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 811-07857
OPPENHEIMER REAL ASSET FUND
(Exact name of registrant as specified in charter)
6803 SOUTH TUCSON WAY, CENTENNIAL, COLORADO 80112-3924
(Address of principal executive offices) (Zip code)
ROBERT G. ZACK, ESQ.
OPPENHEIMERFUNDS, INC.
TWO WORLD FINANCIAL CENTER, NEW YORK, NEW YORK 10281-1008
(Name and address of agent for service)
Registrant's telephone number, including area code: (303) 768-3200
Date of fiscal year end: AUGUST 31
Date of reporting period: FEBRUARY 28, 2006
ITEM 1. REPORTS TO STOCKHOLDERS.
TOP HOLDINGS AND ALLOCATIONS
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SECTOR ALLOCATION ON COMMODITY-LINKED SECURITIES
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Energy 75.0%
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Agriculture 10.0
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Industrial Metals 8.0
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Livestock 5.0
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Precious Metals 2.0
Portfolio holdings and allocations are subject to change. Percentages are as of
February 28, 2006, and are dollar-weighed based on percentages of
commodity-linked securities. Commodity-linked securities are investments whose
return is based upon the price movements (whether up or down) of a particular
commodity or basket of commodities. The Fund's allocation of its investments
within each sector of the GSCI(R) may differ (at times, significantly) from the
sector weightings of the GSCI(R). The Fund is not an index fund.
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PORTFOLIO ALLOCATION
[THE FOLLOWING TABLE WAS REPRESENTED BY A PIE CHART IN THE PRINTED MATERIAL.]
U.S. Government Obligations 29.0%
Corporate Bonds & Notes 21.4
Mortgage-Backed Obligations 20.0
Commodity-Linked Securities 14.4
Cash Equivalents 13.7
Asset-Backed Securities 0.8
Structured Notes 0.4
Foreign Government Obligations 0.3
Portfolio holdings and allocations are subject to change. Percentages are as of
February 28, 2006, and are based on the total market value of investments.
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9 | OPPENHEIMER REAL ASSET FUND
NOTES
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Total returns include changes in share price and reinvestment of dividends and
capital gains distributions in a hypothetical investment for the periods shown.
Cumulative total returns are not annualized. The Fund's total returns shown do
not reflect the deduction of income taxes on an individual's investment. Taxes
may reduce your actual investment returns on income or gains paid by the Fund or
any gains you may realize if you sell your shares. INVESTORS SHOULD CONSIDER THE
FUND'S INVESTMENT OBJECTIVES, RISKS, AND OTHER CHARGES AND EXPENSES CAREFULLY
BEFORE INVESTING. THE FUND'S PROSPECTUS CONTAINS THIS AND OTHER INFORMATION
ABOUT THE FUND, AND MAY BE OBTAINED BY ASKING YOUR FINANCIAL ADVISOR, CALLING US
AT 1.800.525.7048 OR VISITING OUR WEBSITE AT WWW.OPPENHEIMERFUNDS.COM. READ THE
PROSPECTUS CAREFULLY BEFORE INVESTING.
The Fund's investment strategy and focus can change over time. The mention of
specific fund holdings does not constitute a recommendation by OppenheimerFunds,
Inc.
Please note that Oppenheimer Real Asset Fund(R) invests a substantial portion of
its assets in derivative instruments that entail potentially higher volatility
and risk of loss than traditional equity or debt securities. The Fund is not
intended as a complete investment program and is intended for investors with
long-term investment goals who are willing to accept this risk.
CLASS A shares of the Fund were first publicly offered on 3/31/97. Class A
returns include the current maximum initial sales charge of 5.75%.
CLASS B shares of the Fund were first publicly offered on 3/31/97. Class B
returns include the applicable contingent deferred sales charge of 5% (1-year)
and 2% (5-year). Because Class B shares convert to Class A shares 72 months
after purchase, the "since inception" return for Class B uses Class A
performance for the period after conversion. 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 3/31/97. 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.
10 | OPPENHEIMER REAL ASSET FUND
CLASS N shares of the Fund were first publicly offered on 3/1/01. Class N shares
are offered only through retirement plans. Unless otherwise noted, Class N
returns include the contingent deferred sales charge of 1% for the 1-year
period. Class N shares are subject to an annual 0.25% asset-based sales charge.
CLASS Y shares of the Fund were first publicly offered on 3/31/97. Class Y
shares are offered principally to certain institutional investors under special
agreement with the Distributor and are not subject to a sales charge.
An explanation of the calculation of performance is in the Fund's Statement of
Additional Information.
11 | OPPENHEIMER REAL ASSET 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 February 28, 2006.
ACTUAL EXPENSES. The "actual" lines of the table provide information about
actual account values and actual expenses. You may use the information on this
line for the class of shares you hold, together with the amount you invested, to
estimate the expense that you paid over the period. Simply divide your account
value by $1,000.00 (for example, an $8,600.00 account value divided by $1,000.00
= 8.60), then multiply the result by the number in the "actual" line under the
heading entitled "Expenses Paid During Period" to estimate the expenses you paid
on your account during this period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES. The "hypothetical" lines of the
table provide information about hypothetical account values and hypothetical
expenses based on the Fund's actual expense ratio for each class of shares, and
an assumed rate of return of 5% per year before expenses, which is not the
Fund's actual return. The hypothetical account values and expenses may not be
used to estimate the actual ending account balance or expenses you paid for the
period. You may use this information to compare the ongoing costs of investing
in the Fund and other funds. To do so, compare this 5% hypothetical example for
the class of shares you hold with the 5% hypothetical examples that appear in
the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs, such as front-end
or contingent deferred sales charges (loads), redemption fees, or a $12.00 fee
imposed annually on accounts valued at less than $500.00 (subject to
12 | OPPENHEIMER REAL ASSET FUND
exceptions described in the Statement of Additional Information). Therefore, the
"hypothetical" lines of the table are useful in comparing ongoing costs only,
and will not help you determine the relative total costs of owning different
funds. In addition, if these transactional costs were included, your costs would
have been higher.
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BEGINNING ENDING EXPENSES
ACCOUNT ACCOUNT PAID DURING
VALUE VALUE 6 MONTHS ENDED
(9/1/05) (2/28/06) FEBRUARY 28, 2006
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Class A Actual $1,000.00 $ 840.10 $ 6.00
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Class A Hypothetical 1,000.00 1,018.30 6.58
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Class B Actual 1,000.00 837.20 10.03
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Class B Hypothetical 1,000.00 1,013.93 10.99
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Class C Actual 1,000.00 836.70 9.57
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Class C Hypothetical 1,000.00 1,014.43 10.49
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Class N Actual 1,000.00 839.10 7.74
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Class N Hypothetical 1,000.00 1,016.41 8.48
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Class Y Actual 1,000.00 841.70 3.98
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Class Y Hypothetical 1,000.00 1,020.48 4.37
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 February 28, 2006 are as follows:
CLASS EXPENSE RATIOS
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Class A 1.31%
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Class B 2.19
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Class C 2.09
- -----------------------------
Class N 1.69
- -----------------------------
Class Y 0.87
The expense ratios reflect voluntary waivers or reimbursements of expenses by
the Fund's Transfer Agent that can be terminated at any time, without advance
notice. The "Financial Highlights" tables in the Fund's financial statements,
included in this report, also show the gross expense ratios, without such
waivers or reimbursements.
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13 | OPPENHEIMER REAL ASSET FUND
STATEMENT OF INVESTMENTS February 28, 2006 / Unaudited
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PRINCIPAL VALUE
AMOUNT SEE NOTE 1
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ASSET-BACKED SECURITIES--0.9%
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Equity One ABS, Inc., Home Equity Asset-Backed Security,
Series 2004-3, Cl. AF2, 3.80%, 7/25/34 1 $ 3,553,326 $ 3,542,156
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Lehman XS Trust, Home Equity Mtg. Pass-Through Certificates,
Series 2005-2, Cl. 2A1B, 3.63%, 8/25/35 1 6,277,991 6,272,089
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NC Finance Trust, CMO, Home Equity Pass-Through Certificates,
Series 1999-I, Cl. ECFD, 1.079%, 1/25/29 2 645,555 148,478
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Residential Asset Mortgage Products, Inc., Home Equity Asset-Backed
Pass-Through Certificates, Series 2004-RS7, Cl. AI3, 4.45%, 7/25/28 4,561,000 4,535,286
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Salomon Smith Barney Mutual Fund Fee Trust XIV, Asset-Backed Nts.,
Series 2000-14, Cl. 2, 8.61%, 9/30/08 2 3,125,755 701,081
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Wells Fargo Home Equity Trust, Home Equity Asset-Backed Certificates,
Series 2004-2, Cl. AI1B, 2.94%, 9/25/18 1 1,354,971 1,347,218
------------------
Total Asset-Backed Securities (Cost $19,525,704) 16,546,308
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MORTGAGE-BACKED OBLIGATIONS--24.0%
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GOVERNMENT AGENCY--20.9%
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FHLMC/FNMA/SPONSORED--20.9%
Fannie Mae Whole Loan, CMO Pass-Through Certificates,
Trust 2004-W9, Cl. 2A2, 7%, 2/25/44 413,837 427,675
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Federal Home Loan Mortgage Corp.:
4.50%, 9/1/18-10/1/18 2,596,732 2,520,802
6%, 7/1/17 2,454,893 2,497,502
7%, 11/1/22-12/1/34 10,343,722 10,700,099
8%, 4/1/16 210,694 224,158
9%, 8/1/22-5/1/25 53,478 58,029
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Federal Home Loan Mortgage Corp., CMO Gtd. Real Estate Mtg.
Investment Conduit Multiclass Pass-Through Certificates,
Series 2116, Cl. ZA, 6%, 1/15/29 12,571,384 12,771,213
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Federal Home Loan Mortgage Corp., Interest-Only Stripped
Mtg.-Backed Security, Series 177, Cl. B, 12.757%, 7/1/26 3 1,303,929 277,771
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Federal National Mortgage Assn.:
4.50%, 5/1/19 4,343,446 4,227,420
4.50%, 3/1/21 4 2,600,000 2,526,061
5.50%, 3/1/36 4 52,676,000 52,198,650
6%, 8/1/16-11/1/32 51,883,465 52,786,713
6%, 3/1/36 4 46,168,000 46,600,825
6.50%, 12/1/28 1,607,308 1,653,626
6.50%, 4/1/35 4 96,286,000 98,512,614
7%, 11/1/17 5,820,645 6,008,727
7%, 4/1/35 4 65,866,000 68,109,528
8.50%, 7/1/32 38,993 42,228
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Federal National Mortgage Assn., Interest-Only Stripped Mtg.-Backed Security:
Trust 294, Cl. 2, 12.464%, 2/1/28 3 1,039,401 225,134
14 | OPPENHEIMER REAL ASSET FUND
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
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FHLMC/FNMA/SPONSORED Continued
Federal National Mortgage Assn., Interest-Only Stripped
Mtg.-Backed Security: Continued
Trust 321, Cl. 2, 10.658%, 4/1/32 3 $ 4,622,827 $ 1,053,677
Trust 333, Cl. 2, 11.014%, 4/1/33 3 4,088,426 916,570
Trust 338, Cl. 2, 9.73%, 7/1/33 3 7,426,926 1,660,727
Trust 346, Cl. 2, 13.659%, 12/1/33 3 19,357,967 4,262,702
Trust 350, Cl. 2, 9.392%, 3/1/34 3 8,189,849 1,803,362
------------------
372,065,813
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GNMA/GUARANTEED--0.0%
Government National Mortgage Assn., 8.50%, 8/15/17-12/15/17 79,105 85,107
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NON-AGENCY--3.1%
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COMMERCIAL--2.2%
Banc of America Commercial Mortgage, Inc., Commercial Mtg.
Pass-Through Certificates, Series 2005-2, Cl. A4, 4.783%, 7/10/43 1 7,550,000 7,369,714
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Banc of America Funding Corp., CMO Pass-Through Certificates,
Series 2004-2, Cl. 2A1, 6.50%, 7/20/32 3,014,600 3,005,580
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Bear Stearns Commercial Mortgage Securities, Inc., Commercial Mtg.
Obligations, Series 2003-T10, Cl. A1, 4%, 3/13/40 1,142,635 1,099,633
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Countrywide Alternative Loan Trust, CMO,
Series 2005-J3, Cl. 3A1, 6.50%, 9/25/34 1,063,452 1,076,895
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GE Capital Commercial Mortgage Corp., Commercial Mtg. Obligations:
Series 2003-C1, Cl. A2, 4.093%, 1/10/38 1,081,000 1,049,363
Series 2004-C3, Cl. A2, 4.433%, 7/10/39 2,050,000 2,005,226
Series 2005-C3, Cl. A2, 4.853%, 7/10/45 4,340,000 4,285,262
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GS Mortgage Securities Corp. II, Commercial Mtg. Pass-Through Certificates,
Series 2004-GG2, Cl. A3, 4.602%, 8/10/38 1,370,000 1,345,417
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JPMorgan Chase Commercial Mortgage Securities Corp., Commercial Mtg.
Pass-Through Certificates, Series 2005-LDP2, Cl. A2, 4.575%, 7/15/42 1,500,000 1,461,966
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LB-UBS Commercial Mortgage Trust, Commercial Mtg. Pass-Through
Certificates, Series 2005-C5, Cl. A2, 4.885%, 9/15/30 5,240,000 5,174,620
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Mastr Seasoned Securities Trust, Mtg. Pass-Through Certificates,
Series 2004-2, Cl. A1, 6.50%, 8/25/32 6,568,633 6,624,056
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Wachovia Bank Commercial Mortgage Trust, Commercial Mtg. Obligations,
Series 2005-C20, Cl. A5, 5.087%, 7/15/42 1 5,150,000 5,084,762
------------------
39,582,494
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RESIDENTIAL--0.9%
Countrywide Alternative Loan Trust, CMO, Series 2005-J1,
Cl. 3A1, 6.50%, 8/25/32 14,697,691 14,941,129
------------------
Total Mortgage-Backed Obligations (Cost $427,590,729) 426,674,543
15 | OPPENHEIMER REAL ASSET FUND
STATEMENT OF INVESTMENTS Unaudited/Continued
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PRINCIPAL VALUE
AMOUNT SEE NOTE 1
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U.S. GOVERNMENT OBLIGATIONS--34.9%
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Federal Home Loan Bank Unsec. Bonds:
2.50%, 4/11/06 5 $ 17,400,000 $ 17,355,908
3.125%, 11/15/06 90,000 88,910
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Federal Home Loan Mortgage Corp. Unsec. Nts.:
4.375%, 11/16/07 45,000 44,616
4.625%, 2/21/08 85,000 84,587
5.50%, 7/15/06 5 136,211,000 136,522,787
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Federal National Mortgage Assn. Unsec. Nts.:
1.75%, 6/16/06 8,300,000 8,226,495
2.25%, 5/15/06 53,000,000 52,723,658
2.50%, 6/15/06 20,290,000 20,154,950
3.125%, 7/15/06 5 68,000,000 67,568,812
5.25%, 6/15/06 50,000,000 50,055,000
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Federal National Mortgage Assn. Unsec. Sub. Nts., 5.50%, 5/2/06 25,000,000 25,027,150
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U.S. Treasury Bills:
3.78%, 3/16/06 20,000,000 19,968,500
3.91%, 3/30/06 20,000,000 19,937,006
4.145%, 6/15/06 20,000,000 19,738,340
4.37%, 3/23/06 100,000,000 99,733,556
4.43%, 4/27/06 80,000,000 79,438,868
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U.S. Treasury Nts., 3.875%, 9/15/10 5 2,665,000 2,584,322
------------------
Total U.S. Government Obligations (Cost $620,069,485) 619,253,465
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FOREIGN GOVERNMENT OBLIGATIONS--0.3%
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Quebec (Province of) Nts., 5.50%, 4/11/06 (Cost $5,997,886) 5,990,000 5,995,523
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CORPORATE BONDS AND NOTES--25.7%
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CONSUMER DISCRETIONARY--2.8%
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AUTO COMPONENTS--0.0%
Johnson Controls, Inc., 5% Sr. Unsec. Nts., 11/15/06 50,000 49,850
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AUTOMOBILES--0.5%
DaimlerChrysler North America Holding Corp., 6.40% Nts., 5/15/06 8,480,000 8,500,182
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General Motors Nova Scotia Finance Co., 6.85% Nts., 10/15/08 1,205,000 964,000
------------------
9,464,182
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HOUSEHOLD DURABLES--0.3%
Sony Capital Corp., 4.95% Nts., 11/1/06 6 4,900,000 4,873,687
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MEDIA--1.5%
Chancellor Media CCU, 8% Sr. Unsec. Nts., 11/1/08 825,000 872,873
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News America, Inc., 6.625% Sr. Nts., 1/9/08 443,000 453,733
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Reed Elsevier Capital, Inc., 6.125% Bonds, 8/1/06 9,145,000 9,181,754
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Time Warner Cos., Inc., 8.18% Nts., 8/15/07 5 890,000 925,927
16 | OPPENHEIMER REAL ASSET FUND
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
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MEDIA Continued
Tribune Co., 6.875% Nts., 11/1/06 $ 6,900,000 $ 6,959,299
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Walt Disney Co. (The), 6.75% Sr. Unsec. Nts., Series B, 3/30/06 8,299,000 8,311,872
------------------
26,705,458
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MULTILINE RETAIL--0.3%
Target Corp., 5.95% Unsec Sr. Nts., 5/15/06 5,139,000 5,147,659
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TEXTILES, APPAREL & LUXURY GOODS--0.2%
NIKE, Inc., 5.50% Sr. Unsec. Nts., 8/15/06 3,755,000 3,762,123
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CONSUMER STAPLES--0.6%
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BEVERAGES--0.4%
Bottling Group LLC, 2.45% Sr Unsec. Nts., 10/16/06 3,870,000 3,805,460
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Coca-Cola Enterprises, Inc.:
2.50% Unsec. Unsub. Nts., 9/15/06 2,175,000 2,143,241
5.375% Unsec. Unsub. Nts., 8/15/06 1,041,000 1,042,628
------------------
6,991,329
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FOOD & STAPLES RETAILING--0.2%
Kroger Co. (The), 7.625% Sr. Nts., 9/15/06 460,000 465,172
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Wal-Mart Stores, Inc. (Canada), 5.58% Nts., 5/1/06 6 2,000,000 2,002,732
------------------
2,467,904
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FOOD PRODUCTS--0.0%
General Mills, Inc., 3.875% Nts., 11/30/07 515,000 503,496
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ENERGY--1.7%
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OIL & GAS--1.7%
Burlington Resources Finance Co., 5.60% Sr. Unsec Nts., 12/1/06 8,075,000 8,100,081
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Conoco Funding Co., 5.45% Nts., 10/15/06 8,695,000 8,709,286
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Petroleum Export Ltd. Cayman SPV, 4.623% Sr. Nts., 6 Cl. A1, 6/15/10 6 11,550,000 11,396,570
- ------------------------------------------------------------------------------------------------------------------------------------
TransCanada PipeLines Ltd., 9.125% Unsec. Sub. Debs., 4/20/06 2,035,000 2,045,110
------------------
30,251,047
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FINANCIALS--11.0%
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CAPITAL MARKETS--0.6%
Bank of New York Co., Inc. (The), 3.75% Unsec. Unsub. Nts., 2/15/08 5 470,000 458,930
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Credit Suisse First Boston, Inc. (USA):
4.777% Nts., 6/19/06 1 2,500,000 2,502,395
5.75% Unsec. Nts., 4/15/07 600,000 603,707
5.875% Nts., 8/1/06 6,790,000 6,813,792
------------------
10,378,824
17 | OPPENHEIMER REAL ASSET FUND
STATEMENT OF INVESTMENTS Unaudited / Continued
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PRINCIPAL VALUE
AMOUNT SEE NOTE 1
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COMMERCIAL BANKS--4.8%
ABN Amro Bank NV (Chicago Branch), 7.55% Unsec. Sub. Nts., 6/28/06 $ 7,990,000 $ 8,059,257
- ------------------------------------------------------------------------------------------------------------------------------------
Bank of America Corp., 3.875% Nts., 1/15/08 5 500,000 489,611
- ------------------------------------------------------------------------------------------------------------------------------------
Bayerische Landesbank Girozentrale, 2.50% Sr. Nts., 3/30/06 1,000,000 998,352
- ------------------------------------------------------------------------------------------------------------------------------------
First Tennessee Bank, 4.44% Certificate of Deposit, 3/21/06 1 4,500,000 4,461,764
- ------------------------------------------------------------------------------------------------------------------------------------
FleetBoston Financial Corp., 4.20% Nts., 11/30/07 430,000 423,426
- ------------------------------------------------------------------------------------------------------------------------------------
HBOS Treasury Services plc, 2.25% Nts., 5/1/06 6 3,995,000 3,977,526
- ------------------------------------------------------------------------------------------------------------------------------------
Household Finance Corp., 7.20% Sr. Unsec. Nts., 7/15/06 2,880,000 2,902,156
- ------------------------------------------------------------------------------------------------------------------------------------
HSBC Bank plc, 7.625% Unsec. Sub. Nts., 6/15/06 4,200,000 4,230,358
- ------------------------------------------------------------------------------------------------------------------------------------
KeyCorp:
3.05% Sr. Nts., Series G, 11/22/06 5,000,000 4,919,980
6.75% Jr. Unsec. Sub. Nts., 3/15/06 1,700,000 1,700,991
7.50% Sub. Nts., 6/15/06 395,000 397,578
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MBNA Corp., 5.625% Nts., 11/30/07 500,000 503,866
- ------------------------------------------------------------------------------------------------------------------------------------
PNC Funding Corp., 5.75% Sr. Unsec. Nts., 8/1/06 8,645,000 8,668,169
- ------------------------------------------------------------------------------------------------------------------------------------
Popular North America, Inc., 6.125% Nts., Series E, 10/15/06 9,106,000 9,153,023
- ------------------------------------------------------------------------------------------------------------------------------------
Regions Financial Corp., 4.50% Bonds, 8/8/08 2,185,000 2,149,822
- ------------------------------------------------------------------------------------------------------------------------------------
Santander Financial Issuances Ltd., 7% Unsec. Sub. Nts., 4/1/06 1,000,000 1,001,427
- ------------------------------------------------------------------------------------------------------------------------------------
Societe Generale New York, 7.40% Jr. Unsec. Sub. Nts., 6/1/06 3,360,000 3,380,120
- ------------------------------------------------------------------------------------------------------------------------------------
SouthTrust Bank NA, 4.44% Sr. Nts., 6/1/06 1 8,000,000 8,003,064
- ------------------------------------------------------------------------------------------------------------------------------------
SunTrust Banks, Inc., 4.519% Nts., 3/24/06 1 5,850,000 5,849,269
- ------------------------------------------------------------------------------------------------------------------------------------
US Trust Co. New York, 4.62% Certificate of Deposit, 9/12/06 1 6,670,000 6,672,795
- ------------------------------------------------------------------------------------------------------------------------------------
Washington Mutual, Inc., 4.375% Nts., 1/15/08 515,000 507,827
- ------------------------------------------------------------------------------------------------------------------------------------
Wells Fargo & Co., 6.875% Unsec. Sub. Nts., 4/1/06 2,050,000 2,053,091
- ------------------------------------------------------------------------------------------------------------------------------------
Zions Bancorp, 2.70% Sr. Unsec. Nts., 5/1/06 4,475,000 4,458,519
------------------
84,961,991
- ------------------------------------------------------------------------------------------------------------------------------------
DIVERSIFIED FINANCIAL SERVICES--2.4%
American Express Co., 5.50% Nts., 9/12/06 5 2,220,000 2,225,845
- ------------------------------------------------------------------------------------------------------------------------------------
CIT Group, Inc., 2.875% Sr. Nts., 9/29/06 2,020,000 1,995,869
- ------------------------------------------------------------------------------------------------------------------------------------
Citicorp, 7.75% Sub. Nts., 6/15/06 5,790,000 5,831,949
- ------------------------------------------------------------------------------------------------------------------------------------
Citigroup, Inc.:
3.50% Nts., 2/1/08 800,000 777,786
4.521% Sr. Unsec. Nts., 3/29/06 1 1,000,000 999,830
5.75% Sr. Unsec. Nts., 5/10/06 170,000 170,281
- ------------------------------------------------------------------------------------------------------------------------------------
Goldman Sachs Group, Inc. (The), 4.125% Nts., 1/15/08 5 1,000,000 983,368
- ------------------------------------------------------------------------------------------------------------------------------------
JPMorgan Chase & Co.:
4% Nts., 2/1/08 800,000 784,670
5.625% Sr. Unsub. Nts., 8/15/06 8,160,000 8,183,884
- ------------------------------------------------------------------------------------------------------------------------------------
Korea Development Bank, 5.25% Nts., 11/16/06 4,350,000 4,358,509
- ------------------------------------------------------------------------------------------------------------------------------------
Lehman Brothers Holdings, Inc., 6.25% Sr. Unsec. Nts., 5/15/06 6,650,000 6,666,711
18 | OPPENHEIMER REAL ASSET FUND
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- ------------------------------------------------------------------------------------------------------------------------------------
DIVERSIFIED FINANCIAL SERVICES Continued
Merrill Lynch & Co., Inc.:
2.47% Nts., Series B, 3/10/06 $ 50,000 $ 49,977
4% Nts., Series B, 11/15/07 410,000 402,825
- ------------------------------------------------------------------------------------------------------------------------------------
Morgan Stanley, 6.10% Unsec. Unsub. Bonds, 4/15/06 7,510,000 7,521,363
- ------------------------------------------------------------------------------------------------------------------------------------
Morgan Stanley Group, Inc., 4.799% Sr. Nts., 3/27/06 1 1,800,000 1,800,029
------------------
42,752,896
- ------------------------------------------------------------------------------------------------------------------------------------
INSURANCE--2.6%
Allstate Financial Global Funding II, 2.625% Nts., 10/22/06 6 1,495,000 1,469,548
- ------------------------------------------------------------------------------------------------------------------------------------
Hartford Financial Services Group, Inc. (The), 2.375% Nts., 6/1/06 12,260,000 12,183,485
- ------------------------------------------------------------------------------------------------------------------------------------
John Hancock Global Funding II:
5% Nts., 7/27/07 6 760,000 756,759
5.625% Nts., 6/27/06 6 800,000 801,456
- ------------------------------------------------------------------------------------------------------------------------------------
Loews Corp., 6.75% Unsec. Nts., 12/15/06 6,880,000 6,936,368
- ------------------------------------------------------------------------------------------------------------------------------------
Marsh & McLennan Cos., Inc., 3.625% Nts., 2/15/08 1,130,000 1,092,882
- ------------------------------------------------------------------------------------------------------------------------------------
Monumental Global Funding II, 3.85% Nts., 3/3/08 6 1,120,000 1,093,340
- ------------------------------------------------------------------------------------------------------------------------------------
Pricoa Global Funding I, 3.90% Nts., 12/15/08 6 1,800,000 1,738,928
- ------------------------------------------------------------------------------------------------------------------------------------
Principal Life Global Funding, 6.125% Sec. Nts., 3/1/06 6 9,125,000 9,125,000
- ------------------------------------------------------------------------------------------------------------------------------------
Prudential Insurance Co. of America, 6.375% Sr. Nts., 7/23/06 6 9,825,000 9,874,980
- ------------------------------------------------------------------------------------------------------------------------------------
Teachers Insurance & Annuity Assn. Global Markets, Inc.,
3.875% Sr. Unsec. Nts., 1/22/08 6 1,750,000 1,710,503
------------------
46,783,249
- ------------------------------------------------------------------------------------------------------------------------------------
REAL ESTATE--0.1%
EOP Operating LP, 8.10% Unsec. Nts., 8/1/10 1,260,000 1,378,230
- ------------------------------------------------------------------------------------------------------------------------------------
THRIFTS & MORTGAGE FINANCE--0.5%
Countrywide Home Loans, Inc.:
4.689% Unsec. Unsub. Nts., Series L, 4/12/06 1 3,000,000 2,999,535
5.50% Nts., 8/1/06 4,200,000 4,209,584
5.50% Nts., Series K, 2/1/07 5 635,000 636,187
- ------------------------------------------------------------------------------------------------------------------------------------
Washington Mutual, Inc., 7.50% Sr. Unsec. Nts., 8/15/06 1,690,000 1,708,936
------------------
9,554,242
- ------------------------------------------------------------------------------------------------------------------------------------
HEALTH CARE--0.1%
- ------------------------------------------------------------------------------------------------------------------------------------
PHARMACEUTICALS--0.1%
Merck & Co., Inc., 5.25% Unsec. Nts., 7/1/06 1,185,000 1,185,366
- ------------------------------------------------------------------------------------------------------------------------------------
INDUSTRIALS--3.0%
- ------------------------------------------------------------------------------------------------------------------------------------
AEROSPACE & DEFENSE--1.0%
Boeing Capital Corp., 5.65% Sr. Unsec. Nts., 5/15/06 6,661,000 6,672,157
19 | OPPENHEIMER REAL ASSET FUND
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- ------------------------------------------------------------------------------------------------------------------------------------
AEROSPACE & DEFENSE Continued
General Dynamics Corp., 2.125% Nts., 5/15/06 $ 8,126,000 $ 8,083,257
- ------------------------------------------------------------------------------------------------------------------------------------
McDonnell Douglas Corp., 6.875% Unsec. Unsub. Nts., 11/1/06 2,222,000 2,244,262
------------------
16,999,676
- ------------------------------------------------------------------------------------------------------------------------------------
COMMERCIAL SERVICES & SUPPLIES--0.3%
Donnelley (R.R.) & Sons Co., 5% Unsec. Nts., 11/15/06 1,000,000 993,820
- ------------------------------------------------------------------------------------------------------------------------------------
Dun & Bradstreet Corp., 6.625% Sr. Unsec. Nts., Series B, 3/15/06 4,810,000 4,812,477
------------------
5,806,297
- ------------------------------------------------------------------------------------------------------------------------------------
INDUSTRIAL CONGLOMERATES--0.9%
General Electric Capital Corp., 5.35% Nts., Series A, 3/30/06 3,850,000 3,851,844
- ------------------------------------------------------------------------------------------------------------------------------------
Heller Financial, Inc., 6.375% Sr. Unsec. Nts., Cl. A, 3/15/06 2,860,000 2,861,536
- ------------------------------------------------------------------------------------------------------------------------------------
Textron Financial Corp., 2.75% Nts., Series E, 6/1/06 8,830,000 8,785,585
------------------
15,498,965
- ------------------------------------------------------------------------------------------------------------------------------------
MACHINERY--0.5%
Caterpillar Financial Services Corp., 5.95% Sr. Nts., 5/1/06 3,700,000 3,706,605
- ------------------------------------------------------------------------------------------------------------------------------------
Ingersoll-Rand Co. Ltd., 6.25% Nts., 5/15/06 5,805,000 5,820,406
------------------
9,527,011
- ------------------------------------------------------------------------------------------------------------------------------------
ROAD & RAIL--0.3%
Canadian National Railway Co., 6.45% Unsec. Nts., 7/15/06 4,905,000 4,930,226
- ------------------------------------------------------------------------------------------------------------------------------------
MATERIALS--0.8%
- ------------------------------------------------------------------------------------------------------------------------------------
CHEMICALS--0.8%
Dow Chemical Co. (The), 8.625% Unsec. Debs., 4/1/06 7,265,000 7,284,027
- ------------------------------------------------------------------------------------------------------------------------------------
E.I. du Pont de Nemours & Co., 8.25% Unsec. Debs., 9/15/06 1,000,000 1,016,753
- ------------------------------------------------------------------------------------------------------------------------------------
International Flavors & Fragrances, Inc., 6.45% Sr. Unsec. Unsub. Nts., 5/15/06 6,233,000 6,247,311
------------------
14,548,091
- ------------------------------------------------------------------------------------------------------------------------------------
TELECOMMUNICATION SERVICES--2.6%
- ------------------------------------------------------------------------------------------------------------------------------------
DIVERSIFIED TELECOMMUNICATION SERVICES--1.6%
BellSouth Corp., 5% Nts., 10/15/06 8,732,000 8,726,848
- ------------------------------------------------------------------------------------------------------------------------------------
France Telecom SA, 7.20% Sr. Unsec. Nts., 3/1/06 1 8,565,000 8,565,000
- ------------------------------------------------------------------------------------------------------------------------------------
GTE Corp., 6.36% Unsec. Debs., 4/15/06 1,055,000 1,056,403
- ------------------------------------------------------------------------------------------------------------------------------------
SBC Communications, Inc., 5.75% Sr. Nts., 5/2/06 9,000,000 9,009,423
- ------------------------------------------------------------------------------------------------------------------------------------
Verizon Wireless Capital LLC, 5.375% Unsub. Nts., 12/15/06 860,000 861,794
------------------
28,219,468
- ------------------------------------------------------------------------------------------------------------------------------------
WIRELESS TELECOMMUNICATION SERVICES--1.0%
AT&T Wireless Services, Inc., 7.35% Sr. Unsec. Nts., 3/1/06 8,210,000 8,210,000
20 | OPPENHEIMER REAL ASSET FUND
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- ------------------------------------------------------------------------------------------------------------------------------------
WIRELESS TELECOMMUNICATION SERVICES Continued
Sprint Capital Corp., 4.78% Unsec. Nts., 8/17/06 $ 9,290,000 $ 9,274,978
- ------------------------------------------------------------------------------------------------------------------------------------
Vodafone Group plc, 3.95% Unsec. Nts., 1/30/08 860,000 842,367
------------------
18,327,345
- ------------------------------------------------------------------------------------------------------------------------------------
UTILITIES--3.1%
- ------------------------------------------------------------------------------------------------------------------------------------
ELECTRIC UTILITIES--1.9%
Alabama Power Co., 2.80% Sr. Unsec. Unsub. Nts., Series Y, 12/1/06 6,080,000 5,981,480
- ------------------------------------------------------------------------------------------------------------------------------------
Commonwealth Edison Co., 8.25% First Mtg. Nts., Series 76, 10/1/06 2,235,000 2,273,936
- ------------------------------------------------------------------------------------------------------------------------------------
DTE Energy Co., 6.45% Sr. Unsub. Nts., 6/1/06 615,000 617,048
- ------------------------------------------------------------------------------------------------------------------------------------
FPL Group Capital, Inc., 3.25% Nts., 4/11/06 1,305,000 1,302,599
- ------------------------------------------------------------------------------------------------------------------------------------
MidAmerican Energy Co., 6.375% Nts., 6/15/06 7,948,000 7,981,771
- ------------------------------------------------------------------------------------------------------------------------------------
MidAmerican Energy Holdings Co., 4.625% Sr. Nts., 10/1/07 910,000 900,256
- ------------------------------------------------------------------------------------------------------------------------------------
PacifiCorp, 5.65% Bonds, 11/1/06 5,965,000 5,986,027
- ------------------------------------------------------------------------------------------------------------------------------------
PP&L Resources, Inc., 6.55% Bonds, 3/1/06 1,250,000 1,250,000
- ------------------------------------------------------------------------------------------------------------------------------------
Progress Energy, Inc., 6.75% Sr. Nts., 3/1/06 465,000 465,000
- ------------------------------------------------------------------------------------------------------------------------------------
PSI Energy, Inc., 6.65% Sr. Sec. Bonds, Series EEE, 6/15/06 3,400,000 3,414,120
- ------------------------------------------------------------------------------------------------------------------------------------
Southern Co. Capital Funding, Inc., 5.30% Sr. Unsec. Unsub. Nts.,
Series A, 2/1/07 2,000,000 1,993,038
- ------------------------------------------------------------------------------------------------------------------------------------
Virginia Electric & Power Co., 5.75% Sr. Unsec. Unsub. Nts., Series A, 3/31/06 2,587,000 2,588,433
------------------
34,753,708
- ------------------------------------------------------------------------------------------------------------------------------------
ENERGY TRADERS--0.3%
Baltimore Gas & Electric Co., 5.25% Unsec. Nts., 12/15/06 4,800,000 4,803,648
- ------------------------------------------------------------------------------------------------------------------------------------
GAS UTILITIES--0.0%
NiSource Finance Corp., 3.20% Nts., 11/1/06 680,000 671,080
- ------------------------------------------------------------------------------------------------------------------------------------
MULTI-UTILITIES & UNREGULATED POWER--0.9%
Consolidated Natural Gas Co., 5.375% Sr. Unsec. Unsub. Nts.,
Series B, 11/1/06 5,000,000 5,005,590
- ------------------------------------------------------------------------------------------------------------------------------------
Niagara Mohawk Power Corp., 7.75% Sec. Bonds, 5/15/06 2,420,000 2,433,734
- ------------------------------------------------------------------------------------------------------------------------------------
Wisconsin Energy Corp., 5.875% Sr. Unsec. Unsub. Nts., 4/1/06 8,414,000 8,418,300
------------------
15,857,624
------------------
Total Corporate Bonds and Notes (Cost $458,878,071) 457,154,672
- ------------------------------------------------------------------------------------------------------------------------------------
COMMODITY-LINKED SECURITIES--17.3%
- ------------------------------------------------------------------------------------------------------------------------------------
AIG International, Inc., Goldman Sachs Commodity Index Total Return
Linked Securities, 4.66%, 11/9/06 7 40,000,000 30,698,144
- ------------------------------------------------------------------------------------------------------------------------------------
Cargill, Inc.:
Goldman Sachs Commodity Index Total Return Linked Securities, 3.39%,
3/24/06 7 29,000,000 29,576,500
21 | OPPENHEIMER REAL ASSET FUND
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- ------------------------------------------------------------------------------------------------------------------------------------
COMMODITY-LINKED SECURITIES Continued
- ------------------------------------------------------------------------------------------------------------------------------------
Cargill, Inc.: Continued
Goldman Sachs Commodity Index Total Return Linked Securities, 3.503%, 3/31/06 7 $ 39,000,000 $ 30,722,757
Goldman Sachs Commodity Index Total Return Linked Securities, 4.90%, 2/27/07 7 60,000,000 56,504,430
Goldman Sachs Commodity Index Total Return Linked Securities, 4.95%, 3/19/07 7 40,000,000 40,000,000
- ------------------------------------------------------------------------------------------------------------------------------------
Koch Industries, Inc.:
Goldman Sachs Energy Total Return Index Linked Securities, 4.63%, 3/6/06 1,8 10,000,000 9,526,340
Goldman Sachs Energy Total Return Index Linked Securities, 4.63%, 5/5/06 1,8 20,000,000 18,056,880
- ------------------------------------------------------------------------------------------------------------------------------------
Morgan Stanley Capital Services, Inc., Goldman Sachs Commodity Index
Total Return Linked Securities, 4.53%, 3/5/07 1,7 90,000,000 92,538,000
------------------
Total Commodity-Linked Securities (Cost $328,000,000) 307,623,051
- ------------------------------------------------------------------------------------------------------------------------------------
STRUCTURED NOTES--0.5%
- ------------------------------------------------------------------------------------------------------------------------------------
Core Investment Grade Bond Trust I, Pass-Through Certificates,
Series 2002-1, 4.659%, 11/30/071 (Cost $8,895,522) 8,813,827 8,655,223
- ------------------------------------------------------------------------------------------------------------------------------------
SHORT-TERM NOTES--7.8%
- ------------------------------------------------------------------------------------------------------------------------------------
Barclays Bank plc, New York, 4.51%, 6/21/06 1 8,575,000 8,574,803
- ------------------------------------------------------------------------------------------------------------------------------------
Barton Capital Corp., 4.51%, 3/9/06 9 5,000,000 4,994,989
- ------------------------------------------------------------------------------------------------------------------------------------
Chesham Finance LLC, 4.55%, 3/7/06 5,000,000 4,996,233
- ------------------------------------------------------------------------------------------------------------------------------------
Federal Home Loan Bank, 4.583%, 4/19/06 20,000,000 19,877,772
- ------------------------------------------------------------------------------------------------------------------------------------
Federal National Mortgage Assn., 4.697%, 5/24/06 75,000,000 74,209,875
- ------------------------------------------------------------------------------------------------------------------------------------
Gemini Securitization Corp., 4.51%, 3/7/06 9 5,000,000 4,996,242
- ------------------------------------------------------------------------------------------------------------------------------------
Legacy Capital Co. LLC, 4.52%, 3/1/06 5,000,000 5,000,000
- ------------------------------------------------------------------------------------------------------------------------------------
Neptune Funding Corp., 4.58%, 4/3/06 9 5,000,000 4,979,008
- ------------------------------------------------------------------------------------------------------------------------------------
Victory Receivables Corp., 4.52%, 3/15/06 9 5,000,000 4,991,211
- ------------------------------------------------------------------------------------------------------------------------------------
Windmill Funding Corp., 4.51%, 3/2/06 9 5,000,000 4,999,374
------------------
Total Short-Term Notes (Cost $137,608,132) 137,619,507
- ------------------------------------------------------------------------------------------------------------------------------------
JOINT REPURCHASE AGREEMENTS--8.8%
- ------------------------------------------------------------------------------------------------------------------------------------
Undivided interest of 38.98% in repurchase agreement (Principal Amount/
Value $400,396,000, with a maturity value of $400,445,938) with DB Alex Brown
LLC, 4.49%, dated 2/28/06, to be repurchased at $156,092,466 on 3/1/06,
collateralized by U.S. Treasury Bonds, 2.50%--3.625%, 9/30/06--4/30/07,
with a value of $408,499,728 (Cost $156,073,000) 156,073,000 156,073,000
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS, AT VALUE (COST $2,162,638,529) 120.2% 2,135,595,292
- ------------------------------------------------------------------------------------------------------------------------------------
LIABILITIES IN EXCESS OF OTHER ASSETS (20.2) 358,885,572
-------------------------------------
NET ASSETS 100.0% $ 1,776,709,720
=====================================
22 | OPPENHEIMER REAL ASSET FUND
FOOTNOTES TO STATEMENT OF INVESTMENTS
1. Represents the current interest rate for a variable or increasing rate
security.
2. Illiquid security. The aggregate value of illiquid securities as of February
28, 2006 was $849,559, which represents 0.05% of the Fund's net assets. See Note
8 of Notes to Financial Statements.
3. 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 $10,199,943 or 0.57% of the Fund's net assets
as of February 28, 2006.
4. When-issued security or forward commitment to be delivered and settled after
February 28, 2006. See Note 1 of Notes to Financial Statements.
5. All or a portion of the security is held in collateralized accounts to cover
initial margin requirements on open futures sales contracts. The aggregate
market value of such securities is $126,429,596. See Note 5 of Notes to
Financial Statements.
6. 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 $48,821,029 or 2.75% of the Fund's net
assets as of February 28, 2006.
7. Security is linked to the Goldman Sachs Commodity Index, the Goldman Sachs
Commodity Excess Return Index or the Goldman Sachs Commodity Index Total Return
Index. The indexes currently contain twenty-four commodities from the sectors of
energy, metals, livestock and agricultural products. Individual components in
the index are weighted by their respective world production values.
8. Security is linked to the Goldman Sachs Energy Total Return Index. The index
currently contains six commodities from the energy sector. Individual components
in the index are weighted by their respective world production values.
9. Security issued in an exempt transaction without registration under the
Securities Act of 1933. Such securities amount to $24,960,824, or 1.40% of the
Fund's net assets, and have been determined to be liquid pursuant to guidelines
adopted by the Board of Trustees.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
23 | OPPENHEIMER REAL ASSET FUND
STATEMENT OF ASSETS AND LIABILITIES Unaudited
- --------------------------------------------------------------------------------
February 28, 2006
- --------------------------------------------------------------------------------
ASSETS
- --------------------------------------------------------------------------------
Investments, at value (cost $2,162,638,529)--see
accompanying statement of investments $ 2,135,595,292
- --------------------------------------------------------------------------------
Cash 2,320,974
- --------------------------------------------------------------------------------
Unrealized appreciation on swap contracts 45,637
- --------------------------------------------------------------------------------
Receivables and other assets:
Investments sold on a when-issued basis or forward
commitment 210,268,706
Futures margins 20,091,009
Shares of beneficial interest sold 15,582,877
Interest and principal paydowns 14,584,020
Other 24,118
-------------------
Total assets 2,398,512,633
- --------------------------------------------------------------------------------
LIABILITIES
- --------------------------------------------------------------------------------
Payables and other liabilities:
Investments purchased (including $477,916,256 purchased
on a when-issued basis or forward commitment) 612,892,868
Shares of beneficial interest redeemed 7,669,004
Distribution and service plan fees 619,303
Transfer and shareholder servicing agent fees 305,694
Shareholder communications 110,103
Trustees' compensation 16,437
Other 189,504
-------------------
Total liabilities 621,802,913
- --------------------------------------------------------------------------------
NET ASSETS $1,776,709,720
===================
- --------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS
- --------------------------------------------------------------------------------
Par value of shares of beneficial interest $ 242,841
- --------------------------------------------------------------------------------
Additional paid-in capital 1,964,068,631
- --------------------------------------------------------------------------------
Accumulated net investment income 20,927,107
- --------------------------------------------------------------------------------
Accumulated net realized loss on investments (156,888,308)
- --------------------------------------------------------------------------------
Net unrealized depreciation on investments (51,640,551)
-------------------
NET ASSETS $ 1,776,709,720
===================
24 | OPPENHEIMER REAL ASSET FUND
- --------------------------------------------------------------------------------
NET ASSET VALUE PER SHARE
- --------------------------------------------------------------------------------
Class A Shares:
Net asset value and redemption price per share (based on net
assets of $1,102,523,355 and 150,163,195 shares of beneficial
interest outstanding) $ 7.34
Maximum offering price per share (net asset value plus sales
charge of 5.75% of offering price) $ 7.79
- --------------------------------------------------------------------------------
Class B Shares:
Net asset value, redemption price (excludes applicable contingent
deferred sales charge) and offering price per share (based on net
assets of $124,868,907 and 17,293,607 shares of beneficial interest
outstanding) $ 7.22
- --------------------------------------------------------------------------------
Class C Shares:
Net asset value, redemption price (excludes applicable contingent
deferred sales charge) and offering price per share (based on net
assets of $247,830,102 and 34,499,114 shares of beneficial interest
outstanding) $ 7.18
- --------------------------------------------------------------------------------
Class N Shares:
Net asset value, redemption price (excludes applicable contingent
deferred sales charge) and offering price per share (based on net
assets of $24,468,019 and 3,365,115 shares of beneficial interest
outstanding) $ 7.27
- --------------------------------------------------------------------------------
Class Y Shares:
Net asset value, redemption price and offering price per share
(based on net assets of $277,019,337 and 37,519,882 shares of
beneficial interest outstanding) $ 7.38
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
25 | OPPENHEIMER REAL ASSET FUND
STATEMENT OF OPERATIONS Unaudited
- --------------------------------------------------------------------------------
For the Six Months Ended February 28, 2006
- --------------------------------------------------------------------------------
INVESTMENT INCOME
- --------------------------------------------------------------------------------
Interest (net of foreign withholding taxes of $6,369) $ 34,097,520
- --------------------------------------------------------------------------------
Other income 7,145
-------------------
Total investment income 34,104,665
- --------------------------------------------------------------------------------
EXPENSES
- --------------------------------------------------------------------------------
Management fees 7,041,566
- --------------------------------------------------------------------------------
Distribution and service plan fees:
Class A 1,403,388
Class B 666,400
Class C 1,266,701
Class N 60,238
- --------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees:
Class A 1,185,546
Class B 217,558
Class C 304,998
Class N 44,041
Class Y 29,978
- --------------------------------------------------------------------------------
Shareholder communications:
Class A 88,793
Class B 19,741
Class C 23,430
Class N 1,749
Class Y 1,904
- --------------------------------------------------------------------------------
Custodian fees and expenses 104,608
- --------------------------------------------------------------------------------
Trustees' compensation 11,286
- --------------------------------------------------------------------------------
Administration service fees 750
- --------------------------------------------------------------------------------
Other 90,192
-------------------
Total expenses 12,562,867
Less waivers and reimbursements of expenses (2,343)
-------------------
Net expenses 12,560,524
- --------------------------------------------------------------------------------
NET INVESTMENT INCOME 21,544,141
26 | OPPENHEIMER REAL ASSET FUND
- --------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
- --------------------------------------------------------------------------------
Net realized gain (loss) on:
Investments (including premiums on options exercised) $ 22,267,048
Closing and expiration of option contracts written 3,450
Closing and expiration of futures contracts (80,938,553)
Swap contracts 145,144
-------------------
Net realized loss (58,522,911)
- --------------------------------------------------------------------------------
Net change in unrealized appreciation (depreciation) on:
Investments (142,014,912)
Futures contracts (135,170,340)
Option contracts (6,451)
Swap contracts 45,637
-------------------
Net change in unrealized depreciation (277,146,066)
- --------------------------------------------------------------------------------
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS $ (314,124,836)
===================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
27 | OPPENHEIMER REAL ASSET FUND
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
SIX MONTHS
ENDED YEAR
FEBRUARY 28, ENDED
2006 AUGUST 31,
(UNAUDITED) 2005
- --------------------------------------------------------------------------------------------------------------------
OPERATIONS
- --------------------------------------------------------------------------------------------------------------------
Net investment income $ 21,544,141 $ 14,420,818
- --------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) (58,522,911) 249,900,489
- --------------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation (depreciation) (277,146,066) 225,089,316
----------------------------------
Net increase (decrease) in net assets resulting from operations (314,124,836) 489,410,623
- --------------------------------------------------------------------------------------------------------------------
DIVIDENDS AND/OR DISTRIBUTIONS TO SHAREHOLDERS
- --------------------------------------------------------------------------------------------------------------------
Dividends from net investment income:
Class A (5,357,864) (7,247,857)
Class B (348,343) (190,261)
Class C (716,641) (467,943)
Class N (88,834) (86,194)
Class Y (790,337) (970,044)
- --------------------------------------------------------------------------------------------------------------------
Distributions from net realized gain:
Class A (98,053,918) (176,519,945)
Class B (11,828,387) (21,692,760)
Class C (22,813,172) (33,838,230)
Class N (2,151,295) (2,633,667)
Class Y (14,899,429) (14,050,224)
- --------------------------------------------------------------------------------------------------------------------
BENEFICIAL INTEREST TRANSACTIONS
- --------------------------------------------------------------------------------------------------------------------
Net increase in net assets resulting from beneficial interest
transactions:
Class A 165,343,480 452,635,213
Class B 13,728,880 51,758,221
Class C 53,427,251 120,499,718
Class N 5,564,845 13,842,607
Class Y 175,036,685 81,631,447
- --------------------------------------------------------------------------------------------------------------------
NET ASSETS
- --------------------------------------------------------------------------------------------------------------------
Total increase (decrease) (58,071,915) 952,080,704
- --------------------------------------------------------------------------------------------------------------------
Beginning of period 1,834,781,635 882,700,931
----------------------------------
End of period (including accumulated net investment income
of $20,927,107 and $6,684,985, respectively) $ 1,776,709,720 $ 1,834,781,635
==================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
28 | OPPENHEIMER REAL ASSET FUND
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
SIX MONTHS
ENDED
FEBRUARY 28, YEAR ENDED
2006 AUGUST 31,
CLASS A (UNAUDITED) 2005 2004 2003 2002 2001
- ------------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 9.59 $ 9.13 $ 7.51 $ 6.15 $ 6.93 $ 8.18
-----------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .11 1 .11 1 .01 .03 .29 .45
Net realized and unrealized gain (loss) (1.56) 2.84 1.85 1.38 (.71) (1.21)
-----------------------------------------------------------------------------------------
Total from investment operations (1.45) 2.95 1.86 1.41 (.42) (.76)
- ------------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to
shareholders:
Dividends from net investment income (.04) (.07) -- 2 (.05) (.36) (.43)
Distributions from net realized gain (.76) (2.42) (.24) -- -- (.06)
-----------------------------------------------------------------------------------------
Total dividends and/or distributions to
shareholders (.80) (2.49) (.24) (.05) (.36) (.49)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 7.34 $ 9.59 $ 9.13 $ 7.51 $ 6.15 $ 6.93
=========================================================================================
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 3 (15.99)% 44.66% 25.44% 23.08% (5.54)% (9.83)%
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 1,102,524 $ 1,246,436 $638,254 $238,828 $148,319 $ 117,331
- ------------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 1,147,294 $ 844,342 $413,618 $193,837 $115,458 $ 139,631
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 4
Net investment income 2.62% 1.34% 0.22% 0.46% 4.73% 5.73%
Total expenses 1.31% 1.32% 5 1.40% 5,6 1.49% 5 1.68% 5,6 1.51% 5
- ------------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 42% 7 94% 7 87% 61% 49% 105%
1. Per share amounts calculated based on the average shares outstanding during
the period.
2. Less than $0.005 per share.
3. Assumes an investment on the business day before the first day of the fiscal
period, with all dividends and distributions reinvested in additional shares on
the reinvestment date, and redemption at the net asset value calculated on the
last business day of the fiscal period. Sales charges are not reflected in the
total returns. Total returns are not annualized for periods of less than one
full year. Returns do not reflect the deduction of taxes that a shareholder
would pay on Fund distributions or the redemption of Fund shares.
4. Annualized for periods of less than one full year.
5. Reduction to custodian expenses less than 0.01%.
6. Voluntary waiver of transfer agent fees less than 0.01%.
7. The portfolio turnover rate excludes purchase and sales of To Be Announced
(TBA) mortgage-related securities as follows:
PURCHASE TRANSACTIONS SALE TRANSACTIONS
- --------------------------------------------------------------------------------------
Six Months Ended February 28, 2006 $ 2,704,035,903 $ 2,787,964,090
Year Ended August 31, 2005 4,827,248,691 4,809,916,669
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
29 | OPPENHEIMER REAL ASSET FUND
FINANCIAL HIGHLIGHTS Continued
- --------------------------------------------------------------------------------
SIX MONTHS
ENDED
FEBRUARY 28, YEAR ENDED
2006 AUGUST 31,
CLASS B (UNAUDITED) 2005 2004 2003 2002 2001
- -----------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 9.46 $ 9.05 $ 7.51 $ 6.16 $ 6.95 $ 8.20
- -----------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss) .07 1 .04 1 (.05) (.04) .23 .40
Net realized and unrealized gain (loss) (1.53) 2.80 1.83 1.40 (.70) (1.22)
----------------------------------------------------------------------------------------
Total from investment operations (1.46) 2.84 1.78 1.36 (.47) (.82)
- -----------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions
to shareholders:
Dividends from net investment income (.02) (.01) -- (.01) (.32) (.37)
Distributions from net realized gain (.76) (2.42) (.24) -- -- (.06)
----------------------------------------------------------------------------------------
Total dividends and/or distributions
to shareholders (.78) (2.43) (.24) (.01) (.32) (.43)
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 7.22 $ 9.46 $ 9.05 $ 7.51 $ 6.16 $ 6.95
========================================================================================
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2 (16.28)% 43.33% 24.32% 22.12% (6.38) (10.49)%
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- -----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 124,869 $ 147,663 $ 78,125 $ 37,589 $ 24,738 $ 21,321
- -----------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 134,665 $ 102,816 $ 52,436 $ 32,101 $ 20,032 $ 26,295
- -----------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income (loss) 1.74% 0.46% (0.69) (0.41) 4.10% 4.99%
Total expenses 2.19% 2.19% 2.32% 2.44% 2.45% 2.27%
Expenses after payments and waivers
and reduction to custodian expenses 2.19% 2.19% 2.31% 2.36% 2.45% 2.27%
- -----------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 42% 4 94% 4 87% 61% 49% 105%
1. Per share amounts calculated based on the average shares outstanding during
the period.
2. Assumes an investment on the business day before the first day of the fiscal
period, with all dividends and distributions reinvested in additional shares on
the reinvestment date, and redemption at the net asset value calculated on the
last business day of the fiscal period. Sales charges are not reflected in the
total returns. Total returns are not annualized for periods of less than one
full year. Returns do not reflect the deduction of taxes that a shareholder
would pay on Fund distributions or the redemption of Fund shares.
3. Annualized for periods of less than one full year.
4. The portfolio turnover rate excludes purchase and sales of To Be Announced
(TBA) mortgage-related securities as follows:
PURCHASE TRANSACTIONS SALE TRANSACTIONS
- -------------------------------------------------------------------------------------
Six Months Ended February 28, 2006 $ 2,704,035,903 $ 2,787,964,090
Year Ended August 31, 2005 4,827,248,691 4,809,916,669
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
30 | OPPENHEIMER REAL ASSET FUND
SIX MONTHS YEAR
ENDED ENDED
FEBRUARY 28, 2006 AUGUST 31,
CLASS C (UNAUDITED) 2005 2004 2003 2002 2001
- ----------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- ----------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 9.42 $ 9.02 $ 7.48 $ 6.14 $ 6.93 $ 8.17
- ----------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss) .07 1 .05 1 (.03) (.03) .23 .41
Net realized and unrealized gain (loss) (1.52) 2.79 1.81 1.38 (.70) (1.22)
--------------------------------------------------------------------------------
Total from investment operations (1.45) 2.84 1.78 1.35 (.47) (.81)
- ----------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.03) (.02) -- (.01) (.32) (.37)
Distributions from net realized gain (.76) (2.42) (.24) -- -- (.06)
--------------------------------------------------------------------------------
Total dividends and/or distributions to
shareholders (.79) (2.44) (.24) (.01) (.32) (.43)
- ----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 7.18 $ 9.42 $ 9.02 $ 7.48 $ 6.14 $ 6.93
================================================================================
- ----------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2 (16.33)% 43.50% 24.42% 22.04% (6.39)% (10.43)%
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 247,830 $ 264,019 $ 110,728 $ 36,531 $ 18,115 $ 12,588
- ----------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 256,095 $ 170,306 $ 68,392 $ 25,746 $ 11,771 $ 16,165
- ----------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income (loss) 1.84% 0.57% (0.62)% (0.43)% 3.99% 4.95%
Total expenses 2.09% 2.11% 2.24% 2.40% 2.45% 2.26%
Expenses after payments and waivers and
reduction to custodian expenses 2.09% 2.11% 2.24% 2.36% 2.45% 2.26%
- ----------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 42% 4 94% 4 87% 61% 49% 105%
1. Per share amounts calculated based on the average shares outstanding during
the period.
2. Assumes an investment on the business day before the first day of the fiscal
period, with all dividends and distributions reinvested in additional shares on
the reinvestment date, and redemption at the net asset value calculated on the
last business day of the fiscal period. Sales charges are not reflected in the
total returns. Total returns are not annualized for periods of less than one
full year. Returns do not reflect the deduction of taxes that a shareholder
would pay on Fund distributions or the redemption of Fund shares.
3. Annualized for periods of less than one full year.
4. The portfolio turnover rate excludes purchase and sales of To Be Announced
(TBA) mortgage-related securities as follows:
PURCHASE TRANSACTIONS SALE TRANSACTIONS
--------------------------------------------------------------------------
Six Months Ended February 28, 2006 $ 2,704,035,903 $ 2,787,964,090
Year Ended August 31, 2005 4,827,248,691 4,809,916,669
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
31 | OPPENHEIMER REAL ASSET FUND
FINANCIAL HIGHLIGHTS Continued
- --------------------------------------------------------------------------------
SIX MONTHS YEAR
ENDED ENDED
FEBRUARY 28, 2006 AUGUST 31,
CLASS N (UNAUDITED) 2005 2004 2003 2002 2001 1
- ----------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- ----------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 9.51 $ 9.08 $ 7.50 $ 6.15 $ 6.99 $ 7.67
- ----------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .09 2 .08 2 -- .07 .30 .22
Net realized and unrealized gain (loss) (1.54) 2.82 1.82 1.36 (.78) (.73)
--------------------------------------------------------------------------------
Total from investment operations (1.45) 2.90 1.82 1.43 (.48) (.51)
- ----------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.03) (.05) -- (.08) (.36) (.17)
Distributions from net realized gain (.76) (2.42) (.24) -- -- --
--------------------------------------------------------------------------------
Total dividends and/or distributions to
shareholders (.79) (2.47) (.24) (.08) (.36) (.17)
- ----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 7.27 $ 9.51 $ 9.08 $ 7.50 $ 6.15 $ 6.99
================================================================================
- ----------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 3 (16.09)% 44.03% 24.90% 23.63% (6.47)% (6.75)%
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 24,468 $ 25,586 $ 8,206 $ 1,578 $ 314 $ 61
- ----------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 24,644 $ 14,654 $ 4,516 $ 1,001 $ 146 $ 14
- ----------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 4
Net investment income (loss) 2.25% 1.03% (0.17)% 0.27% 3.57% 5.95%
Total expenses 1.70% 1.68% 1.84% 1.83% 1.94% 1.88%
Expenses after payments and waivers and
reduction to custodian expenses 1.69% 1.68% 1.80% 1.63% 1.94% 1.88%
- ----------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 42% 5 94% 5 87% 61% 49% 105%
1. For the period from March 1, 2001 (inception of offering) to August 31, 2001.
2. Per share amounts calculated based on the average shares outstanding during
the period.
3. Assumes an investment on the business day before the first day of the fiscal
period, with all dividends and distributions reinvested in additional shares on
the reinvestment date, and redemption at the net asset value calculated on the
last business day of the fiscal period. Sales charges are not reflected in the
total returns. Total returns are not annualized for periods of less than one
full year. Returns do not reflect the deduction of taxes that a shareholder
would pay on Fund distributions or the redemption of Fund shares.
4. Annualized for periods of less than one full year.
5. The portfolio turnover rate excludes purchase and sales of To Be Announced
(TBA) mortgage-related securities as follows:
PURCHASE TRANSACTIONS SALE TRANSACTIONS
-----------------------------------------------------------------------------
Six Months Ended February 28, 2006 $ 2,704,035,903 $ 2,787,964,090
Year Ended August 31, 2005 4,827,248,691 4,809,916,669
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
32 | OPPENHEIMER REAL ASSET FUND
SIX MONTHS YEAR
ENDED ENDED
FEBRUARY 28, 2006 AUGUST 31,
CLASS Y (UNAUDITED) 2005 2004 2003 2002 2001
- -----------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 9.63 $ 9.15 $ 7.52 $ 6.15 $ 6.94 $ 8.16
- -----------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .13 1 .15 1 .05 .06 .32 .25
Net realized and unrealized gain (loss) (1.57) 2.86 1.84 1.39 (.73) (.95)
---------------------------------------------------------------------------------
Total from investment operations (1.44) 3.01 1.89 1.45 (.41) (.70)
- -----------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.05) (.11) (.02) (.08) (.38) (.46)
Distributions from net realized gain (.76) (2.42) (.24) -- -- (.06)
---------------------------------------------------------------------------------
Total dividends and/or distributions to
shareholders (.81) (2.53) (.26) (.08) (.38) (.52)
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 7.38 $ 9.63 $ 9.15 $ 7.52 $ 6.15 $ 6.94
=================================================================================
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2 (15.83)% 45.42% 25.84% 23.69% (5.36)% (9.21)%
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- -----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 277,019 $ 151,078 $ 47,387 $ 25,724 $ 6,908 $ 1,741
- -----------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 183,603 $ 83,836 $ 31,449 $ 15,755 $ 3,420 $ 868
- -----------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income 3.12% 1.83% 0.65% 0.83% 3.95% 6.46%
Total expenses 0.87% 0.88% 0.97% 1.08% 1.27% 1.38% 4
Expenses after payments and waivers and
reduction to custodian expenses 0.87% 0.88% 0.97% 1.08% 1.26% 1.17%
- -----------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 42% 5 94% 5 87% 61% 49% 105%
1. Per share amounts calculated based on the average shares outstanding during
the period.
2. Assumes an investment on the business day before the first day of the fiscal
period, with all dividends and distributions reinvested in additional shares on
the reinvestment date, and redemption at the net asset value calculated on the
last business day of the fiscal period. Sales charges are not reflected in the
total returns. Total returns are not annualized for periods of less than one
full year. Returns do not reflect the deduction of taxes that a shareholder
would pay on Fund distributions or the redemption of Fund shares.
3. Annualized for periods of less than one full year.
4. Added since August 31, 2001 to reflect expenses before reduction to custodian
expenses and voluntary waiver of transfer agent fees.
5. The portfolio turnover rate excludes purchase and sales of To Be Announced
(TBA) mortgage-related securities as follows:
PURCHASE TRANSACTIONS SALE TRANSACTIONS
----------------------------------------------------------------------------
Six Months Ended February 28, 2006 $ 2,704,035,903 $ 2,787,964,090
Year Ended August 31, 2005 4,827,248,691 4,809,916,669
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
33 | OPPENHEIMER REAL ASSET FUND
NOTES TO FINANCIAL STATEMENTS Unaudited
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
Oppenheimer Real Asset 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 total return. Total return refers to
the change in value of an investment in shares of the Fund over time resulting
from changes in value of the Fund's investments and income on those investments.
The Fund's investment advisor is OppenheimerFunds, Inc. (the Advisor). The
Sub-Advisor is Oppenheimer Real Asset Management, Inc. (the Manager), a wholly
owned subsidiary of the Advisor.
The Fund offers Class A, Class B, Class C, Class N and Class Y shares.
Class A shares are sold at their offering price, which is normally net asset
value plus a front-end sales charge. Class B, Class C and Class N shares are
sold without a front-end sales charge but may be subject to a contingent
deferred sales charge (CDSC). Class N shares are sold only through retirement
plans. Retirement plans that offer Class N shares may impose charges on those
accounts. Class Y shares are sold to certain institutional investors without
either a front-end sales charge or a CDSC, however, the institutional investor
may impose charges on those accounts. All classes of shares have identical
rights and voting privileges with respect to the Fund in general and exclusive
voting rights on matters that affect that class alone. Earnings, net assets and
net asset value per share may differ due to each class having its own expenses,
such as transfer and shareholder servicing agent fees and shareholder
communications, directly attributable to that class. Class A, B, C and N have
separate distribution and/or service plans. No such plan has been adopted for
Class Y shares. Class B shares will automatically convert to Class A shares six
years after the date of purchase. The Fund assesses a 2% fee on the proceeds of
fund shares that are redeemed (either by selling or exchanging to another
Oppenheimer fund) within 30 days of their purchase. The fee, which is retained
by the Fund, is accounted for as an addition to paid-in capital.
The following is a summary of significant accounting policies consistently
followed by the Fund.
- --------------------------------------------------------------------------------
SECURITIES VALUATION. The Fund calculates the net asset value of its shares as
of the close of the New York Stock Exchange (the Exchange), normally 4:00 P.M.
Eastern time, on each day the Exchange is open for business. Securities may be
valued primarily using dealer-supplied valuations or a portfolio pricing service
authorized by the Board of Trustees. Securities listed or traded on National
Stock Exchanges or other domestic 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. Securities traded on foreign
exchanges are valued based on the last sale price on the principal exchange on
which the security is traded, as identified by the portfolio pricing service,
prior to the time when the Fund's assets are valued. In the
34 | OPPENHEIMER REAL ASSET FUND
absence of a sale, the security is valued at the official closing price on the
principal exchange. 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
(including restricted securities) for which market quotations are not readily
available are valued at their fair value. Foreign and domestic securities whose
values have been materially affected by what the Manager identifies as a
significant event occurring before the Fund's assets are valued but after the
close of their respective exchanges will be fair valued. Fair value is
determined in good faith using consistently applied procedures under the
supervision of the Board of Trustees. Short-term "money market type" debt
securities with remaining maturities of sixty days or less are valued at
amortized cost (which approximates market value).
- --------------------------------------------------------------------------------
STRUCTURED SECURITIES. The Fund invests in structured securities whose market
values, interest rates and/or redemption prices are linked to the performance of
underlying foreign currencies, interest rate spreads, stock market indices,
prices of individual securities, commodities or other financial instruments or
the occurrence of other specific events. The structured securities are often
leveraged, increasing the volatility of each note's market value relative to the
change in the underlying linked financial element or event. Fluctuations in
value of these securities are recorded as unrealized gains and losses in the
accompanying Statement of Operations. The Fund records a realized gain or loss
when a structured security is sold or matures. As of February 28, 2006, the
market value of these securities comprised 17.8% of the Fund's net assets and
resulted in unrealized cumulative losses of $20,617,248.
- --------------------------------------------------------------------------------
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 February 28, 2006, the Fund had purchased
$477,916,256 of securities issued on a when-issued basis or forward commitment
and sold $210,291,406 of securities issued on a when-issued basis or forward
commitment.
35 | OPPENHEIMER REAL ASSET FUND
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES Continued
FOREIGN CURRENCY TRANSLATION. The Fund's accounting records are maintained in
U.S. dollars. The values of securities denominated in foreign currencies and
amounts related to the purchase and sale of foreign securities and foreign
investment income are translated into U.S. dollars as of the close of the New
York Stock Exchange (the Exchange), normally 4:00 P.M. Eastern time, on each day
the Exchange is open for business. Foreign exchange rates may be valued
primarily using dealer supplied valuations or a portfolio pricing service
authorized by the Board of Trustees.
Reported net realized foreign exchange gains or losses arise from sales of
portfolio securities, sales and maturities of short-term securities, sales of
foreign currencies, currency gains or losses realized between the trade and
settlement dates on securities transactions, and the difference between the
amounts of dividends, interest, and foreign withholding taxes recorded on the
Fund's books and the U.S. dollar equivalent of the amounts actually received or
paid. Net unrealized foreign exchange gains and losses arise from changes in the
values of assets and liabilities, including investments in securities at fiscal
period end, resulting from changes in exchange rates.
The effect of changes in foreign currency exchange rates on investments is
separately identified from the fluctuations arising from changes in market
values of securities held and reported with all other foreign currency gains and
losses in the Fund's Statement of Operations.
- --------------------------------------------------------------------------------
JOINT REPURCHASE AGREEMENTS. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission, the Fund, along with other affiliated funds
advised by the Manager, may transfer uninvested cash balances into joint trading
accounts on a daily basis. These balances are invested in one or more repurchase
agreements. Securities pledged as collateral for repurchase agreements are held
by a custodian bank until the agreements mature. Each agreement requires that
the market value of the collateral be sufficient to cover payments of interest
and principal. In the event of default by the other party to the agreement,
retention of the collateral may be subject to legal proceedings.
- --------------------------------------------------------------------------------
ALLOCATION OF INCOME, EXPENSES, GAINS AND LOSSES. Income, expenses (other than
those attributable to a specific class), gains and losses are allocated on a
daily basis to each class of shares based upon the relative proportion of net
assets represented by such class. Operating expenses directly attributable to a
specific class are charged against the operations of that class.
- --------------------------------------------------------------------------------
FEDERAL TAXES. The Fund intends to comply with provisions of the Internal
Revenue Code applicable to regulated investment companies and to distribute
substantially all of its investment company taxable income, including any net
realized gain on investments not offset by capital loss carryforwards, if any,
to shareholders, therefore, no federal income or excise tax provision is
required.
Net investment income (loss) and net realized gain (loss) may differ for
financial statement and tax purposes. The character of dividends and
distributions made during the fiscal year from net investment income or net
realized gains may differ from their ultimate characterization for federal
income tax purposes. Also, due to timing of dividends
36 | OPPENHEIMER REAL ASSET FUND
and distributions, the fiscal year in which amounts are distributed may differ
from the fiscal year in which the income or net realized gain was recorded by
the Fund.
As of February 28, 2006, the Fund had available for federal income tax
purposes an estimated capital loss carryforward of $58,522,911 expiring by 2014.
This estimated capital loss carryforward represents carryforward as of the end
of the last fiscal year, increased for losses deferred under tax accounting
rules to the current fiscal year and is increased or decreased by capital losses
or gains realized in the first six months of the current fiscal year. As of
February 28, 2006, it is estimated that the Fund will not utilize any capital
loss carryforward to offset realized capital gains. During the year ended August
31, 2005, the Fund did not utilize any capital loss carryforward to offset
capital gains realized in that fiscal year.
- --------------------------------------------------------------------------------
TRUSTEES' COMPENSATION. The Board of Trustees has adopted a deferred
compensation plan for independent trustees that enables trustees to elect to
defer receipt of all or a portion of the annual compensation they are entitled
to receive from the Fund. For purposes of determining the amount owed to the
Trustee under the plan, deferred amounts are treated as though equal dollar
amounts had been invested in shares of the Fund or in other Oppenheimer funds
selected by the Trustee. The Fund purchases shares of the funds selected for
deferral by the Trustee in amounts equal to his or her deemed investment,
resulting in a Fund asset equal to the deferred compensation liability. Such
assets are included as a component of "Other" within the asset section of the
Statement of Assets and Liabilities. Deferral of trustees' fees under the plan
will not affect the net assets of the Fund, and will not materially affect the
Fund's assets, liabilities or net investment income per share. Amounts will be
deferred until distributed in accordance to the Plan.
- --------------------------------------------------------------------------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS. Dividends and distributions to
shareholders, which are determined in accordance with income tax regulations,
are recorded on the ex-dividend date. Income distributions, if any, are declared
and paid quarterly. 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, to the extent they are not
offset by positive cash balances maintained by the Fund, at a rate equal to the
Federal Funds Rate plus 0.50%. The "Reduction to custodian expenses" line item,
if
37 | OPPENHEIMER REAL ASSET FUND
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES Continued
applicable, represents earnings on cash balances maintained by the Fund during
the period. Such interest expense and other custodian fees may be paid with
these earnings.
- --------------------------------------------------------------------------------
SECURITY TRANSACTIONS. Security transactions are recorded on the trade date.
Realized gains and losses on securities sold are determined on the basis of
identified cost.
- --------------------------------------------------------------------------------
INDEMNIFICATIONS. The Fund's organizational documents provide current and former
trustees and officers with a limited indemnification against liabilities arising
in connection with the performance of their duties to the Fund. In the normal
course of business, the Fund may also enter into contracts that provide general
indemnifications. The Fund's maximum exposure under these arrangements is
unknown as this would be dependent on future claims that may be made against the
Fund. The risk of material loss from such claims is considered remote.
- --------------------------------------------------------------------------------
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 $0.001 par value shares of
beneficial interest of each class. Transactions in shares of beneficial interest
were as follows:
SIX MONTHS ENDED FEBRUARY 28, 2006 YEAR ENDED AUGUST 31, 2005
SHARES AMOUNT SHARES AMOUNT
- -----------------------------------------------------------------------------------------------------
CLASS A
Sold 45,923,062 $ 381,694,707 94,212,026 $ 777,455,272
Dividends and/or
distributions reinvested 10,660,435 87,328,670 24,089,571 160,454,202
Redeemed (36,414,617) (303,679,897) 1 (58,238,089) (485,274,261) 2
---------------------------------------------------------------------
Net increase 20,168,880 $ 165,343,480 60,063,508 $ 452,635,213
=====================================================================
- -----------------------------------------------------------------------------------------------------
CLASS B
Sold 3,598,517 $ 29,745,629 9,282,558 $ 76,207,355
Dividends and/or
distributions reinvested 1,267,572 10,207,819 2,820,081 18,521,469
Redeemed (3,174,789) (26,224,568) 1 (5,135,305) (42,970,603) 2
---------------------------------------------------------------------
Net increase 1,691,300 $ 13,728,880 6,967,334 $ 51,758,221
=====================================================================
- -----------------------------------------------------------------------------------------------------
CLASS C
Sold 9,607,480 $ 78,742,605 18,790,237 $ 152,585,965
Dividends and/or
distributions reinvested 2,244,373 17,988,097 4,162,996 27,230,330
Redeemed (5,385,367) (43,303,451) 1 (7,202,060) (59,316,577) 2
---------------------------------------------------------------------
Net increase 6,466,486 $ 53,427,251 15,751,173 $ 120,499,718
=====================================================================
38 | OPPENHEIMER REAL ASSET FUND
SIX MONTHS ENDED FEBRUARY 28, 2006 YEAR ENDED AUGUST 31, 2005
SHARES AMOUNT SHARES AMOUNT
- -----------------------------------------------------------------------------------------------------
CLASS N
Sold 1,329,313 $ 11,009,943 2,265,268 $ 18,313,212
Dividends and/or
distributions reinvested 254,260 2,062,748 403,003 2,665,360
Redeemed (908,104) (7,507,846) 1 (882,773) (7,135,965) 2
--------------------------------------------------------------------------
Net increase 675,469 $ 5,564,845 1,785,498 $ 13,842,607
==========================================================================
- -----------------------------------------------------------------------------------------------------
CLASS Y
Sold 24,534,613 $ 197,974,224 16,487,939 $ 131,638,201
Dividends and/or
distributions reinvested 1,388,405 11,423,188 1,252,352 8,401,675
Redeemed (4,097,667) (34,360,727) 1 (7,222,356) (58,408,429) 2
--------------------------------------------------------------------------
Net increase 21,825,351 $ 175,036,685 10,517,935 $ 81,631,447
==========================================================================
1. Net of redemption fees of $50,976, $5,983, $11,379, $1,095 and $8,158 for
Class A, Class B, Class C, Class N and Class Y, respectively.
2. Net of redemption fees of $92,832, $11,304, $18,724, $1,611 and $9,217 for
Class A, Class B, Class C, Class N and Class Y, respectively.
- --------------------------------------------------------------------------------
3.PURCHASES AND SALES OF SECURITIES
The aggregate cost of purchases and proceeds from sales of securities, other
than short-term obligations, for the six months ended February 28, 2006, were as
follows:
PURCHASES SALES
---------------------------------------------------------------
Investment securities $ 235,069,844 $ 249,997,606
U.S. government and
government agency obligations 3,090,314 26,768,980
To Be Announced (TBA)
mortgage-related securities 2,704,035,903 2,787,964,090
- --------------------------------------------------------------------------------
4.FEES AND OTHER TRANSACTIONS WITH AFFILIATES
MANAGEMENT FEES. Management fees paid to the Advisor were in accordance with the
investment advisory agreement with the Fund which provides for a fee at an
annual rate of 1.0% of the first $200 million of average annual net assets,
0.90% of the next $200 million, 0.85% of the next $200 million, 0.80% of the
next $200 million, and 0.75% of net assets in excess of $800 million. Under the
sub-advisory agreement, the Advisor pays the Sub-Advisor the following annual
fees: 0.50% of the first $200 million of average annual net assets, 0.45% of the
next $200 million, 0.425% of the next $200 million, 0.40% of the next $200
million, and 0.375% of the net assets in excess of $800 million.
- --------------------------------------------------------------------------------
ADMINISTRATION SERVICE FEES. The Fund pays the Manager a fee of $1,500 per year
for preparing and filing the Fund's tax returns.
- --------------------------------------------------------------------------------
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
39 | OPPENHEIMER REAL ASSET FUND
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES Continued
account fee. For the six months ended February 28, 2006, the Fund paid
$1,739,674 to OFS for services to the Fund.
Additionally, Class Y shares are subject to minimum fees of $10,000 per
annum for assets of $10 million or more. The Class Y shares are subject to the
minimum fees in the event that the per account fee does not equal or exceed the
applicable minimum fees. OFS may voluntarily waive the minimum fees.
- --------------------------------------------------------------------------------
DISTRIBUTION AND SERVICE PLAN (12b-1) FEES. Under its General Distributor's
Agreement with the Fund, OppenheimerFunds Distributor, Inc. (the Distributor)
acts as the Fund's principal underwriter in the continuous public offering of
the Fund's classes of shares.
- --------------------------------------------------------------------------------
SERVICE PLAN FOR CLASS A SHARES. The Fund has adopted a Service Plan for Class A
shares. It reimburses the Distributor for a portion of its costs incurred for
services provided to accounts that hold Class A shares. Reimbursement is made
periodically 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 periodically 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
periods. 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 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 February 28, 2006 for Class B, Class C
and Class N shares were $4,196,265, $3,032,331 and $230,979, 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.
40 | OPPENHEIMER REAL ASSET FUND
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
SIX MONTHS RETAINED BY RETAINED BY RETAINED BY RETAINED BY RETAINED BY
ENDED DISTRIBUTOR DISTRIBUTOR DISTRIBUTOR DISTRIBUTOR DISTRIBUTOR
- -------------------------------------------------------------------------------------------------
February 28, 2006 $ 614,533 $ 7,620 $ 138,811 $ 73,882 $ 22,291
- -------------------------------------------------------------------------------------------------
WAIVERS AND REIMBURSEMENTS OF EXPENSES. OFS has voluntarily agreed to limit
transfer and shareholder servicing agent fees for all classes to 0.35% of
average annual net assets per class. During the six months ended February 28,
2006, OFS waived $322 and $2,021 for Class B and Class N shares, respectively.
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), debt securities (interest rate futures) and various
commodities (commodity futures) inherent in the Fund's holdings of structured
notes. The Fund may also buy or write put or call options on these futures
contracts.
The Fund generally sells futures contracts to hedge against increases in
interest rates and the resulting negative effect on the value of fixed rate
portfolio securities, decreases in market value of portfolio securities, or
decreases in commodity prices. The Fund may also purchase futures contracts
without owning the underlying fixed-income security as an efficient or cost
effective means to gain exposure to changes in interest rates, commodity prices
or market indices. The Fund will then either purchase the underlying
fixed-income security or close out the futures contract.
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 expires.
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 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.
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.
41 | OPPENHEIMER REAL ASSET FUND
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
5. FUTURES CONTRACTS Continued
As of February 28, 2006, the Fund had outstanding futures contracts as follows:
VALUATION AS OF UNREALIZED
EXPIRATION NUMBER OF FEBRUARY 28, APPRECIATION
CONTRACT DESCRIPTION DATES CONTRACTS 2006 (DEPRECIATION)
- ---------------------------------------------------------------------------------------------------
CONTRACTS TO PURCHASE
AGRICULTURE
Corn 5/12/06 1,810 $ 21,606,875 $ 819,890
Soybean 5/12/06 170 5,049,000 (24,875)
Wheat 5/12/06 1,209 23,744,175 1,395,813
ENERGY
Brent Crude Oil 4/12/06 1,753 109,597,560 1,012,085
Crude Oil 3/21/06 3,779 232,068,390 (7,432,000)
Gas Oil 4/12/06 597 32,282,775 (519,235)
Heating Oil 3/31/06 718 51,940,694 (1,022,524)
Natural Gas 3/29/06 1,006 67,542,840 (18,254,756)
Unleaded Gasoline 3/31/06 712 47,568,293 (4,852,596)
LIVESTOCK
Cattle Feeder 4/27/06 116 6,224,850 (92,574)
Lean Hogs 4/17/06 906 22,278,540 (915,461)
Live Cattle 4/28/06 536 18,701,040 (717,518)
INDUSTRIAL METALS
Copper 5/26/06 500 27,231,250 1,298,534
London Metals Exchange
Aluminum High Grade 4/13/06 413 24,878,088 2,639,857
London Metals Exchange Nickel 4/19/06 21 1,878,660 19,808
London Metals Exchange Zinc 4/13/06-5/12/06 282 16,611,681 1,286,208
PRECIOUS METALS
Gold (100 Oz.) 4/26/06 313 17,650,070 1,510,280
Silver 5/26/06 44 2,157,100 221,432
SOFTS
Coffee, Cl. C 5/18/06 53 2,259,788 (89,544)
Florida Orange Juice 5/10/06 224 4,475,520 163,997
Sugar #11 4/28/06 770 14,764,288 (621,247)
GOVERNMENTS
U.S. Long Bonds 6/21/06 148 16,737,875 53,976
---------------
(24,120,450)
---------------
CONTRACTS TO SELL
SOFTS
Cocoa 5/15/06 475 6,939,750 (112,990)
AGRICULTURE
Cotton No. 2 5/8/06 5 138,600 (10)
INDUSTRIAL METALS
London Metals Exchange Lead 5/12/06 41 1,212,575 (7,196)
GOVERNMENTS
U.S. Treasury Nts., 2 yr 6/30/06 2,779 567,958,125 (357,454)
U.S. Treasury Nts., 5 yr. 6/30/06 137 14,410,688 (11,111)
U.S. Treasury Nts., 10 yr. 3/22/06-6/21/06 237 25,577,344 (33,740)
---------------
(522,501)
---------------
$ (24,642,951)
===============
42 | OPPENHEIMER REAL ASSET FUND
- --------------------------------------------------------------------------------
6. OPTION ACTIVITY
The Fund may buy and sell put and call options, or write put and covered call
options on portfolio securities in order to produce incremental earnings or
protect against changes in the value of portfolio securities.
The Fund generally purchases put options or writes covered call options to
hedge against adverse movements in the value of portfolio holdings. When an
option is written, the Fund receives a premium and becomes obligated to sell or
purchase the underlying security at a fixed price, upon exercise of the option.
Options are valued daily based upon the last sale price on the principal
exchange on which the option is traded and unrealized appreciation or
depreciation is recorded. The Fund will realize a gain or loss upon the
expiration or closing of the option transaction. When an option is exercised,
the proceeds on sales for a written call option, the purchase cost for a written
put option, or the cost of the security for a purchased put or call option is
adjusted by the amount of premium received or paid.
Securities designated to cover outstanding call options are noted in the
Statement of Investments where applicable. Contracts subject to call, expiration
date, exercise price, premium received and market value are detailed in a note
to the Statement of Investments. Options written are reported as a liability in
the Statement of Assets and Liabilities. Realized gains and losses are reported
in the Statement of Operations.
The risk in writing a call option is that the Fund gives up the
opportunity for profit if the market price of the security or commodity
increases and the option is exercised. The risk in writing a put option is that
the Fund may incur a loss if the market price of the security or commodity
decreases and the option is exercised. The risk in buying an option is that the
Fund pays a premium whether or not the option is exercised. The Fund also has
the additional risk of not being able to enter into a closing transaction if a
liquid secondary market does not exist.
Written option activity for the six months ended February 28, 2006 was as
follows:
CALL OPTIONS PUT OPTIONS
------------------------------- ---------------------------------
NUMBER OF AMOUNT OF NUMBER OF AMOUNT OF
CONTRACTS PREMIUMS CONTRACTS PREMIUMS
- ---------------------------------------------------------------------------------------------------
Options outstanding as of
August 31, 2005 -- $ -- 127 $ 12,076
Options written 489 410,305 202 51,750
Options closed or expired (371) (400,428) (233) (57,226)
Options exercised (118) (9,877) (96) (6,600)
-------------------------------------------------------------------
Options outstanding as of
February 28, 2006 -- $ -- -- $ --
===================================================================
- --------------------------------------------------------------------------------
7. TOTAL RETURN SWAP CONTRACTS
The Fund may enter into a total return swap transaction to maintain a total
return on a particular investment, or portion of its portfolio, or for other
non-speculative purposes. Because the principal amount is not exchanged, it
represents neither an asset nor a
43 | OPPENHEIMER REAL ASSET FUND
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
7. TOTAL RETURN SWAP CONTRACTS Continued
liability to either counterparty, and is referred to as notional. The unrealized
gain (loss) related to the daily change in the valuation of the notional amount
of the swap, as well as the amount due to (owed by) the Fund at termination or
settlement, is combined and separately disclosed as an asset (liability). The
Fund also records any periodic payments received from (paid to) the
counterparty, including at termination, under such contracts as realized gain
(loss). Total return swaps are subject to risks (if the counterparty fails to
meet its obligations).
As of February 28, 2006, the Fund had entered into the following total return
swap agreements:
SWAP NOTIONAL TERMINATION UNREALIZED
COUNTERPARTY SWAP DESCRIPTION AMOUNT DATES APPRECIATION
- ----------------------------------------------------------------------------------------------------------------
Received or paid monthly. The Counterparty
pays the Fund a Floating Payment which is
the sum of the Notional Amount, the
Lehman Brothers CMBS Index Spread and
the Financial Spread on the initial Notional
Amount for the Swap Interest Accrual
Period. In addition, the Counterparty, pays
the Fund the Total Return Amount if it is a
positive value for a given Index Period. If
it is a negative, the Fund pays the Counterparty
the absolute value of the Total Return
Amount for a given Index Period, on each
Deutsche Bank AG Payment Date. $50,000,000 3/1/06 $ 29,876
- ----------------------------------------------------------------------------------------------------------------
Received or paid monthly. If the sum of the
Lehman Brothers CMBS Index Payer
Payment Amount and the Floating Rate
Payer Payment Amount is positive, the
Counterparty will pay such amount to the
Goldman Fund. If the sums are negative, then the
Sachs Group, Fund shall pay the absolute value of such
Inc. (The) amount to the Counterparty. 40,000,000 6/1/06 15,761
-------------
$ 45,637
=============
Abbreviations are as follows:
CMBS Commercial Mortgage Backed Securities
- --------------------------------------------------------------------------------
8. ILLIQUID SECURITIES
As of February 28, 2006, 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 10% 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.
44 | OPPENHEIMER REAL ASSET FUND
- --------------------------------------------------------------------------------
9. LITIGATION
A complaint was filed as a putative class action against the Manager and the
Transfer Agent (and other defendants) in the U.S. District Court for the
Southern District of New York on January 10, 2005 and was amended on March 4,
2005. The complaint alleged, among other things, that the Manager charged
excessive fees for distribution and other costs, and that by permitting and/or
participating in those actions, the Directors/Trustees and the Officers of the
funds breached their fiduciary duties to fund shareholders under the Investment
Company Act of 1940 and at common law. The plaintiffs sought unspecified
damages, an accounting of all fees paid, and an award of attorneys' fees and
litigation expenses. Seven of the eight counts in the complaint, including the
claims against certain of the Oppenheimer funds, as nominal defendants, and
against certain present and former Directors, Trustees and Officers of the
funds, and the Distributor, as defendants, were dismissed with prejudice, by
court order dated March 10, 2006, in response to motions to dismiss the suit
that had been filed by the defendants. The remaining count against the Manager
and the Transfer Agent was dismissed with prejudice by court order dated April
5, 2006. The time in which plaintiffs may file an appeal to those decisions has
not yet lapsed.
45 | OPPENHEIMER REAL ASSET 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
http://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.
46 | OPPENHEIMER REAL ASSET 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 Fund's
investment advisory agreement (the "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 Agreement. The Board employs an independent consultant to prepare a
report that provides information, including comparative information, that the
Board requests for that purpose. In addition, the Board receives information
throughout the year regarding Fund services, fees, expenses and performance.
The Manager and the independent consultant provided information to the
Board on the following factors: (i) the nature, quality and extent of the
Manager's services, (ii) the investment performance of the Fund and the Manager,
(iii) the fees and expenses of the Fund, including comparative expense
information, (iv) the profitability of the Manager, including an analysis of the
cost of providing services, (v) whether economies of scale are realized as the
Fund grows and whether fee levels reflect these economies of scale for Fund
investors and (vi) other benefits to the Manager from its relationship with the
Fund. Outlined below is a summary of the principal information considered by the
Board as well as the Board's conclusions.
NATURE, QUALITY, AND EXTENT OF SERVICES. The Board considered information
on the nature and extent of the services provided to the Fund and information
regarding the Manager's key personnel that provide such services. The Manager's
duties include providing the Fund with the services of the portfolio manager and
the Manager's investment team, who provide research, analysis and other advisory
services in regard to the Fund's investments; securities trading services;
oversight of third party service providers; monitoring compliance with
applicable Fund policies and procedures and adherence to the Fund's investment
restrictions. The Manager is responsible for providing certain administrative
services to the Fund as well. Those services include providing and supervising
all administrative and clerical personnel that are necessary in order to provide
effective corporate administration for the Fund; compiling and maintaining
records with respect to the Fund's operations; preparing and filing reports
required by the Securities and Exchange Commission; preparing periodic reports
regarding the operations of the Fund for its shareholders; preparing proxy
materials for shareholder meetings; and preparing the registration statements
required by Federal and state securities laws for the sale of the Fund's shares.
The Manager also provides the Fund with office space, facilities and equipment.
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
took account of the fact
47 | OPPENHEIMER REAL ASSET FUND
BOARD APPROVAL OF THE FUND'S INVESTMENT
ADVISORY AGREEMENT Unaudited / Continued
- --------------------------------------------------------------------------------
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 has
received regarding the experience and professional qualifications of the
Manager's key personnel and the size and functions of its staff providing
investment management services to the Fund. The Board also considered compliance
reports from the Fund's Chief Compliance Officer. In its evaluation of the
quality of the portfolio management services provided, the Board considered the
experience of Kevin Baum and Angelo Manioudakis and the Manager's Investment
Grade investment team and analysts. Messrs. Baum and Manioudakis have had over
11 and 14 years of experience, respectively, managing investments. The Board
members also considered the totality of their experiences with the Manager, as
directors or trustees of the Fund and other funds advised by the Manager. In
light of the foregoing, the Board concluded that the Fund benefits from the
services provided under the Agreement as a result of the Manager's experience,
reputation, personnel, operations, and resources.
INVESTMENT PERFORMANCE OF THE MANAGER AND THE FUND. During the year, the
Manager provided information on the performance of the Fund and the Manager at
each Board meeting, including comparative performance information. The Board
also reviewed information, prepared by the Manager and by the independent
consultant, comparing the Fund's historical performance to other specialty
diversified equity funds that invest in commodities. The Board noted that,
although comparative data was not available for other periods, the Fund's
one-year performance was better than its peer group average. The Board felt that
the Fund's performance over its three-year and five-year periods was
satisfactory.
COSTS OF SERVICES AND PROFITS REALIZED BY THE MANAGER. The Board
considered information regarding the Manager's costs in serving as the Fund's
investment adviser, including the costs associated with the personnel and
systems necessary to manage the Fund, and information regarding the Manager's
profitability from its relationship with the Fund. The Board reviewed the fees
paid to the Manager and the other expenses borne by the Fund. The Board also
evaluated the comparability of the fees charged and the services provided to the
Fund to the fees and services for other clients or accounts advised by the
Manager. The independent consultant provided comparative data in regard to the
fees and expenses of the Fund, other specialty diversified equity funds that
invest in commodities and other funds with comparable distribution features. The
Board noted that the Fund's contractual management fees are lower than its peer
group average but higher than its peer group median; that its actual management
fees are equal to its peer
48 | OPPENHEIMER REAL ASSET FUND
group median and higher than its peer group average and that its total expenses
are equal to its peer group median and average. In light of this, the Board
concluded that the management fee was reasonable.
ECONOMIES OF SCALE. The Board reviewed whether the Fund's advisory fee
shares with shareholders economies of scale that the Manager may realize in
managing and supporting the Fund. The Board noted the Fund's breakpoints, which
are intended to share with shareholders economies of scale that may exist as the
Fund grows.
OTHER BENEFITS TO THE MANAGER. In addition to considering the profits
realized by the Manager, 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 and research provided to the Manager in connection with permissible
brokerage arrangements (soft dollar arrangements). The Board also considered
that the Manager must be able to pay and retain 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.
CONCLUSIONS. These factors were also considered by the independent
Trustees meeting separately from the full Board, assisted by experienced counsel
to the Fund and to the independent Trustees. Fund counsel and the independent
Trustees' counsel are both independent of the Manager within the meaning and
intent of the Securities and Exchange Commission Rules.
Based on its review of the information it received and its evaluations
described above, the Board, including a majority of the independent Trustees,
decided to continue the 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.
49 | OPPENHEIMER REAL ASSET FUND
ITEM 2. CODE OF ETHICS.
Not applicable to semiannual reports.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
Not applicable to semiannual reports.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Not applicable to semiannual reports.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS
Not applicable.
ITEM 6. SCHEDULE OF INVESTMENTS.
Not applicable.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 9. PURCHASES 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 FUND'S GOVERNANCE COMMITTEE PROVISIONS WITH RESPECT TO NOMINATIONS OF
DIRECTORS/TRUSTEES TO THE RESPECTIVE BOARDS
1. The Fund's Governance Committee (the "Committee") will evaluate potential
Board candidates to assess their qualifications. The Committee shall have
the authority, upon approval of the Board, to retain an executive search
firm to assist in this effort. The Committee may consider recommendations
by business and personal contacts of current Board members and by
executive search firms which the Committee may engage from time to time
and may also consider shareholder recommendations. The Committee may
consider the advice and recommendation of the Funds' investment manager
and its affiliates in making the selection.
2. The Committee shall screen candidates for Board membership. The Committee
has not established specific qualifications that it believes must be met
by a trustee nominee. In evaluating trustee nominees, the Committee
considers, among other things, an individual's
background, skills, and experience; whether the individual is an
"interested person" as defined in the Investment Company Act of 1940; and
whether the individual would be deemed an "audit committee financial
expert" within the meaning of applicable SEC rules. The Committee also
considers whether the individual's background, skills, and experience will
complement the background, skills, and experience of other nominees and
will contribute to the Board. There are no differences in the manner in
which the Committee evaluates nominees for trustees based on whether the
nominee is recommended by a shareholder.
3. The Committee may consider nominations from shareholders for the Board at
such times as the Committee meets to consider new nominees for the Board.
The Committee shall have the sole discretion to determine the candidates
to present to the Board and, in such cases where required, to
shareholders. Recommendations for trustee nominees should, at a minimum,
be accompanied by the following:
o the name, address, and business, educational, and/or other pertinent
background of the person being recommended;
o a statement concerning whether the person is an "interested person"
as defined in the Investment Company Act of 1940;
o any other information that the Funds would be required to include in
a proxy statement concerning the person if he or she was nominated;
and
o the name and address of the person submitting the recommendation
and, if that person is a shareholder, the period for which that
person held Fund shares.
The recommendation also can include any additional information which the
person submitting it believes would assist the Committee in evaluating the
recommendation.
4. Shareholders should note that a person who owns securities issued by
Massachusetts Mutual Life Insurance Company (the parent company of the
Funds' investment adviser) would be deemed an "interested person" under
the Investment Company Act of 1940. In addition, certain other
relationships with Massachusetts Mutual Life Insurance Company or its
subsidiaries, with registered broker-dealers, or with the Funds' outside
legal counsel may cause a person to be deemed an "interested person."
5. Before the Committee decides to nominate an individual as a trustee,
Committee members and other directors customarily interview the individual
in person. In addition, the individual customarily is asked to complete a
detailed questionnaire which is designed to elicit information which must
be disclosed under SEC and stock exchange rules and to determine whether
the individual is subject to any statutory disqualification from serving
as a trustee of a registered investment company.
ITEM 11. CONTROLS AND PROCEDURES.
Based on their evaluation of the 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 February 28, 2006, the registrant's principal executive
officer and principal financial officer found the registrant's disclosure
controls and procedures to provide reasonable assurances that information
required to be disclosed by the 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.
There have been no changes in the registrant's internal controls over financial
reporting that occurred during the registrant's second fiscal quarter of the
period covered by this report that have materially affected, or are reasonably
likely to materially affect, the registrant's internal control over financial
reporting.
ITEM 12. EXHIBITS.
(a) (1) Not applicable to semiannual reports.
(2) Exhibits attached hereto.
(3) Not applicable.
(b) Exhibit attached hereto.
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 Real Asset Fund
By: /s/ John V. Murphy
-----------------------------
John V. Murphy
Principal Executive Officer
Date: April 19, 2006
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: April 19, 2006
By: /s/ Brian W. Wixted
-----------------------------
Brian W. Wixted
Principal Financial Officer
Date: April 19, 2006