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 811-21686
Oppenheimer Portfolio Series
----------------------------
(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: JANUARY 31
Date of reporting period: 07/31/2007
ITEM 1. REPORTS TO STOCKHOLDERS.
CONSERVATIVE INVESTOR FUND
TOP HOLDINGS AND ALLOCATIONS
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- --------------------------------------------------------------------------------
ASSET CLASS ALLOCATION
[THE FOLLOWING TABLE WAS REPRESENTED BY A PIE CHART IN THE PRINTED MATERIAL.]
Fixed Income Funds 66.8%
U.S. Equity Funds 16.9
Alternative Investments Funds 10.4
Global Equity Fund 5.6
Money Market Fund 0.3
Portfolio holdings and allocations are subject to change. Percentages are as of
July 31, 2007, and are based on the total market value of investments in
affiliated companies
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10 | CONSERVATIVE INVESTOR 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.
The Portfolio'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 Portfolio or any gains you may realize if you
sell your shares.
INVESTORS SHOULD CONSIDER THE PORTFOLIO'S INVESTMENT OBJECTIVES, RISKS, AND
OTHER CHARGES AND EXPENSES CAREFULLY BEFORE INVESTING. THE PORTFOLIO'S
PROSPECTUS CONTAINS THIS AND OTHER INFORMATION ABOUT THE PORTFOLIO, 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 Portfolio's investment strategy and focus can change over time. The mention
of specific holdings does not constitute a recommendation by OppenheimerFunds,
Inc.
CLASS A shares of the Portfolio were first publicly offered on 4/5/05. Unless
otherwise noted, Class A returns include the current maximum initial sales
charge of 5.75%.
CLASS B shares of the Portfolio were first publicly offered on 4/5/05. Unless
otherwise noted, Class B returns include the applicable contingent deferred
sales charge of 5% (1-year) and 3% (since inception). Class B shares are subject
to an annual 0.75% asset-based sales charge.
CLASS C shares of the Portfolio were first publicly offered on 4/5/05. Unless
otherwise noted, Class C returns include the contingent deferred sales charge of
1% for the 1-year period. Class C shares are subject to an annual 0.75%
asset-based sales charge.
CLASS N shares of the Portfolio were first publicly offered on 4/5/05.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.
11 | CONSERVATIVE INVESTOR FUND
NOTES
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CLASS Y shares of the Portfolio were first publicly offered on 4/5/05. Class Y
shares are offered only to certain institutional investors under special
agreement with the Distributor.
An explanation of the calculation of performance is in the Portfolio's Statement
of Additional Information.
12 | CONSERVATIVE INVESTOR FUND
PORTFOLIO EXPENSES
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PORTFOLIO EXPENSES. As a shareholder of the Portfolio, 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 Portfolio expenses. These examples are
intended to help you understand your ongoing costs (in dollars) of investing in
the Portfolio 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 July 31, 2007.
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 Portfolio'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
Portfolio'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 Portfolio and other funds. To do so, compare this 5%
hypothetical example for the class of shares you hold with the 5% hypothetical
examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs, such as front-end
or contingent deferred sales charges (loads), or a $12.00 fee imposed annually
on accounts valued at less than $500.00 (subject to exceptions described in the
Statement of Additional Information). Therefore, the "hypothetical" lines of the
table are useful in comparing ongoing costs only, and will not help you
determine the relative total costs of owning different funds. In addition, if
these transactional costs were included, your costs would have been higher.
13 | CONSERVATIVE INVESTOR FUND
PORTFOLIO EXPENSES Continued
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- --------------------------------------------------------------------------------
BEGINNING ENDING EXPENSES
ACCOUNT ACCOUNT PAID DURING
VALUE VALUE 6 MONTHS ENDED
(2/1/07) (7/31/07) JULY 31, 2007
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Class A Actual $ 1,000.00 $ 1,014.60 $ 1.80
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Class A Hypothetical 1,000.00 1,023.01 1.81
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Class B Actual 1,000.00 1,010.10 5.90
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Class B Hypothetical 1,000.00 1,018.94 5.92
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Class C Actual 1,000.00 1,011.10 5.75
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Class C Hypothetical 1,000.00 1,019.09 5.77
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Class N Actual 1,000.00 1,012.80 3.25
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Class N Hypothetical 1,000.00 1,021.57 3.26
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Class Y Actual 1,000.00 1,016.40 0.15
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Class Y Hypothetical 1,000.00 1,024.65 0.15
Hypothetical assumes 5% annual return before expenses.
Expenses are equal to the Portfolio'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,
excluding all underlying fund expenses, based on the 6-month period ended July
31, 2007 are as follows:
CLASS EXPENSE RATIOS
- -----------------------------
Class A 0.36%
- -----------------------------
Class B 1.18
- -----------------------------
Class C 1.15
- -----------------------------
Class N 0.65
- -----------------------------
Class Y 0.03
The expense ratios reflect reduction to custodian expenses and voluntary waivers
or reimbursements by the Portfolio's Manager that can be terminated at any time,
without advance notice. The "Financial Highlights" tables in the Portfolio's
financial statements, included in this report, also show the gross expense
ratios, without such waivers or reimbursements and reduction to custodian
expenses, if applicable.
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14 | CONSERVATIVE INVESTOR FUND
STATEMENT OF INVESTMENTS July 31, 2007 / Unaudited
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VALUE
SHARES SEE NOTE 1
- ----------------------------------------------------------------------------------------
INVESTMENTS IN AFFILIATED COMPANIES--98.1% 1
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ALTERNATIVE INVESTMENT FUNDS--10.2%
Oppenheimer Commodity Strategy Total Return Fund, Cl. Y 2,244,407 $ 16,451,502
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Oppenheimer Real Estate Fund, Cl. Y 609,653 12,753,927
--------------
29,205,429
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FIXED INCOME FUNDS--65.5%
Oppenheimer Champion Income Fund, Cl. Y 3,448,096 31,136,311
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Oppenheimer Core Bond Fund, Cl. Y 9,186,575 92,416,953
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Oppenheimer International Bond Fund, Cl. Y 2,540,490 15,903,467
- ----------------------------------------------------------------------------------------
Oppenheimer Limited-Term Government Fund, Cl. Y 4,865,285 48,166,322
--------------
187,623,053
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GLOBAL EQUITY FUND--5.5%
Oppenheimer Global Fund, Cl. Y 202,000 15,822,614
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MONEY MARKET FUND--0.3%
Oppenheimer Institutional Money Market Fund, Cl. E, 5.28% 2 808,722 808,722
- ----------------------------------------------------------------------------------------
U.S. EQUITY FUNDS--16.6%
Oppenheimer Capital Appreciation Fund, Cl. Y 3 310,022 15,901,018
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Oppenheimer Main Street Fund, Cl. Y 368,159 15,661,450
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Oppenheimer Value Fund, Cl. Y 545,898 15,825,564
--------------
47,388,032
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TOTAL INVESTMENTS, AT VALUE (COST $276,475,443) 98.1% 280,847,850
- ----------------------------------------------------------------------------------------
OTHER ASSETS NET OF LIABILITIES 1.9 5,417,766
---------------------------
NET ASSETS 100.0% $ 286,265,616
===========================
15 | CONSERVATIVE INVESTOR FUND
STATEMENT OF INVESTMENTS Unaudited / Continued
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FOOTNOTES TO STATEMENT OF INVESTMENTS
1. Is or was an affiliate, as defined in the Investment Company Act of 1940, at
or during the period ended July 31, 2007, by virtue of the Portfolio owning at
least 5% of the voting securities of the issuer or as a result of the Portfolio
and the issuer having the same investment advisor. Transactions during the
period in which the issuer was an affiliate are as follows:
SHARES SHARES
JANUARY 31, GROSS GROSS JULY 31,
2007 ADDITIONS REDUCTIONS 2007
- ----------------------------------------------------------------------------------------------------------
Oppenheimer Capital Appreciation Fund, Cl. Y 231,332 93,733 15,043 310,022
Oppenheimer Champion Income Fund, Cl. Y 2,477,295 1,135,582 164,781 3,448,096
Oppenheimer Commodity Strategy
Total Return Fund, Cl. Y 1,441,991 884,076 81,660 2,244,407
Oppenheimer Core Bond Fund, Cl. Y 6,523,270 2,993,618 330,313 9,186,575
Oppenheimer Global Fund, Cl. Y 155,463 60,755 14,218 202,000
Oppenheimer Institutional Money Market Fund, Cl. E 637,460 33,424,947 33,253,685 808,722
Oppenheimer International Bond Fund, Cl. Y 1,863,135 813,594 136,239 2,540,490
Oppenheimer Limited-Term Government Fund, Cl. Y 3,414,211 1,625,479 174,405 4,865,285
Oppenheimer Main Street Fund, Cl. Y 280,537 110,530 22,908 368,159
Oppenheimer Real Estate Fund, Cl. Y 506,371 222,088 118,806 609,653
Oppenheimer Value Fund, Cl. Y 439,532 163,898 57,532 545,898
VALUE DIVIDEND REALIZED
SEE NOTE 1 INCOME GAIN (LOSS)
- ----------------------------------------------------------------------------------------------------------
Oppenheimer Capital Appreciation Fund, Cl. Y $ 15,901,018 $ -- $ (4,650)
Oppenheimer Champion Income Fund, Cl. Y 31,136,311 1,027,102 (14,708)
Oppenheimer Commodity Strategy Total Return Fund, Cl. Y 16,451,502 -- (171,171)
Oppenheimer Core Bond Fund, Cl. Y 92,416,953 2,130,130 (72,118)
Oppenheimer Global Fund, Cl. Y 15,822,614 -- (4,382)
Oppenheimer Institutional Money Market Fund, Cl. E 808,722 13,091 --
Oppenheimer International Bond Fund, Cl. Y 15,903,467 298,995 (2,401)
Oppenheimer Limited-Term Government Fund, Cl. Y 48,166,322 1,004,646 (25,950)
Oppenheimer Main Street Fund, Cl. Y 15,661,450 -- (8,618)
Oppenheimer Real Estate Fund, Cl. Y 12,753,927 27,325 163,218
Oppenheimer Value Fund, Cl. Y 15,825,564 -- 12,919
----------------------------------------
$ 280,847,850 $ 4,501,289 $ (127,861)
========================================
2. Rate shown is the 7-day yield as of July 31, 2007.
3. Non-income producing security.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
16 | CONSERVATIVE INVESTOR FUND
STATEMENT OF ASSETS AND LIABILITIES Unaudited
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July 31, 2007
- --------------------------------------------------------------------------------
ASSETS
- --------------------------------------------------------------------------------
Investments, at value--see accompanying statement of
investments--
affiliated companies (cost $276,475,443) $ 280,847,850
- --------------------------------------------------------------------------------
Cash 81,301
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Receivables and other assets:
Shares of beneficial interest sold 7,368,146
Dividends 822,440
Other 4,718
--------------
Total assets 289,124,455
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LIABILITIES
- --------------------------------------------------------------------------------
Payables and other liabilities:
Investments purchased 1,714,284
Shares of beneficial interest redeemed 1,017,251
Distribution and service plan fees 57,883
Transfer and shareholder servicing agent fees 24,142
Shareholder communications 18,940
Trustees' compensation 12,127
Other 14,212
--------------
Total liabilities 2,858,839
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NET ASSETS $ 286,265,616
==============
- --------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS
- --------------------------------------------------------------------------------
Par value of shares of beneficial interest $ 25,922
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Additional paid-in capital 276,769,414
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Accumulated net investment income 4,219,354
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Accumulated net realized gain on investments 878,519
- --------------------------------------------------------------------------------
Net unrealized appreciation on investments 4,372,407
--------------
NET ASSETS $ 286,265,616
==============
17 | CONSERVATIVE INVESTOR FUND
STATEMENT OF ASSETS AND LIABILITIES Unaudited / Continued
- --------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
NET ASSET VALUE PER SHARE
- ----------------------------------------------------------------------------------------------------------
Class A Shares:
Net asset value and redemption price per share (based on net assets of $150,860,154 and
13,602,447 shares of beneficial interest outstanding) $ 11.09
Maximum offering price per share (net asset value plus sales charge of 5.75% of offering price) $ 11.77
- ----------------------------------------------------------------------------------------------------------
Class B Shares:
Net asset value, redemption price (excludes applicable contingent deferred sales charge)
and offering price per share (based on net assets of $27,198,346 and 2,476,467 shares of
beneficial interest outstanding) $ 10.98
- ----------------------------------------------------------------------------------------------------------
Class C Shares:
Net asset value, redemption price (excludes applicable contingent deferred sales charge)
and offering price per share (based on net assets of $73,667,556 and 6,715,640 shares of
beneficial interest outstanding) $ 10.97
- ----------------------------------------------------------------------------------------------------------
Class N Shares:
Net asset value, redemption price (excludes applicable contingent deferred sales charge)
and offering price per share (based on net assets of $34,128,234 and 3,090,969 shares of
beneficial interest outstanding) $ 11.04
- ----------------------------------------------------------------------------------------------------------
Class Y Shares:
Net asset value, redemption price and offering price per share (based on net assets of
$411,326 and 36,914 shares of beneficial interest outstanding) $ 11.14
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
18 | CONSERVATIVE INVESTOR FUND
STATEMENT OF OPERATIONS Unaudited
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For the Six Months Ended July 31, 2007
- --------------------------------------------------------------------------------
INVESTMENT INCOME
- --------------------------------------------------------------------------------
Dividends from affiliated companies $ 4,501,289
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Interest 11,683
-------------
Total investment income 4,512,972
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EXPENSES
- --------------------------------------------------------------------------------
Distribution and service plan fees:
Class A 159,864
Class B 122,982
Class C 308,886
Class N 74,161
- --------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees:
Class A 49,491
Class B 15,749
Class C 36,293
Class N 18,907
- --------------------------------------------------------------------------------
Shareholder communications:
Class A 9,734
Class B 3,682
Class C 5,960
Class N 780
Class Y 9
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Trustees' compensation 5,148
- --------------------------------------------------------------------------------
Custodian fees and expenses 481
- --------------------------------------------------------------------------------
Other 18,306
-------------
Total expenses 830,433
Less reduction to custodian expenses (48)
Less waivers and reimbursements of expenses (243)
-------------
Net expenses 830,142
- --------------------------------------------------------------------------------
NET INVESTMENT INCOME 3,682,830
- --------------------------------------------------------------------------------
REALIZED AND UNREALIZED LOSS
- --------------------------------------------------------------------------------
Net realized loss on investments--affiliated companies (127,861)
- --------------------------------------------------------------------------------
Net change in unrealized appreciation on investments (1,221,729)
- --------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 2,333,240
=============
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
19 | CONSERVATIVE INVESTOR FUND
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
SIX MONTHS YEAR
ENDED ENDED
JULY 31, 2007 JANUARY 31,
(UNAUDITED) 2007
- ---------------------------------------------------------------------------------------------------------------------------
OPERATIONS
- ---------------------------------------------------------------------------------------------------------------------------
Net investment income $ 3,682,830 $ 5,562,146
- ---------------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) (127,861) 1,186,431
- ---------------------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation (1,221,729) 4,526,707
-------------------------------
Net increase in net assets resulting from operations 2,333,240 11,275,284
- ---------------------------------------------------------------------------------------------------------------------------
DIVIDENDS AND/OR DISTRIBUTIONS TO SHAREHOLDERS
- ---------------------------------------------------------------------------------------------------------------------------
Dividends from net investment income:
Class A -- (3,003,750)
Class B -- (480,154)
Class C -- (1,164,379)
Class N -- (517,426)
Class Y -- (3,818)
-------------------------------
-- (5,169,527)
- ---------------------------------------------------------------------------------------------------------------------------
Distributions from net realized gain:
Class A -- (155,287)
Class B -- (31,426)
Class C -- (73,612)
Class N -- (28,428)
Class Y -- (185)
-------------------------------
-- (288,938)
- ---------------------------------------------------------------------------------------------------------------------------
BENEFICIAL INTEREST TRANSACTIONS
- ---------------------------------------------------------------------------------------------------------------------------
Net increase in net assets resulting from beneficial interest transactions:
Class A 39,018,945 60,904,680
Class B 4,996,930 12,171,265
Class C 22,406,058 30,347,750
Class N 12,577,090 13,094,093
Class Y 276,800 31,178
-------------------------------
79,275,823 116,548,966
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NET ASSETS
- ---------------------------------------------------------------------------------------------------------------------------
Total increase 81,609,063 122,365,785
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Beginning of period 204,656,553 82,290,768
-------------------------------
End of period (including accumulated net investment income of
$4,219,354 and $536,524, respectively) $286,265,616 $204,656,553
===============================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
20 | CONSERVATIVE INVESTOR FUND
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
SIX MONTHS
ENDED
JULY 31, 2007 YEAR ENDED JANUARY 31,
CLASS A (UNAUDITED) 2007 2006 1
- ---------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- ---------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 10.93 $ 10.53 $ 10.00
- ---------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income 2 0.18 0.46 0.38
Net realized and unrealized gain (loss) (0.02) 0.29 0.33
---------------------------------------
Total from investment operations 0.16 0.75 0.71
- ---------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income -- (0.33) (0.18)
Distributions from net realized gain -- (0.02) --
---------------------------------------
Total dividends and/or distributions to shareholders -- (0.35) (0.18)
- ---------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 11.09 $ 10.93 $ 10.53
=======================================
- ---------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 3 1.46% 7.11% 7.15%
- ---------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ---------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $150,860 $110,378 $ 46,318
- ---------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $131,644 $ 76,542 $ 21,844
- ---------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 4
Net investment income 3.30% 4.24% 4.50%
Total expenses 5 0.36% 0.38% 0.53%
Expenses after payments, waivers and/or reimbursements
and reduction to custodian expenses 0.36% 0.38% 0.51%
- ---------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 6% 5% 11%
1. For the period from April 5, 2005 (commencement of operations) to January 31,
2006.
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 less than one full
year. Returns do not reflect the deduction of taxes that a shareholder would pay
on portfolio distributions or the redemption of portfolio shares.
4. Annualized for periods less than one full year.
5. Total expenses including all underlying fund expenses were as follows:
Six Months Ended July 31, 2007 0.91%
Year Ended January 31, 2007 0.98%
Period Ended January 31, 2006 1.19%
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
21 | CONSERVATIVE INVESTOR FUND
FINANCIAL HIGHLIGHTS Continued
- --------------------------------------------------------------------------------
SIX MONTHS
ENDED
JULY 31, 2007 YEAR ENDED JANUARY 31,
CLASS B (UNAUDITED) 2007 2006 1
- ---------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- ---------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 10.87 $ 10.49 $ 10.00
- ---------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income 2 0.14 0.36 0.32
Net realized and unrealized gain (loss) (0.03) 0.30 0.32
---------------------------------------
Total from investment operations 0.11 0.66 0.64
- ---------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income -- (0.26) (0.15)
Distributions from net realized gain -- (0.02) --
---------------------------------------
Total dividends and/or distributions to shareholders -- (0.28) (0.15)
- ---------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 10.98 $ 10.87 $ 10.49
=======================================
- ---------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 3 1.01% 6.28% 6.44%
- ---------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ---------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 27,199 $ 21,991 $ 9,163
- ---------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 24,829 $ 15,882 $ 4,018
- ---------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 4
Net investment income 2.48% 3.36% 3.74%
Total expenses 5 1.18% 1.23% 1.39%
Expenses after payments, waivers and/or reimbursements
and reduction to custodian expenses 1.18% 1.23% 1.34%
- ---------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 6% 5% 11%
1. For the period from April 5, 2005 (commencement of operations) to January 31,
2006.
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 less than one full
year. Returns do not reflect the deduction of taxes that a shareholder would pay
on portfolio distributions or the redemption of portfolio shares.
4. Annualized for periods less than one full year.
5. Total expenses including all underlying fund expenses were as follows:
Six Months Ended July 31, 2007 1.73%
Year Ended January 31, 2007 1.83%
Period Ended January 31, 2006 2.05%
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
22 | CONSERVATIVE INVESTOR FUND
SIX MONTHS
ENDED
JULY 31, 2007 YEAR ENDED JANUARY 31,
CLASS C (UNAUDITED) 2007 2006 1
- ---------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- ---------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 10.85 $ 10.48 $ 10.00
- ---------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income 2 0.14 0.37 0.32
Net realized and unrealized gain (loss) (0.02) 0.29 0.31
---------------------------------------
Total from investment operations 0.12 0.66 0.63
- ---------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income -- (0.27) (0.15)
Distributions from net realized gain -- (0.02) --
---------------------------------------
Total dividends and/or distributions to shareholders -- (0.29) (0.15)
- ---------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 10.97 $ 10.85 $ 10.48
=======================================
- ---------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 3 1.11% 6.28% 6.37%
- ---------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ---------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 73,668 $ 50,876 $ 19,145
- ---------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 62,426 $ 35,277 $ 7,647
- ---------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 4
Net investment income 2.50% 3.46% 3.78%
Total expenses 5 1.15% 1.19% 1.36%
Expenses after payments, waivers and/or reimbursements
and reduction to custodian expenses 1.15% 1.19% 1.33%
- ---------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 6% 5% 11%
1. For the period from April 5, 2005 (commencement of operations) to January 31,
2006.
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 less than one full
year. Returns do not reflect the deduction of taxes that a shareholder would pay
on portfolio distributions or the redemption of portfolio shares.
4. Annualized for periods less than one full year.
5. Total expenses including all underlying fund expenses were as follows:
Six Months Ended July 31, 2007 1.70%
Year Ended January 31, 2007 1.79%
Period Ended January 31, 2006 2.02%
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
23 | CONSERVATIVE INVESTOR FUND
FINANCIAL HIGHLIGHTS Continued
- --------------------------------------------------------------------------------
SIX MONTHS
ENDED
JULY 31, 2007 YEAR ENDED JANUARY 31,
CLASS N (UNAUDITED) 2007 2006 1
- ---------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- ---------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 10.90 $ 10.51 $ 10.00
- ---------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income 2 0.17 0.44 0.41
Net realized and unrealized gain (loss) (0.03) 0.28 0.28
---------------------------------------
Total from investment operations 0.14 0.72 0.69
- ---------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income -- (0.31) (0.18)
Distributions from net realized gain -- (0.02) --
---------------------------------------
Total dividends and/or distributions to shareholders -- (0.33) (0.18)
- ---------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 11.04 $ 10.90 $ 10.51
=======================================
- ---------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 3 1.28% 6.84% 6.98%
- ---------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ---------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 34,128 $ 21,277 $ 7,569
- ---------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 29,983 $ 13,671 $ 2,231
- ---------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 4
Net investment income 3.00% 4.08% 4.82%
Total expenses 5 0.65% 0.66% 0.72%
Expenses after payments, waivers and/or reimbursements
and reduction to custodian expenses 0.65% 0.66% 0.71%
- ---------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 6% 5% 11%
1. For the period from April 5, 2005 (commencement of operations) to January 31,
2006.
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 less than one full
year. Returns do not reflect the deduction of taxes that a shareholder would pay
on portfolio distributions or the redemption of portfolio shares.
4. Annualized for periods less than one full year.
5. Total expenses including all underlying fund expenses were as follows:
Six Months Ended July 31, 2007 1.20%
Year Ended January 31, 2007 1.26%
Period Ended January 31, 2006 1.38%
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
24 | CONSERVATIVE INVESTOR FUND
SIX MONTHS
ENDED
JULY 31, 2007 YEAR ENDED JANUARY 31,
CLASS Y (UNAUDITED) 2007 2006 1
- ---------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- ---------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 10.96 $ 10.54 $ 10.00
- ---------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income 2 0.20 0.49 0.38
Net realized and unrealized gain (loss) (0.02) 0.30 0.35
---------------------------------------
Total from investment operations 0.18 0.79 0.73
- ---------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income -- (0.35) (0.19)
Distributions from net realized gain -- (0.02) --
---------------------------------------
Total dividends and/or distributions to shareholders -- (0.37) (0.19)
- ---------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 11.14 $ 10.96 $ 10.54
=======================================
- ---------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 3 1.64% 7.50% 7.34%
- ---------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ---------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 411 $ 135 $ 96
- ---------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 245 $ 127 $ 71
- ---------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 4
Net investment income 3.63% 4.57% 4.42%
Total expenses 5 0.03% 0.06% 0.30%
Expenses after payments, waivers and/or reimbursements
and reduction to custodian expenses 0.03% 0.06% 0.25%
- ---------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 6% 5% 11%
1. For the period from April 5, 2005 (commencement of operations) to January 31,
2006.
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 less than one full
year. Returns do not reflect the deduction of taxes that a shareholder would pay
on portfolio distributions or the redemption of portfolio shares.
4. Annualized for periods less than one full year.
5. Total expenses including all underlying fund expenses were as follows:
Six Months Ended July 31, 2007 0.58%
Year Ended January 31, 2007 0.66%
Period Ended January 31, 2006 0.96%
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
25 | CONSERVATIVE INVESTOR FUND
NOTES TO FINANCIAL STATEMENTS Unaudited
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
Oppenheimer Portfolio Series (the "Fund") is registered under the Investment
Company Act of 1940, as amended, as an open-end management investment company.
Conservative Investor Fund (the "Portfolio") is a series of the Fund whose
investment objective is to seek current income with a secondary objective of
long-term growth of capital. The Portfolio is a special type of mutual fund
known as a "fund of funds" because it invests in other mutual funds. The
Portfolio normally invests in a diversified portfolio of Oppenheimer mutual
funds (individually, an "Underlying Fund" and collectively, the "Underlying
Funds"). The Portfolio's investment advisor is OppenheimerFunds, Inc. (the
"Manager").
The Portfolio 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 Portfolio in general and
exclusive voting rights on matters that affect that class alone. Earnings, net
assets and net asset value per share may differ due to each class having its own
expenses, such as transfer and shareholder servicing agent fees and shareholder
communications, directly attributable to that class. Class A, B, C and N have
separate distribution and/or service plans. No such plan has been adopted for
Class Y shares. Class B shares will automatically convert to Class A shares six
years after the date of purchase.
The following is a summary of significant accounting policies consistently
followed by the Portfolio.
- --------------------------------------------------------------------------------
SECURITIES VALUATION. The Portfolio calculates the net asset value of each class
of shares based upon the net asset value of the applicable Underlying Funds. For
each Underlying Fund, the net asset value per share for a class of shares on a
"regular business day" is determined by dividing the value of the Underlying
Fund's net assets attributable to that class by the number of shares of that
class outstanding on that day. To determine net asset values, the Underlying
Fund assets are valued primarily on the basis of current market quotations. If
market quotations are not readily available or do not accurately reflect fair
value for a security (in the Manager's judgment) or if a security's value has
been materially affected by events occurring after the close of the exchange or
market on which the security is principally traded, that security may be valued
by another method that the Underlying Fund's Board of Trustees/Directors
believes accurately reflects the fair value. Because some foreign securities
trade in markets and on exchanges that operate on weekends and U.S. holidays,
the values of some of the Underlying Fund's foreign investments may change on
days when investors cannot buy or redeem Underlying Fund shares.
26 | CONSERVATIVE INVESTOR FUND
Short-term "money market type" debt securities with remaining maturities
of sixty days or less are valued at amortized cost (which approximates market
value).
- --------------------------------------------------------------------------------
RISKS OF INVESTING IN THE UNDERLYING FUNDS. Each of the Underlying Funds in
which the Portfolio invests has its own investment risks, and those risks can
affect the value of the Portfolio's investments and therefore the value of the
Portfolio's shares. To the extent that the Portfolio invests more of its assets
in one Underlying Fund than in another, the Portfolio will have greater exposure
to the risks of that Underlying Fund.
- --------------------------------------------------------------------------------
INVESTMENT IN OPPENHEIMER INSTITUTIONAL MONEY MARKET FUND. The Portfolio is
permitted to invest daily available cash balances in an affiliated money market
fund. The Portfolio may invest the available cash in Class E shares of
Oppenheimer Institutional Money Market Fund ("IMMF") which seeks current income
and stability of principal. IMMF is a registered open-end management investment
company, regulated as a money market fund under the Investment Company Act of
1940, as amended. The Manager is also the investment advisor of IMMF. The
Portfolio's investment in IMMF is included in the Statement of Investments. As a
shareholder, the Portfolio is subject to its proportional share of IMMF's Class
E expenses, including its management fee. The Manager will waive fees and/or
reimburse Portfolio expenses in an amount equal to the indirect management fees
incurred through the Portfolio's investment in IMMF.
- --------------------------------------------------------------------------------
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 Portfolio intends to comply with provisions of the Internal
Revenue Code applicable to regulated investment companies and to distribute
substantially all of its investment company taxable income, including any net
realized gain on investments not offset by capital loss carryforwards, if any,
to shareholders, therefore, no federal income or excise tax provision is
required.
Net investment income (loss) and net realized gain (loss) may differ for
financial statement and tax purposes. The character of dividends and
distributions made during the fiscal year from net investment income or net
realized gains may differ from their ultimate characterization for federal
income tax purposes. Also, due to timing of dividends and distributions, the
fiscal year in which amounts are distributed may differ from the fiscal year in
which the income or net realized gain was recorded by the Portfolio.
As of July 31, 2007, the Portfolio had available for federal income tax
purposes an estimated capital loss carryforward of $127,861 expiring by 2015.
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 July
31, 2007, it is estimated that the Portfolio will not utilize any capital loss
27 | CONSERVATIVE INVESTOR FUND
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES Continued
carryforward to offset realized capital gains. During the fiscal year ended
January 31, 2007, the Portfolio did not utilize any capital loss carryforward to
offset capital gains realized in that fiscal year.
- --------------------------------------------------------------------------------
TRUSTEES' COMPENSATION. The Portfolio has adopted an unfunded retirement plan
(the "Plan") for the Portfolio's independent trustees. Benefits are based on
years of service and fees paid to each trustee during their period of service.
The Plan was frozen with respect to adding new participants effective December
31, 2006 (the "Freeze Date") and existing Plan Participants as of the Freeze
Date will continue to receive accrued benefits under the Plan. Active
independent trustees as of the Freeze Date have each elected a distribution
method with respect to their benefits under the Plan. During the six months
ended July 31, 2007, the Portfolio's projected benefit obligations were
increased by $3,054 and payments of $2,968 were made to retired trustees,
resulting in an accumulated liability of $9,821 as of July 31, 2007.
The Board of Trustees has adopted a compensation deferral 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
Portfolio. 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 Portfolio or in other Oppenheimer funds selected by
the Trustee. The Portfolio purchases shares of the funds selected for deferral
by the Trustee in amounts equal to his or her deemed investment, resulting in a
Portfolio 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 Portfolio, and will not materially affect the
Portfolio's assets, liabilities or net investment income per share. Amounts will
be deferred until distributed in accordance to the compensation deferral plan.
- --------------------------------------------------------------------------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS. Dividends and distributions to
shareholders, which are determined in accordance with income tax regulations,
are recorded on the ex-dividend date. Income and capital gain distributions, if
any, are declared and paid annually.
- --------------------------------------------------------------------------------
INVESTMENT INCOME. Dividend income is recorded on the ex-dividend date or upon
ex-dividend notification in the case of certain foreign dividends where the
ex-dividend date may have passed. Non-cash dividends included in dividend
income, if any, are recorded at the fair market value of the securities
received. Interest income, which includes accretion of discount and amortization
of premium, is accrued as earned.
- --------------------------------------------------------------------------------
CUSTODIAN FEES. "Custodian fees and expenses" in the Statement of Operations may
include interest expense incurred by the Portfolio 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 share-
28 | CONSERVATIVE INVESTOR FUND
holder redemption activity. The Portfolio pays interest to its custodian on such
cash overdrafts, to the extent they are not offset by positive cash balances
maintained by the Portfolio, at a rate equal to the Federal Funds Rate plus
0.50%. The "Reduction to custodian expenses" line item, if applicable,
represents earnings on cash balances maintained by the Portfolio 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 Portfolio'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 Portfolio. In
the normal course of business, the Portfolio may also enter into contracts that
provide general indemnifications. The Portfolio's maximum exposure under these
arrangements is unknown as this would be dependent on future claims that may be
made against the Portfolio. 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 Portfolio 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 JULY 31, 2007 YEAR ENDED JANUARY 31, 2007
SHARES AMOUNT SHARES AMOUNT
- -------------------------------------------------------------------------------------------------------------
CLASS A
Sold 5,457,230 $ 60,856,417 6,963,555 $ 74,510,538
Dividends and/or distributions reinvested -- -- 273,173 2,955,734
Redeemed (1,952,695) (21,837,472) (1,539,439) (16,561,592)
---------------------------------------------------------------
Net increase 3,504,535 $ 39,018,945 5,697,289 $ 60,904,680
===============================================================
- -------------------------------------------------------------------------------------------------------------
CLASS B
Sold 792,346 $ 8,746,571 1,545,034 $ 16,399,320
Dividends and/or distributions reinvested -- -- 44,717 481,607
Redeemed (339,247) (3,749,641) (439,932) (4,709,662)
---------------------------------------------------------------
Net increase 453,099 $ 4,996,930 1,149,819 $ 12,171,265
===============================================================
- -------------------------------------------------------------------------------------------------------------
CLASS C
Sold 2,657,639 $ 29,357,054 3,733,906 $ 39,648,370
Dividends and/or distributions reinvested -- -- 104,459 1,122,933
Redeemed (629,413) (6,950,996) (977,406) (10,423,553)
---------------------------------------------------------------
Net increase 2,028,226 $ 22,406,058 2,860,959 $ 30,347,750
===============================================================
29 | CONSERVATIVE INVESTOR FUND
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
2. SHARES OF BENEFICIAL INTEREST Continued
SIX MONTHS ENDED JULY 31, 2007 YEAR ENDED JANUARY 31, 2007
SHARES AMOUNT SHARES AMOUNT
- -------------------------------------------------------------------------------------------------------------
CLASS N
Sold 1,979,647 $ 21,931,492 1,890,946 $ 20,227,682
Dividends and/or distributions reinvested -- -- 43,968 474,413
Redeemed (841,213) (9,354,402) (702,789) (7,608,002)
--------------------------------------------------------------
Net increase 1,138,434 $ 12,577,090 1,232,125 $ 13,094,093
==============================================================
- -------------------------------------------------------------------------------------------------------------
CLASS Y
Sold 35,359 $ 396,941 11,192 $ 118,410
Dividends and/or distributions reinvested -- -- 366 3,967
Redeemed (10,727) (120,141) (8,365) (91,199)
--------------------------------------------------------------
Net increase 24,632 $ 276,800 3,193 $ 31,178
==============================================================
- --------------------------------------------------------------------------------
3. PURCHASES AND SALES OF SECURITIES
The aggregate cost of purchases and proceeds from sales of securities, other
than short--term obligations and investments in IMMF, for the six months ended
July 31, 2007, were as follows:
PURCHASES SALES
-----------------------------------------------------
Investment securities $92,525,879 $15,719,886
- --------------------------------------------------------------------------------
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES
MANAGEMENT FEES. Under the investment advisory agreement, the Manager does not
charge a management fee, but rather collects indirect management fees from
investments in the Underlying Funds. The weighted indirect management fees
collected from the Underlying Funds, as a percent of average daily net assets of
the Portfolio for the six months ended July 31, 2007 was 0.52%.
- --------------------------------------------------------------------------------
TRANSFER AGENT FEES. OppenheimerFunds Services (OFS), a division of the Manager,
acts as the transfer and shareholder servicing agent for the Portfolio. The
Portfolio pays OFS a per account fee. For the six months ended July 31, 2007,
the Portfolio paid $111,727 to OFS for services to the Portfolio.
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 Portfolio, OppenheimerFunds Distributor, Inc. (the
Distributor) acts as the Portfolio's principal underwriter in the continuous
public offering of the Portfolio's classes of shares.
- --------------------------------------------------------------------------------
SERVICE PLAN FOR CLASS A SHARES. The Portfolio 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
30 | CONSERVATIVE INVESTOR FUND
up to 0.25% of the average annual net assets of Class A shares of the Portfolio.
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
Portfolio under the plan are detailed in the Statement of Operations.
- --------------------------------------------------------------------------------
DISTRIBUTION AND SERVICE PLANS FOR CLASS B, CLASS C AND CLASS N SHARES. The
Portfolio 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
Portfolio 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 Portfolio 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 Portfolio 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
determines its uncompensated expenses under the plan at calendar quarter ends.
The Distributor's aggregate uncompensated expenses under the plan at June 30,
2007 for Class B, Class C and Class N shares were $414,065, $484,731 and
$367,873, respectively. Fees incurred by the Portfolio 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 Portfolio. They are deducted from the
proceeds of sales of Portfolio 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 following table for the period
indicated.
CLASS A CLASS B CLASS C CLASS N
CLASS A CONTINGENT CONTINGENT CONTINGENT CONTINGENT
FRONT-END DEFERRED DEFERRED DEFERRED DEFERRED
SALES CHARGES SALES CHARGES SALES CHARGES SALES CHARGES SALES CHARGES
RETAINED BY RETAINED BY RETAINED BY RETAINED BY RETAINED BY
SIX MONTHS ENDED DISTRIBUTOR DISTRIBUTOR DISTRIBUTOR DISTRIBUTOR DISTRIBUTOR
- -------------------------------------------------------------------------------------------------
July 31, 2007 $235,583 $1,046 $27,335 $10,877 $5,765
- --------------------------------------------------------------------------------
WAIVERS AND REIMBURSEMENTS OF EXPENSES. The Manager has voluntarily agreed to a
total expense limitation on the aggregate amount of combined direct
(fund-of-funds level) and indirect expense so that "Total expenses" as a
percentage of average daily net assets will not exceed the following annual
rates: 1.25%, 2.00%, 2.00%, 1.50% and 1.00%, for Class A, Class B, Class C,
Class N and Class Y, respectively. The Manager may modify or terminate this
undertaking at any time without notice to shareholders. These expense
limitations do not include Extraordinary Expenses and other expenses not
incurred in the
31 | CONSERVATIVE INVESTOR FUND
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES Continued
ordinary course of the Portfolio's business. Notwithstanding the foregoing
limits, the Manager is not required to waive or reimburse Portfolio expenses in
excess of indirect management fees earned from investments in Underlying Funds
to assure that expenses do not exceed those limits.
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. This
undertaking may be amended or withdrawn at any time.
The Manager will waive fees and/or reimburse Portfolio expenses in an
amount equal to the indirect management fees incurred through the Portfolio's
investment in IMMF. During the six months ended July 31, 2007, the Manager
waived $243 for IMMF management fees.
- --------------------------------------------------------------------------------
5. RECENT ACCOUNTING PRONOUNCEMENT
In September 2006, Financial Accounting Standards Board issued Statement of
Financial Accounting Standards ("SFAS") No. 157, FAIR VALUE MEASUREMENTS. This
standard establishes a single authoritative definition of fair value, sets out a
framework for measuring fair value and expands disclosures about fair value
measurements. SFAS No. 157 applies to fair value measurements already required
or permitted by existing standards. SFAS No. 157 is effective for financial
statements issued for fiscal years beginning after November 15, 2007, and
interim periods within those fiscal years. As of July 31, 2007, the Manager does
not believe the adoption of SFAS No. 157 will materially impact the financial
statement amounts; however, additional disclosures may be required about the
inputs used to develop the measurements and the effect of certain of the
measurements on changes in net assets for the period.
32 | CONSERVATIVE INVESTOR FUND
PORTFOLIO PROXY VOTING POLICIES AND PROCEDURES;
UPDATES TO STATEMENTS OF INVESTMENTS Unaudited
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
The Portfolio has adopted Portfolio Proxy Voting Policies and Procedures under
which the Portfolio votes proxies relating to securities ("portfolio proxies")
held by the Portfolio. A description of the Portfolio's Portfolio Proxy Voting
Policies and Procedures is available (i) without charge, upon request, by
calling the Portfolio toll-free at 1.800.525.7048, (ii) on the Portfolio's
website at www.oppenheimerfunds.com, and (iii) on the SEC's website at
www.sec.gov. In addition, the Portfolio 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 Portfolio's voting record is available (i) without
charge, upon request, by calling the Portfolio 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 Portfolio 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 Portfolio'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.
33 | CONSERVATIVE INVESTOR FUND
EQUITY INVESTOR FUND
TOP HOLDINGS AND ALLOCATIONS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
ASSET CLASS ALLOCATION
[THE FOLLOWING TABLE WAS REPRESENTED BY A PIE CHART IN THE PRINTED MATERIAL.]
U.S. Equity Funds 69.2%
Global Equity Funds 30.8
Money Market Fund 0.0
Portfolio holdings and allocations are subject to change. Percentages are as of
July 31, 2007, and are based on the total market value of investments in
affiliated companies.
- --------------------------------------------------------------------------------
9 | EQUITY INVESTOR FUND
NOTES
- --------------------------------------------------------------------------------
Total returns include changes in share price and reinvestment of dividends and
capital gains distributions in a hypothetical investment for the periods shown.
The Portfolio'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 Portfolio or any gains you may realize if you
sell your shares.
INVESTORS SHOULD CONSIDER THE PORTFOLIO'S INVESTMENT OBJECTIVES, RISKS, AND
OTHER CHARGES AND EXPENSES CAREFULLY BEFORE INVESTING. THE PORTFOLIO'S
PROSPECTUS CONTAINS THIS AND OTHER INFORMATION ABOUT THE PORTFOLIO, 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 Portfolio's investment strategy and focus can change over time. The mention
of specific holdings does not constitute a recommendation by OppenheimerFunds,
Inc.
CLASS A shares of the Portfolio were first publicly offered on 4/5/05. Unless
otherwise noted, Class A returns include the current maximum initial sales
charge of 5.75%.
CLASS B shares of the Portfolio were first publicly offered on 4/5/05. Unless
otherwise noted, Class B returns include the applicable contingent deferred
sales charge of 5% (1-year) and 3% (since inception). Class B shares are subject
to an annual 0.75% asset-based sales charge.
CLASS C shares of the Portfolio were first publicly offered on 4/5/05. Unless
otherwise noted, Class C returns include the contingent deferred sales charge of
1% for the 1-year period. Class C shares are subject to an annual 0.75%
asset-based sales charge.
CLASS N shares of the Portfolio were first publicly offered on 4/5/05. 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 Portfolio were first publicly offered on 4/5/05. Class Y
shares are offered only to certain institutional investors under special
agreement with the Distributor.
An explanation of the calculation of performance is in the Portfolio's Statement
of Additional Information.
10 | EQUITY INVESTOR FUND
PORTFOLIO EXPENSES
- --------------------------------------------------------------------------------
PORTFOLIO EXPENSES. As a shareholder of the Portfolio, 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 Portfolio expenses. These examples are
intended to help you understand your ongoing costs (in dollars) of investing in
the Portfolio 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 July 31, 2007.
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 Portfolio'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
Portfolio'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 Portfolio and other funds. To do so, compare this 5%
hypothetical example for the class of shares you hold with the 5% hypothetical
examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs, such as front-end
or contingent deferred sales charges (loads), or a $12.00 fee imposed annually
on accounts valued at less than $500.00 (subject to exceptions described in the
Statement of Additional Information). Therefore, the "hypothetical" lines of the
table are useful in comparing ongoing costs only, and will not help you
determine the relative total costs of owning different funds. In addition, if
these transactional costs were included, your costs would have been higher.
11 | EQUITY INVESTOR FUND
PORTFOLIO EXPENSES Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
BEGINNING ENDING EXPENSES
ACCOUNT ACCOUNT PAID DURING
VALUE VALUE 6 MONTHS ENDED
(2/1/07) (7/31/07) JULY 31, 2007
- ---------------------------------------------------------------------------------------
Class A Actual $ 1,000.00 $ 1,050.70 $ 2.29
- ---------------------------------------------------------------------------------------
Class A Hypothetical 1,000.00 1,022.56 2.26
- ---------------------------------------------------------------------------------------
Class B Actual 1,000.00 1,046.30 6.36
- ---------------------------------------------------------------------------------------
Class B Hypothetical 1,000.00 1,018.60 6.28
- ---------------------------------------------------------------------------------------
Class C Actual 1,000.00 1,047.10 6.26
- ---------------------------------------------------------------------------------------
Class C Hypothetical 1,000.00 1,018.70 6.18
- ---------------------------------------------------------------------------------------
Class N Actual 1,000.00 1,049.20 3.41
- ---------------------------------------------------------------------------------------
Class N Hypothetical 1,000.00 1,021.47 3.36
- ---------------------------------------------------------------------------------------
Class Y Actual 1,000.00 1,052.90 0.10
- ---------------------------------------------------------------------------------------
Class Y Hypothetical 1,000.00 1,024.70 0.10
Hypothetical assumes 5% annual return before expenses.
Expenses are equal to the Portfolio'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,
excluding all underlying fund expenses, based on the 6-month period ended July
31, 2007 are as follows:
CLASS EXPENSE RATIOS
- ---------------------------------
Class A 0.45%
- ---------------------------------
Class B 1.25
- ---------------------------------
Class C 1.23
- ---------------------------------
Class N 0.67
- ---------------------------------
Class Y 0.02
The expense ratios reflect reduction to custodian expenses and voluntary waivers
or reimbursements by the Portfolio's Manager that can be terminated at any time,
without advance notice. The "Financial Highlights" tables in the Portfolio's
financial statements, included in this report, also show the gross expense
ratios, without such waivers or reimbursements and reduction to custodian
expenses, if applicable.
- --------------------------------------------------------------------------------
12 | EQUITY INVESTOR FUND
STATEMENT OF INVESTMENTS July 31, 2007 / Unaudited
- --------------------------------------------------------------------------------
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------------------------
INVESTMENTS IN AFFILIATED COMPANIES--99.8% 1
- --------------------------------------------------------------------------------------------------
GLOBAL EQUITY FUNDS--30.7%
Oppenheimer Developing Markets Fund, Cl. Y 521,078 $ 26,105,985
- --------------------------------------------------------------------------------------------------
Oppenheimer Global Fund, Cl. Y 1,187,004 92,977,984
- --------------------------------------------------------------------------------------------------
Oppenheimer Global Opportunities Fund, Cl. Y 607,292 24,036,617
------------
143,120,586
- --------------------------------------------------------------------------------------------------
MONEY MARKET FUND--0.0%
Oppenheimer Institutional Money Market Fund, Cl. E, 5.28% 2 225,303 225,303
- --------------------------------------------------------------------------------------------------
U.S. EQUITY FUNDS--69.1%
Oppenheimer Capital Appreciation Fund, Cl. Y 3 1,820,947 93,396,405
- --------------------------------------------------------------------------------------------------
Oppenheimer Main Street Fund, Cl. Y 1,622,819 69,034,710
- --------------------------------------------------------------------------------------------------
Oppenheimer Main Street Opportunity Fund, Cl. Y 2,938,119 45,834,650
- --------------------------------------------------------------------------------------------------
Oppenheimer Main Street Small Cap Fund, Cl. Y 1,851,918 43,964,540
- --------------------------------------------------------------------------------------------------
Oppenheimer Value Fund, Cl. Y 2,406,077 69,752,171
------------
321,982,476
- --------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS, AT VALUE (COST $425,934,323) 99.8% 465,328,365
- --------------------------------------------------------------------------------------------------
OTHER ASSETS NET OF LIABILITIES 0.2 736,936
-------------------------
NET ASSETS 100.0% $466,065,301
=========================
13 | EQUITY INVESTOR FUND
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
FOOTNOTES TO STATEMENT OF INVESTMENTS
1. Is or was an affiliate, as defined in the Investment Company Act of 1940, at
or during the period ended July 31, 2007, by virtue of the Portfolio owning at
least 5% of the voting securities of the issuer or as a result of the Portfolio
and the issuer having the same investment advisor. Transactions during the
period in which the issuer was an affiliate are as follows:
SHARES GROSS GROSS SHARES
JANUARY 31, 2007 ADDITIONS REDUCTIONS JULY 31, 2007
- ----------------------------------------------------------------------------------------------------------------
Oppenheimer Capital Appreciation Fund, Cl. Y 1,364,861 462,433 6,347 1,820,947
Oppenheimer Developing Markets Fund, Cl. Y 425,351 121,172 25,445 521,078
Oppenheimer Global Fund, Cl. Y 915,262 278,198 6,456 1,187,004
Oppenheimer Global Opportunities Fund, Cl. Y 430,055 179,322 2,085 607,292
Oppenheimer Institutional Money Market Fund, Cl. E 812,798 26,246,748 26,834,243 225,303
Oppenheimer Main Street Fund, Cl. Y 1,239,380 389,077 5,638 1,622,819
Oppenheimer Main Street Opportunity Fund, Cl. Y 2,241,434 706,899 10,214 2,938,119
Oppenheimer Main Street Small Cap Fund, Cl. Y 1,423,589 437,100 8,771 1,851,918
Oppenheimer Value Fund, Cl. Y 1,940,570 563,188 97,681 2,406,077
VALUE DIVIDEND REALIZED
SEE NOTE 1 INCOME GAIN (LOSS)
- ----------------------------------------------------------------------------------------------------------------
Oppenheimer Capital Appreciation Fund, Cl. Y $ 93,396,405 $ -- $ (4,050)
Oppenheimer Developing Markets Fund, Cl. Y 26,105,985 -- (8,083)
Oppenheimer Global Fund, Cl. Y 92,977,984 -- (11,443)
Oppenheimer Global Opportunities Fund, Cl. Y 24,036,617 -- (10,738)
Oppenheimer Institutional Money Market Fund, Cl. E 225,303 21,053 --
Oppenheimer Main Street Fund, Cl. Y 69,034,710 -- (4,072)
Oppenheimer Main Street Opportunity Fund, Cl. Y 45,834,650 -- (2,927)
Oppenheimer Main Street Small Cap Fund, Cl. Y 43,964,540 -- (4,881)
Oppenheimer Value Fund, Cl. Y 69,752,171 -- 26,552
------------------------------------------
$465,328,365 $ 21,053 $ (19,642)
==========================================
2. Rate shown is the 7-day yield as of July 31, 2007.
3. Non-income producing security.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
14 | EQUITY INVESTOR FUND
STATEMENT OF ASSETS AND LIABILITIES Unaudited
- --------------------------------------------------------------------------------
July 31, 2007
- ----------------------------------------------------------------------------------------
ASSETS
- ----------------------------------------------------------------------------------------
Investments, at value--see accompanying statement of investments--
affiliated companies (cost $425,934,323) $ 465,328,365
- ----------------------------------------------------------------------------------------
Cash 130,910
- ----------------------------------------------------------------------------------------
Receivables and other assets:
Shares of beneficial interest sold 1,476,496
Dividends 3,147
Other 5,742
---------------
Total assets 466,944,660
- ----------------------------------------------------------------------------------------
LIABILITIES
- ----------------------------------------------------------------------------------------
Payables and other liabilities:
Investments purchased 357,541
Shares of beneficial interest redeemed 297,861
Distribution and service plan fees 98,407
Transfer and shareholder servicing agent fees 69,613
Shareholder communications 24,092
Trustees' compensation 18,341
Other 13,504
---------------
Total liabilities 879,359
- ----------------------------------------------------------------------------------------
NET ASSETS $ 466,065,301
===============
- ----------------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS
- ----------------------------------------------------------------------------------------
Par value of shares of beneficial interest $ 35,290
- ----------------------------------------------------------------------------------------
Additional paid-in capital 420,117,837
- ----------------------------------------------------------------------------------------
Accumulated net investment loss (1,572,865)
- ----------------------------------------------------------------------------------------
Accumulated net realized gain on investments 8,090,997
- ----------------------------------------------------------------------------------------
Net unrealized appreciation on investments 39,394,042
---------------
NET ASSETS $ 466,065,301
===============
15 | EQUITY INVESTOR FUND
STATEMENT OF ASSETS AND LIABILITIES Unaudited / Continued
- --------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------
NET ASSET VALUE PER SHARE
- -------------------------------------------------------------------------------------------------------------
Class A Shares:
Net asset value and redemption price per share (based on net assets
of $241,266,179 and 18,185,620 shares of beneficial interest outstanding) $ 13.27
Maximum offering price per share (net asset value plus sales charge
of 5.75% of offering price) $ 14.08
- -------------------------------------------------------------------------------------------------------------
Class B Shares:
Net asset value, redemption price (excludes applicable contingent
deferred sales charge) and offering price per share (based on net assets
of $76,212,626 and 5,807,575 shares of beneficial interest outstanding) $ 13.12
- -------------------------------------------------------------------------------------------------------------
Class C Shares:
Net asset value, redemption price (excludes applicable contingent
deferred sales charge) and offering price per share (based on net assets
of $98,496,750 and 7,509,749 shares of beneficial interest outstanding) $ 13.12
- -------------------------------------------------------------------------------------------------------------
Class N Shares:
Net asset value, redemption price (excludes applicable contingent
deferred sales charge) and offering price per share (based on net assets
of $47,475,437 and 3,590,863 shares of beneficial interest outstanding) $ 13.22
- -------------------------------------------------------------------------------------------------------------
Class Y Shares:
Net asset value, redemption price and offering price per share
(based on net assets of $2,614,309 and 196,036 shares of beneficial interest outstanding) $ 13.34
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
16 | EQUITY INVESTOR FUND
STATEMENT OF OPERATIONS Unaudited
- --------------------------------------------------------------------------------
For the Six Months Ended July 31, 2007
- -------------------------------------------------------------------------------------
INVESTMENT INCOME
- -------------------------------------------------------------------------------------
Dividends from affiliated companies $ 21,053
- -------------------------------------------------------------------------------------
Interest 11,417
--------------
Total investment income 32,470
- -------------------------------------------------------------------------------------
EXPENSES
- -------------------------------------------------------------------------------------
Distribution and service plan fees:
Class A 260,437
Class B 344,057
Class C 429,917
Class N 108,254
- -------------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees:
Class A 183,357
Class B 69,412
Class C 85,962
Class N 31,319
Class Y 7
- -------------------------------------------------------------------------------------
Shareholder communications:
Class A 23,966
Class B 11,488
Class C 8,650
Class N 1,195
Class Y 4
- -------------------------------------------------------------------------------------
Trustees' compensation 9,400
- -------------------------------------------------------------------------------------
Custodian fees and expenses 799
- -------------------------------------------------------------------------------------
Other 21,460
--------------
Total expenses 1,589,684
Less reduction to custodian expenses (88)
Less waivers and reimbursements of expenses (402)
--------------
Net expenses 1,589,194
- -------------------------------------------------------------------------------------
NET INVESTMENT LOSS (1,556,724)
- -------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
- -------------------------------------------------------------------------------------
Net realized loss on investments--affiliated companies (19,642)
- -------------------------------------------------------------------------------------
Net change in unrealized appreciation on investments 19,238,457
- -------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 17,662,091
==============
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
17 | EQUITY INVESTOR FUND
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
SIX MONTHS YEAR
ENDED ENDED
JULY 31,2007 JANUARY 31,
(UNAUDITED) 2007
- ----------------------------------------------------------------------------------------------------------------------------
OPERATIONS
- ----------------------------------------------------------------------------------------------------------------------------
Net investment income (loss) $ (1,556,724) $ 3,773,289
- ----------------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) (19,642) 9,113,640
- ----------------------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation 19,238,457 14,991,693
-------------------------------
Net increase in net assets resulting from operations 17,662,091 27,878,622
- ----------------------------------------------------------------------------------------------------------------------------
DIVIDENDS AND/OR DISTRIBUTIONS TO SHAREHOLDERS
- ----------------------------------------------------------------------------------------------------------------------------
Dividends from net investment income:
Class A -- (2,293,120)
Class B -- (510,255)
Class C -- (615,967)
Class N -- (486,103)
Class Y -- (30,630)
-------------------------------
-- (3,936,075)
- ----------------------------------------------------------------------------------------------------------------------------
Distributions from net realized gain:
Class A -- (522,857)
Class B -- (182,273)
Class C -- (214,177)
Class N -- (112,075)
Class Y -- (5,808)
-------------------------------
-- (1,037,190)
- ----------------------------------------------------------------------------------------------------------------------------
BENEFICIAL INTEREST TRANSACTIONS
- ----------------------------------------------------------------------------------------------------------------------------
Net increase in net assets resulting from beneficial interest transactions:
Class A 58,349,564 113,644,714
Class B 13,955,336 36,285,425
Class C 24,445,811 45,942,782
Class N 9,844,937 27,802,175
Class Y 498,125 1,165,948
-------------------------------
107,093,773 224,841,044
- ----------------------------------------------------------------------------------------------------------------------------
NET ASSETS
- ----------------------------------------------------------------------------------------------------------------------------
Total increase 124,755,864 247,746,401
- ----------------------------------------------------------------------------------------------------------------------------
Beginning of period 341,309,437 93,563,036
-------------------------------
End of period (including accumulated net investment loss of
$1,572,865 and $16,141, respectively) $ 466,065,301 $ 341,309,437
===============================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
18 | EQUITY INVESTOR FUND
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
SIX MONTHS
ENDED
JULY 31, 2007 YEAR ENDED JANUARY 31,
CLASS A (UNAUDITED) 2007 2006 1
- --------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- --------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 12.63 $ 11.60 $ 10.00
- --------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss) 2 (.03) .25 .22
Net realized and unrealized gain .67 1.00 1.52
------------------------------------
Total from investment operations .64 1.25 1.74
- --------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income -- (.18) (.12)
Distributions from net realized gain -- (.04) (.02)
------------------------------------
Total dividends and/or distributions to shareholders -- (.22) (.14)
- --------------------------------------------------------------------------------------------------
Net asset value, end of period $ 13.27 $ 12.63 $ 11.60
====================================
- --------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 3 5.07% 10.85% 17.46%
- --------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- --------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $241,266 $173,539 $48,132
- --------------------------------------------------------------------------------------------------
Average net assets (in thousands) $214,566 $109,318 $17,321
- --------------------------------------------------------------------------------------------------
Ratios to average net assets: 4
Net investment income (loss) (0.44)% 2.07% 2.47%
Total expenses 5 0.45% 0.50% 0.70%
Expenses after payments, waivers and/or reimbursements
and reduction to custodian expenses 0.45% 0.50% 0.68%
- --------------------------------------------------------------------------------------------------
Portfolio turnover rate 1% 2% 7%
1. For the period from April 5, 2005 (commencement of operations) to January 31,
2006.
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 less than one full
year. Returns do not reflect the deduction of taxes that a shareholder would pay
on portfolio distributions or the redemption of portfolio shares.
4. Annualized for periods less than one full year.
5. Total expenses including all underlying fund expenses were as follows:
Six Months Ended July 31, 2007 1.08%
Year Ended January 31, 2007 1.15%
Period Ended January 31, 2006 1.39%
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
19 | EQUITY INVESTOR FUND
FINANCIAL HIGHLIGHTS Continued
- --------------------------------------------------------------------------------
SIX MONTHS
ENDED
JULY 31, 2007 YEAR ENDED 31 JANUARY 31,
CLASS B (UNAUDITED) 2007 2006 1
- --------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- --------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 12.54 $ 11.55 $ 10.00
- --------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss) 2 (.08) .14 .16
Net realized and unrealized gain .66 1.01 1.50
------------------------------------
Total from investment operations .58 1.15 1.66
- --------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income -- (.12) (.09)
Distributions from net realized gain -- (.04) (.02)
------------------------------------
Total dividends and/or distributions to shareholders -- (.16) (.11)
- --------------------------------------------------------------------------------------------------
Net asset value, end of period $ 13.12 $ 12.54 $ 11.55
====================================
- --------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 3 4.63% 9.97% 16.70%
- --------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- --------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 76,213 $59,406 $19,078
- --------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 69,485 $38,569 $ 7,050
- --------------------------------------------------------------------------------------------------
Ratios to average net assets: 4
Net investment income (loss) (1.23)% 1.19% 1.83%
Total expenses 5 1.25% 1.31% 1.53%
Expenses after payments, waivers and/or reimbursements
and reduction to custodian expenses 1.25% 1.31% 1.50%
- --------------------------------------------------------------------------------------------------
Portfolio turnover rate 1% 2% 7%
1. For the period from April 5, 2005 (commencement of operations) to January 31,
2006.
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 less than one full
year. Returns do not reflect the deduction of taxes that a shareholder would pay
on portfolio distributions or the redemption of portfolio shares.
4. Annualized for periods less than one full year.
5. Total expenses including all underlying fund expenses were as follows:
Six Months Ended July 31, 2007 1.88%
Year Ended January 31, 2007 1.96%
Period Ended January 31, 2006 2.22%
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
20 | EQUITY INVESTOR FUND
SIX MONTHS
ENDED
JULY 31, 2007 YEAR ENDED JANUARY 31,
CLASS C (UNAUDITED) 2007 2006 1
- --------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- --------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 12.53 $ 11.54 $ 10.00
- --------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss) 2 (.08) .14 .15
Net realized and unrealized gain .67 1.01 1.51
------------------------------------
Total from investment operations .59 1.15 1.66
- --------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income -- (.12) (.10)
Distributions from net realized gain -- (.04) (.02)
------------------------------------
Total dividends and/or distributions to shareholders -- (.16) (.12)
- --------------------------------------------------------------------------------------------------
Net asset value, end of period $ 13.12 $ 12.53 $ 11.54
====================================
- --------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 3 4.71% 10.00% 16.64%
- --------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- --------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 98,497 $70,691 $20,034
- --------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 86,859 $45,312 $ 6,131
- --------------------------------------------------------------------------------------------------
Ratios to average net assets: 4
Net investment income (loss) (1.22)% 1.23% 1.71%
Total expenses 5 1.23% 1.29% 1.48%
Expenses after payments, waivers and/or reimbursements
and reduction to custodian expenses 1.23% 1.29% 1.45%
- --------------------------------------------------------------------------------------------------
Portfolio turnover rate 1% 2% 7%
1. For the period from April 5, 2005 (commencement of operations) to January 31,
2006.
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 less than one full
year. Returns do not reflect the deduction of taxes that a shareholder would pay
on portfolio distributions or the redemption of portfolio shares.
4. Annualized for periods less than one full year.
5. Total expenses including all underlying fund expenses were as follows:
Six Months Ended July 31, 2007 1.86%
Year Ended January 31, 2007 1.94%
Period Ended January 31, 2006 2.17%
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
21 | EQUITY INVESTOR FUND
FINANCIAL HIGHLIGHTS Continued
- --------------------------------------------------------------------------------
SIX MONTHS
ENDED
JULY 31, 2007 YEAR ENDED JANUARY 31,
CLASS N (UNAUDITED) 2007 2006 1
- --------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- --------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 12.60 $ 11.59 $ 10.00
- --------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss) 2 (.04) .29 .24
Net realized and unrealized gain .66 .94 1.49
------------------------------------
Total from investment operations .62 1.23 1.73
- --------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income -- (.18) (.12)
Distributions from net realized gain -- (.04) (.02)
------------------------------------
Total dividends and/or distributions to shareholders -- (.22) (.14)
- --------------------------------------------------------------------------------------------------
Net asset value, end of period $ 13.22 $ 12.60 $ 11.59
====================================
- --------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 3 4.92% 10.67% 17.34%
- --------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- --------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 47,475 $35,652 $ 5,608
- --------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 43,739 $18,874 $ 1,717
- --------------------------------------------------------------------------------------------------
Ratios to average net assets: 4
Net investment income (loss) (0.64)% 2.47% 2.62%
Total expenses 5 0.67% 0.69% 0.79%
Expenses after payments, waivers and/or reimbursements
and reduction to custodian expenses 0.67% 0.69% 0.78%
- --------------------------------------------------------------------------------------------------
Portfolio turnover rate 1% 2% 7%
1. For the period from April 5, 2005 (commencement of operations) to January 31,
2006.
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 less than one full
year. Returns do not reflect the deduction of taxes that a shareholder would pay
on portfolio distributions or the redemption of portfolio shares.
4. Annualized for periods less than one full year.
5. Total expenses including all underlying fund expenses were as follows:
Six Months Ended July 31, 2007 1.30%
Year Ended January 31, 2007 1.34%
Period Ended January 31, 2006 1.48%
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
22 | EQUITY INVESTOR FUND
SIX MONTHS
ENDED
JULY 31, 2007 YEAR ENDED JANUARY 31,
CLASS Y (UNAUDITED) 2007 2006 1
- --------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- --------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 12.67 $ 11.61 $ 10.00
- --------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income 2 -- 3 .29 .24
Net realized and unrealized gain .67 1.03 1.52
------------------------------------
Total from investment operations .67 1.32 1.76
- --------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income -- (.22) (.13)
Distributions from net realized gain -- (.04) (.02)
------------------------------------
Total dividends and/or distributions to shareholders -- (.26) (.15)
- --------------------------------------------------------------------------------------------------
Net asset value, end of period $ 13.34 $ 12.67 $ 11.61
====================================
- --------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 4 5.29% 11.42% 17.69%
- --------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- --------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 2,614 $ 2,021 $ 711
- --------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 2,292 $ 1,267 $ 331
- --------------------------------------------------------------------------------------------------
Ratios to average net assets: 5
Net investment income 0.01% 2.46% 2.67%
Total expenses 6 0.02% 0.03% 0.30%
Expenses after payments, waivers and/or reimbursements
and reduction to custodian expenses 0.02% 0.03% 0.27%
- --------------------------------------------------------------------------------------------------
Portfolio turnover rate 1% 2% 7%
1. For the period from April 5, 2005 (commencement of operations) to January 31,
2006.
2. Per share amounts calculated based on the average shares outstanding during
the period.
3. Less than $0.005 per share.
4. Assumes an investment on the business day before the first day of the fiscal
period, with all dividends and distributions reinvested in additional shares on
the reinvestment date, and redemption at the net asset value calculated on the
last business day of the fiscal period. Sales charges are not reflected in the
total returns. Total returns are not annualized for periods less than one full
year. Returns do not reflect the deduction of taxes that a shareholder would pay
on portfolio distributions or the redemption of portfolio shares.
5. Annualized for periods less than one full year.
6. Total expenses including all underlying fund expenses were as follows:
Six Months Ended July 31, 2007 0.65%
Year Ended January 31, 2007 0.68%
Period Ended January 31, 2006 0.99%
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
23 | EQUITY INVESTOR FUND
NOTES TO FINANCIAL STATEMENTS Unaudited
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
Oppenheimer Portfolio Series (the "Fund") is registered under the Investment
Company Act of 1940, as amended, as an open-end management investment company.
Equity Investor Fund (the "Portfolio") is a series of the Fund whose investment
objective is to seek long term growth of capital. The Portfolio is a special
type of mutual fund known as a "fund of funds" because it invests in other
mutual funds. The Portfolio normally invests in a diversified portfolio of
Oppenheimer mutual funds (individually, an "Underlying Fund" and collectively,
the "Underlying Funds"). The Portfolio's investment advisor is OppenheimerFunds,
Inc. (the "Manager").
The Portfolio 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 Portfolio in general and
exclusive voting rights on matters that affect that class alone. Earnings, net
assets and net asset value per share may differ due to each class having its own
expenses, such as transfer and shareholder servicing agent fees and shareholder
communications, directly attributable to that class. Class A, B, C and N have
separate distribution and/or service plans. No such plan has been adopted for
Class Y shares. Class B shares will automatically convert to Class A shares six
years after the date of purchase.
The following is a summary of significant accounting policies consistently
followed by the Portfolio.
- --------------------------------------------------------------------------------
SECURITIES VALUATION. The Portfolio calculates the net asset value of each class
of shares based upon the net asset value of the applicable Underlying Funds. For
each Underlying Fund, the net asset value per share for a class of shares on a
"regular business day" is determined by dividing the value of the Underlying
Fund's net assets attributable to that class by the number of shares of that
class outstanding on that day. To determine net asset values, the Underlying
Fund assets are valued primarily on the basis of current market quotations. If
market quotations are not readily available or do not accurately reflect fair
value for a security (in the Manager's judgment) or if a security's value has
been materially affected by events occurring after the close of the exchange or
market on which the security is principally traded, that security may be valued
by another method that the Underlying Fund's Board of Trustees/Directors
believes accurately reflects the fair value. Because some foreign securities
trade in markets and on exchanges that operate on weekends and U.S. holidays,
the values of some of the Underlying Fund's foreign investments may change on
days when investors cannot buy or redeem Underlying Fund shares.
Short-term "money market type" debt securities with remaining maturities
of sixty days or less are valued at amortized cost (which approximates market
value).
24 | EQUITY INVESTOR FUND
- --------------------------------------------------------------------------------
RISKS OF INVESTING IN THE UNDERLYING FUNDS. Each of the Underlying Funds in
which the Portfolio invests has its own investment risks, and those risks can
affect the value of the Portfolio's investments and therefore the value of the
Portfolio's shares. To the extent that the Portfolio invests more of its assets
in one Underlying Fund than in another, the Portfolio will have greater exposure
to the risks of that Underlying Fund.
- --------------------------------------------------------------------------------
INVESTMENT IN OPPENHEIMER INSTITUTIONAL MONEY MARKET FUND. The Portfolio is
permitted to invest daily available cash balances in an affiliated money market
fund. The Portfolio may invest the available cash in Class E shares of
Oppenheimer Institutional Money Market Fund ("IMMF") which seeks current income
and stability of principal. IMMF is a registered open-end management investment
company, regulated as a money market fund under the Investment Company Act of
1940, as amended. The Manager is also the investment advisor of IMMF. The
Portfolio's investment in IMMF is included in the Statement of Investments. As a
shareholder, the Portfolio is subject to its proportional share of IMMF's Class
E expenses, including its management fee. The Manager will waive fees and/or
reimburse Portfolio expenses in an amount equal to the indirect management fees
incurred through the Portfolio's investment in IMMF.
- --------------------------------------------------------------------------------
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 Portfolio intends to comply with provisions of the Internal
Revenue Code applicable to regulated investment companies and to distribute
substantially all of its investment company taxable income, including any net
realized gain on investments not offset by capital loss carryforwards, if any,
to shareholders, therefore, no federal income or excise tax provision is
required.
Net investment income (loss) and net realized gain (loss) may differ for
financial statement and tax purposes. The character of dividends and
distributions made during the fiscal year from net investment income or net
realized gains may differ from their ultimate characterization for federal
income tax purposes. Also, due to timing of dividends and distributions, the
fiscal year in which amounts are distributed may differ from the fiscal year in
which the income or net realized gain was recorded by the Portfolio.
As of July 31, 2007, the Portfolio had available for federal income tax
purposes an estimated capital loss carryforward of $19,642 expiring by 2015.
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 July
31, 2007, it is estimated that the Portfolio will not utilize any capital loss
carryforward to offset realized capital gains. During the fiscal year ended
January 31, 2007, the Portfolio did not utilize any capital loss carryforward to
offset capital gains realized in that fiscal year.
25 | EQUITY INVESTOR FUND
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES Continued
TRUSTEES' COMPENSATION. The Portfolio has adopted an unfunded retirement plan
(the "Plan") for the Portfolio's independent trustees. Benefits are based on
years of service and fees paid to each trustee during their period of service.
The Plan was frozen with respect to adding new participants effective December
31, 2006 (the "Freeze Date") and existing Plan Participants as of the Freeze
Date will continue to receive accrued benefits under the Plan. Active
independent trustees as of the Freeze Date have each elected a distribution
method with respect to their benefits under the Plan. During the six months
ended July 31, 2007, the Portfolio's projected benefit obligations were
increased by $6,132 and payments of $4,367 were made to retired trustees,
resulting in an accumulated liability of $15,186 as of July 31, 2007.
The Board of Trustees has adopted a compensation deferral 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
Portfolio. 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 Portfolio or in other Oppenheimer funds selected by
the Trustee. The Portfolio purchases shares of the funds selected for deferral
by the Trustee in amounts equal to his or her deemed investment, resulting in a
Portfolio 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 Portfolio, and will not materially affect the
Portfolio's assets, liabilities or net investment income per share. Amounts will
be deferred until distributed in accordance to the compensation deferral plan.
- --------------------------------------------------------------------------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS. Dividends and distributions to
shareholders, which are determined in accordance with income tax regulations,
are recorded on the ex-dividend date. Income and capital gain distributions, if
any, are declared and paid annually.
- --------------------------------------------------------------------------------
INVESTMENT INCOME. Dividend income is recorded on the ex-dividend date or upon
ex-dividend notification in the case of certain foreign dividends where the
ex-dividend date may have passed. Non-cash dividends included in dividend
income, if any, are recorded at the fair market value of the securities
received. Interest income, which includes accretion of discount and amortization
of premium, is accrued as earned.
- --------------------------------------------------------------------------------
CUSTODIAN FEES. "Custodian fees and expenses" in the Statement of Operations may
include interest expense incurred by the Portfolio 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 Portfolio pays
interest to its custodian on such cash overdrafts, to the extent they are not
offset by positive cash balances maintained by the Portfolio, at a rate equal to
26 | EQUITY INVESTOR FUND
the Federal Funds Rate plus 0.50%. The "Reduction to custodian expenses" line
item, if applicable, represents earnings on cash balances maintained by the
Portfolio 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 Portfolio'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 Portfolio. In
the normal course of business, the Portfolio may also enter into contracts that
provide general indemnifications. The Portfolio's maximum exposure under these
arrangements is unknown as this would be dependent on future claims that may be
made against the Portfolio. 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 Portfolio 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 JULY 31, 2007 YEAR ENDED JANUARY 31, 2007
SHARES AMOUNT SHARES AMOUNT
- -------------------------------------------------------------------------------------------
CLASS A
Sold 5,660,122 $ 74,357,754 10,788,987 $ 127,694,890
Dividends and/or
distributions reinvested -- -- 217,939 2,704,630
Redeemed (1,215,173) (16,008,190) (1,417,148) (16,754,806)
----------------------------------------------------------
Net increase 4,444,949 $ 58,349,564 9,589,778 $ 113,644,714
==========================================================
- -------------------------------------------------------------------------------------------
CLASS B
Sold 1,530,315 $ 19,926,795 3,586,753 $ 42,131,412
Dividends and/or
distributions reinvested -- -- 54,487 671,822
Redeemed (459,555) (5,971,459) (556,353) (6,517,809)
----------------------------------------------------------
Net increase 1,070,760 $ 13,955,336 3,084,887 $ 36,285,425
==========================================================
- -------------------------------------------------------------------------------------------
CLASS C
Sold 2,616,104 $ 34,106,275 4,655,073 $ 54,733,344
Dividends and/or
distributions reinvested -- -- 65,253 803,921
Redeemed (746,179) (9,660,464) (816,245) (9,594,483)
----------------------------------------------------------
Net increase 1,869,925 $ 24,445,811 3,904,081 $ 45,942,782
==========================================================
27 | EQUITY INVESTOR FUND
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
2. SHARES OF BENEFICIAL INTEREST Continued
SIX MONTHS ENDED JULY 31, 2007 YEAR ENDED JANUARY 31, 2007
SHARES AMOUNT SHARES AMOUNT
- -------------------------------------------------------------------------------------------
CLASS N
Sold 1,118,783 $ 14,568,484 2,837,844 $ 33,657,788
Dividends and/or
distributions reinvested -- -- 41,434 512,955
Redeemed (357,614) (4,723,547) (533,502) (6,368,568)
---------------------------------------------------------
Net increase 761,169 $ 9,844,937 2,345,776 $ 27,802,175
=========================================================
- -------------------------------------------------------------------------------------------
CLASS Y
Sold 69,873 $ 935,878 121,765 $ 1,440,825
Dividends and/or
distributions reinvested -- -- 2,927 36,412
Redeemed (33,379) (437,753) (26,372) (311,289)
---------------------------------------------------------
Net increase 36,494 $ 498,125 98,320 $ 1,165,948
=========================================================
- --------------------------------------------------------------------------------
3. PURCHASES AND SALES OF SECURITIES
The aggregate cost of purchases and proceeds from sales of securities, other
than short-term obligations and investments in IMMF, for the six months ended
July 31, 2007, were as follows:
PURCHASES SALES
-----------------------------------------------------
Investment securities $112,102,625 $5,389,276
- --------------------------------------------------------------------------------
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES
MANAGEMENT FEES. Under the investment advisory agreement, the Manager does not
charge a management fee, but rather collects indirect management fees from
investments in the Underlying Funds. The weighted indirect management fees
collected from the Underlying Funds, as a percent of average daily net assets of
the Portfolio for the six months ended July 31, 2007 was 0.57%.
- --------------------------------------------------------------------------------
TRANSFER AGENT FEES. OppenheimerFunds Services (OFS), a division of the Manager,
acts as the transfer and shareholder servicing agent for the Portfolio. The
Portfolio pays OFS a per account fee. For the six months ended July 31, 2007,
the Portfolio paid $351,542 to OFS for services to the Portfolio.
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 Portfolio, OppenheimerFunds Distributor, Inc. (the
Distributor) acts as the Portfolio's principal underwriter in the continuous
public offering of the Portfolio's classes of shares.
28 | EQUITY INVESTOR FUND
- --------------------------------------------------------------------------------
SERVICE PLAN FOR CLASS A SHARES. The Portfolio 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 Portfolio. 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
Portfolio under the plan are detailed in the Statement of Operations.
- --------------------------------------------------------------------------------
DISTRIBUTION AND SERVICE PLANS FOR CLASS B, CLASS C AND CLASS N SHARES. The
Portfolio 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
Portfolio 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 Portfolio 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 Portfolio 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
determines its uncompensated expenses under the plan at calendar quarter ends.
The Distributor's aggregate uncompensated expenses under the plan at June 30,
2007 for Class B, Class C and Class N shares were $1,331,835, $724,267 and
$350,954, respectively. Fees incurred by the Portfolio 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 Portfolio. They are deducted from the
proceeds of sales of Portfolio 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 following table for the period
indicated.
CLASS A CLASS B CLASS C CLASS N
CLASS A CONTINGENT CONTINGENT CONTINGENT CONTINGENT
FRONT-END DEFERRED DEFERRED DEFERRED DEFERRED
SALES CHARGES SALES CHARGES SALES CHARGES SALES CHARGES SALES CHARGES
SIX MONTHS RETAINED BY RETAINED BY RETAINED BY RETAINED BY RETAINED BY
ENDED DISTRIBUTOR DISTRIBUTOR DISTRIBUTOR DISTRIBUTOR DISTRIBUTOR
- ---------------------------------------------------------------------------------------------------
July 31, 2007 $553,559 $1,543 $60,105 $6,539 $1,282
- --------------------------------------------------------------------------------
WAIVERS AND REIMBURSEMENTS OF EXPENSES. The Manager has voluntarily agreed to a
total expense limitation on the aggregate amount of combined direct
(fund-of-funds level) and indirect expense so that "Total expenses" as a
percentage of average daily net assets will not exceed the following annual
rates: 1.45%, 2.20%, 2.20%, 1.70% and 1.20%, for
29 | EQUITY INVESTOR FUND
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES Continued
Class A, Class B, Class C, Class N and Class Y, respectively. The Manager may
modify or terminate this undertaking at any time without notice to shareholders.
These expense limitations do not include Extraordinary Expenses and other
expenses not incurred in the ordinary course of the Portfolio's business.
Notwithstanding the foregoing limits, the Manager is not required to waive or
reimburse Portfolio expenses in excess of indirect management fees earned from
investments in Underlying Funds to assure that expenses do not exceed those
limits.
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. This
undertaking may be amended or withdrawn at any time.
The Manager will waive fees and/or reimburse Portfolio expenses in an
amount equal to the indirect management fees incurred through the Portfolio's
investment in IMMF. During the six months ended July 31, 2007, the Manager
waived $402 for IMMF management fees.
- --------------------------------------------------------------------------------
5. RECENT ACCOUNTING PRONOUNCEMENT
In September 2006, Financial Accounting Standards Board issued Statement of
Financial Accounting Standards ("SFAS") No. 157, FAIR VALUE MEASUREMENTS. This
standard establishes a single authoritative definition of fair value, sets out a
framework for measuring fair value and expands disclosures about fair value
measurements. SFAS No. 157 applies to fair value measurements already required
or permitted by existing standards. SFAS No. 157 is effective for financial
statements issued for fiscal years beginning after November 15, 2007, and
interim periods within those fiscal years. As of July 31, 2007, the Manager does
not believe the adoption of SFAS No. 157 will materially impact the financial
statement amounts; however, additional disclosures may be required about the
inputs used to develop the measurements and the effect of certain of the
measurements on changes in net assets for the period.
30 | EQUITY INVESTOR FUND
PORTFOLIO PROXY VOTING POLICIES AND PROCEDURES;
UPDATES TO STATEMENTS OF INVESTMENTS Unaudited
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
The Portfolio has adopted Portfolio Proxy Voting Policies and Procedures under
which the Portfolio votes proxies relating to securities ("portfolio proxies")
held by the Portfolio. A description of the Portfolio's Portfolio Proxy Voting
Policies and Procedures is available (i) without charge, upon request, by
calling the Portfolio toll-free at 1.800.525.7048, (ii) on the Portfolio's
website at www.oppenheimerfunds.com, and (iii) on the SEC's website at
www.sec.gov. In addition, the Portfolio 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 Portfolio's voting record is available (i) without
charge, upon request, by calling the Portfolio 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 Portfolio 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 Portfolio'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.
31 | EQUITY INVESTOR FUND
MODERATE INVESTOR FUND
TOP HOLDINGS AND ALLOCATIONS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
ASSET CLASS ALLOCATION
[THE FOLLOWING TABLE WAS REPRESENTED BY A PIE CHART IN THE PRINTED MATERIAL.]
Fixed Income Funds 44.6%
U.S. Equity Funds 35.5
Global Equity Fund 10.2
Alternative Investment Funds 9.4
Money Market Fund 0.3
Portfolio holdings and allocations are subject to change. Percentages are as of
July 31, 2007, and are based on the total market value of investments in
affiliated companies.
- --------------------------------------------------------------------------------
10 | MODERATE INVESTOR FUND
NOTES
- --------------------------------------------------------------------------------
Total returns include changes in share price and reinvestment of dividends and
capital gains distributions in a hypothetical investment for the periods shown.
The Portfolio'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 Portfolio or any gains you may realize if you
sell your shares.
INVESTORS SHOULD CONSIDER THE PORTFOLIO'S INVESTMENT OBJECTIVES, RISKS, AND
OTHER CHARGES AND EXPENSES CAREFULLY BEFORE INVESTING. THE PORTFOLIO'S
PROSPECTUS CONTAINS THIS AND OTHER INFORMATION ABOUT THE PORTFOLIO, 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 Portfolio's investment strategy and focus can change over time. The mention
of specific holdings does not constitute a recommendation by OppenheimerFunds,
Inc.
CLASS A shares of the Portfolio were first publicly offered on 4/5/05. Unless
otherwise noted, Class A returns include the current maximum initial sales
charge of 5.75%.
CLASS B shares of the Portfolio were first publicly offered on 4/5/05. Unless
otherwise noted, Class B returns include the applicable contingent deferred
sales charge of 5% (1-year) and 3% (since inception). Class B shares are subject
to an annual 0.75% asset-based sales charge.
CLASS C shares of the Portfolio were first publicly offered on 4/5/05. Unless
otherwise noted, Class C returns include the contingent deferred sales charge of
1% for the 1-year period. Class C shares are subject to an annual 0.75%
asset-based sales charge.
CLASS N shares of the Portfolio were first publicly offered on 4/5/05. 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 Portfolio were first publicly offered on 4/5/05. Class Y
shares are offered only to certain institutional investors under special
agreement with the Distributor.
An explanation of the calculation of performance is in the Portfolio's Statement
of Additional Information.
11 | MODERATE INVESTOR FUND
PORTFOLIO EXPENSES
- --------------------------------------------------------------------------------
Portfolio Expenses. As a shareholder of the Portfolio, 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 Portfolio expenses. These examples are
intended to help you understand your ongoing costs (in dollars) of investing in
the Portfolio 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 July 31, 2007.
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 Portfolio'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
Portfolio'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 Portfolio and other funds. To do so, compare this 5%
hypothetical example for the class of shares you hold with the 5% hypothetical
examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs, such as front-end
or contingent deferred sales charges (loads), or a $12.00 fee imposed annually
on accounts valued at less than $500.00 (subject to exceptions described in the
Statement of Additional Information). Therefore, the "hypothetical" lines of the
table are useful in comparing ongoing costs only, and will not help you
determine the relative total costs of owning different funds. In addition, if
these transactional costs were included, your costs would have been higher.
12 | MODERATE INVESTOR FUND
- --------------------------------------------------------------------------------
BEGINNING ENDING EXPENSES
ACCOUNT ACCOUNT PAID DURING
VALUE VALUE 6 MONTHS ENDED
(2/1/07) (7/31/07) JULY 31, 2007
- --------------------------------------------------------------------------------
Class A Actual $ 1,000.00 $ 1,021.00 $ 1.86
- --------------------------------------------------------------------------------
Class A Hypothetical 1,000.00 1,022.96 1.86
- --------------------------------------------------------------------------------
Class B Actual 1,000.00 1,017.60 5.87
- --------------------------------------------------------------------------------
Class B Hypothetical 1,000.00 1,018.99 5.87
- --------------------------------------------------------------------------------
Class C Actual 1,000.00 1,017.70 5.72
- --------------------------------------------------------------------------------
Class C Hypothetical 1,000.00 1,019.14 5.72
- --------------------------------------------------------------------------------
Class N Actual 1,000.00 1,019.30 3.21
- --------------------------------------------------------------------------------
Class N Hypothetical 1,000.00 1,021.62 3.21
- --------------------------------------------------------------------------------
Class Y Actual 1,000.00 1,023.60 0.05
- --------------------------------------------------------------------------------
Class Y Hypothetical 1,000.00 1,024.74 0.05
Hypothetical assumes 5% annual return before expenses.
Expenses are equal to the Portfolio'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,
excluding all underlying fund expenses, based on the 6-month period ended July
31, 2007 are as follows:
CLASS EXPENSE RATIOS
- -----------------------------
Class A 0.37%
- -----------------------------
Class B 1.17
- -----------------------------
Class C 1.14
- -----------------------------
Class N 0.64
- -----------------------------
Class Y 0.01
The expense ratios reflect reduction to custodian expenses and voluntary waivers
or reimbursements by the Portfolio's Manager that can be terminated at any time,
without advance notice. The "Financial Highlights" tables in the Portfolio's
financial statements, included in this report, also show the gross expense
ratios, without such waivers or reimbursements and reduction to custodian
expenses, if applicable.
- --------------------------------------------------------------------------------
13 | MODERATE INVESTOR FUND
STATEMENT OF INVESTMENTS July 31, 2007 / Unaudited
- --------------------------------------------------------------------------------
VALUE
SHARES SEE NOTE 1
- -----------------------------------------------------------------------------------------------
INVESTMENTS IN AFFILIATED COMPANIES--100.0% 1
- -----------------------------------------------------------------------------------------------
ALTERNATIVE INVESTMENT FUNDS--9.4%
Oppenheimer Commodity Strategy Total Return Fund, Cl. Y 5,845,266 $ 42,845,802
- -----------------------------------------------------------------------------------------------
Oppenheimer Real Estate Fund, Cl. Y 1,594,370 33,354,226
--------------
76,200,028
- -----------------------------------------------------------------------------------------------
FIXED INCOME FUNDS--44.6%
Oppenheimer Champion Income Fund, Cl. Y 8,608,470 77,734,488
- -----------------------------------------------------------------------------------------------
Oppenheimer Core Bond Fund, Cl. Y 15,975,485 160,713,376
- -----------------------------------------------------------------------------------------------
Oppenheimer International Bond Fund, Cl. Y 6,627,303 41,486,921
- -----------------------------------------------------------------------------------------------
Oppenheimer Limited-Term Government Fund, Cl. Y 8,209,406 81,273,124
--------------
361,207,909
- -----------------------------------------------------------------------------------------------
GLOBAL EQUITY FUND--10.2%
Oppenheimer Global Fund, Cl. Y 1,054,251 82,579,483
- -----------------------------------------------------------------------------------------------
MONEY MARKET FUND--0.3%
Oppenheimer Institutional Money Market Fund, Cl. E, 5.28% 2 2,834,830 2,834,830
- -----------------------------------------------------------------------------------------------
U.S. EQUITY FUNDS--35.5%
Oppenheimer Capital Appreciation Fund, Cl. Y 3 1,617,020 82,936,945
- -----------------------------------------------------------------------------------------------
Oppenheimer Main Street Fund, Cl. Y 1,921,579 81,743,943
- -----------------------------------------------------------------------------------------------
Oppenheimer Main Street Opportunity Fund, Cl. Y 2,609,345 40,705,785
- -----------------------------------------------------------------------------------------------
Oppenheimer Value Fund, Cl. Y 2,849,125 82,596,133
--------------
287,982,806
- -----------------------------------------------------------------------------------------------
TOTAL INVESTMENTS, AT VALUE (COST $780,613,037) 100.0% 810,805,056
- -----------------------------------------------------------------------------------------------
LIABILITIES IN EXCESS OF OTHER ASSETS (0.0) (208,601)
---------------------------
NET ASSETS 100.0% $ 810,596,455
===========================
14 | MODERATE INVESTOR FUND
FOOTNOTE TO STATEMENT OF INVESTMENTS
1. Is or was an affiliate, as defined in the Investment Company Act of 1940, at
or during the period ended July 31, 2007, by virtue of the Portfolio owning at
least 5% of the voting securities of the issuer or as a result of the Portfolio
and the issuer having the same investment advisor. Transactions during the
period in which the issuer was an affiliate are as follows:
SHARES GROSS GROSS SHARES
JANUARY 31, 2007 ADDITIONS REDUCTIONS JULY 31, 2007
- ---------------------------------------------------------------------------------------------------------------------------------
Oppenheimer Capital Appreciation Fund, Cl. Y 1,239,117 388,219 10,316 1,617,020
Oppenheimer Champion Income Fund, Cl. Y 6,341,189 2,322,214 54,933 8,608,470
Oppenheimer Commodity Strategy Total Return Fund, Cl. Y 3,864,044 2,019,217 37,995 5,845,266
Oppenheimer Core Bond Fund, Cl. Y 11,639,178 4,439,704 103,397 15,975,485
Oppenheimer Global Fund, Cl. Y 831,381 250,951 28,081 1,054,251
Oppenheimer Institutional Money Market Fund, Cl. E 1,897,564 54,078,338 53,141,072 2,834,830
Oppenheimer International Bond Fund, Cl. Y 4,986,529 1,706,852 66,078 6,627,303
Oppenheimer Limited-Term Government Fund, Cl. Y 5,914,588 2,347,869 53,051 8,209,406
Oppenheimer Main Street Fund, Cl. Y 1,499,294 456,733 34,448 1,921,579
Oppenheimer Main Street Opportunity Fund, Cl. Y 2,033,988 620,720 45,363 2,609,345
Oppenheimer Real Estate Fund, Cl. Y 1,351,142 391,430 148,202 1,594,370
Oppenheimer Value Fund, Cl. Y 2,348,542 677,301 176,718 2,849,125
VALUE DIVIDEND REALIZED
SEE NOTE 1 INCOME GAIN (LOSS)
- ---------------------------------------------------------------------------------------------------------------------------------
Oppenheimer Capital Appreciation Fund, Cl. Y $ 82,936,945 $ -- $ (1,518)
Oppenheimer Champion Income Fund, Cl. Y 77,734,488 2,571,173 (6,279)
Oppenheimer Commodity Strategy Total Return Fund, Cl. Y 42,845,802 -- (90,493)
Oppenheimer Core Bond Fund, Cl. Y 160,713,376 3,715,003 (24,097)
Oppenheimer Global Fund, Cl. Y 82,579,483 -- (28,327)
Oppenheimer Institutional Money Market Fund, Cl. E 2,834,830 35,338 --
Oppenheimer International Bond Fund, Cl. Y 41,486,921 782,213 (1,142)
Oppenheimer Limited-Term Government Fund, Cl. Y 81,273,124 1,699,994 (7,964)
Oppenheimer Main Street Fund, Cl. Y 81,743,943 -- (16,622)
Oppenheimer Main Street Opportunity Fund, Cl. Y 40,705,785 -- (7,844)
Oppenheimer Real Estate Fund, Cl. Y 33,354,226 69,879 (47)
Oppenheimer Value Fund, Cl. Y 82,596,133 -- 62,160
------------------------------------------------
$ 810,805,056 $ 8,873,600 $ (122,173)
================================================
2. Rate shown is the 7-day yield as of July 31, 2007.
3. Non-income producing security.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
15 | MODERATE INVESTOR FUND
STATEMENT OF ASSETS AND LIABILITIES Unaudited
- --------------------------------------------------------------------------------
July 31, 2007
- ---------------------------------------------------------------------------------------------------------------
ASSETS
- ---------------------------------------------------------------------------------------------------------------
Investments, at value--see accompanying statement of investments--
affiliated companies (cost $780,613,037) $ 810,805,056
- ---------------------------------------------------------------------------------------------------------------
Cash 225,559
- ---------------------------------------------------------------------------------------------------------------
Receivables and other assets:
Shares of beneficial interest sold 5,745,823
Dividends 1,598,162
Other 8,970
----------------
Total assets 818,383,570
- ---------------------------------------------------------------------------------------------------------------
LIABILITIES
- ---------------------------------------------------------------------------------------------------------------
Payables and other liabilities:
Investments purchased 5,841,271
Shares of beneficial interest redeemed 1,612,067
Distribution and service plan fees 168,396
Transfer and shareholder servicing agent fees 76,933
Shareholder communications 36,491
Trustees' compensation 34,380
Other 17,577
----------------
Total liabilities 7,787,115
- ---------------------------------------------------------------------------------------------------------------
NET ASSETS $ 810,596,455
================
- ---------------------------------------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS
- ---------------------------------------------------------------------------------------------------------------
Par value of shares of beneficial interest $ 69,839
- ---------------------------------------------------------------------------------------------------------------
Additional paid-in capital 767,046,956
- ---------------------------------------------------------------------------------------------------------------
Accumulated net investment income 7,376,201
- ---------------------------------------------------------------------------------------------------------------
Accumulated net realized gain on investments 5,911,440
- ---------------------------------------------------------------------------------------------------------------
Net unrealized appreciation on investments 30,192,019
----------------
NET ASSETS $ 810,596,455
================
16 | MODERATE INVESTOR FUND
- ---------------------------------------------------------------------------------------------------------------
NET ASSET VALUE PER SHARE
- ---------------------------------------------------------------------------------------------------------------
Class A Shares:
Net asset value and redemption price per share (based on net assets of $423,230,446
and 36,291,272 shares of beneficial interest outstanding) $ 11.66
Maximum offering price per share (net asset value plus sales charge of 5.75% of
offering price) $ 12.37
- ---------------------------------------------------------------------------------------------------------------
Class B Shares:
Net asset value, redemption price (excludes applicable contingent deferred sales charge)
and offering price per share (based on net assets of $121,772,657 and 10,554,091 shares
of beneficial interest outstanding) $ 11.54
- ---------------------------------------------------------------------------------------------------------------
Class C Shares:
Net asset value, redemption price (excludes applicable contingent deferred sales charge)
and offering price per share (based on net assets of $192,360,418 and 16,684,188 shares
of beneficial interest outstanding) $ 11.53
- ---------------------------------------------------------------------------------------------------------------
Class N Shares:
Net asset value, redemption price (excludes applicable contingent deferred sales charge)
and offering price per share (based on net assets of $71,917,887 and 6,197,354 shares
of beneficial interest outstanding) $ 11.60
- ---------------------------------------------------------------------------------------------------------------
Class Y Shares:
Net asset value, redemption price and offering price per share (based on net assets
of $1,315,047 and 112,223 shares of beneficial interest outstanding) $ 11.72
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
17 | MODERATE INVESTOR FUND
STATEMENT OF OPERATIONS Unaudited
- --------------------------------------------------------------------------------
For the Six Months Ended July 31, 2007
- --------------------------------------------------------------------------------
INVESTMENT INCOME
- --------------------------------------------------------------------------------
Dividends from affiliated companies $ 8,873,600
- --------------------------------------------------------------------------------
Interest 23,238
--------------
Total investment income 8,896,838
- --------------------------------------------------------------------------------
EXPENSES
- --------------------------------------------------------------------------------
Distribution and service plan fees:
Class A 460,636
Class B 566,822
Class C 841,327
Class N 156,992
- --------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees:
Class A 185,615
Class B 79,807
Class C 99,218
Class N 39,167
- --------------------------------------------------------------------------------
Shareholder communications:
Class A 24,079
Class B 12,361
Class C 10,696
Class N 1,336
- --------------------------------------------------------------------------------
Trustees' compensation 16,088
- --------------------------------------------------------------------------------
Custodian fees and expenses 1,473
- --------------------------------------------------------------------------------
Other 25,345
--------------
Total expenses 2,520,962
Less reduction to custodian expenses (108)
Less waivers and reimbursements of expenses (691)
--------------
Net expenses 2,520,163
- --------------------------------------------------------------------------------
NET INVESTMENT INCOME 6,376,675
- --------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
- --------------------------------------------------------------------------------
Net realized loss on investments--affiliated companies (122,173)
- --------------------------------------------------------------------------------
Net change in unrealized appreciation on investments 5,170,597
- --------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 11,425,099
==============
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
18 | MODERATE INVESTOR FUND
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
SIX MONTHS YEAR
ENDED ENDED
JULY 31, 2007 JANUARY 31,
(UNAUDITED) 2007
- --------------------------------------------------------------------------------------------------------------
OPERATIONS
- --------------------------------------------------------------------------------------------------------------
Net investment income $ 6,376,675 $ 12,927,432
- --------------------------------------------------------------------------------------------------------------
Net realized gain (loss) (122,173) 6,721,332
- --------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation 5,170,597 20,367,168
--------------------------------
Net increase in net assets resulting from operations 11,425,099 40,015,932
- --------------------------------------------------------------------------------------------------------------
DIVIDENDS AND/OR DISTRIBUTIONS TO SHAREHOLDERS
- --------------------------------------------------------------------------------------------------------------
Dividends from net investment income:
Class A -- (6,838,205)
Class B -- (1,753,095)
Class C -- (2,462,961)
Class N -- (1,056,853)
Class Y -- (23,344)
--------------------------------
-- (12,134,458)
- --------------------------------------------------------------------------------------------------------------
Distributions from net realized gain:
Class A -- (694,225)
Class B -- (231,731)
Class C -- (318,700)
Class N -- (111,013)
Class Y -- (2,136)
--------------------------------
-- (1,357,805)
- --------------------------------------------------------------------------------------------------------------
BENEFICIAL INTEREST TRANSACTIONS
- --------------------------------------------------------------------------------------------------------------
Net increase in net assets resulting from beneficial interest transactions:
Class A 103,483,675 191,855,068
Class B 18,145,431 60,241,093
Class C 47,740,063 88,079,456
Class N 19,307,264 37,858,714
Class Y 112,078 845,510
--------------------------------
188,788,511 378,879,841
- --------------------------------------------------------------------------------------------------------------
NET ASSETS
- --------------------------------------------------------------------------------------------------------------
Total increase 200,213,610 405,403,510
- --------------------------------------------------------------------------------------------------------------
Beginning of period 610,382,845 204,979,335
--------------------------------
End of period (including accumulated net investment income
of $7,376,201 and $999,526, respectively) $ 810,596,455 $ 610,382,845
================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
19 | MODERATE INVESTOR FUND
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
SIX MONTHS
ENDED
JULY 31, 2007 YEAR ENDED JANUARY 31,
CLASS A (UNAUDITED) 2007 2006 1
- --------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- --------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 11.42 $ 10.78 $ 10.00
- --------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income 2 .12 .39 .38
Net realized and unrealized gain .12 .55 .57
------------------------------------
Total from investment operations .24 .94 .95
- --------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income -- (.27) (.17)
Distributions from net realized gain -- (.03) --
------------------------------------
Total dividends and/or distributions to shareholders -- (.30) (.17)
- --------------------------------------------------------------------------------------------------
Net asset value, end of period $ 11.66 $ 11.42 $ 10.78
====================================
- --------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 3 2.10% 8.73% 9.58%
- --------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- --------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 423,230 $ 313,311 $ 107,686
- --------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 376,184 $ 206,672 $ 43,984
- --------------------------------------------------------------------------------------------------
Ratios to average net assets: 4
Net investment income 2.10% 3.57% 4.39%
Total expenses 5 0.37% 0.40% 0.47%
Expenses after payments, waivers
and/or reimbursements
and reduction to custodian expenses 0.37% 0.40% 0.46%
- --------------------------------------------------------------------------------------------------
Portfolio turnover rate 2% 4% 0%
1. For the period from April 5, 2005 (commencement of operations) to January 31,
2006.
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 less than one full
year. Returns do not reflect the deduction of taxes that a shareholder would pay
on portfolio distributions or the redemption of portfolio shares.
4. Annualized for periods less than one full year.
5. Total expenses including all underlying fund expenses were as follows:
Six Months Ended July 31, 2007 0.95%
Year Ended January 31, 2007 1.01%
Period Ended January 31, 2006 1.15%
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
20 | MODERATE INVESTOR FUND
SIX MONTHS
ENDED
JULY 31, 2007 YEAR ENDED JANUARY 31,
CLASS B (UNAUDITED) 2007 2006 1
- --------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- --------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 11.34 $ 10.74 $ 10.00
- --------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income 2 .07 .30 .31
Net realized and unrealized gain .13 .54 .58
------------------------------------
Total from investment operations .20 .84 .89
- --------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income -- (.21) (.15)
Distributions from net realized gain -- (.03) --
------------------------------------
Total dividends and/or distributions to shareholders -- (.24) (.15)
- --------------------------------------------------------------------------------------------------
Net asset value, end of period $ 11.54 $ 11.34 $ 10.74
====================================
- --------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 3 1.76% 7.80% 8.90%
- --------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- --------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 121,773 $ 101,929 $ 36,956
- --------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 114,419 $ 70,066 $ 15,521
- --------------------------------------------------------------------------------------------------
Ratios to average net assets: 4
Net investment income 1.30% 2.73% 3.56%
Total expenses 5 1.17% 1.21% 1.31%
Expenses after payments, waivers and/or
reimbursements and reduction to custodian expenses 1.17% 1.21% 1.29%
- --------------------------------------------------------------------------------------------------
Portfolio turnover rate 2% 4% 0%
1. For the period from April 5, 2005 (commencement of operations) to January 31,
2006.
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 less than one full
year. Returns do not reflect the deduction of taxes that a shareholder would pay
on portfolio distributions or the redemption of portfolio shares.
4. Annualized for periods less than one full year.
5. Total expenses including all underlying fund expenses were as follows:
Six Months Ended July 31, 2007 1.75%
Year Ended January 31, 2007 1.82%
Period Ended January 31, 2006 1.99%
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
21 | MODERATE INVESTOR FUND
FINANCIAL HIGHLIGHTS Continued
- --------------------------------------------------------------------------------
SIX MONTHS
ENDED
JULY 31, 2007 YEAR ENDED JANUARY 31,
CLASS C (UNAUDITED) 2007 2006 1
- --------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- --------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 11.33 $ 10.73 $ 10.00
- --------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income 2 .08 .30 .31
Net realized and unrealized gain .12 .54 .57
------------------------------------
Total from investment operations .20 .84 .88
- --------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income -- (.21) (.15)
Distributions from net realized gain -- (.03) --
------------------------------------
Total dividends and/or distributions to shareholders -- (.24) (.15)
- --------------------------------------------------------------------------------------------------
Net asset value, end of period $ 11.53 $ 11.33 $ 10.73
====================================
- --------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 3 1.77% 7.85% 8.82%
- --------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- --------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 192,360 $ 142,351 $ 47,904
- --------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 169,976 $ 95,773 $ 19,527
- --------------------------------------------------------------------------------------------------
Ratios to average net assets: 4
Net investment income 1.33% 2.78% 3.64%
Total expenses 5 1.14% 1.16% 1.23%
Expenses after payments, waivers and/or
reimbursements and reduction to custodian expenses 1.14% 1.16% 1.22%
- --------------------------------------------------------------------------------------------------
Portfolio turnover rate 2% 4% 0%
1. For the period from April 5, 2005 (commencement of operations) to January 31,
2006.
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 less than one full
year. Returns do not reflect the deduction of taxes that a shareholder would pay
on portfolio distributions or the redemption of portfolio shares.
4. Annualized for periods less than one full year.
5. Total expenses including all underlying fund expenses were as follows:
Six Months Ended July 31, 2007 1.72%
Year Ended January 31, 2007 1.77%
Period Ended January 31, 2006 1.91%
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
22 | MODERATE INVESTOR FUND
SIX MONTHS
ENDED
JULY 31, 2007 YEAR ENDED JANUARY 31,
CLASS N (UNAUDITED) 2007 2006 1
- --------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- --------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 11.38 $ 10.76 $ 10.00
- --------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income 2 .11 .40 .40
Net realized and unrealized gain .11 .51 .53
------------------------------------
Total from investment operations .22 .91 .93
- --------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income -- (.26) (.17)
Distributions from net realized gain -- (.03) --
------------------------------------
Total dividends and/or distributions to shareholders -- (.29) (.17)
- --------------------------------------------------------------------------------------------------
Net asset value, end of period $ 11.60 $ 11.38 $ 10.76
====================================
- --------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 3 1.93% 8.47% 9.35%
- --------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- --------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 71,918 $ 51,620 $ 12,117
- --------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 63,431 $ 27,110 $ 4,158
- --------------------------------------------------------------------------------------------------
Ratios to average net assets: 4
Net investment income 1.83% 3.58% 4.56%
Total expenses 5 0.64% 0.65% 0.68%
Expenses after payments, waivers and/or
reimbursements and reduction to custodian expenses 0.64% 0.65% 0.67%
- --------------------------------------------------------------------------------------------------
Portfolio turnover rate 2% 4% 0%
1. For the period from April 5, 2005 (commencement of operations) to January 31,
2006.
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 less than one full
year. Returns do not reflect the deduction of taxes that a shareholder would pay
on portfolio distributions or the redemption of portfolio shares.
4. Annualized for periods less than one full year.
5. Total expenses including all underlying fund expenses were as follows:
Six Months Ended July 31, 2007 1.22%
Year Ended January 31, 2007 1.26%
Period Ended January 31, 2006 1.36%
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
23 | MODERATE INVESTOR FUND
FINANCIAL HIGHLIGHTS Continued
- --------------------------------------------------------------------------------
SIX MONTHS
ENDED
JULY 31, 2007 YEAR ENDED JANUARY 31,
CLASS Y (UNAUDITED) 2007 2006 1
- --------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- --------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 11.45 $ 10.79 $ 10.00
- --------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income 2 .14 .56 .36
Net realized and unrealized gain .13 .43 .61
------------------------------------
Total from investment operations .27 .99 .97
- --------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income -- (.30) (.18)
Distributions from net realized gain -- (.03) --
------------------------------------
Total dividends and/or distributions to shareholders -- (.33) (.18)
- --------------------------------------------------------------------------------------------------
Net asset value, end of period $ 11.72 $ 11.45 $ 10.79
====================================
- --------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 3 2.36% 9.18% 9.79%
- --------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- --------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 1,315 $ 1,172 $ 316
- --------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 1,279 $ 335 $ 216
- --------------------------------------------------------------------------------------------------
Ratios to average net assets: 4
Net investment income 2.46% 5.06% 4.20%
Total expenses 5 0.01% 0.00% 0.28%
Expenses after payments, waivers and/or
reimbursements and reduction to custodian expenses 0.01% 0.00% 0.12%
- --------------------------------------------------------------------------------------------------
Portfolio turnover rate 2% 4% 0%
1. For the period from April 5, 2005 (commencement of operations) to January 31,
2006.
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 less than one full
year. Returns do not reflect the deduction of taxes that a shareholder would pay
on portfolio distributions or the redemption of portfolio shares.
4. Annualized for periods less than one full year.
5. Total expenses including all underlying fund expenses were as follows:
Six Months Ended July 31, 2007 0.59%
Year Ended January 31, 2007 0.61%
Period Ended January 31, 2006 0.96%
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
24 | MODERATE INVESTOR FUND
NOTES TO FINANCIAL STATEMENTS Unaudited
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
Oppenheimer Portfolio Series (the "Fund") is registered under the Investment
Company Act of 1940, as amended, as an open-end management investment company.
Moderate Investor Fund (the "Portfolio") is a series of the Fund whose
investment objective is to seek long term growth of capital and current income.
The Portfolio is a special type of mutual fund known as a "fund of funds"
because it invests in other mutual funds. The Portfolio normally invests in a
diversified portfolio of Oppenheimer mututal funds (individually, an "Underlying
Fund" and collectively, the "Underlying Funds"). The Portfolio's investment
advisor is OppenheimerFunds, Inc. (the "Manager").
The Portfolio 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 Portfolio in general and
exclusive voting rights on matters that affect that class alone. Earnings, net
assets and net asset value per share may differ due to each class having its own
expenses, such as transfer and shareholder servicing agent fees and shareholder
communications, directly attributable to that class. Class A, B, C and N have
separate distribution and/or service plans. No such plan has been adopted for
Class Y shares. Class B shares will automatically convert to Class A shares six
years after the date of purchase.
The following is a summary of significant accounting policies consistently
followed by the Portfolio.
- --------------------------------------------------------------------------------
SECURITIES VALUATION. The Portfolio calculates the net asset value of each class
of shares based upon the net asset value of the applicable Underlying Funds. For
each Underlying Fund, the net asset value per share for a class of shares on a
"regular business day" is determined by dividing the value of the Underlying
Fund's net assets attributable to that class by the number of shares of that
class outstanding on that day. To determine net asset values, the Underlying
Fund assets are valued primarily on the basis of current market quotations. If
market quotations are not readily available or do not accurately reflect fair
value for a security (in the Manager's judgment) or if a security's value has
been materially affected by events occurring after the close of the exchange or
market on which the security is principally traded, that security may be valued
by another method that the Underlying Fund's Board of Trustees/Directors
believes accurately reflects the fair value. Because some foreign securities
trade in markets and on exchanges that operate on weekends and U.S. holidays,
the values of some of the Underlying Fund's foreign investments may change on
days when investors cannot buy or redeem Underlying Fund shares.
25 | MODERATE INVESTOR FUND
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES Continued
Short-term "money market type" debt securities with remaining maturities
of sixty days or less are valued at amortized cost (which approximates market
value).
- --------------------------------------------------------------------------------
RISKS OF INVESTING IN THE UNDERLYING FUNDS. Each of the Underlying Funds in
which the Portfolio invests has its own investment risks, and those risks can
affect the value of the Portfolio's investments and therefore the value of the
Portfolio's shares. To the extent that the Portfolio invests more of its assets
in one Underlying Fund than in another, the Portfolio will have greater exposure
to the risks of that Underlying Fund.
- --------------------------------------------------------------------------------
INVESTMENT IN OPPENHEIMER INSTITUTIONAL MONEY MARKET FUND. The Portfolio is
permitted to invest daily available cash balances in an affiliated money market
fund. The Portfolio may invest the available cash in Class E shares of
Oppenheimer Institutional Money Market Fund ("IMMF") which seeks current income
and stability of principal. IMMF is a registered open-end management investment
company, regulated as a money market fund under the Investment Company Act of
1940, as amended. The Manager is also the investment advisor of IMMF. The
Portfolio's investment in IMMF is included in the Statement of Investments. As a
shareholder, the Portfolio is subject to its proportional share of IMMF's Class
E expenses, including its management fee. The Manager will waive fees and/or
reimburse Portfolio expenses in an amount equal to the indirect management fees
incurred through the Portfolio's investment in IMMF.
- --------------------------------------------------------------------------------
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 Portfolio intends to comply with provisions of the Internal
Revenue Code applicable to regulated investment companies and to distribute
substantially all of its investment company taxable income, including any net
realized gain on investments not offset by capital loss carryforwards, if any,
to shareholders, therefore, no federal income or excise tax provision is
required.
Net investment income (loss) and net realized gain (loss) may differ for
financial statement and tax purposes. The character of dividends and
distributions made during the fiscal year from net investment income or net
realized gains may differ from their ultimate characterization for federal
income tax purposes. Also, due to timing of dividends and distributions, the
fiscal year in which amounts are distributed may differ from the fiscal year in
which the income or net realized gain was recorded by the Portfolio.
As of July 31, 2007, the Portfolio had available for federal income tax
purposes an estimated capital loss carryforward of $122,173 expiring by 2015.
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
26 | MODERATE INVESTOR FUND
year. As of July 31, 2007, it is estimated that the Portfolio will not utilize
any capital loss carryforward to offset realized capital gains. During the
fiscal year ended January 31, 2007, the Portfolio did not utilize any capital
loss carryforward to offset capital gains realized in that fiscal year.
- --------------------------------------------------------------------------------
TRUSTEES' COMPENSATION. The Portfolio has adopted an unfunded retirement plan
(the "Plan") for the Portfolio's independent trustees. Benefits are based on
years of service and fees paid to each trustee during their period of service.
The Plan was frozen with respect to adding new participants effective December
31, 2006 (the "Freeze Date") and existing Plan Participants as of the Freeze
Date will continue to receive accrued benefits under the Plan. Active
independent trustees as of the Freeze Date have each elected a distribution
method with respect to their benefits under the Plan. During the six months
ended July 31, 2007, the Portfolio's projected benefit obligations were
increased by $10,059 and payments of $8,301 were made to retired trustees,
resulting in an accumulated liability of $28,157 as of July 31, 2007.
The Board of Trustees has adopted a compensation deferral 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
Portfolio. 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 Portfolio or in other Oppenheimer funds selected by
the Trustee. The Portfolio purchases shares of the funds selected for deferral
by the Trustee in amounts equal to his or her deemed investment, resulting in a
Portfolio 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 Portfolio, and will not materially affect the
Portfolio's assets, liabilities or net investment income per share. Amounts will
be deferred until distributed in accordance to the compensation deferral plan.
- --------------------------------------------------------------------------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS. Dividends and distributions to
shareholders, which are determined in accordance with income tax regulations,
are recorded on the ex-dividend date. Income and capital gain distributions, if
any, are declared and paid annually.
- --------------------------------------------------------------------------------
INVESTMENT INCOME. Dividend income is recorded on the ex-dividend date or upon
ex-dividend notification in the case of certain foreign dividends where the
ex-dividend date may have passed. Non-cash dividends included in dividend
income, if any, are recorded at the fair market value of the securities
received. Interest income, which includes accretion of discount and amortization
of premium, is accrued as earned.
- --------------------------------------------------------------------------------
CUSTODIAN FEES. "Custodian fees and expenses" in the Statement of Operations may
include interest expense incurred by the Portfolio 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 share
27 | MODERATE INVESTOR FUND
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES Continued
holder redemption activity. The Portfolio pays interest to its custodian on such
cash overdrafts, to the extent they are not offset by positive cash balances
maintained by the Portfolio, at a rate equal to the Federal Funds Rate plus
0.50%. The "Reduction to custodian expenses" line item, if applicable,
represents earnings on cash balances maintained by the Portfolio 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 Portfolio'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 Portfolio. In
the normal course of business, the Portfolio may also enter into contracts that
provide general indemnifications. The Portfolio's maximum exposure under these
arrangements is unknown as this would be dependent on future claims that may be
made against the Portfolio. 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 Portfolio 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 JULY 31, 2007 YEAR ENDED JANUARY 31, 2007
SHARES AMOUNT SHARES AMOUNT
- -----------------------------------------------------------------------------------------------------------
CLASS A
Sold 12,030,688 $140,736,098 20,288,978 $223,056,909
Dividends and/or
distributions reinvested -- -- 639,909 7,205,339
Redeemed (3,178,363) (37,252,423) (3,480,234) (38,407,180)
---------------------------------------------------------------
Net increase 8,852,325 $103,483,675 17,448,653 $191,855,068
===============================================================
- -----------------------------------------------------------------------------------------------------------
CLASS B
Sold 2,671,500 $ 30,955,149 6,606,757 $ 71,847,371
Dividends and/or
distributions reinvested -- -- 169,423 1,897,534
Redeemed (1,104,418) (12,809,718) (1,231,276) (13,503,812)
---------------------------------------------------------------
Net increase 1,567,082 $ 18,145,431 5,544,904 $ 60,241,093
===============================================================
28 | MODERATE INVESTOR FUND
- --------------------------------------------------------------------------------
2. SHARES OF BENEFICIAL INTEREST Continued
SIX MONTHS ENDED JULY 31, 2007 YEAR ENDED JANUARY 31, 2007
SHARES AMOUNT SHARES AMOUNT
- -----------------------------------------------------------------------------------------------------------
CLASS C
Sold 5,420,899 $ 62,847,738 9,578,836 $104,254,518
Dividends and/or
distributions reinvested -- -- 232,677 2,603,646
Redeemed (1,298,726) (15,107,675) (1,715,538) (18,778,708)
---------------------------------------------------------------
Net increase 4,122,173 $ 47,740,063 8,095,975 $ 88,079,456
===============================================================
- -----------------------------------------------------------------------------------------------------------
CLASS N
Sold 2,595,558 $ 30,261,996 4,596,537 $ 50,879,391
Dividends and/or
distributions reinvested -- -- 94,107 1,056,826
Redeemed (935,378) (10,954,732) (1,279,558) (14,077,503)
---------------------------------------------------------------
Net increase 1,660,180 $ 19,307,264 3,411,086 $37,858,714
===============================================================
- -----------------------------------------------------------------------------------------------------------
CLASS Y
Sold 21,401 $ 249,403 102,771 $ 1,171,814
Dividends and/or
distributions reinvested -- -- 2,252 25,447
Redeemed (11,550) (137,325) (31,969) (351,751)
---------------------------------------------------------------
Net increase 9,851 $ 112,078 73,054 $ 845,510
===============================================================
- --------------------------------------------------------------------------------
3. PURCHASES AND SALES OF SECURITIES
The aggregate cost of purchases and proceeds from sales of securities, other
than short-term obligations and investments in IMMF, for the six months ended
July 31, 2007, were as follows:
PURCHASES SALES
----------------------------------------------------------
Investment securities $210,766,334 $16,542,334
- --------------------------------------------------------------------------------
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES
MANAGEMENT FEES. Under the investment advisory agreement, the Manager does not
charge a management fee, but rather collects indirect management fees from
investments in the Underlying Funds. The weighted indirect management fees
collected from the Underlying Funds, as a percent of average daily net assets of
the Portfolio for the six months ended July 31, 2007 was 0.54%.
- --------------------------------------------------------------------------------
TRANSFER AGENT FEES. OppenheimerFunds Services (OFS), a division of the Manager,
acts as the transfer and shareholder servicing agent for the Portfolio. The
Portfolio pays OFS a per account fee. For the six months ended July 31, 2007,
the Portfolio paid $382,848 to OFS for services to the Portfolio.
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.
29 | MODERATE INVESTOR FUND
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES Continued
DISTRIBUTION AND SERVICE PLAN (12b-1) FEES. Under its General Distributor's
Agreement with the Portfolio, OppenheimerFunds Distributor, Inc. (the
Distributor) acts as the Portfolio's principal underwriter in the continuous
public offering of the Portfolio's classes of shares.
- --------------------------------------------------------------------------------
SERVICE PLAN FOR CLASS A SHARES. The Portfolio 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 Portfolio. 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
Portfolio under the plan are detailed in the Statement of Operations.
- --------------------------------------------------------------------------------
DISTRIBUTION AND SERVICE PLANS FOR CLASS B, CLASS C AND CLASS N SHARES. The
Portfolio 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
Portfolio 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 Portfolio 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 Portfolio 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
determines its uncompensated expenses under the plan at calendar quarter ends.
The Distributor's aggregate uncompensated expenses under the plan at June 30,
2007 for Class B, Class C and Class N shares were $1,884,044, $1,402,423 and
$648,318, respectively. Fees incurred by the Portfolio 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 Portfolio. They are deducted from the
proceeds of sales of Portfolio 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 following table for the period
indicated.
30 | MODERATE INVESTOR 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
RETAINED BY RETAINED BY RETAINED BY RETAINED BY RETAINED BY
SIX MONTHS ENDED DISTRIBUTOR DISTRIBUTOR DISTRIBUTOR DISTRIBUTOR DISTRIBUTOR
- -------------------------------------------------------------------------------------------------
July 31, 2007 $798,161 $9,530 $96,193 $15,959 $3,412
- --------------------------------------------------------------------------------
WAIVERS AND REIMBURSEMENTS OF EXPENSES. The Manager has voluntarily agreed to a
total expense limitation on the aggregate amount of combined direct
(fund-of-funds level) and indirect expense so that "Total expenses" as a
percentage of average daily net assets will not exceed the following annual
rates: 1.30%, 2.05%, 2.05%, 1.55% and 1.05%, for Class A, Class B, Class C,
Class N and Class Y, respectively. The Manager may modify or terminate this
undertaking at any time without notice to shareholders. These expense
limitations do not include Extraordinary Expenses and other expenses not
incurred in the ordinary course of the Portfolio's business. Notwithstanding the
foregoing limits, the Manager is not required to waive or reimburse Portfolio
expenses in excess of indirect management fees earned from investments in
Underlying Funds to assure that expenses do not exceed those limits.
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. This
undertaking may be amended or withdrawn at any time.
The Manager will waive fees and/or reimburse Portfolio expenses in an
amount equal to the indirect management fees incurred through the Portfolio's
investment in IMMF. During the six months ended July 31, 2007, the Manager
waived $691 for IMMF management fees.
- --------------------------------------------------------------------------------
5. RECENT ACCOUNTING PRONOUNCEMENT
In September 2006, Financial Accounting Standards Board issued Statement of
Financial Accounting Standards ("SFAS") No. 157, FAIR VALUE MEASUREMENTS. This
standard establishes a single authoritative definition of fair value, sets out a
framework for measuring fair value and expands disclosures about fair value
measurements. SFAS No. 157 applies to fair value measurements already required
or permitted by existing standards. SFAS No. 157 is effective for financial
statements issued for fiscal years beginning after November 15, 2007, and
interim periods within those fiscal years. As of July 31, 2007, the Manager does
not believe the adoption of SFAS No. 157 will materially impact the financial
statement amounts; however, additional disclosures may be required about the
inputs used to develop the measurements and the effect of certain of the
measurements on changes in net assets for the period.
31 | MODERATE INVESTOR FUND
PORTFOLIO PROXY VOTING POLICIES AND PROCEDURES;
UPDATES TO STATEMENTS OF INVESTMENTS Unaudited
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
The Portfolio has adopted Portfolio Proxy Voting Policies and Procedures under
which the Portfolio votes proxies relating to securities ("portfolio proxies")
held by the Portfolio. A description of the Portfolio's Portfolio Proxy Voting
Policies and Procedures is available (i) without charge, upon request, by
calling the Portfolio toll-free at 1.800.525.7048, (ii) on the Portfolio's
website at www.oppenheimerfunds.com, and (iii) on the SEC's website at
www.sec.gov. In addition, the Portfolio 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 Portfolio's voting record is available (i) without
charge, upon request, by calling the Portfolio 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 Portfolio 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 Portfolio'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.
32 | MODERATE INVESTOR FUND
ACTIVE ALLOCATION FUND
TOP HOLDINGS AND ALLOCATIONS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
ASSET CLASS ALLOCATION
[THE FOLLOWING TABLE WAS REPRESENTED BY A PIE CHART IN THE PRINTED MATERIAL.]
U.S. Equity Funds 50.1%
Fixed Income Funds 23.8
Global Equity Funds 21.2
Alternative Investment Fund 4.6
Money Market Fund 0.3
Portfolio holdings and allocations are subject to change. Percentages are as of
July 31, 2007, and are based on the total market value of investments in
affiliated companies.
- --------------------------------------------------------------------------------
10 | ACTIVE ALLOCATION FUND
NOTES
- --------------------------------------------------------------------------------
Total returns include changes in share price and reinvestment of dividends and
capital gains distributions in a hypothetical investment for the periods shown.
The Portfolio'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 Portfolio or any gains you may realize if you
sell your shares.
INVESTORS SHOULD CONSIDER THE PORTFOLIO'S INVESTMENT OBJECTIVES, RISKS, AND
OTHER CHARGES AND EXPENSES CAREFULLY BEFORE INVESTING. THE PORTFOLIO'S
PROSPECTUS CONTAINS THIS AND OTHER INFORMATION ABOUT THE PORTFOLIO, 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 Portfolio's investment strategy and focus can change over time. The mention
of specific holdings does not constitute a recommendation by OppenheimerFunds,
Inc.
CLASS A shares of the Portfolio were first publicly offered on 4/5/05. Unless
otherwise noted, Class A returns include the current maximum initial sales
charge of 5.75%.
CLASS B shares of the Portfolio were first publicly offered on 4/5/05. Unless
otherwise noted, Class B returns include the applicable contingent deferred
sales charge of 5% (1-year) and 3% (since inception). Class B shares are subject
to an annual 0.75% asset-based sales charge.
CLASS C shares of the Portfolio were first publicly offered on 4/5/05. Unless
otherwise noted, Class C returns include the contingent deferred sales charge of
1% for the 1-year period. Class C shares are subject to an annual 0.75%
asset-based sales charge.
CLASS N shares of the Portfolio were first publicly offered on 4/5/05. 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 Portfolio were first publicly offered on 4/5/05. Class Y
shares are offered only to certain institutional investors under special
agreement with the Distributor.
An explanation of the calculation of performance is in the Portfolio's Statement
of Additional Information.
11 | ACTIVE ALLOCATION FUND
PORTFOLIO EXPENSES
- --------------------------------------------------------------------------------
PORTFOLIO EXPENSES. As a shareholder of the Portfolio, 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 Portfolio expenses. These examples are
intended to help you understand your ongoing costs (in dollars) of investing in
the Portfolio 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 July 31, 2007.
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 Portfolio'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
Portfolio'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 Portfolio and other funds. To do so, compare this 5%
hypothetical example for the class of shares you hold with the 5% hypothetical
examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs, such as front-end
or contingent deferred sales charges (loads), or a $12.00 fee imposed annually
on accounts valued at less than $500.00 (subject to exceptions described in the
Statement of Additional Information). Therefore, the "hypothetical" lines of the
table are useful in comparing ongoing costs only, and will not help you
determine the relative total costs of owning different funds. In addition, if
these transactional costs were included, your costs would have been higher.
12 | ACTIVE ALLOCATION FUND
- --------------------------------------------------------------------------------
BEGINNING ENDING EXPENSES
ACCOUNT ACCOUNT PAID DURING
VALUE VALUE 6 MONTHS ENDED
(2/1/07) (7/31/07) JULY 31, 2007
- --------------------------------------------------------------------------------
Class A Actual $ 1,000.00 $ 1,028.20 $ 2.42
- --------------------------------------------------------------------------------
Class A Hypothetical 1,000.00 1,022.41 2.41
- --------------------------------------------------------------------------------
Class B Actual 1,000.00 1,024.20 6.39
- --------------------------------------------------------------------------------
Class B Hypothetical 1,000.00 1,018.50 6.38
- --------------------------------------------------------------------------------
Class C Actual 1,000.00 1,024.30 6.24
- --------------------------------------------------------------------------------
Class C Hypothetical 1,000.00 1,018.65 6.23
- --------------------------------------------------------------------------------
Class N Actual 1,000.00 1,026.60 3.47
- --------------------------------------------------------------------------------
Class N Hypothetical 1,000.00 1,021.37 3.46
- --------------------------------------------------------------------------------
Class Y Actual 1,000.00 1,029.80 0.76
- --------------------------------------------------------------------------------
Class Y Hypothetical 1,000.00 1,024.05 0.75
Hypothetical assumes 5% annual return before expenses.
Expenses are equal to the Portfolio'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,
excluding all underlying fund expenses, based on the 6-month period ended July
31, 2007 are as follows:
CLASS EXPENSE RATIOS
- ---------------------------------
Class A 0.48%
- ---------------------------------
Class B 1.27
- ---------------------------------
Class C 1.24
- ---------------------------------
Class N 0.69
- ---------------------------------
Class Y 0.15
The expense ratios reflect reduction to custodian expenses and voluntary waivers
or reimbursements by the Portfolio's Manager that can be terminated at any time,
without advance notice. The "Financial Highlights" tables in the Portfolio's
financial statements, included in this report, also show the gross expense
ratios, without such waivers or reimbursements and reduction to custodian
expenses, if applicable.
- --------------------------------------------------------------------------------
13 | ACTIVE ALLOCATION FUND
STATEMENT OF INVESTMENTS July 31, 2007 / Unaudited
- --------------------------------------------------------------------------------
VALUE
SHARES SEE NOTE 1
- -------------------------------------------------------------------------------------------------
INVESTMENTS IN AFFILIATED COMPANIES--99.5% 1
- -------------------------------------------------------------------------------------------------
ALTERNATIVE INVESTMENT FUND--4.6%
Oppenheimer Real Estate Fund, Cl. Y 5,332,888 $ 111,564,028
- -------------------------------------------------------------------------------------------------
FIXED INCOME FUNDS--23.6%
Oppenheimer Champion Income Fund, Cl. Y 5,553,668 50,149,621
- -------------------------------------------------------------------------------------------------
Oppenheimer Core Bond Fund, Cl. Y 22,941,876 230,795,273
- -------------------------------------------------------------------------------------------------
Oppenheimer International Bond Fund, Cl. Y 3,806,830 23,830,755
- -------------------------------------------------------------------------------------------------
Oppenheimer Strategic Income Fund, Cl. Y 54,101,422 233,718,144
- -------------------------------------------------------------------------------------------------
Oppenheimer U.S. Government Trust, Cl. Y 4,320,557 40,483,616
----------------
578,977,409
- -------------------------------------------------------------------------------------------------
GLOBAL EQUITY FUNDS--21.1%
Oppenheimer Developing Markets Fund, Cl. Y 420,981 21,091,159
- -------------------------------------------------------------------------------------------------
Oppenheimer Global Fund, Cl. Y 3,028,298 237,206,559
- -------------------------------------------------------------------------------------------------
Oppenheimer Global Opportunities Fund, Cl. Y 3,614,034 143,043,450
- -------------------------------------------------------------------------------------------------
Oppenheimer International Growth Fund, Cl. Y 1,847,450 56,864,514
- -------------------------------------------------------------------------------------------------
Oppenheimer International Small Company Fund, Cl. Y 609,102 20,545,028
- -------------------------------------------------------------------------------------------------
Oppenheimer Quest International Value Fund, Inc., Cl. A 1,575,267 37,428,338
----------------
516,179,048
- -------------------------------------------------------------------------------------------------
MONEY MARKET FUND--0.3%
Oppenheimer Institutional Money Market Fund, Cl. E, 5.28% 2 8,455,646 8,455,646
- -------------------------------------------------------------------------------------------------
U.S. EQUITY FUNDS--49.9%
Oppenheimer Capital Appreciation Fund, Cl. Y 3 6,481,233 332,422,405
- -------------------------------------------------------------------------------------------------
Oppenheimer Main Street Fund, Cl. Y 5,519,884 234,815,853
- -------------------------------------------------------------------------------------------------
Oppenheimer Main Street Opportunity Fund, Cl. Y 8,743,085 136,392,126
- -------------------------------------------------------------------------------------------------
Oppenheimer Main Street Small Cap Fund, Cl. Y 5,510,533 130,820,047
- -------------------------------------------------------------------------------------------------
Oppenheimer Small- & Mid- Cap Value Fund, Cl. Y 903,501 37,016,410
- -------------------------------------------------------------------------------------------------
Oppenheimer Value Fund, Cl. Y 12,064,510 349,750,138
----------------
1,221,216,979
- -------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS, AT VALUE (COST $2,278,287,738) 99.5% 2,436,393,110
- -------------------------------------------------------------------------------------------------
OTHER ASSETS NET OF LIABILITIES 0.5 12,360,083
-----------------------------
NET ASSETS 100.0% $ 2,448,753,193
=============================
FOOTNOTES TO STATEMENT OF INVESTMENTS
1. Is or was an affiliate, as defined in the Investment Company Act of 1940, at
or during the period ended July 31, 2007, by virtue of the Portfolio owning at
least 5% of the voting securities of the issuer or as a result of the Portfolio
and the issuer having the same investment advisor. Transactions during the
period in which the issuer was an affiliate are as follows:
14 | ACTIVE ALLOCATION FUND
SHARES
JANUARY 31, GROSS GROSS SHARES
2007 ADDITIONS REDUCTIONS JULY 31, 2007
- --------------------------------------------------------------------------------------------------------------
Oppenheimer Capital Appreciation Fund, Cl. Y 5,035,770 1,560,114 114,651 6,481,233
Oppenheimer Champion Income Fund, Cl. Y 3,973,401 1,703,735 123,468 5,553,668
Oppenheimer Core Bond Fund, Cl. Y 17,144,429 5,970,088 172,641 22,941,876
Oppenheimer Developing Markets Fund, Cl. Y 366,377 94,720 40,116 420,981
Oppenheimer Global Fund, Cl. Y 2,405,097 715,884 92,683 3,028,298
Oppenheimer Global Opportunities Fund, Cl. Y 2,450,325 1,174,609 10,900 3,614,034
Oppenheimer Institutional Money Market Fund, Cl. E 6,349,533 95,210,442 93,104,329 8,455,646
Oppenheimer International Bond Fund, Cl. Y 2,779,230 1,113,242 85,642 3,806,830
Oppenheimer International Growth Fund, Cl. Y 1,566,542 418,441 137,533 1,847,450
Oppenheimer International Small Company Fund, Cl. Y 558,527 138,653 88,078 609,102
Oppenheimer Main Street Fund, Cl. Y 4,361,432 1,302,776 144,324 5,519,884
Oppenheimer Main Street Opportunity Fund, Cl. Y 6,480,652 2,289,175 26,742 8,743,085
Oppenheimer Main Street Small Cap Fund, Cl. Y 4,007,613 1,519,943 17,023 5,510,533
Oppenheimer Quest International Value Fund, Inc., Cl. A 1,270,789 356,300 51,822 1,575,267
Oppenheimer Real Estate Fund, Cl. Y 4,290,964 1,613,856 571,932 5,332,888
Oppenheimer Small- & Mid- Cap Value Fund, Cl. Y 762,924 202,245 61,668 903,501
Oppenheimer Strategic Income Fund, Cl. Y 41,051,737 14,051,400 1,001,715 54,101,422
Oppenheimer U.S. Government Trust, Cl. Y 3,000,034 1,413,678 93,155 4,320,557
Oppenheimer Value Fund, Cl. Y 9,865,588 2,822,040 623,118 12,064,510
VALUE DIVIDEND REALIZED
SEE NOTE 1 INCOME GAIN (LOSS)
- ---------------------------------------------------------------------------------------------------------------
Oppenheimer Capital Appreciation Fund, Cl. Y $ 332,422,405 $ -- $ (76,245)
Oppenheimer Champion Income Fund, Cl. Y 50,149,621 1,640,327 (10,299)
Oppenheimer Core Bond Fund, Cl. Y 230,795,273 5,411,277 (22,336)
Oppenheimer Developing Markets Fund, Cl. Y 21,091,159 -- 5,182
Oppenheimer Global Fund, Cl. Y 237,206,559 -- (100,806)
Oppenheimer Global Opportunities Fund, Cl. Y 143,043,450 -- (54,134)
Oppenheimer Institutional Money Market Fund, Cl. E 8,455,646 336,474 --
Oppenheimer International Bond Fund, Cl. Y 23,830,755 444,171 (1,943)
Oppenheimer International Growth Fund, Cl. Y 56,864,514 -- 38,486
Oppenheimer International Small Company Fund, Cl. Y 20,545,028 -- 172,702
Oppenheimer Main Street Fund, Cl. Y 234,815,853 -- (79,197)
Oppenheimer Main Street Opportunity Fund, Cl. Y 136,392,126 -- (9,269)
Oppenheimer Main Street Small Cap Fund, Cl. Y 130,820,047 -- (11,659)
Oppenheimer Quest International Value Fund, Inc., Cl. A 37,428,338 -- (23,389)
Oppenheimer Real Estate Fund, Cl. Y 111,564,028 236,295 781,806
Oppenheimer Small- & Mid- Cap Value Fund, Cl. Y 37,016,410 -- 16,020
Oppenheimer Strategic Income Fund, Cl. Y 233,718,144 5,739,069 (984)
Oppenheimer U.S. Government Trust, Cl. Y 40,483,616 858,960 (5,757)
Oppenheimer Value Fund, Cl. Y 349,750,138 -- 134,802
--------------------------------------------
$2,436,393,110 $14,666,573 $ 752,980
============================================
2. Rate shown is the 7-day yield as of July 31, 2007.
3. Non-income producing security.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
15 | ACTIVE ALLOCATION FUND
STATEMENT OF ASSETS AND LIABILITIES Unaudited
- --------------------------------------------------------------------------------
July 31, 2007
- -----------------------------------------------------------------------------------------------------
ASSETS
- -----------------------------------------------------------------------------------------------------
Investments, at value--see accompanying statement of investments--
affiliated companies (cost $2,278,287,738) $ 2,436,393,110
- -----------------------------------------------------------------------------------------------------
Cash 1,344,994
- -----------------------------------------------------------------------------------------------------
Cash used for collateral on futures 4,612,400
- -----------------------------------------------------------------------------------------------------
Swaps, at value 1,671,182
- -----------------------------------------------------------------------------------------------------
Receivables and other assets:
Shares of beneficial interest sold 11,791,435
Dividends 1,781,011
Investments sold 90,731
Other 21,307
------------------
Total assets 2,457,706,170
- -----------------------------------------------------------------------------------------------------
LIABILITIES
- -----------------------------------------------------------------------------------------------------
Swaps, at value 98,010
- -----------------------------------------------------------------------------------------------------
Payables and other liabilities:
Investments purchased 4,600,197
Shares of beneficial interest redeemed 2,241,319
Futures margins 1,054,010
Distribution and service plan fees 519,294
Transfer and shareholder servicing agent fees 239,694
Trustees' compensation 100,902
Shareholder communications 70,081
Other 29,470
------------------
Total liabilities 8,952,977
- -----------------------------------------------------------------------------------------------------
NET ASSETS $ 2,448,753,193
==================
- -----------------------------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS
- -----------------------------------------------------------------------------------------------------
Par value of shares of beneficial interest $ 198,574
- -----------------------------------------------------------------------------------------------------
Additional paid-in capital 2,258,986,391
- -----------------------------------------------------------------------------------------------------
Accumulated net investment income 8,680,408
- -----------------------------------------------------------------------------------------------------
Accumulated net realized gain on investments and foreign currency transactions 25,923,832
- -----------------------------------------------------------------------------------------------------
Net unrealized appreciation on investments 154,963,988
------------------
NET ASSETS $ 2,448,753,193
==================
16 | ACTIVE ALLOCATION FUND
- -----------------------------------------------------------------------------------------------------
NET ASSET VALUE PER SHARE
- -----------------------------------------------------------------------------------------------------
Class A Shares:
Net asset value and redemption price per share (based on net assets of
$1,277,428,344 and 103,106,146 shares of beneficial interest outstanding) $ 12.39
Maximum offering price per share (net asset value plus sales charge of 5.75% of
offering price) $ 13.15
- -----------------------------------------------------------------------------------------------------
Class B Shares:
Net asset value, redemption price (excludes applicable contingent deferred sales
charge) and offering price per share (based on net assets of $439,813,172 and
35,860,097 shares of beneficial interest outstanding) $ 12.26
- -----------------------------------------------------------------------------------------------------
Class C Shares:
Net asset value, redemption price (excludes applicable contingent deferred sales
charge) and offering price per share (based on net assets of $582,378,977 and
47,529,330 shares of beneficial interest outstanding) $ 12.25
- -----------------------------------------------------------------------------------------------------
Class N Shares:
Net asset value, redemption price (excludes applicable contingent deferred sales
charge) and offering price per share (based on net assets of $145,623,733 and
11,797,239 shares of beneficial interest outstanding) $ 12.34
- -----------------------------------------------------------------------------------------------------
Class Y Shares:
Net asset value, redemption price and offering price per share (based on net
assets of $3,508,967 and 281,581 shares of beneficial interest outstanding) $ 12.46
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
17 | ACTIVE ALLOCATION FUND
STATEMENT OF OPERATIONS Unaudited
- --------------------------------------------------------------------------------
For the Six Months Ended July 31, 2007
- --------------------------------------------------------------------------------
INVESTMENT INCOME
- --------------------------------------------------------------------------------
Dividends--affiliated companies $ 14,666,573
- --------------------------------------------------------------------------------
Interest 66,037
-------------
Total investment income 14,732,610
- --------------------------------------------------------------------------------
EXPENSES
- --------------------------------------------------------------------------------
Distribution and service plan fees:
Class A 1,417,397
Class B 2,011,033
Class C 2,591,129
Class N 327,656
- --------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees:
Class A 634,148
Class B 276,686
Class C 310,505
Class N 51,031
Class Y 6
- --------------------------------------------------------------------------------
Shareholder communications:
Class A 71,042
Class B 37,400
Class C 30,771
Class N 2,712
Class Y 9
- --------------------------------------------------------------------------------
Asset allocation fees 1,095,930
- --------------------------------------------------------------------------------
Trustees' compensation 49,654
- --------------------------------------------------------------------------------
Custodian fees and expenses 4,359
- --------------------------------------------------------------------------------
Other 47,085
-------------
Total expenses 8,958,553
Less reduction to custodian expenses (638)
Less waivers and reimbursements of expenses (44,131)
-------------
Net expenses 8,913,784
- --------------------------------------------------------------------------------
NET INVESTMENT INCOME 5,818,826
18 | ACTIVE ALLOCATION FUND
- --------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
- --------------------------------------------------------------------------------
Net realized gain on:
Investments:
Affiliated companies $ 752,980
Closing and expiration of futures contracts 670,780
Foreign currency transactions 156,265
Swap contracts 1,930,300
-------------
Net realized gain 3,510,325
- --------------------------------------------------------------------------------
Net change in unrealized appreciation (depreciation) on:
Investments:
Affiliated companies 41,835,271
Futures contracts (5,813,965)
Swap contracts 1,653,625
-------------
Net change in unrealized appreciation 37,674,931
- --------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 47,004,082
=============
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
19 | ACTIVE ALLOCATION FUND
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
SIX MONTHS YEAR
ENDED ENDED
JULY 31, 2007 JANUARY 31,
(UNAUDITED) 2007
- -----------------------------------------------------------------------------------------------------------------------------
OPERATIONS
- -----------------------------------------------------------------------------------------------------------------------------
Net investment income $ 5,818,826 $ 32,270,527
- -----------------------------------------------------------------------------------------------------------------------------
Net realized gain 3,510,325 26,702,188
- -----------------------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation 37,674,931 94,186,438
----------------------------------
Net increase in net assets resulting from operations 47,004,082 153,159,153
- -----------------------------------------------------------------------------------------------------------------------------
DIVIDENDS AND/OR DISTRIBUTIONS TO SHAREHOLDERS
- -----------------------------------------------------------------------------------------------------------------------------
Dividends from net investment income:
Class A -- (17,134,058)
Class B -- (4,713,190)
Class C -- (5,972,851)
Class N -- (1,888,584)
Class Y -- (50,117)
----------------------------------
-- (29,758,800)
- -----------------------------------------------------------------------------------------------------------------------------
Distributions from net realized gain:
Class A -- (3,316,909)
Class B -- (1,236,698)
Class C -- (1,515,292)
Class N -- (381,215)
Class Y -- (8,618)
----------------------------------
-- (6,458,732)
- -----------------------------------------------------------------------------------------------------------------------------
BENEFICIAL INTEREST TRANSACTIONS
- -----------------------------------------------------------------------------------------------------------------------------
Net increase in net assets resulting from beneficial interest transactions:
Class A 294,957,117 602,241,849
Class B 82,701,294 210,888,833
Class C 139,290,488 280,476,657
Class N 33,481,279 74,350,364
Class Y 633,182 2,130,523
----------------------------------
551,063,360 1,170,088,226
- -----------------------------------------------------------------------------------------------------------------------------
NET ASSETS
- -----------------------------------------------------------------------------------------------------------------------------
Total increase 598,067,442 1,287,029,847
- -----------------------------------------------------------------------------------------------------------------------------
Beginning of period 1,850,685,751 563,655,904
----------------------------------
End of period (including accumulated net investment income of
$8,680,408 and $2,861,582, respectively) $ 2,448,753,193 $ 1,850,685,751
==================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
20 | ACTIVE ALLOCATION FUND
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
SIX MONTHS
ENDED
JULY 31, 2007 YEAR ENDED JANUARY 31,
CLASS A (UNAUDITED) 2007 2006 1
- ----------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- ----------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 12.05 $ 11.10 $ 10.00
- ----------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income 2 .05 .35 .43
Net realized and unrealized gain .29 .89 .89
--------------------------------------
Total from investment operations .34 1.24 1.32
- ----------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income -- (.24) (.20)
Distributions from net realized gain -- (.05) (.02)
--------------------------------------
Total dividends and/or distributions to shareholders -- (.29) (.22)
- ----------------------------------------------------------------------------------------------------
Net asset value, end of period $ 12.39 $ 12.05 $ 11.10
======================================
- ----------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 3 2.82% 11.14% 13.31%
- ----------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ----------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 1,277,428 $ 956,520 $ 293,578
- ----------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 1,148,144 $ 605,517 $ 112,224
- ----------------------------------------------------------------------------------------------------
Ratios to average net assets: 4
Net investment income 0.87% 3.10% 4.94%
Total expenses 5 0.48% 0.51% 0.56%
Expenses after payments, waivers and/or reimbursements
and reduction to custodian expenses 0.48% 0.50% 0.55%
- ----------------------------------------------------------------------------------------------------
Portfolio turnover rate 3% 40% 90%
1. For the period from April 5, 2005 (commencement of operations) to January 31,
2006.
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 less than one full
year. Returns do not reflect the deduction of taxes that a shareholder would pay
on portfolio distributions or the redemption of portfolio shares.
4. Annualized for periods less than one full year.
5. Total expenses including all underlying fund expenses were as follows:
Six Months Ended July 31, 2007 1.10%
Year Ended January 31, 2007 1.16%
Period Ended January 31, 2006 1.28%
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
21 | ACTIVE ALLOCATION FUND
FINANCIAL HIGHLIGHTS Continued
- --------------------------------------------------------------------------------
SIX MONTHS
ENDED
JULY 31, 2007 YEAR ENDED JANUARY 31,
CLASS B (UNAUDITED) 2007 2006 1
- ----------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- ----------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 11.97 $ 11.07 $ 10.00
- ----------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income 2 -- 3 .26 .36
Net realized and unrealized gain .29 .86 .91
--------------------------------------
Total from investment operations .29 1.12 1.27
- ----------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income -- (.17) (.18)
Distributions from net realized gain -- (.05) (.02)
--------------------------------------
Total dividends and/or distributions to shareholders -- (.22) (.20)
- ----------------------------------------------------------------------------------------------------
Net asset value, end of period $ 12.26 $ 11.97 $ 11.07
======================================
- ----------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 4 2.42% 10.15% 12.72%
- ----------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ----------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 439,813 $ 349,024 $ 115,629
- ----------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 406,088 $ 229,365 $ 46,284
- ----------------------------------------------------------------------------------------------------
Ratios to average net assets: 5
Net investment income 0.07% 2.26% 4.06%
Total expenses 6 1.27% 1.29% 1.37%
Expenses after payments, waivers and/or reimbursements
and reduction to custodian expenses 1.27% 1.29% 1.34%
- ----------------------------------------------------------------------------------------------------
Portfolio turnover rate 3% 40% 90%
1. For the period from April 5, 2005 (commencement of operations) to January 31,
2006.
2. Per share amounts calculated based on the average shares outstanding during
the period.
3. Less than $0.005 per share.
4. Assumes an investment reinvested in additional shares on the reinvestment
date, and redemption at the net asset value calculated on the last on the
business day before the first day of the fiscal period, with all dividends and
distributions business day of the fiscal period. Sales charges are not reflected
in the total returns. Total returns are not annualized for periods less than one
full year. Returns do not reflect the deduction of taxes that a shareholder
would pay on portfolio distributions or the redemption of portfolio shares.
5. Annualized for periods less than one full year.
6. Total expenses including all underlying fund expenses were as follows:
Six Months Ended July 31, 2007 1.89%
Year Ended January 31, 2007 1.94%
Period Ended January 31, 2006 2.09%
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
22 | ACTIVE ALLOCATION FUND
SIX MONTHS
ENDED
JULY 31, 2007 YEAR ENDED JANUARY 31,
CLASS C (UNAUDITED) 2007 2006 1
- ----------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- ----------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 11.96 $ 11.06 $ 10.00
- ----------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income 2 .01 .27 .37
Net realized and unrealized gain .28 .86 .89
--------------------------------------
Total from investment operations .29 1.13 1.26
- ----------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income -- (.18) (.18)
Distributions from net realized gain -- (.05) (.02)
--------------------------------------
Total dividends and/or distributions to shareholders -- (.23) (.20)
- ----------------------------------------------------------------------------------------------------
Net asset value, end of period $ 12.25 $ 11.96 $ 11.06
======================================
- ----------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 3 2.43% 10.21% 12.66%
- ----------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ----------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 582,379 $ 433,213 $ 125,622
- ----------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 523,401 $ 272,038 $ 45,647
- ----------------------------------------------------------------------------------------------------
Ratios to average net assets: 4
Net investment income 0.11% 2.34% 4.18%
Total expenses 5 1.24% 1.27% 1.33%
Expenses after payments, waivers and/or reimbursements
and reduction to custodian expenses 1.24% 1.26% 1.31%
- ----------------------------------------------------------------------------------------------------
Portfolio turnover rate 3% 40% 90%
1. For the period from April 5, 2005 (commencement of operations) to January 31,
2006.
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 less than one full
year. Returns do not reflect the deduction of taxes that a shareholder would pay
on portfolio distributions or the redemption of portfolio shares.
4. Annualized for periods less than one full year.
5. Total expenses including all underlying fund expenses were as follows:
Six Months Ended July 31, 2007 1.86%
Year Ended January 31, 2007 1.92%
Period Ended January 31, 2006 2.05%
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
23 | ACTIVE ALLOCATION FUND
FINANCIAL HIGHLIGHTS Continued
- ------------------------------------------------------------------------------
SIX MONTHS
ENDED
JULY 31, 2007 YEAR ENDED JANUARY 31,
CLASS N (UNAUDITED) 2007 2006 1
- ----------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- ----------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 12.02 $ 11.09 $ 10.00
- ----------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income 2 .04 .35 .46
Net realized and unrealized gain .28 .86 .85
--------------------------------------
Total from investment operations .32 1.21 1.31
- ----------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income -- (.23) (.20)
Distributions from net realized gain -- (.05) (.02)
--------------------------------------
Total dividends and/or distributions to shareholders -- (.28) (.22)
- ----------------------------------------------------------------------------------------------------
Net asset value, end of period $ 12.34 $ 12.02 $ 11.09
======================================
- ----------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 3 2.66% 10.88% 13.18%
- ----------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ----------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 145,624 $ 109,146 $ 28,345
- ----------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 132,356 $ 62,929 $ 9,156
- ----------------------------------------------------------------------------------------------------
Ratios to average net assets: 4
Net investment income 0.66% 3.07% 5.28%
Total expenses 5 0.69% 0.70% 0.73%
Expenses after payments, waivers and/or reimbursements
and reduction to custodian expenses 0.69% 0.70% 0.72%
- ----------------------------------------------------------------------------------------------------
Portfolio turnover rate 3% 40% 90%
1. For the period from April 5, 2005 (commencement of operations) to January 31,
2006.
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 less than one full
year. Returns do not reflect the deduction of taxes that a shareholder would pay
on portfolio distributions or the redemption of portfolio shares.
4. Annualized for periods less than one full year.
5. Total expenses including all underlying fund expenses were as follows:
Six Months Ended July 31, 2007 1.31%
Year Ended January 31, 2007 1.35%
Period Ended January 31, 2006 1.45%
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
24 | ACTIVE ALLOCATION FUND
SIX MONTHS
ENDED
JULY 31, 2007 YEAR ENDED JANUARY 31,
CLASS Y (UNAUDITED) 2007 2006 1
- ----------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- ----------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 12.10 $ 11.13 $ 10.00
- ----------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income 2 .07 .44 .39
Net realized and unrealized gain .29 .85 .97
--------------------------------------
Total from investment operations .36 1.29 1.36
- ----------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income -- (.27) (.21)
Distributions from net realized gain -- (.05) (.02)
--------------------------------------
Total dividends and/or distributions to shareholders -- (.32) (.23)
- ----------------------------------------------------------------------------------------------------
Net asset value, end of period $ 12.46 $ 12.10 $ 11.13
======================================
- ----------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 3 2.98% 11.56% 13.72%
- ----------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ----------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 3,509 $ 2,783 $ 482
- ----------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 3,380 $ 1,317 $ 196
- ----------------------------------------------------------------------------------------------------
Ratios to average net assets: 4
Net investment income 1.20% 3.79% 4.44%
Total expenses 5 0.15% 0.11% 0.33%
Expenses after payments, waivers and/or reimbursements
and reduction to custodian expenses 0.15% 0.11% 0.21%
- ----------------------------------------------------------------------------------------------------
Portfolio turnover rate 3% 40% 90%
1. For the period from April 5, 2005 (commencement of operations) to January 31,
2006.
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 less than one full
year. Returns do not reflect the deduction of taxes that a shareholder would pay
on portfolio distributions or the redemption of portfolio shares.
4. Annualized for periods less than one full year.
5. Total expenses including all underlying fund expenses were as follows:
Six Months Ended July 31, 2007 0.77%
Year Ended January 31, 2007 0.76%
Period Ended January 31, 2006 1.05%
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
25 | ACTIVE ALLOCATION FUND
NOTES TO FINANCIAL STATEMENTS Unaudited
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
Oppenheimer Portfolio Series (the "Fund") is registered under the Investment
Company Act of 1940, as amended, as an open-end management investment company.
Active Allocation Fund (the "Portfolio") is a series of the Fund whose
investment objective is to seek long term growth of capital with a secondary
objective of current income. The Portfolio is a special type of mutual fund
known as a "fund of funds" because it invests in other mutual funds. The
Portfolio normally invests in a diversified portfolio of Oppenheimer mutual
funds (individually, an "Underlying Fund" and collectively, the "Underlying
Funds"). The Portfolio's investment advisor is OppenheimerFunds, Inc. (the
"Manager").
The Portfolio 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 Portfolio in general and
exclusive voting rights on matters that affect that class alone. Earnings, net
assets and net asset value per share may differ due to each class having its own
expenses, such as transfer and shareholder servicing agent fees and shareholder
communications, directly attributable to that class. Class A, B, C and N have
separate distribution and/or service plans. No such plan has been adopted for
Class Y shares. Class B shares will automatically convert to Class A shares six
years after the date of purchase.
The following is a summary of significant accounting policies consistently
followed by the Portfolio.
- --------------------------------------------------------------------------------
SECURITIES VALUATION. The Portfolio calculates the net asset value of each class
of shares based upon the net asset value of the applicable Underlying Funds. For
each Underlying Fund, the net asset value per share for a class of shares on a
"regular business day" is determined by dividing the value of the Underlying
Fund's net assets attributable to that class by the number of shares of that
class outstanding on that day. To determine net asset values, the Underlying
Fund assets are valued primarily on the basis of current market quotations. If
market quotations are not readily available or do not accurately reflect fair
value for a security (in the Manager's judgment) or if a security's value has
been materially affected by events occurring after the close of the exchange or
market on which the security is principally traded, that security may be valued
by another method that the Underlying Fund's Board of Trustees/Directors
believes accurately reflects the fair value. Because some foreign securities
trade in markets and on exchanges that operate on weekends and U.S. holidays,
the values of some of the Underlying Fund's foreign investments may change on
days when investors cannot buy or redeem Underlying Fund shares.
26 | ACTIVE ALLOCATION FUND
Short-term "money market type" debt securities with remaining maturities
of sixty days or less are valued at amortized cost (which approximates market
value).
- --------------------------------------------------------------------------------
RISKS OF INVESTING IN THE UNDERLYING FUNDS. Each of the Underlying Funds in
which the Portfolio invests has its own investment risks, and those risks can
affect the value of the Portfolio's investments and therefore the value of the
Portfolio's shares. To the extent that the Portfolio invests more of its assets
in one Underlying Fund than in another, the Portfolio will have greater exposure
to the risks of that Underlying Fund.
- --------------------------------------------------------------------------------
FOREIGN CURRENCY TRANSLATION. The Portfolio'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
Portfolio'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 Portfolio's Statement of Operations.
- --------------------------------------------------------------------------------
INVESTMENT IN OPPENHEIMER INSTITUTIONAL MONEY MARKET FUND. The Portfolio is
permitted to invest daily available cash balances in an affiliated money market
fund. The Portfolio may invest the available cash in Class E shares of
Oppenheimer Institutional Money Market Fund ("IMMF") which seeks current income
and stability of principal. IMMF is a registered open-end management investment
company, regulated as a money market fund under the Investment Company Act of
1940, as amended. The Manager is also the investment advisor of IMMF. The
Portfolio's investment in IMMF is included in the Statement of Investments. As a
shareholder, the Portfolio is subject to its proportional share of IMMF's Class
E expenses, including its management fee. The Manager will waive fees and/or
reimburse Portfolio expenses in an amount equal to the indirect management fees
incurred through the Portfolio's investment in IMMF.
27 | ACTIVE ALLOCATION FUND
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES Continued
INVESTMENTS WITH OFF BALANCE SHEET RISK. The Portfolio enters into financial
instrument transactions (such as swaps, futures, options and other derivatives)
that may have off-balance sheet market risk. Off-balance sheet market risk
exists when the maximum potential loss on a particular financial instrument is
greater than the value of such financial instrument, as reflected in the
Portfolio's Statement of Assets and Liabilities.
- --------------------------------------------------------------------------------
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 Portfolio intends to comply with provisions of the Internal
Revenue Code applicable to regulated investment companies and to distribute
substantially all of its investment company taxable income, including any net
realized gain on investments not offset by capital loss carryforwards, if any,
to shareholders, therefore, no federal income or excise tax provision is
required.
Net investment income (loss) and net realized gain (loss) may differ for
financial statement and tax purposes. The character of dividends and
distributions made during the fiscal year from net investment income or net
realized gains may differ from their ultimate characterization for federal
income tax purposes. Also, due to timing of dividends and distributions, the
fiscal year in which amounts are distributed may differ from the fiscal year in
which the income or net realized gain was recorded by the Portfolio.
During the fiscal year ended January 31, 2007, the Portfolio did not
utilize any capital loss carryforward to offset capital gains realized in that
fiscal year.
- --------------------------------------------------------------------------------
TRUSTEES' COMPENSATION. The Portfolio has adopted an unfunded retirement plan
(the "Plan") for the Portfolio's independent trustees. Benefits are based on
years of service and fees paid to each trustee during their period of service.
The Plan was frozen with respect to adding new participants effective December
31, 2006 (the "Freeze Date") and existing Plan Participants as of the Freeze
Date will continue to receive accrued benefits under the Plan. Active
independent trustees as of the Freeze Date have each elected a distribution
method with respect to their benefits under the Plan. During the six months
ended July 31, 2007, the Portfolio's projected benefit obligations were
increased by $31,815 and payments of $24,183 were made to retired trustees,
resulting in an accumulated liability of $83,134 as of July 31, 2007.
The Board of Trustees has adopted a compensation deferral 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
Portfolio. 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 Portfolio or in other Oppenheimer funds selected by
the Trustee. The Portfolio purchases shares of the funds
28 | ACTIVE ALLOCATION FUND
selected for deferral by the Trustee in amounts equal to his or her deemed
investment, resulting in a Portfolio 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 Portfolio, and will not
materially affect the Portfolio's assets, liabilities or net investment income
per share. Amounts will be deferred until distributed in accordance to the
compensation deferral plan.
- --------------------------------------------------------------------------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS. Dividends and distributions to
shareholders, which are determined in accordance with income tax regulations,
are recorded on the ex-dividend date. Income and capital gain distributions, if
any, are declared and paid annually.
- --------------------------------------------------------------------------------
INVESTMENT INCOME. Dividend income is recorded on the ex-dividend date or upon
ex-dividend notification in the case of certain foreign dividends where the
ex-dividend date may have passed. Non-cash dividends included in dividend
income, if any, are recorded at the fair market value of the securities
received. Interest income, which includes accretion of discount and amortization
of premium, is accrued as earned.
- --------------------------------------------------------------------------------
CUSTODIAN FEES. "Custodian fees and expenses" in the Statement of Operations may
include interest expense incurred by the Portfolio 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 Portfolio pays
interest to its custodian on such cash overdrafts, to the extent they are not
offset by positive cash balances maintained by the Portfolio, at a rate equal to
the Federal Funds Rate plus 0.50%. The "Reduction to custodian expenses" line
item, if applicable, represents earnings on cash balances maintained by the
Portfolio 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 Portfolio'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 Portfolio. In
the normal course of business, the Portfolio may also enter into contracts that
provide general indemnifications. The Portfolio's maximum exposure under these
arrangements is unknown as this would be dependent on future claims that may be
made against the Portfolio. 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.
29 | ACTIVE ALLOCATION FUND
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
2. SHARES OF BENEFICIAL INTEREST
The Portfolio 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 JULY 31, 2007 YEAR ENDED JANUARY 31, 2007
SHARES AMOUNT SHARES AMOUNT
- -------------------------------------------------------------------------------------------------------
CLASS A
Sold 30,061,317 $ 374,179,755 57,596,220 $ 654,562,965
Dividends and/or
distributions reinvested -- -- 1,662,202 19,663,799
Redeemed (6,348,380) (79,222,638) (6,303,806) (71,984,915)
---------------------------------------------------------------
Net increase 23,712,937 $ 294,957,117 52,954,616 $ 602,241,849
===============================================================
- -------------------------------------------------------------------------------------------------------
CLASS B
Sold 9,564,480 $ 117,909,923 21,225,979 $ 239,218,008
Dividends and/or
distributions reinvested -- -- 490,803 5,771,900
Redeemed (2,855,533) (35,208,629) (3,014,115) (34,101,075)
---------------------------------------------------------------
Net increase 6,708,947 $ 82,701,294 18,702,667 $ 210,888,833
===============================================================
- -------------------------------------------------------------------------------------------------------
CLASS C
Sold 14,161,389 $ 174,641,174 27,543,050 $ 310,509,299
Dividends and/or
distributions reinvested -- -- 600,867 7,060,230
Redeemed (2,853,735) (35,350,686) (3,282,836) (37,092,872)
---------------------------------------------------------------
Net increase 11,307,654 $ 139,290,488 24,861,081 $ 280,476,657
===============================================================
- -------------------------------------------------------------------------------------------------------
CLASS N
Sold 3,668,416 $ 45,408,543 7,119,593 $ 81,030,208
Dividends and/or
distributions reinvested -- -- 176,954 2,088,058
Redeemed (954,394) (11,927,264) (769,703) (8,767,902)
---------------------------------------------------------------
Net increase 2,714,022 $ 33,481,279 6,526,844 $ 74,350,364
===============================================================
- -------------------------------------------------------------------------------------------------------
CLASS Y
Sold 112,894 $ 1,410,087 197,518 $ 2,248,494
Dividends and/or
distributions reinvested -- -- 4,945 58,703
Redeemed (61,388) (776,905) (15,653) (176,674)
---------------------------------------------------------------
Net increase 51,506 $ 633,182 186,810 $ 2,130,523
===============================================================
- --------------------------------------------------------------------------------
3. PURCHASES AND SALES OF SECURITIES
The aggregate cost of purchases and proceeds from sales of securities, other
than short-term obligations and investments in IMMF, for the six months ended
July 31, 2007, were as follows:
PURCHASES SALES
-----------------------------------------------------------
Investment securities $625,830,961 $73,657,943
30 | ACTIVE ALLOCATION FUND
- --------------------------------------------------------------------------------
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES
MANAGEMENT FEES. Under the investment advisory agreement, the Manager does not
charge a management fee, but rather collects indirect management fees from
investments in the Underlying Funds. The weighted indirect management fees
collected from the Underlying Funds, as a percent of average daily net assets of
the Portfolio for the six months ended July 31, 2007 was 0.57%.
The Portfolio pays the Manager an asset allocation fee equal to an annual
rate of 0.10% of the average daily net assets of the Portfolio.
- --------------------------------------------------------------------------------
TRANSFER AGENT FEES. OppenheimerFunds Services (OFS), a division of the Manager,
acts as the transfer and shareholder servicing agent for the Portfolio. The
Portfolio pays OFS a per account fee. For the six months ended July 31, 2007,
the Portfolio paid $1,207,817 to OFS for services to the Portfolio.
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 Portfolio, OppenheimerFunds Distributor, Inc. (the
Distributor) acts as the Portfolio's principal underwriter in the continuous
public offering of the Portfolio's classes of shares.
- --------------------------------------------------------------------------------
SERVICE PLAN FOR CLASS A SHARES. The Portfolio 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 Portfolio. 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
Portfolio under the plan are detailed in the Statement of Operations.
- --------------------------------------------------------------------------------
DISTRIBUTION AND SERVICE PLANS FOR CLASS B, CLASS C AND CLASS N SHARES. The
Portfolio 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
Portfolio 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 Portfolio 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 Portfolio 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
determines its uncompensated expenses under the plan at calendar quarter ends.
The Distributor's aggregate uncompensated expenses under the
31 | ACTIVE ALLOCATION FUND
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES Continued
plan at June 30, 2007 for Class B, Class C and Class N shares were $6,995,711,
$4,204,836 and $1,201,309, respectively. Fees incurred by the Portfolio 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 Portfolio. They are deducted from the
proceeds of sales of Portfolio 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 following table for the period
indicated.
CLASS A CLASS B CLASS C CLASS N
CLASS A CONTINGENT CONTINGENT CONTINGENT CONTINGENT
FRONT-END DEFERRED DEFERRED DEFERRED DEFERRED
SALES CHARGES SALES CHARGES SALES CHARGES SALES CHARGES SALES CHARGES
SIX MONTHS RETAINED BY RETAINED BY RETAINED BY RETAINED BY RETAINED BY
ENDED DISTRIBUTOR DISTRIBUTOR DISTRIBUTOR DISTRIBUTOR DISTRIBUTOR
- ----------------------------------------------------------------------------------------------
July 31, 2007 $2,316,864 $6,488 $289,118 $53,635 $10,973
- ----------------------------------------------------------------------------------------------
WAIVERS AND REIMBURSEMENTS OF EXPENSES. The Manager has voluntarily agreed to a
total expense limitation on the aggregate amount of combined direct
(fund-of-funds level) and indirect expense so that "Total expenses" as a
percentage of average daily net assets will not exceed the following annual
rates: 1.45%, 2.20%, 2.20%, 1.70% and 1.20%, for Class A, Class B, Class C,
Class N and Class Y, respectively. During the six months ended July 31, 2007,
the Manager reimbursed the Portfolio $19,558, $6,931, $8,915, $2,256 and $58,
for the Class A, Class B, Class C, Class N and Class Y shares, respectively. The
Manager may modify or terminate this undertaking at any time without notice to
shareholders. These expense limitations do not include Extraordinary Expenses
and other expenses not incurred in the ordinary course of the Portfolio's
business. Notwithstanding the foregoing limits, the Manager is not required to
waive or reimburse Portfolio expenses in excess of indirect management fees
earned from investments in Underlying Funds to assure that expenses do not
exceed those limits.
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. This
undertaking may be amended or withdrawn at any time.
The Manager will waive fees and/or reimburse Portfolio expenses in an
amount equal to the indirect management fees incurred through the Portfolio's
investment in IMMF. During the six months ended July 31, 2007, the Manager
waived $6,413 for IMMF management fees.
- --------------------------------------------------------------------------------
5. FOREIGN CURRENCY CONTRACTS
A foreign currency contract is a commitment to purchase or sell a foreign
currency at a future date, at a negotiated rate. The Portfolio may enter into
foreign currency contracts to settle specific purchases or sales of securities
denominated in a foreign currency and for protection from adverse exchange rate
fluctuation. Risks to the Portfolio include the potential inability of the
counterparty to meet the terms of the contract.
32 | ACTIVE ALLOCATION FUND
The net U.S. dollar value of foreign currency underlying all contractual
commitments held by the Portfolio and the resulting unrealized appreciation or
depreciation are determined using prevailing foreign currency exchange rates.
Unrealized appreciation and depreciation on foreign currency contracts are
reported in the Statement of Assets and Liabilities as a receivable or payable
and in the Statement of Operations with the change in unrealized appreciation or
depreciation.
The Portfolio may realize a gain or loss upon the closing or settlement of
the foreign transaction. Contracts closed or settled with the same broker are
recorded as net realized gains or losses. Such realized gains and losses are
reported with all other foreign currency gains and losses in the Statement of
Operations.
As of July 31, 2007, the Portfolio had no outstanding foreign currency
contracts.
- --------------------------------------------------------------------------------
6. 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 Portfolio may
buy and sell futures contracts that relate to broadly based securities indices
(financial futures) or debt securities (interest rate futures) in order to gain
exposure to or protection from changes in market value of stocks and bonds or
interest rates. The Portfolio may also buy or write put or call options on these
futures contracts.
The Portfolio generally sells futures contracts as a hedge against
increases in interest rates and decreases in market value of portfolio
securities. The Portfolio may also purchase futures contracts to gain exposure
to market changes as it may be more efficient or cost effective than actually
buying securities.
Upon entering into a futures contract, the Portfolio 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 Portfolio 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 Portfolio recognizes a realized gain or loss
when the contract is closed or has expired.
Cash held by the broker to cover initial margin requirements on open
futures contracts is noted in the Statement of Assets and Liabilities.
Securities held in collateralized accounts to cover initial margin requirements
on open futures contracts are noted in the Statement of Investments. The
Statement of Assets and Liabilities reflects a receivable and/or payable for the
daily mark to market for variation margin. Realized gains and losses are
reported in the Statement of Operations at the closing and expiration of futures
contracts. The net change in unrealized appreciation and depreciation is
reported in the Statement of Operations.
Risks of entering into futures contracts (and related options) include the
possibility that there may be an illiquid market and that a change in the value
of the contract or option may not correlate with changes in the value of the
underlying securities.
33 | ACTIVE ALLOCATION FUND
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
6. FUTURES CONTRACTS Continued
As of July 31, 2007, the Portfolio had outstanding futures contracts as follows:
EXPIRATION NUMBER OF VALUATION AS OF UNREALIZED
CONTRACT DESCRIPTION DATES CONTRACTS JULY 31, 2007 DEPRECIATION
- ---------------------------------------------------------------------------------------
CONTRACTS TO PURCHASE
Standard & Poor's 500 E-Mini 9/21/07 995 $ 72,729,525 $ 3,348,970
-------------
CONTRACTS TO SELL
U.S. Treasury Nts., 5 yr. 9/28/07 948 99,984,375 1,365,586
-------------
$ 4,714,556
=============
- --------------------------------------------------------------------------------
7. TOTAL RETURN SWAP CONTRACTS
A total return swap is an agreement under which a set of future cash flows is
exchanged between two counterparties. One cash flow stream will typically be
based on a reference interest rate or index and the other on the total return of
a reference asset such as a security, a basket of securities, or an index. The
total return includes appreciation or depreciation on the reference asset, plus
any interest or dividend payments. Payments under the swap are based on an
agreed upon principal amount but since this principal amount is not exchanged,
it represents neither an asset nor a liability to either counterparty, and is
referred to as notional. Total return swaps are marked to market daily using
primarily quotations from counterparties and brokers. The value of the contracts
is separately disclosed on the Statement of Assets and Liabilities. The
unrealized appreciation (depreciation) related to the change in the valuation of
the notional amount of the swap is combined with the amount due to (owed by) the
Portfolio at termination or settlement. The net change in this amount during the
period is included on the Statement of Operations. The Portfolio also records
any periodic payments received from (paid to) the counterparty, including at
termination, under such contracts as realized gain (loss) on the Statement of
Operations. The primary risks associated with total return swaps are credit
risks (if the counterparty fails to meet its obligations) and market risk (if
there is no liquid market for the agreement or unfavorable changes occur in the
reference asset).
As of July 31, 2007, the Portfolio had entered into the following total return
swap agreements:
SWAP NOTIONAL PAID BY RECEIVED BY TERMINATION
COUNTERPARTY AMOUNT THE PORTFOLIO THE PORTFOLIO DATES VALUE
- ------------------------------------------------------------------------------------------------------
One-Month USD
BBA LIBOR minus
If positive, the 0.5% and if negative,
Total Return of the absolute value
the Standard & of the Total Return
Poor's 600 of the Standard &
SmallCap Total Poor's 600 SmallCap
Citibank NA $24,500,163 Return Index. Total Return Index. 7/9/08 $ 1,661,293
34 | ACTIVE ALLOCATION FUND
SWAP NOTIONAL PAID BY RECEIVED BY TERMINATION
COUNTERPARTY AMOUNT THE PORTFOLIO THE PORTFOLIO DATES VALUE
- ------------------------------------------------------------------------------------------------------
Goldman Sachs
International:
One-Month USD
BBA LIBOR and if
negative, the
absolute value of If positive, the
the Total Return Total Return of
of the MSCI Daily the MSCI Daily
Total Return Net Total Return Net
Emerging Market Belgium USD
$ 1,102,810 USD Index. Market Index. 12/10/07 $ (4,764)
One-Month USD
BBA LIBOR and if
negative, the
absolute value of If positive, the
the Total Return Total Return of
of the MSCI Daily the MSCI Daily
Total Return Net Total Return Net
Emerging Market Emerging Market
1,002,642 USD Index. USD Index. 12/10/07 (4,713)
One-Month USD
BBA LIBOR and if
negative, the
absolute value of If positive, the
the Total Return Total Return of
of the MSCI Daily the MSCI Daily
Total Return Net Total Return Net
Belgium USD Belgium USD
701,580 Market Index. Market Index. 12/10/07 (3,266)
One-Month USD
BBA LIBOR and if
negative, the
absolute Value of If positive, the
the Total Return Total Return of
of the MSCI Daily the MSCI Daily
Total Return Net Total Return Net
Belgium USD Belgium USD
2,606,387 Market Index. Market Index. 12/10/07 (11,984)
One-Month USD
BBA LIBOR and if
negative, the
absolute value of If positive, the
the Total Return Total Return of
of the MSCI Daily the MSCI Daily
Total Return Net Total Return Net
Emerging Market Emerging Market
14,987,602 USD Index. USD Index. 12/10/07 (73,283)
35 | ACTIVE ALLOCATION FUND
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
7. TOTAL RETURN SWAP CONTRACTS Continued
SWAP NOTIONAL PAID BY RECEIVED BY TERMINATION
COUNTERPARTY AMOUNT THE PORTFOLIO THE PORTFOLIO DATES VALUE
- -----------------------------------------------------------------------------------------------------
One-Month USD
BBA LIBOR minus
.08% and if
negative, the If positive, the
absolute value of Total Return of
the Lehman MBS the Lehman MBS
Fixed Rate Agency Fixed Rate Agency
UBS $ 24,500,000 Index. Index. 10/1/07 $ 9,889
-----------
$1,573,172
===========
Abbreviations are as follows:
BBA LIBOR British Bankers' Association London-Interbank Offered Rate
MBS Mortgage-Backed Security
MSCI Morgan Stanley Capital International
- --------------------------------------------------------------------------------
8. RECENT ACCOUNTING PRONOUNCEMENT
In September 2006, Financial Accounting Standards Board issued Statement of
Financial Accounting Standards ("SFAS") No. 157, FAIR VALUE MEASUREMENTS. This
standard establishes a single authoritative definition of fair value, sets out a
framework for measuring fair value and expands disclosures about fair value
measurements. SFAS No. 157 applies to fair value measurements already required
or permitted by existing standards. SFAS No. 157 is effective for financial
statements issued for fiscal years beginning after November 15, 2007, and
interim periods within those fiscal years. As of July 31, 2007, the Manager does
not believe the adoption of SFAS No. 157 will materially impact the financial
statement amounts; however, additional disclosures may be required about the
inputs used to develop the measurements and the effect of certain of the
measurements on changes in net assets for the period.
36 | ACTIVE ALLOCATION FUND
PORTFOLIO PROXY VOTING POLICIES AND PROCEDURES;
UPDATES TO STATEMENTS OF INVESTMENTS Unaudited
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
The Portfolio has adopted Portfolio Proxy Voting Policies and Procedures under
which the Portfolio votes proxies relating to securities ("portfolio proxies")
held by the Portfolio. A description of the Portfolio's Portfolio Proxy Voting
Policies and Procedures is available (i) without charge, upon request, by
calling the Portfolio toll-free at 1.800.525.7048, (ii) on the Portfolio's
website at www.oppenheimerfunds.com, and (iii) on the SEC's website at
www.sec.gov. In addition, the Portfolio 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 Portfolio's voting record is available (i) without
charge, upon request, by calling the Portfolio 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 Portfolio 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 Portfolio'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.
37 | ACTIVE ALLOCATION 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 07/31/2007, 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 Portfolio Series
By: /s/ John V. Murphy
---------------------------
John V. Murphy
Principal Executive Officer
Date: 09/13/2007
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: 09/13/2007
By: /s/ Brian W. Wixted
---------------------------
Brian W. Wixted
Principal Financial Officer
Date: 09/13/2007