as the Fund's principal underwriter in the continuous public offering of
the Fund's classes of shares.
- --------------------------------------------------------------------------------
SERVICE PLAN FOR CLASS A SHARES. The Fund has adopted a Service Plan for Class A
shares. It reimburses the Distributor for a portion of its costs incurred for
services provided to accounts that hold Class A shares. Reimbursement is made
quarterly at an annual rate of up to 0.25% of the average annual net assets of
Class A shares of the Fund. The Distributor currently uses all of those fees to
pay dealers, brokers, banks and other financial institutions quarterly for
providing personal services and maintenance of accounts of their customers that
hold Class A shares. Any unreimbursed expenses the Distributor 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% on Class B and
Class C shares and 0.25% on Class N shares. The Distributor also receives a
service fee of 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
46 | OPPENHEIMER TOTAL RETURN BOND FUND
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 April 30, 2005 for Class B, Class C and Class N
shares were $106,487, $79,904 and $59,930, 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
- --------------------------------------------------------------------------------------------------------------
April 30, 2005 $58,309 $-- $15,271 $1,143 $1,551
- --------------------------------------------------------------------------------------------------------------
WAIVERS AND REIMBURSEMENTS OF EXPENSES. The Manager has voluntarily agreed to
waive management fees and/or reimburse expenses such that "Total Annual
Operating Expenses" will not exceed 0.90% for Class A shares, 1.65% for Class B
shares, 1.65% for Class C shares and 1.15% for Class N shares, respectively.
During the year ended April 30, 2005, the Manager reimbursed the Fund $1,130,
$23,935, $23,903 and $6,387 for Class A, Class B, Class C and Class N shares,
respectively. The voluntary waiver described above may be amended or withdrawn
at any time.
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 April 30, 2005, OFS waived $3,440 for Class B shares. This
undertaking may be amended or withdrawn at any time.
- --------------------------------------------------------------------------------
5. FUTURES CONTRACTS
A futures contract is a commitment to buy or sell a specific amount of a
commodity or financial instrument at a negotiated price on a stipulated future
date. Futures contracts are traded on a commodity exchange. The Fund may buy and
sell futures contracts that relate to broadly based securities indices
(financial futures) or debt securities (interest rate futures) in order to gain
exposure to or protection from changes in market value of stocks and bonds or
interest rates. The Fund may also buy or write put or call options on these
futures contracts.
The Fund generally sells futures contracts as a hedge against increases in
interest rates and decreases in market value of portfolio securities. The Fund
may also purchase futures contracts to gain exposure to market changes as it may
be more efficient or cost effective than actually buying securities.
47 | OPPENHEIMER TOTAL RETURN BOND FUND
NOTES TO FINANCIAL STATEMENTS Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
5. FUTURES CONTRACTS CONTINUED
Upon entering into a futures contract, the Fund is required to deposit
either cash or securities (initial margin) in an amount equal to a certain
percentage of the contract value. Subsequent payments (variation margin) are
made or received by the Fund each day. The variation margin payments are equal
to the daily changes in the contract value and are recorded as unrealized gains
and losses. The Fund recognizes a realized gain or loss when the contract is
closed or has expired.
Cash held by the broker to cover initial margin requirements on open
futures contracts is noted in the Statement of Assets and Liabilities.
Securities held in collateralized accounts to cover initial margin requirements
on open futures contracts are noted in the Statement of Investments. The
Statement of Assets and Liabilities reflects a receivable and/or payable for the
daily mark to market for variation margin. Realized gains and losses are
reported in the Statement of Operations as the closing and expiration of futures
contracts. The net change in unrealized appreciation or depreciation is reported
in the Statement of Operations.
Risks of entering into futures contracts (and related options) include the
possibility that there may be an illiquid market and that a change in the value
of the contract or option may not correlate with changes in the value of the
underlying securities.
As of April 30, 2005, the Fund had outstanding futures contracts as follows:
UNREALIZED
EXPIRATION NUMBER OF VALUATION AS OF APPRECIATION
CONTRACT DESCRIPTION DATES CONTRACTS APRIL 30, 2005 (DEPRECIATION)
- ---------------------------------------------------------------------------------------
CONTRACTS TO PURCHASE
U.S. Long Bonds 6/21/05 37 $ 4,249,219 $ 80,302
U.S. Treasury Nts., 10 yr. 6/21/05 24 2,674,125 36,722
-----------
117,024
-----------
CONTRACTS TO SELL
U. S. Treasury Nts., 2 yr. 6/30/05 46 9,554,344 (12,463)
U. S. Treasury Nts., 5 yr. 6/21/05 95 10,303,047 (49,520)
-----------
(61,983)
-----------
$ 55,041
===========
- --------------------------------------------------------------------------------
6. ILLIQUID SECURITIES
As of April 30, 2005, investments in securities included issues that are
illiquid. A security may 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 securities. Securities that are
illiquid are marked with the applicable footnote on the Statement of
Investments.
48 | OPPENHEIMER TOTAL RETURN BOND FUND
- --------------------------------------------------------------------------------
7. LITIGATION
A consolidated amended complaint has been filed as putative derivative and class
actions against the Manager, OFS and the Distributor, as well as 51 of the
Oppenheimer funds (as "Nominal Defendants") including the Fund, 30 present and
former Directors or Trustees and 8 present and former officers of the funds.
This complaint, initially filed in the U.S. District Court for the Southern
District of New York on January 10, 2005 and amended on March 4, 2005,
consolidates into a single action and amends six individual previously-filed
putative derivative and class action complaints. Like those prior complaints,
the complaint alleges 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 assets of the funds to make
those payments in violation of the Investment Company Act of 1940 and the
Investment Advisers Act of 1940. Also, like those prior complaints, the
complaint further alleges that by permitting and/or participating in those
actions, the Directors/Trustees and the Officers breached their fiduciary duties
to shareholders of the funds under the Investment Company Act of 1940 and at
common law. The complaint seeks unspecified compensatory and punitive damages,
rescission of the funds' investment advisory agreements, an accounting of all
fees paid, and an award of attorneys' fees and litigation expenses.
The defendants believe that the allegations contained in the Complaints
are without merit and that they have meritorious defenses against the claims
asserted. The defendants intend to defend these lawsuits vigorously and to
contest any claimed liability. The defendants believe that it is premature to
render any opinion as to the likelihood of an outcome unfavorable to them and
that no estimate can yet be made with any degree of certainty as to the amount
or range of any potential loss.
49 | OPPENHEIMER TOTAL RETURN BOND FUND
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TO THE SHAREHOLDERS AND BOARD OF TRUSTEES OF OPPENHEIMER TOTAL RETURN BOND FUND
We have audited the accompanying statement of assets and liabilities of
Oppenheimer Total Return Bond Fund (the "Fund"), including the statement of
investments, as of April 30, 2005, 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 periods
indicated therein. 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.
We were not engaged to perform an audit of the Fund's internal control over
financial reporting. Our audit included consideration of internal control over
financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Fund's internal control over financial
reporting. Accordingly, we express no such opinion. 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 April 30, 2005, by correspondence with the custodian and others. 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 Total Return Bond Fund at April 30, 2005, 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 periods indicated therein in conformity with U.S. generally accepted
accounting principles.
/s/ Ernest & Young LLP
New York, New York
May 26, 2005
50 | OPPENHEIMER TOTAL RETURN BOND FUND
FEDERAL INCOME TAX INFORMATION Unaudited
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
In early 2006, if applicable, shareholders of record will receive information
regarding all dividends and distributions paid to them by the Fund during
calendar year 2005. Regulations of the U.S. Treasury Department require the Fund
to report this information to the Internal Revenue Service.
Dividends and distributions of $0.1133, $0.1056, $0.1056 and $0.1099 per
share were paid to Class A, Class B, Class C and Class N shareholders,
respectively, on December 30, 2004, of which $0.0117 was designated as a
"capital gain distribution" for federal income tax purposes. Whether received in
stock or in cash, the capital gain distribution should be treated by
shareholders as a gain from the sale of the capital assets held for more than
one year (long-term capital gains).
None of the dividends paid by the Fund during the year ended April 30,
2005 are eligible for the corporate dividend-received deduction.
Dividends, if any, paid by the Fund during the fiscal year ended April 30,
2005 which are not designated as capital gain distributions, may be eligible for
lower individual income tax rates to the extent that the Fund has received
qualified dividend income as stipulated by recent tax legislation. In early
2006, shareholders of record will receive information regarding the percentage
of distributions that are eligible for lower individual income tax rates. The
amount will be the maximum amount allowed.
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.
51 | OPPENHEIMER TOTAL RETURN BOND 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 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 voting record is
available (i) without charge, upon request, by calling the Fund toll-free at
1.800.525.7048, and (ii) in the Form N-PX filing 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.
52 | OPPENHEIMER TOTAL RETURN BOND FUND
BOARD APPROVAL OF THE FUND'S INVESTMENT
ADVISORY AGREEMENT Unaudited
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Each year, the Board of Trustees (the "Board"), including a majority of the
independent Trustees, is required to determine whether to renew the advisory
agreement. The Investment Company Act of 1940, as amended, requires that the
Board request and evaluate, and that the Manager provide, such information as
may be reasonably necessary to evaluate the terms of the advisory agreement. The
Board employs an independent consultant to prepare a report that provides
information, including comparative information, that the Board requests for this
purpose. In addition, the Board receives information throughout the year
regarding Fund services, fees, expenses and performance.
NATURE AND EXTENT OF SERVICES. In considering the renewal of the Fund's
advisory agreement for the current year, the Board evaluated the nature and
extent of the services provided by the Manager and its affiliates. The Manager
provides the Fund with office space, facilities and equipment; administrative,
accounting, clerical, legal and compliance personnel; securities trading
services; oversight of third party service providers and the services of the
portfolio managers and the Manager's investment team, who provide research,
analysis and other advisory services in regard to the Fund's investments.
QUALITY OF SERVICES. The Board also considered the quality of the services
provided and the quality of the Manager's resources that are available to the
Fund. The Board noted that the Manager has had over forty years of experience as
an investment adviser and that its assets under management rank it among the top
mutual fund managers in the United States. The Board evaluated the Manager's
administrative, accounting, legal and compliance services and information the
Board received regarding the experience and professional qualifications of the
Manager's personnel and the size and functions of its staff. The Board members
also considered their experiences as directors or trustees of the Fund and other
funds advised by the Manager. The Board received and reviewed information
regarding the quality of services provided by affiliates of the Manager, which
it also reviews at other times during the year in connection with the renewal of
the Fund's service agreements. The Board noted that the relatively low
redemption rate for funds advised by the Manager provided an indication of
shareholder satisfaction with the overall level of services provided by the
Manager.
PORTFOLIO MANAGEMENT SERVICES AND PERFORMANCE. In its evaluation of the
quality of the portfolio management services provided, the Board considered the
experience of Angelo Manioudakis, Charles Moon, Benjamin Gord, Geoffrey Caan and
Antulio Bomfim and the Manager's High Grade investment team and analysts.
Messrs. Manioudakis, Moon, Gord, Caan and Bomfim had over 12, 13, 14, 10 and 13
years, respectively, of experience managing fixed-income investments. Mr.
Manioudakis has been a Senior Vice President of the Manager and of HarbourView
Asset Management Corporation since
53 | OPPENHEIMER TOTAL RETURN BOND FUND
BOARD APPROVAL OF THE FUND'S INVESTMENT
ADVISORY AGREEMENT Unaudited / Continued
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- --------------------------------------------------------------------------------
April 2002 and has been a Senior Vice President of OFI Institutional Asset
Management, Inc. since June 2002. He was Executive Director and portfolio
manager for Miller, Anderson & Sherrerd, a division of Morgan Stanley Investment
Management from August 1993 through April 2002. Mr. Gord has been a Vice
President of the Manager since April 2002 and was an Executive Director and a
Senior Fixed Income Analyst at Miller, Anderson & Sherrerd from April 1992
through March 2002. Mr. Moon has been a Vice President of the Manager since
April 2002 and was an Executive Director and a portfolio manager at Miller,
Anderson & Sherrerd from June 1999 through March 2002. Mr. Caan has been a Vice
President of the Manager since August 2003 and was a Vice President of ABN AMRO
N.A., Inc. from June 2002 through August 2003, and a Vice President of Zurich
Scudder Investments from January 1999 through June 2002. Mr. Bomfim has been a
Vice President of the Manager since October 2003 and was a Senior Economist at
the Board of Governors of the Federal Reserve System from June 1992 to October
2003.
The Board reviewed information, prepared by the Manager and by the
independent consultant, comparing the Fund's historical performance to relevant
market indices and to the performance of other intermediate investment-grade
debt funds (including both funds advised by the Manager and funds advised by
other investment advisers). The Board also receives and reviews comparative
performance information regarding the Fund and other funds at each Board
meeting. The Board noted that the Fund's one-year and since inception
performance were both better than its peer group average.
MANAGEMENT FEES AND EXPENSES. The Board also reviewed information,
including comparative information, regarding the fees paid to the Manager and
its affiliates and the other expenses borne by the Fund. The independent
consultant provided comparative data in regard to the fees and expenses of the
Fund, other intermediate investment-grade debt funds and other funds with
comparable assets levels and distribution features. The Manager has agreed to
voluntarily cap expenses at 0.90% for Class A shares, 1.65% for Class B and
Class C shares and 1.15% for Class N shares. The Board noted that the Fund's
contractual management fees and its total expenses are lower than its peer group
average, although the Fund's actual management fees are slightly higher than its
peer group average. In addition, the Board evaluated the comparability of the
fees charged and the services provided to the Fund to the fees charged and
services provided to other types of entities advised by the Manager.
PROFITABILITY OF THE MANAGER AND AFFILIATES. The Board also reviewed
information regarding the cost of services provided by the Manager and its
affiliates and the Manager's profitability. The Board considered that the
Manager must be able to pay and retain
54 | OPPENHEIMER TOTAL RETURN BOND FUND
experienced professional personnel at competitive rates to provide services to
the Fund and that maintaining the financial viability of the Manager is
important in order for the Manager to continue to provide significant services
to the Fund and its shareholders. In addition the Board considered information
that was provided regarding the direct and indirect benefits the Manager
receives as a result of its relationship with the Fund, including compensation
paid to the Manager's affiliates
ECONOMIES OF SCALE. The Board reviewed the extent to which the Manager may
realize economies of scale in managing and supporting the Fund and the current
level of Fund assets in relation to the Fund's breakpoint schedule for its
management fees. The Board noted that the fund has recently experienced
significant asset growth but that current asset levels remain relatively modest
and that, based on current asset levels, the Fund is not yet approaching its
last management fee breakpoint.
CONCLUSIONS. These factors were also considered by the independent
Trustees meeting separately from the full Board, assisted by experienced counsel
to the Fund. Fund counsel is independent of the Manager within the meaning and
intent of the Securities and Exchange Commission Rules. The Board was aware that
there are alternatives to retaining the Manager.
Based on its review of the information it received and its evaluations
described above, the Board, including a majority of the independent Trustees,
concluded that the nature, extent and quality of the services provided to the
Fund by the Manager are a benefit to the Fund and in the best interest of the
Fund's shareholders and that the amount and structure of the compensation
received by the Manager and its affiliates are reasonable in relation to the
services provided. Accordingly, the Board elected to continue the investment
advisory agreement for another year. In arriving at this decision, the Board did
not single out any factor or factors as being more important than others, but
considered all of the factors together. The Board judged the terms and
conditions of the advisory agreement, including the management fee, in light of
all of the surrounding circumstances.
55 | OPPENHEIMER TOTAL RETURN BOND FUND
TRUSTEES AND OFFICERS Unaudited
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NAME, POSITION(S) HELD WITH PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS;
FUND, LENGTH OF SERVICE, AGE OTHER TRUSTEESHIPS/DIRECTORSHIPS HELD BY
TRUSTEE; NUMBER OF PORTFOLIOS IN FUND COMPLEX
CURRENTLY OVERSEEN BY TRUSTEE
INDEPENDENT THE ADDRESS OF EACH TRUSTEE AND INTERESTED
TRUSTEES TRUSTEE IN THE CHARTS BELOW IS 6803 S. TUCSON
WAY, CENTENNIAL, CO 80112-3924. EACH TRUSTEE
SERVES FOR AN INDEFINITE TERM, UNTIL HIS OR
HER RESIGNATION, RETIREMENT, DEATH OR
REMOVAL.
PETER I. WOLD, President of Wold Oil Properties, Inc. (oil
Chairman of the Board and gas exploration and production company)
(since December 2004), (since 1994); Vice President, Secretary and
Trustee (since 2003) Treasurer of Wold Trona Company, Inc. (soda
Age: 57 ash processing and production) (since 1996);
Vice President of Wold Talc Company, Inc.
(talc mining) (since 1999); Managing Member
of Hole-in-the-Wall Ranch (cattle ranching)
(since 1979); Director and Chairman of the
Denver Branch of the Federal Reserve Bank of
Kansas City (1993-1999); and Director of
PacifiCorp. (electric utility) (1995-1999).
Oversees 14 portfolios in the
OppenheimerFunds complex.
RONALD J. ABDOW, Chairman of Abdow Corporation (operator of
Trustee (since 2003) restaurants) (since 1959); Trustee of the
Age: 73 following real estate businesses (owners and
operators of restaurants): G&R Realty Co.
(since 1973), G&R Trust Co. (since 1973),
Abdow Partnership (since 1975), Auburn
Associates (since 1983) and Hazard Associates
(since 1985); Trustee of the following
open-end investment companies: MML Series
Investment Fund II (since 2005), MassMutual
Premier Funds (since 2004), MML Series
Investment Fund (1993-2004) and of MassMutual
Select Funds (formerly MassMutual
Institutional Funds) (1994-2004); Trustee of
Bay State Health System (health services)
(since 1994); Chairman of Western Mass
Development Corp. (non-profit land
development) (since 1996); and Chairman of
American Inter- national College (non-profit
college) (since 1991). Oversees 14 portfolios
in the OppenheimerFunds complex.
JOSEPH M. WIKLER, Director of the following medical device
Trustee (since 2003) companies: Medintec (since 1992) and Cathco
Age: 64 (since 1996); Director of Lakes Environmental
Association (since 1996); Member of the
Investment Committee of the Associated Jewish
Charities of Baltimore (since 1994); Director
of Fortis/Hartford mutual funds (1994 -
December 2001). Oversees 14 portfolios in the
OppenheimerFunds complex.
- --------------------------------------------------------------------------------
INTERESTED TRUSTEE
EUSTIS WALCOTT, Principal with Ardsley Associates (consulting
Trustee (since 2003) firm) (since 2000); Director of Cornerstone
Age: 67 Real Estate Advisors LLC (real estate equity
investment manage- ment services) (an
affiliate of the Manager) (since October
2000); Director of MML Investors Services
(individual retirement, insurance,
investment, and life event planning products
and services company) (an affiliate of the
Manager) (since October 2000); Trustee of OFI
Trust Company (an affiliate of the Manager)
(since 2001); Trustee of the American
International College (1995 - December 2003);
Senior Vice President of Massachusetts Mutual
Life Insurance Company (May 1990 - July
2000); Vice President of MassMutual
Foundation for Hartford, Inc. (since 2005).
Oversees 14 portfolios in the
OppenheimerFunds complex.
56 | OPPENHEIMER TOTAL RETURN BOND FUND
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INTERESTED TRUSTEE THE ADDRESS OF MR. MURPHY IN THE CHART BELOW
AND OFFICER IS TWO WORLD FINANCIAL CENTER, 225 LIBERTY
STREET, NEW YORK, NY 10281-1008. MR. MURPHY
SERVES FOR AN INDEFINITE TERM, UNTIL HIS
RESIGNATION, DEATH OR REMOVAL.
JOHN V. MURPHY, Chairman, Chief Executive Officer and
President and Trustee director (since June 2001) and President
(since 2003) (since September 2000) of the Manager;
Age: 55 President and a director or trustee of other
Oppenheimer funds; President and a director
(since July 2001) of 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 Manage- ment Corporation,
Trinity Investment Management Corporation and
Tremont Capital Management, Inc. (since
November 2001), HarbourView Asset Manage-
ment 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 com-
pany); 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 Select 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 66 portfolios as
Trustee/Director and 20 additional port-
folios as Officer in the OppenheimerFunds
complex.
- --------------------------------------------------------------------------------
OFFICERS THE ADDRESS OF THE OFFICERS IN THE CHART
BELOW IS AS FOLLOWS: FOR MR. MANIOUDAKIS AND
MR. ZACK, TWO WORLD FINANCIAL CENTER, 225
LIBERTY STREET, NEW YORK, NY 10281- 1008; FOR
MR. WIXTED AND MR. VANDEHEY, 6803 S. TUCSON
WAY, CENTENNIAL, CO 80112-3924. EACH OFFICER
SERVES FOR AN ANNUAL TERM OR UNTIL HIS OR HER
EARLIER RESIGNATION, DEATH OR REMOVAL.
ANGELO MANIOUDAKIS, Senior Vice President of the Manager (since
Vice President (since 2003) April 2002), of HarbourView Asset Management
Age: 38 Corporation (since April, 2002) and of OFI
Institutional Asset Management, Inc. (since
June 2002); an officer of 14 portfolios in
the OppenheimerFunds complex. Formerly
Executive Director and portfolio man- ager
for Miller, Anderson & Sherrerd, a division
of Morgan Stanley Investment Management
(August 1993-April 2002).
BRIAN W. WIXTED, Senior Vice President and Treasurer (since
Treasurer (since 2003) March 1999) of the Manager; Treasurer of
Age: 45 HarbourView Asset Management Corporation,
Shareholder Financial 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
Inter- national Ltd. and OppenheimerFunds plc
(since May 2000), of OFI Institutional
57 | OPPENHEIMER TOTAL RETURN BOND FUND
TRUSTEES AND OFFICERS Unaudited / Continued
- --------------------------------------------------------------------------------
BRIAN W. WIXTED, Asset Management, Inc. (since November 2000),
Continued 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 86 portfolios in the
OppenheimerFunds complex.
ROBERT G. ZACK, Executive Vice President (since January 2004)
Secretary (since 2003) and General Counsel (since February 2002) of
Age: 56 the Manager; General Counsel and a director
(since November 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
86 portfolios in the OppenheimerFunds
complex.
MARK S. VANDEHEY, Senior Vice President and Chief Compliance
Vice President and Officer (since March 2004) of the Manager;
Chief Compliance Officer Vice President (since June 1983) of
(since 2004) OppenheimerFunds Distributor, Inc.,
Age: 54 Centennial Asset Management Corporation and
Shareholder Services, Inc. Formerly (until
February 2004) Vice President and Director of
Internal Audit of the Manager. An officer of
86 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.
58 | OPPENHEIMER TOTAL RETURN BOND 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 Joseph M.
Wikler, 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. Wikler as the
Audit Committee's financial expert. Mr. Wikler 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 $19,450 in fiscal 2005 and $18,250 in
fiscal 2004.
(b) Audit-Related 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 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: 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 no such fees to the registrant 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: 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 to the registrant during
the last two fiscal years.
The principal accountant for the audit of the registrant's annual
financial statements billed $115,000 in fiscal 2005 and no such
fees in fiscal 2004 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 would include the cost to the principal accountant of
attending audit committee meetings and 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.
Under applicable laws, pre-approval of non-audit services maybe
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 $115,000 in fiscal 2005 and no such
fess in fiscal 2004 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. DISCLOSURE OF PROXY POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT
INVESTMENT COMPANIES
Not applicable
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT COMPANIES
Not applicable
ITEM 9. PURCHASE OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS
Not applicable
ITEM 10. 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 11. CONTROLS AND PROCEDURES
(a) Based on their evaluation of registrant's disclosure controls and
procedures (as defined in rule 30a-3(c) under the Investment
Company Act of 1940 (17 CFR 270.30a-3(c)) as of April 30, 2005,
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 changes in registrant's internal controls over
financial reporting that occurred during the registrant's last
fiscal quarter that has materially affected, or is reasonably
likely to materially affect, the registrant's internal control
over financial reporting.
ITEM 12. EXHIBITS.
(A) EXHIBIT ATTACHED HERETO. (ATTACH CODE OF ETHICS AS EXHIBIT)(NOT
APPLICABLE TO SEMIANNUAL REPORTS)
(B) EXHIBITS ATTACHED HERETO. (ATTACH CERTIFICATIONS AS EXHIBITS)
(C) EXHIBITS ATTACHED HERETO. (ATTACH PORTFOLIO PROXY VOTING POLICIES AND
PROCEDURES AS REQUIRED BY ITEM 7)
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
Oppenheimer Total Return Bond Fund
By: /S/ JOHN V. MURPHY
----------------------------
John V. Murphy
Principal Executive Officer
Date: June 15, 2005
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By: /S/ JOHN V. MURPHY
----------------------------
John V. Murphy
Principal Executive Officer
Date: June 15, 2005
By: /S/ BRIAN W. WIXTED
----------------------------
Brian W. Wixted
Chief Financial Officer
Date: June 15, 2005