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 811-3864
--------
Oppenheimer Balanced Fund
-------------------------
(Exact name of registrant as specified in charter)
6803 South Tucson Way, Centennial, Colorado 80112-3924
------------------------------------------------------
(Address of principal executive offices) (Zip code)
Robert G. Zack, Esq.
OppenheimerFunds, Inc.
Two World Financial Center, New York, New York 10281-1008
---------------------------------------------------------
(Name and address of agent for service)
Registrant's telephone number, including area code: (303) 768-3200
--------------
Date of fiscal year end: September 30
------------
Date of reporting period: 03/31/2008
----------
ITEM 1. REPORTS TO STOCKHOLDERS.
MARCH 31, 2008
- -----------------------------------------------------------------------------
Oppenheimer Management
BALANCED FUND Commentaries
and
Semiannual
Report
- -----------------------------------------------------------------------------
MANAGEMENT COMMENTARIES
An Interview with Your Fund's Managers
Listing of Top Holdings
SEMIANNUAL REPORT
Listing of Investments
Financial Statements
[OPPENHEIMERFUNDS LOGO]
TOP HOLDINGS AND ALLOCATIONS
- --------------------------------------------------------------------------------
TOP TEN COMMON STOCK INDUSTRIES
- ------------------------------------------------------------------------------
Software 11.4%
- ------------------------------------------------------------------------------
Media 4.8
- ------------------------------------------------------------------------------
Tobacco 4.2
- ------------------------------------------------------------------------------
Oil, Gas & Consumable Fuels 4.1
- ------------------------------------------------------------------------------
Pharmaceuticals 2.9
- ------------------------------------------------------------------------------
Aerospace & Defense 2.0
- ------------------------------------------------------------------------------
Internet Software & Services 1.8
- ------------------------------------------------------------------------------
Capital Markets 1.5
- ------------------------------------------------------------------------------
Machinery 1.4
- ------------------------------------------------------------------------------
Biotechnology 1.4
Portfolio holdings and allocations are subject to change. Percentages are as of
March 31, 2008, and are based on net assets.
TOP TEN COMMON STOCK HOLDINGS
- ------------------------------------------------------------------------------
Take-Two Interactive Software, Inc. 6.2%
- ------------------------------------------------------------------------------
Liberty Global, Inc., Series A 2.5
- ------------------------------------------------------------------------------
Liberty Global, Inc., Series C 2.4
- ------------------------------------------------------------------------------
Exxon Mobil Corp. 2.2
- ------------------------------------------------------------------------------
Microsoft Corp. 1.9
- ------------------------------------------------------------------------------
Philip Morris International, Inc. 1.8
- ------------------------------------------------------------------------------
THQ, Inc. 1.8
- ------------------------------------------------------------------------------
United Technologies Corp. 1.7
- ------------------------------------------------------------------------------
Loews Corp./Carolina Group 1.5
- ------------------------------------------------------------------------------
Credit Suisse Group, ADR 1.5
Portfolio holdings and allocations are subject to change. Percentages are as of
March 31, 2008, and are based on net assets.
For up-to-date Top 10 Fund holdings, please visit www.oppenheimerfunds.com.
11 | OPPENHEIMER BALANCED FUND
TOP HOLDINGS AND ALLOCATIONS
- --------------------------------------------------------------------------------
PORTFOLIO ALLOCATION
[PIE CHART]
Bonds and Notes 48.4%
Stocks 45.5
Investment Company 5.9
Convertible Corporate Bonds and Notes 0.2
Portfolio holdings and allocations are subject to change. Percentages are as of
March 31, 2008, and are based on the total market value of investments.
12 | OPPENHEIMER BALANCED 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. Cumulative total returns are not annualized. The Fund's
total returns shown do not reflect the deduction of income taxes on an
individual's investment. Taxes may reduce your actual investment returns on
income or gains paid by the Fund or any gains you may realize if you sell
your shares. INVESTORS SHOULD CONSIDER THE FUND'S INVESTMENT OBJECTIVES,
RISKS AND OTHER CHARGES AND EXPENSES CAREFULLY BEFORE INVESTING. THE FUND'S
PROSPECTUS CONTAINS THIS AND OTHER INFORMATION ABOUT THE FUND, AND MAY BE
OBTAINED BY ASKING YOUR FINANCIAL ADVISOR, CALLING US AT 1.800.525.7048 OR
VISITING OUR WEBSITE AT WWW.OPPENHEIMERFUNDS.COM. READ THE PROSPECTUS
CAREFULLY BEFORE INVESTING.
The Fund's investment strategy and focus can change over time. The mention
of specific fund holdings does not constitute a recommendation by
OppenheimerFunds, Inc.
CLASS A shares of the Fund were first publicly offered on 4/24/87. Unless
otherwise noted, Class A returns include the current maximum initial sales
charge of 5.75%.
CLASS B shares of the Fund were first publicly offered on 8/29/95. Unless
otherwise noted, Class B returns include the applicable contingent deferred
sales charge of 5% (1-year) and 2% (5-year). Because Class B shares convert
to Class A shares 72 months after purchase, the 10-year return for Class B
uses Class A performance for the period after conversion. Class B shares
are subject to an annual 0.75% asset-based sales charge.
CLASS C shares of the Fund were first publicly offered on 12/1/93. Unless
otherwise noted, Class C returns include the contingent deferred sales
charge of 1% for the 1-year period. Class C shares are subject to an annual
0.75% asset-based sales charge.
CLASS N shares of the Fund were first publicly offered on 3/1/01. Class N
shares are offered only through retirement plans. Unless otherwise noted,
Class N returns include the contingent deferred sales charge of 1% for the
1-year period. Class N shares are subject to an annual 0.25% asset-based
sales charge.
An explanation of the calculation of performance is in the Fund's Statement
of Additional Information.
13 | OPPENHEIMER BALANCED FUND
FUND EXPENSES
- --------------------------------------------------------------------------------
FUND EXPENSES. As a shareholder of the Fund, you incur two types of
costs: (1) transaction costs, which may include sales charges (loads) on
purchase payments, contingent deferred sales charges on redemptions; and
redemption fees (if applicable); and (2) ongoing costs, including
management fees; distribution and service fees; and other Fund expenses.
These examples are intended to help you understand your ongoing costs (in
dollars) of investing in the Fund and to compare these costs with the
ongoing costs of investing in other mutual funds.
The examples are based on an investment of $1,000.00 invested at the
beginning of the period and held for the entire 6-month period ended March
31, 2008.
ACTUAL EXPENSES. The first section of the table provides information about
actual account values and actual expenses. You may use the information in
this section 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 first section 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 second section of the
table provides information about hypothetical account values and
hypothetical expenses based on the Fund's actual expense ratio for each
class of shares, and an assumed rate of return of 5% per year for each
class before expenses, which is not the actual return. The hypothetical
account values and expenses may not be used to estimate the actual ending
account balance or expenses you paid for the period. You may use this
information to compare the ongoing costs of investing in the Fund and other
funds. To do so, compare this 5% hypothetical example for the class of
shares you hold with the 5% hypothetical examples that appear in the
shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight
your ongoing costs only and do not reflect any transactional costs, such as
front-end or contingent deferred sales charges (loads), or a $12.00 fee
imposed annually on accounts valued at less than $500.00 (subject to
exceptions described in the Statement
14 | OPPENHEIMER BALANCED FUND
of Additional Information). Therefore, the "hypothetical" section of the
table is useful in comparing ongoing costs only, and will not help you
determine the relative total costs of owning different funds. In addition,
if these transactional costs were included, your costs would have been
higher.
BEGINNING ENDING EXPENSES
ACCOUNT ACCOUNT PAID DURING
VALUE VALUE 6 MONTHS ENDED
ACTUAL OCTOBER 1, 2007 MARCH 31, 2008 MARCH 31, 2008
- -------------------------------------------------------------------------------------------------------------------
Class A $ 1,000.00 $ 909.20 $ 4.98
- -------------------------------------------------------------------------------------------------------------------
Class B 1,000.00 905.10 9.33
- -------------------------------------------------------------------------------------------------------------------
Class C 1,000.00 905.80 9.05
- -------------------------------------------------------------------------------------------------------------------
Class N 1,000.00 906.70 7.23
HYPOTHETICAL
(5% return before expenses)
- -------------------------------------------------------------------------------------------------------------------
Class A 1,000.00 1,019.80 5.27
- -------------------------------------------------------------------------------------------------------------------
Class B 1,000.00 1,015.25 9.87
- -------------------------------------------------------------------------------------------------------------------
Class C 1,000.00 1,015.55 9.57
- -------------------------------------------------------------------------------------------------------------------
Class N 1,000.00 1,017.45 7.64
Expenses are equal to the Fund's annualized expense ratio for that class,
multiplied by the average account value over the period, multiplied by 183/366
(to reflect the one-half year period). Those annualized expense ratios,
excluding indirect expenses from affiliated fund, based on the 6-month period
ended March 31, 2008 are as follows:
CLASS EXPENSE RATIOS
- ------------------------------
Class A 1.04%
- ------------------------------
Class B 1.95
- ------------------------------
Class C 1.89
- ------------------------------
Class N 1.51
The expense ratios reflect reduction to custodian expenses and voluntary waivers
or reimbursements of expenses by the Fund's Manager that can be terminated at
any time, without advance notice. The "Financial Highlights" tables in the
Fund's financial statements, included in this report, also show the gross
expense ratios, without such waivers or reimbursements and reduction to
custodian expenses, if applicable.
15 | OPPENHEIMER BALANCED FUND
STATEMENT OF INVESTMENTS March 31, 2008 / Unaudited
- --------------------------------------------------------------------------------
SHARES VALUE
- ------------------------------------------------------------------------
- ------------------------------------------------------------------------
COMMON STOCKS--48.0%
- ------------------------------------------------------------------------
CONSUMER DISCRETIONARY--5.2%
- ------------------------------------------------------------------------
MEDIA--4.8%
Liberty Global, Inc., Series A 1 679,227 $ 23,148,056
- ------------------------------------------------------------------------
Liberty Global, Inc., Series C 1 688,831 22,373,231
--------------
45,521,287
- ------------------------------------------------------------------------
SPECIALTY RETAIL--0.4%
Office Depot, Inc. 1 150,970 1,668,219
- ------------------------------------------------------------------------
OfficeMax, Inc. 98,470 1,884,716
--------------
3,552,935
- ------------------------------------------------------------------------
CONSUMER STAPLES--5.0%
- ------------------------------------------------------------------------
FOOD & STAPLES RETAILING--0.5%
Costco Wholesale Corp. 68,380 4,442,649
- ------------------------------------------------------------------------
FOOD PRODUCTS--0.3%
ConAgra Foods, Inc. 134,820 3,228,939
- ------------------------------------------------------------------------
TOBACCO--4.2%
Altria Group, Inc. 342,460 7,602,612
- ------------------------------------------------------------------------
Loews Corp./Carolina Group 198,660 14,412,783
- ------------------------------------------------------------------------
Philip Morris International, Inc. 1 342,460 17,321,627
--------------
39,337,022
- ------------------------------------------------------------------------
ENERGY--4.1%
- ------------------------------------------------------------------------
OIL, GAS & CONSUMABLE FUELS--4.1%
BP plc, ADR 93,880 5,693,822
- ------------------------------------------------------------------------
Exxon Mobil Corp. 240,760 20,363,481
- ------------------------------------------------------------------------
Petroleo Brasileiro SA, ADR 59,660 6,091,883
- ------------------------------------------------------------------------
Petroleo Brasileiro SA, Preference 137,930 5,809,772
--------------
37,958,958
- ------------------------------------------------------------------------
FINANCIALS--3.1%
- ------------------------------------------------------------------------
CAPITAL MARKETS--1.5%
Credit Suisse Group, ADR 278,700 14,180,256
- ------------------------------------------------------------------------
CONSUMER FINANCE--0.5%
American Express Co. 106,380 4,650,934
- ------------------------------------------------------------------------
INSURANCE--1.1%
Everest Re Group Ltd. 82,760 7,409,503
- ------------------------------------------------------------------------
National Financial Partners Corp. 134,080 3,012,778
--------------
10,422,281
16 | OPPENHEIMER BALANCED FUND
SHARES VALUE
- -------------------------------------------------------------------------
HEALTH CARE--6.0%
- -------------------------------------------------------------------------
BIOTECHNOLOGY--1.4%
Amicus Therapeutics, Inc. 1 261,310 $ 2,796,017
- -------------------------------------------------------------------------
deCODE genetics, Inc. 1 364,060 557,012
- -------------------------------------------------------------------------
Human Genome Sciences, Inc. 1 496,100 2,922,029
- -------------------------------------------------------------------------
Orexigen Therapeutics, Inc. 1 337,740 3,478,722
- -------------------------------------------------------------------------
Theravance, Inc. 1 122,600 1,290,978
- -------------------------------------------------------------------------
Vanda Pharmaceuticals, Inc. 1 488,830 1,891,772
------------
12,936,530
- -------------------------------------------------------------------------
HEALTH CARE EQUIPMENT & SUPPLIES--0.5%
Beckman Coulter, Inc. 72,710 4,693,431
- -------------------------------------------------------------------------
HEALTH CARE PROVIDERS & SERVICES--1.2%
Medco Health Solutions, Inc. 1 82,320 3,604,793
- -------------------------------------------------------------------------
Skilled Healthcare Group, Inc., Cl. A 1 265,480 2,914,970
- -------------------------------------------------------------------------
WellPoint, Inc. 1 112,040 4,944,325
------------
11,464,088
- -------------------------------------------------------------------------
PHARMACEUTICALS--2.9%
Abbott Laboratories 110,020 6,067,603
- -------------------------------------------------------------------------
Medicines Co. (The) 1 359,250 7,256,850
- -------------------------------------------------------------------------
Mylan Laboratories, Inc. 450,340 5,223,944
- -------------------------------------------------------------------------
Novartis AG, ADR 92,760 4,752,095
- -------------------------------------------------------------------------
Schering-Plough Corp. 294,000 4,236,540
------------
27,537,032
- -------------------------------------------------------------------------
INDUSTRIALS--4.8%
- -------------------------------------------------------------------------
AEROSPACE & DEFENSE--2.0%
Orbital Sciences Corp. 1 144,037 3,471,292
- -------------------------------------------------------------------------
United Technologies Corp. 225,380 15,510,652
------------
18,981,944
- -------------------------------------------------------------------------
COMMERCIAL SERVICES & SUPPLIES--0.2%
Sinomem Technology Ltd. 1 3,240,000 1,517,074
- -------------------------------------------------------------------------
INDUSTRIAL CONGLOMERATES--1.2%
Siemens AG, Sponsored ADR 100,930 10,995,314
- -------------------------------------------------------------------------
MACHINERY--1.4%
Navistar International Corp. 1 218,860 13,164,429
- -------------------------------------------------------------------------
INFORMATION TECHNOLOGY--15.6%
- -------------------------------------------------------------------------
COMMUNICATIONS EQUIPMENT--0.8%
Cisco Systems, Inc. 1 307,930 7,418,034
17 | OPPENHEIMER BALANCED FUND
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
SHARES VALUE
- ----------------------------------------------------------------------------------------
COMPUTERS & PERIPHERALS--0.8%
International Business Machines Corp. 67,570 $ 7,780,010
- ----------------------------------------------------------------------------------------
INTERNET SOFTWARE & SERVICES--1.8%
eBay, Inc. 1 243,030 7,252,015
- ----------------------------------------------------------------------------------------
Google, Inc., Cl. A 1 6,420 2,827,817
- ----------------------------------------------------------------------------------------
Yahoo!, Inc. 1 223,780 6,473,955
--------------
16,553,787
- ----------------------------------------------------------------------------------------
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT--0.8%
Texas Instruments, Inc. 262,910 7,432,466
- ----------------------------------------------------------------------------------------
SOFTWARE--11.4%
Microsoft Corp. 644,190 18,282,112
- ----------------------------------------------------------------------------------------
Novell, Inc. 1 768,640 4,834,746
- ----------------------------------------------------------------------------------------
Synopsys, Inc. 1 402,760 9,146,680
- ----------------------------------------------------------------------------------------
Take-Two Interactive Software, Inc. 1 2,266,547 57,842,279
- ----------------------------------------------------------------------------------------
THQ, Inc. 1 786,830 17,152,894
------------
107,258,711
- ----------------------------------------------------------------------------------------
MATERIALS--2.1%
- ----------------------------------------------------------------------------------------
CHEMICALS--0.3%
Lubrizol Corp. (The) 51,210 2,842,667
- ----------------------------------------------------------------------------------------
CONSTRUCTION MATERIALS--0.5%
Texas Industries, Inc. 46,830 2,814,951
- ----------------------------------------------------------------------------------------
Vulcan Materials Co. 31,970 2,122,808
--------------
4,937,759
- ----------------------------------------------------------------------------------------
METALS & MINING--1.3%
Carpenter Technology Corp. 95,160 5,326,105
- ----------------------------------------------------------------------------------------
Companhia Vale do Rio Doce, Sponsored ADR 235,000 6,850,250
--------------
12,176,355
- ----------------------------------------------------------------------------------------
TELECOMMUNICATION SERVICES--1.3%
- ----------------------------------------------------------------------------------------
DIVERSIFIED TELECOMMUNICATION SERVICES -- 1.0%
AT&T, Inc. 240,350 9,205,405
- ----------------------------------------------------------------------------------------
WIRELESS TELECOMMUNICATION SERVICES -- 0.3%
Sprint Nextel Corp. 487,550 3,261,710
- ----------------------------------------------------------------------------------------
UTILITIES -- 0.8%
- ----------------------------------------------------------------------------------------
ENERGY TRADERS -- 0.8%
AES Corp. (The) 1 291,250 4,855,138
- ----------------------------------------------------------------------------------------
Dynegy, Inc., Cl. A 1 343,640 2,711,320
--------------
7,566,458
Total Common Stocks (Cost $376,956,742) 451,018,465
18 | OPPENHEIMER BALANCED FUND
PRINCIPAL
AMOUNT VALUE
- --------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------
ASSET-BACKED SECURITIES--3.0%
- --------------------------------------------------------------------------------------------------------------
Ace Securities Corp. Home Equity Loan Trust, Asset-Backed Pass-Through
Certificates, Series 2005-HE7, Cl. A2B, 2.779%, 11/25/35 2 $ 536,487 $ 526,976
- --------------------------------------------------------------------------------------------------------------
Aesop Funding II LLC, Automobile Asset-Backed Certificates,
Series 2005-1A, Cl. A2, 2.596%, 4/20/09 2,3 105,000 104,794
- --------------------------------------------------------------------------------------------------------------
Argent Securities Trust 2004-W8, Asset-Backed Pass-Through Certificates,
Series 2004-W8, Cl. A2, 3.079%, 5/25/34 2 1,500,534 1,320,076
- --------------------------------------------------------------------------------------------------------------
Argent Securities Trust 2006-W5, Asset-Backed Pass-Through Certificates,
Series 2006-W5, Cl. A2B, 2.699%, 5/26/36 2 1,250,000 1,182,396
- --------------------------------------------------------------------------------------------------------------
Capital One Prime Auto Receivables Trust, Automobile Asset-Backed
Certificates, Series 2005-1, Cl. A4, 2.838%, 4/15/11 2 4,970,000 4,938,508
- --------------------------------------------------------------------------------------------------------------
Centex Home Equity Loan Trust 2005-D, Asset-Backed Certificates,
Series 2005-D, Cl. AV2, 2.869%, 10/25/35 2 298,800 297,894
- --------------------------------------------------------------------------------------------------------------
Centex Home Equity Loan Trust 2006-A, Asset-Backed Certificates,
Series 2006-A, Cl. AV2, 2.699%, 5/16/36 2 1,531,390 1,482,635
- --------------------------------------------------------------------------------------------------------------
Citibank Credit Card Issuance Trust, Credit Card Receivable Nts.,
Series 2003-C4, Cl. C4, 5%, 6/10/15 310,000 265,987
- --------------------------------------------------------------------------------------------------------------
CWABS Asset-Backed Certificates Trust 2002-4, Asset-Backed Certificates,
Series 2002-4, Cl. A1, 3.339%, 2/25/33 2 31,485 28,997
- --------------------------------------------------------------------------------------------------------------
CWABS Asset-Backed Certificates Trust 2005-11, Asset-Backed Certificates,
Series 2005-11, Cl. AF2, 4.657%, 2/25/36 650,000 646,842
- --------------------------------------------------------------------------------------------------------------
CWABS Asset-Backed Certificates Trust 2005-16, Asset-Backed Certificates,
Series 2005-16, Cl. 2AF2, 5.382%, 5/25/36 2 1,700,000 1,618,329
- --------------------------------------------------------------------------------------------------------------
CWABS Asset-Backed Certificates Trust 2005-17, Asset-Backed Certificates:
Series 2005-17, Cl. 1AF1, 2.799%, 5/25/36 2 99,978 99,281
Series 2005-17, Cl. 1AF2, 5.363%, 5/25/36 2 420,000 404,649
- --------------------------------------------------------------------------------------------------------------
CWABS Asset-Backed Certificates Trust 2006-25, Asset-Backed Certificates,
Series 2006-25, Cl. 2A2, 2.719%, 12/25/29 2 920,000 793,776
- --------------------------------------------------------------------------------------------------------------
First Franklin Mortgage Loan Trust 2005-FF10, Mtg. Pass-Through Certificates,
Series 2005-FF10, Cl. A3, 2.809%, 11/25/35 2 1,435,630 1,419,285
- --------------------------------------------------------------------------------------------------------------
First Franklin Mortgage Loan Trust 2006-FF10, Mtg. Pass-Through Certificates,
Series 2006-FF10, Cl. A3, 2.689%, 7/25/36 2 1,230,000 1,128,249
- --------------------------------------------------------------------------------------------------------------
First Franklin Mortgage Loan Trust 2006-FF5, Mtg. Pass-Through Certificates,
Series 2006-FF5, Cl. 2A1, 2.649%, 5/15/36 2 150,967 149,345
- --------------------------------------------------------------------------------------------------------------
First Franklin Mortgage Loan Trust 2006-FF9, Mtg. Pass-Through Certificates,
Series 2006-FF9, Cl. 2A2, 2.709%, 7/7/36 2 620,000 571,045
- --------------------------------------------------------------------------------------------------------------
Honda Auto Receivables Owner Trust, Automobile Receivable Obligations,
Series 2005-2, Cl. A4, 4.15%, 10/15/10 823,067 826,273
- --------------------------------------------------------------------------------------------------------------
HSBC Home Equity Loan Trust 2005-3, Closed-End Home Equity Loan
Asset-Backed Nts., Series 2005-3, Cl. A1, 2.796%, 1/20/35 2 589,400 496,111
- --------------------------------------------------------------------------------------------------------------
HSBC Home Equity Loan Trust 2006-4, Closed-End Home Equity Loan
Asset-Backed Certificates, Series 2006-4, Cl. A2V, 2.646%, 3/20/36 2 340,000 301,529
19 | OPPENHEIMER BALANCED FUND
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
PRINCIPAL
AMOUNT VALUE
- ---------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------
ASSET-BACKED SECURITIES Continued
- ---------------------------------------------------------------------------------------------------------------
Lehman XS Trust, Mtg. Pass-Through Certificates, Series 2005-2, Cl. 2A1B,
5.18%, 8/25/35 2 $ 418,180 $ 420,167
- ---------------------------------------------------------------------------------------------------------------
Litigation Settlement Monetized Fee Trust, Asset-Backed Certificates,
Series 2001-1A, Cl. A1, 8.33%, 4/25/31 4 342,813 334,218
- ---------------------------------------------------------------------------------------------------------------
MBNA Credit Card Master Note Trust, Credit Card Receivables,
Series 2003-C7, Cl. C7, 4.168%, 3/15/16 2 2,900,000 2,284,304
- ---------------------------------------------------------------------------------------------------------------
Option One Mortgage Loan Trust, Asset-Backed Certificates,
Series 2006-2, Cl. 2A2, 2.699%, 7/1/36 2 2,060,000 1,910,572
- ---------------------------------------------------------------------------------------------------------------
RAMP Series 2006-RS4 Trust, Mtg. Asset-Backed Pass-Through Certificates,
Series 2006-RS4, Cl. A1, 2.679%, 7/25/36 2 227,875 223,754
- ---------------------------------------------------------------------------------------------------------------
RASC Series 2006-KS7 Trust, Home Equity Mtg. Asset-Backed Pass-Through
Certificates, Series 2006-KS7, Cl. A2, 2.699%, 9/25/36 2 1,500,000 1,453,685
- ---------------------------------------------------------------------------------------------------------------
Specialty Underwriting & Residential Finance Trust, Home Equity
Asset-Backed Obligations, Series 2005-BC3, Cl. A2B, 2.849%, 6/25/36 2 640,786 632,855
- ---------------------------------------------------------------------------------------------------------------
Structured Asset Investment Loan Trust, Mtg. Pass-Through Certificates:
Series 2006-2, Cl. A1, 2.659%, 4/25/36 2 52,515 52,219
Series 2006-BNC3, Cl. A2, 2.639%, 9/25/36 2 800,774 774,714
- ---------------------------------------------------------------------------------------------------------------
Structured Asset Securities Corp., Mtg. Pass-Through Certificates,
Series 2005-4XS, Cl. 3A1, 5.18%, 3/26/35 115,869 116,018
- ---------------------------------------------------------------------------------------------------------------
Wells Fargo Home Equity Asset-Backed Securities 2006-2 Trust,
Home Equity Asset-Backed Certificates, Series 2006-2, Cl. A2, 2.699%, 7/25/36 2 1,230,000 1,167,612
------------
Total Asset-Backed Securities (Cost $29,896,005) 27,973,095
- ---------------------------------------------------------------------------------------------------------------
MORTGAGE-BACKED OBLIGATIONS--38.3%
- ---------------------------------------------------------------------------------------------------------------
GOVERNMENT AGENCY--25.2%
- ---------------------------------------------------------------------------------------------------------------
FHLMC/FNMA/SPONSORED--25.0%
Federal Home Loan Mortgage Corp.:
4.50%, 5/15/18-5/15/19 2,360,087 2,354,992
5%, 8/15/33-12/15/34 2,150,027 2,135,443
6%, 4/15/17-3/15/33 1,807,133 1,864,891
6.50%, 4/15/18-4/1/34 3,904,947 4,094,275
7%, 5/15/29-11/1/32 2,589,613 2,747,840
8%, 4/1/16 42,073 44,807
9%, 8/1/22-5/1/25 12,651 13,907
- ---------------------------------------------------------------------------------------------------------------
Federal Home Loan Mortgage Corp., Gtd. Real Estate Mtg. Investment
Conduit Multiclass Pass-Through Certificates:
Series 151, Cl. F, 9%, 5/15/21 30,038 30,019
Series 2006-11, Cl. PS, 15.01%, 3/25/36 2 665,457 786,441
Series 2034, Cl. Z, 6.50%, 2/15/28 360,155 378,470
Series 2043, Cl. ZP, 6.50%, 4/15/28 1,081,757 1,134,499
Series 2053, Cl. Z, 6.50%, 4/15/28 388,670 407,909
Series 2055, Cl. ZM, 6.50%, 5/15/28 519,850 541,457
Series 2075, Cl. D, 6.50%, 8/15/28 1,290,290 1,354,521
Series 2080, Cl. Z, 6.50%, 8/15/28 791,985 831,450
20 | OPPENHEIMER BALANCED FUND
PRINCIPAL
AMOUNT VALUE
- ----------------------------------------------------------------------------------------------------------------
FHLMC/FNMA/SPONSORED Continued
Federal Home Loan Mortgage Corp., Gtd. Real Estate Mtg. Investment
Conduit Multiclass Pass-Through Certificates: Continued
Series 2427, Cl. ZM, 6.50%, 3/15/32 $ 1,389,236 $ 1,463,865
Series 2500, Cl. FD, 3.318%, 3/15/32 2 157,204 158,320
Series 2526, Cl. FE, 3.218%, 6/15/29 2 230,355 231,350
Series 2551, Cl. FD, 3.218%, 1/15/33 2 177,817 173,594
Series 2592, Cl. F, 3.568%, 12/15/32 2 3,580,042 3,566,012
Series 2936, Cl. PE, 5%, 2/1/35 1,448,000 1,358,117
Series 3025, Cl. SJ, 14.419%, 8/15/35 2 143,788 173,885
- ----------------------------------------------------------------------------------------------------------------
Federal Home Loan Mortgage Corp., Interest-Only Stripped
Mtg.-Backed Security:
Series 176, Cl. IO, 11.904%, 6/1/26 5 301,985 63,985
Series 183, Cl. IO, 10.538%, 4/1/27 5 489,438 100,059
Series 184, Cl. IO, 16.621%, 12/1/26 5 532,325 106,413
Series 192, Cl. IO, 13.079%, 2/1/28 5 152,249 33,659
Series 200, Cl. IO, 12.161%, 1/1/29 5 183,977 38,720
Series 2130, Cl. SC, 21.799%, 3/15/29 5 390,476 39,274
Series 216, Cl. IO, 11.875%, 12/1/31 5 354,796 83,301
Series 224, Cl. IO, 8.485%, 3/1/33 5 1,101,516 241,970
Series 243, Cl. 6, 15.055%, 12/15/32 5 680,113 129,255
Series 2796, Cl. SD, 31.41%, 7/15/26 5 579,439 59,811
Series 2802, Cl. AS, 64.495%, 4/15/33 5 1,047,316 87,001
Series 2920, Cl. S, 35.444%, 1/15/35 5 3,266,023 239,781
Series 3000, Cl. SE, 57.054%, 7/15/25 5 3,458,910 292,057
Series 3110, Cl. SL, 88.749%, 2/15/26 5 575,120 49,544
- ----------------------------------------------------------------------------------------------------------------
Federal Home Loan Mortgage Corp., Principal-Only Stripped
Mtg.-Backed Security:
Series 176, Cl. PO, 4.735%, 6/1/26 6 128,295 109,793
Series 192, Cl. PO, 6.336%, 2/1/28 6 152,249 124,817
- ----------------------------------------------------------------------------------------------------------------
Federal National Mortgage Assn.:
4.50%, 11/1/19-8/1/20 3,235,346 3,232,732
4.50%, 4/1/21 7 16,340,000 16,253,202
5%, 12/1/17-9/25/35 33,128,694 33,398,208
5%, 4/1/38 7 11,390,000 11,274,323
5%, 9/25/33 8 598,230 593,852
5.50%, 2/25/33-11/25/34 29,032,853 29,415,313
5.50%, 4/1/23-4/1/38 7 20,173,000 20,405,431
6%, 9/25/19-8/1/34 16,729,623 17,249,429
6%, 4/1/21-4/1/37 7 7,007,000 7,208,316
6%, 10/25/33 8 1,486,929 1,532,776
6.50%, 6/25/17-11/25/31 9,620,426 10,079,024
6.50%, 1/25/28 8 268,531 281,060
7%, 11/1/17-1/25/35 3,915,300 4,154,123
7.50%, 6/25/08-1/1/33 409,570 443,269
8.50%, 7/1/32 21,017 23,178
- ----------------------------------------------------------------------------------------------------------------
Federal National Mortgage Assn. Grantor Trust, Gtd. Trust Mtg.
Pass-Through Certificates, Trust 2002-T1, Cl. A2, 7%, 11/25/31 1,127,454 1,130,132
21 | OPPENHEIMER BALANCED FUND
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
PRINCIPAL
AMOUNT VALUE
- ----------------------------------------------------------------------------------------------------------------
FHLMC/FNMA/SPONSORED Continued
Federal National Mortgage Assn., Gtd. Real Estate Mtg. Investment
Conduit Pass-Through Certificates:
Trust 1992-15, Cl. KZ, 7%, 2/25/22 $ 51,442 $ 51,949
Trust 1993-215, Cl. ZQ, 6.50%, 11/25/23 1,230,354 1,305,419
Trust 1993-87, Cl. Z, 6.50%, 6/25/23 982,537 1,029,767
Trust 1996-35, Cl. Z, 7%, 7/25/26 179,116 191,216
Trust 1998-61, Cl. PL, 6%, 11/25/28 604,174 626,227
Trust 2001-44, Cl. QC, 6%, 9/25/16 1,734,545 1,824,286
Trust 2001-51, Cl. OD, 6.50%, 10/25/31 1,389,179 1,480,326
Trust 2001-70, Cl. LR, 6%, 9/25/30 86,074 86,530
Trust 2001-82, Cl. ZA, 6.50%, 1/25/32 550,686 581,628
Trust 2003-130, Cl. CS, 8.888%, 12/25/33 2 955,079 995,102
Trust 2003-17, Cl. EQ, 5.50%, 3/25/23 1,138,000 1,172,291
Trust 2003-28, Cl. KG, 5.50%, 4/25/23 1,045,000 1,083,238
Trust 2003-84, Cl. PW, 3%, 6/25/22 238,092 237,499
Trust 2004-101, Cl. BG, 5%, 1/25/20 1,869,000 1,930,778
Trust 2005-59, Cl. NQ, 10.359%, 5/25/35 2 711,019 775,938
Trust 2005-71, Cl. DB, 4.50%, 8/25/25 160,000 157,253
Trust 2006-24, Cl. DB, 5.50%, 4/25/26 4,010,000 4,065,898
Trust 2006-44, Cl. OA, 5.50%, 12/25/26 2,404,003 2,460,697
Trust 2006-46, Cl. SW, 14.643%, 6/25/36 2 523,993 619,031
Trust 2006-50, Cl. KS, 14.644%, 6/25/36 2 1,299,337 1,475,209
Trust 2006-50, Cl. SK, 14.644%, 6/25/36 2 1,172,535 1,339,489
Trust 2006-57, Cl. PA, 5.50%, 8/25/27 2,942,556 3,010,974
Trust 2006-64, Cl. MD, 5.50%, 7/25/36 5,101,000 5,109,801
- ----------------------------------------------------------------------------------------------------------------
Federal National Mortgage Assn., Interest-Only Stripped
Mtg.-Backed Security:
Trust 1993-223, Cl. PM, 40.554%, 10/25/23 5 21,542 968
Trust 2001-65, Cl. S, 34.252%, 11/25/31 5 1,586,933 177,991
Trust 2001-81, Cl. S, 19.024%, 1/25/32 5 338,285 34,842
Trust 2002-38, Cl. IO, 26.619%, 4/25/32 5 559,872 48,159
Trust 2002-47, Cl. NS, 20.508%, 4/25/32 5 670,785 71,674
Trust 2002-51, Cl. S, 20.755%, 8/25/32 5 615,931 66,745
Trust 2002-52, Cl. SD, 19.424%, 9/25/32 5 689,618 77,280
Trust 2002-77, Cl. IS, 24.972%, 12/18/32 5 953,857 101,446
Trust 2002-77, Cl. SH, 25.007%, 12/18/32 5 450,982 53,841
Trust 2002-9, Cl. MS, 21.463%, 3/25/32 5 465,142 51,508
Trust 2002-96, Cl. SK, 36.596%, 4/25/32 5 4,271,402 554,388
Trust 2003-118, Cl. S, 33.23%, 12/25/33 5 2,958,717 427,667
Trust 2003-33, Cl. SP, 37.842%, 5/25/33 5 1,671,583 209,404
Trust 2003-4, Cl. S, 32.491%, 2/25/33 5 885,795 102,793
Trust 2003-46, Cl. IH, 1.021%, 6/1/33 5 5,872,169 1,091,296
Trust 2004-54, Cl. DS, 24.304%, 11/25/30 5 645,382 61,892
Trust 2005-19, Cl. SA, 36.222%, 3/25/35 5 8,697,930 739,797
Trust 2005-40, Cl. SA, 36.097%, 5/25/35 5 1,846,103 154,073
Trust 2005-6, Cl. SE, 43.032%, 2/25/35 5 2,360,750 189,325
Trust 2005-71, Cl. SA, 46.916%, 8/25/25 5 2,171,997 216,637
Trust 2005-87, Cl. SE, 97.063%, 10/25/35 5 5,028,442 361,711
22 | OPPENHEIMER BALANCED FUND
PRINCIPAL
AMOUNT VALUE
- ---------------------------------------------------------------------------------------------------------------------
FHLMC/FNMA/SPONSORED Continued
Federal National Mortgage Assn., Interest-Only Stripped
Mtg.-Backed Security: Continued
Trust 2005-87, Cl. SG, 67.85%, 10/25/35 5 $ 4,708,002 $ 402,727
Trust 2006-33, Cl. SP, 53.693%, 5/25/36 5 5,310,903 606,244
Trust 214, Cl. 2, 21.289%, 3/1/23 5 834,203 204,165
Trust 222, Cl. 2, 17.645%, 6/1/23 5 1,137,031 245,397
Trust 240, Cl. 2, 22.347%, 9/1/23 5 1,778,702 436,539
Trust 247, Cl. 2, 15.381%, 10/1/23 5 220,875 53,219
Trust 252, Cl. 2, 16.29%, 11/1/23 5 832,379 207,701
Trust 273, Cl. 2, 16.505%, 8/1/26 5 233,330 56,954
Trust 319, Cl. 2, 11.775%, 2/1/32 5 333,426 69,841
Trust 321, Cl. 2, 7.067%, 4/1/32 5 3,415,646 732,012
Trust 331, Cl. 9, 16.372%, 2/1/33 5 112,560 19,616
Trust 334, Cl. 17, 23.423%, 2/1/33 5 545,638 102,291
Trust 339, Cl. 7, 9.999%, 7/1/33 5 2,459,596 522,202
Trust 342, Cl. 2, 11.085%, 9/1/33 5 419,243 93,121
Trust 344, Cl. 2, 6.769%, 12/1/33 5 6,557,843 1,455,722
Trust 345, Cl. 9, 11.45%, 1/1/34 5 1,522,263 320,218
Trust 362, Cl. 12, 11.422%, 8/1/35 5 4,907,143 962,947
Trust 362, Cl. 13, 11.426%, 8/1/35 5 2,724,454 536,219
- ---------------------------------------------------------------------------------------------------------------------
Federal National Mortgage Assn., Principal-Only Stripped Mtg.-Backed
Security, Trust 1993-184, Cl. M, 5.037%, 9/25/23 6 412,545 352,516
- ---------------------------------------------------------------------------------------------------------------------
RALI Series 2003-QS1 Trust, Mtg. Asset-Backed Pass-Through Certificates,
Series 2003-QS1, Cl. A2, 5.75%, 1/25/33 612,934 597,410
- ---------------------------------------------------------------------------------------------------------------------
RALI Series 2007-QS6 Trust, Mtg. Asset-Backed Pass-Through Certificates,
Series 2007-QS6, Cl. A114, 5.75%, 4/25/37 1,356,581 1,302,643
- ---------------------------------------------------------------------------------------------------------------------
WaMu Mortgage Pass-Through Certificates 2003-AR9 Trust, Mtg.
Pass-Through Certificates, Series 2003-AR9, Cl. 2A, 4.039%, 9/25/33 2 1,387,983 1,320,404
- ---------------------------------------------------------------------------------------------------------------------
WaMu Mortgage Pass-Through Certificates 2006-AR8 Trust, Mtg.
Pass-Through Certificates, Series 2006-AR8, Cl. 2A1, 6.131%, 8/25/36 2 4,066,712
3,944,772
----------------
235,268,735
- ---------------------------------------------------------------------------------------------------------------------
GNMA/GUARANTEED -- 0.2%
Government National Mortgage Assn.:
6.375%, 4/8/26 2 19,442 19,904
7%, 4/29/09-4/29/26 187,282 200,201
7.50%, 3/29/09-5/29/27 722,212 778,561
8%, 5/30/17 26,805 29,187
8.50%, 8/1/17-12/15/17 18,015 19,703
- ---------------------------------------------------------------------------------------------------------------------
Government National Mortgage Assn., Interest-Only Stripped
Mtg.-Backed Security:
Series 2001-21, Cl. SB, 33.342%, 1/16/27 5 800,445 85,434
Series 2002-15, Cl. SM, 28.388%, 2/16/32 5 663,937 73,057
Series 2002-76, Cl. SY, 28.869%, 12/16/26 5 1,596,770 188,141
Series 2004-11, Cl. SM, 17.772%, 1/17/30 5 527,166 69,744
----------------
1,463,932
23 | OPPENHEIMER BALANCED FUND
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
PRINCIPAL
AMOUNT VALUE
- --------------------------------------------------------------------------------------------------------------------------
NON-AGENCY -- 13.1%
- --------------------------------------------------------------------------------------------------------------------------
COMMERCIAL -- 5.6%
Banc of America Commercial Mortgage, Inc., Commercial
Mtg. Pass-Through Certificates:
Series 2005-3, Cl. A2, 4.501%, 7/10/43 $ 1,810,000 $ 1,781,756
Series 2006-1, Cl. AM, 5.421%, 9/1/45 2 3,700,000 3,389,280
- --------------------------------------------------------------------------------------------------------------------------
Banc of America Funding Corp., Mtg. Pass-Through Certificates,
Series 2004-2, Cl. 2A1, 6.50%, 7/20/32 1,035,702 1,006,783
- --------------------------------------------------------------------------------------------------------------------------
Banc of America Mortgage Securities, Inc., Mtg. Pass-Through Certificates,
Series 2004-8, Cl. 5A1, 6.50%, 5/25/32 890,334 914,515
- --------------------------------------------------------------------------------------------------------------------------
ChaseFlex Trust 2006-2, Multiclass Mtg. Pass-Through Certificates,
Series 2006-2, Cl. A1B, 3.235%, 8/25/08 2 406,072 392,607
- --------------------------------------------------------------------------------------------------------------------------
Citigroup Mortgage Loan Trust, Inc. 2006-WF1, Asset-Backed
Pass-Through Certificates, Series 2006-WF1, Cl. A2B, 5.536%, 3/1/36 352,278 354,807
- --------------------------------------------------------------------------------------------------------------------------
Citigroup/Deutsche Bank 2007-CD4 Commercial Mortgage Trust,
Commercial Mtg. Pass-Through Certificates, Series 2007-CD4,
Cl. A2B, 5.205%, 12/11/49 2,150,000 2,095,494
- --------------------------------------------------------------------------------------------------------------------------
CitiMortgage Alternative Loan Trust 2006-A5, Real Estate Mtg.
Investment Conduit Pass-Through Certificates:
Series 2006-A5, Cl. 1A1, 3.006%, 10/25/36 2 2,921,269 2,402,349
Series 2006-A5, Cl. 1A13, 3.056%, 10/25/36 2 1,543,760 1,131,323
- --------------------------------------------------------------------------------------------------------------------------
Deutsche Alt-A Securities Mortgage Loan Trust, Mtg. Pass-Through
Certificates:
Series 2006-AB2, Cl. A7, 5.961%, 6/25/36 690,229 683,754
Series 2006-AB4, Cl. A1A, 6.005%, 10/25/36 1,785,002 1,717,104
Series 2006-AB3, Cl. A7, 6.36%, 7/1/36 226,312 223,033
- --------------------------------------------------------------------------------------------------------------------------
First Horizon Alternative Mortgage Securities Trust 2004-FA2, Mtg.
Pass-Through Certificates, Series 2004-FA2, Cl. 3A1, 6%, 1/25/35 773,521 699,040
- --------------------------------------------------------------------------------------------------------------------------
First Horizon Alternative Mortgage Securities Trust 2007-FA2, Mtg.
Pass-Through Certificates, Series 2007-FA2, Cl. 1A1, 5.50%, 4/25/37 972,702 943,713
- --------------------------------------------------------------------------------------------------------------------------
First Union National Bank/Lehman Brothers/Bank of America
Commercial Mtg. Trust, Pass-Through Certificates, Series 1998-C2,
Cl. A2, 6.56%, 11/18/35 133,542 133,192
- --------------------------------------------------------------------------------------------------------------------------
GE Capital Commercial Mortgage Corp., Commercial Mtg. Obligations:
Series 2004-C3, Cl. A2, 4.433%, 7/10/39 960,000 952,488
Series 2005-C3, Cl. A2, 4.853%, 7/10/45 1,080,000 1,071,142
- --------------------------------------------------------------------------------------------------------------------------
Greenwich Capital Commercial Funding Corp., Commercial Mtg.
Pass-Through Certificates:
Series 2005-GG3, Cl. A2, 4.305%, 8/10/42 1,520,000 1,500,386
Series 2005-GG5, Cl. A2, 5.117%, 4/10/37 1,200,000 1,193,685
Series 2007-GG9, Cl. A2, 5.381%, 3/10/39 4,440,000 4,354,137
- --------------------------------------------------------------------------------------------------------------------------
JPMorgan Chase Commercial Mortgage Securities Corp., Commercial Mtg.
Pass-Through Certificates:
Series 2005-LDP2, Cl. A2, 4.575%, 7/15/42 440,000 433,615
Series 2005-LDP4, Cl. A2, 4.79%, 10/15/42 1,560,000 1,541,825
24 | OPPENHEIMER BALANCED FUND
PRINCIPAL
AMOUNT VALUE
- ---------------------------------------------------------------------------------------------------------------------
COMMERCIAL Continued
JPMorgan Chase Commercial Mortgage Securities Corp., Commercial Mtg.
Pass-Through Certificates: Continued
Series 2007-LDPX, Cl. A2S, 5.305%, 1/15/49 $ 3,400,000 $ 3,316,673
Series 2007-LD12, Cl. A2, 5.827%, 2/15/51 1,020,000 1,010,718
- ---------------------------------------------------------------------------------------------------------------------
LB-UBS Commercial Mortgage Trust 2005-C5, Commercial Mtg.
Pass-Through Certificates, Series 2005-C5, Cl. A2, 4.885%, 9/15/30 1,280,000 1,272,028
- ---------------------------------------------------------------------------------------------------------------------
LB-UBS Commercial Mortgage Trust 2005-C7, Commercial Mtg.
Pass-Through Certificates, Series 2005-C7, Cl. A2, 5.103%, 11/11/30 700,000 695,920
- ---------------------------------------------------------------------------------------------------------------------
LB-UBS Commercial Mortgage Trust 2006-C1, Commercial Mtg.
Pass-Through Certificates:
Series 2006-C1, Cl. A2, 5.084%, 2/11/31 2,090,000 2,062,486
Series 2006-C1, Cl. AM, 5.217%, 2/11/31 2 2,090,000 1,889,886
- ---------------------------------------------------------------------------------------------------------------------
LB-UBS Commercial Mortgage Trust 2007-C1, Commercial Mtg.
Pass-Through Certificates, Series 2007-C1, Cl. A2, 5.318%, 1/15/12 1,780,000 1,743,614
- ---------------------------------------------------------------------------------------------------------------------
Mastr Alternative Loan Trust, CMO Pass-Through Certificates,
Series 2004-6, Cl. 10A1, 6%, 7/25/34 1,363,763 1,257,883
- ---------------------------------------------------------------------------------------------------------------------
Nomura Asset Securities Corp., Commercial Mtg. Pass-Through
Certificates, Series 1998-D6, Cl. A1B, 6.59%, 3/15/30 293,425 294,067
- ---------------------------------------------------------------------------------------------------------------------
Prudential Mortgage Capital Co. II LLC, Commercial Mtg. Pass-Through
Certificates, Series PRU-HTG 2000-C1, Cl. A2, 7.306%, 10/6/15 1,554,000 1,609,758
- ---------------------------------------------------------------------------------------------------------------------
Residential Asset Securitization Trust 2006-A9CB, Mtg. Pass-Through
Certificates, Series 2006-A9CB, Cl. A5, 6%, 9/25/36 1,738,315 1,726,329
- ---------------------------------------------------------------------------------------------------------------------
Wachovia Bank Commercial Mortgage Trust 2005-C17, Commercial
Mtg. Pass-Through Certificates, Series 2005-C17, Cl. A2, 4.782%, 3/15/42 2,450,547 2,434,109
- ---------------------------------------------------------------------------------------------------------------------
Wachovia Bank Commercial Mortgage Trust 2006-C29, Commercial
Mtg. Pass-Through Certificates, Series 2006-C29, Cl. A2, 5.272%, 11/15/48 492,000 482,503
- ---------------------------------------------------------------------------------------------------------------------
WaMu Mortgage Pass-Through Certificates 2006-AR8 Trust, Mtg,
Pass-Through Certificates, Series 2006-AR8, Cl. 1A4, 5.884%, 8/1/46 2 3,756,487 3,606,954
-------------
52,318,956
- ---------------------------------------------------------------------------------------------------------------------
MANUFACTURED HOUSING -- 0.7%
Wells Fargo Mortgage-Backed Securities 2006-AR12 Trust, Mtg. Pass-Through
Certificates, Series 2006-AR12, Cl. 2A1, 6.10%, 9/25/36 2 3,177,670 2,995,756
- ---------------------------------------------------------------------------------------------------------------------
Wells Fargo Mortgage-Backed Securities 2006-AR2 Trust, Mtg. Pass-Through
Certificates, Series 2006-AR2, Cl. 2A5, 5.109%, 3/25/36 2 3,740,251 3,587,165
-------------
6,582,921
- ---------------------------------------------------------------------------------------------------------------------
MULTIFAMILY -- 3.9%
Banc of America Mortgage Securities, Inc., Mtg. Pass-Through Certificates:
Series 2003-E, Cl. 2A2, 4.35%, 6/25/33 2 2,103,439 2,099,866
Series 2005-F, Cl. 2A3, 4.716%, 7/25/35 2 2,715,804 2,663,204
- ---------------------------------------------------------------------------------------------------------------------
Bear Stearns ARM Trust 2006-4, Mtg. Pass-Through Certificates,
Series 2006-4, Cl. 2A1, 5.795%, 10/25/36 2 1,452,863 1,308,769
25 | OPPENHEIMER BALANCED FUND
STATEMENT OF INVESTMENTS Unaudited / Continued
- -------------------------------------------------------------------------------
PRINCIPAL
AMOUNT VALUE
- -------------------------------------------------------------------------------------------------------------------------------
MULTIFAMILY Continued
Citigroup Mortgage Loan Trust, Inc. 2006-AR5, Mtg. Pass-Through
Certificates, Series 2006-AR5, Cl. 1 A3A, 5.888%, 7/25/36 2 $ 1,105,053 $ 1,063,342
- -------------------------------------------------------------------------------------------------------------------------------
Countrywide Alternative Loan Trust 2004-28CB, Mtg. Pass-Through
Certificates, Series 2004-28CB, Cl.2A4, 5.75%, 1/25/35 2,325,000 1,985,781
- -------------------------------------------------------------------------------------------------------------------------------
Countrywide Alternative Loan Trust 2005-85CB, Mtg. Pass-Through
Certificates, Series 2005-85CB, Cl.2A3, 5.50%, 2/25/36 1,730,000 1,537,981
- -------------------------------------------------------------------------------------------------------------------------------
Countrywide Home Loans Servicing LP, Mtg. Pass-Through Certificates:
Series 2003-46, Cl. 1A2, 4.124%, 1/19/34 2 1,891,058 1,920,790
Series 2005-HYB1, Cl. 5A1, 4.995%, 3/25/35 2 2,550,551 2,451,717
Series 2007-HY1, Cl. 1A1, 5.691%, 4/25/37 2 2,673,178 2,533,506
- -------------------------------------------------------------------------------------------------------------------------------
GMAC Mortgage Corp. Loan Trust, Mtg. Pass-Through Certificates:
Series 2005-AR4, Cl. 2A1, 5.295%, 7/19/35 2 2,927,896 2,513,208
Series 2004-J4, Cl. A7, 5.50%, 9/25/34 1,600,000 1,409,493
- -------------------------------------------------------------------------------------------------------------------------------
GSR Mortgage Loan Trust 2005-AR7, Mtg. Pass-Through Certificates,
Series 2005-AR7, Cl. 3A1, 5.149%, 11/25/35 2 4,312,524 4,146,424
- -------------------------------------------------------------------------------------------------------------------------------
Merrill Lynch Mortgage Investors Trust 2007-2, Mtg. Pass-Through
Certificates, Series 2007-2, Cl. 2A1, 6.002%, 6/25/37 2 3,613,792 3,426,976
- -------------------------------------------------------------------------------------------------------------------------------
Wells Fargo Mortgage-Backed Securities 2004-AA Trust, Mtg. Pass-Through
Certificates, Series 2004-AA, Cl. 2A, 4.996%, 12/25/34 2 881,176 829,432
- -------------------------------------------------------------------------------------------------------------------------------
Wells Fargo Mortgage-Backed Securities 2004-S Trust, Mtg. Pass-Through
Certificates, Series 2004-S, Cl. A1, 3.541%, 9/25/34 2 742,953 706,327
- -------------------------------------------------------------------------------------------------------------------------------
Wells Fargo Mortgage-Backed Securities 2005-AR2 Trust, Mtg.
Pass-Through Certificates, Series 2005-AR2, Cl. 2A2, 4.541%, 3/25/35 2 538,978 523,955
- -------------------------------------------------------------------------------------------------------------------------------
Wells Fargo Mortgage-Backed Securities 2005-AR4 Trust, Mtg.
Pass-Through Certificates, Series 2005-AR4, Cl. 2A2, 4.523%, 4/25/35 2 896,713 838,429
- -------------------------------------------------------------------------------------------------------------------------------
Wells Fargo Mortgage-Backed Securities 2006-AR10 Trust, Mtg.
Pass-Through Certificates:
Series 2006-AR10, Cl. 4A1, 5.561%, 7/25/36 2 1,793,319 1,720,188
Series 2006-AR10, Cl. 2A1, 5.65%, 7/25/36 2 1,363,024 1,307,463
- -------------------------------------------------------------------------------------------------------------------------------
Wells Fargo Mortgage-Backed Securities 2006-AR2 Trust, Mtg.
Pass-Through Certificates, Series 2006-AR2, Cl. 2A6, 5.109%, 3/25/36 2 719,881 672,025
- -------------------------------------------------------------------------------------------------------------------------------
Wells Fargo Mortgage-Backed Securities 2006-AR6 Trust, Mtg.
Pass-Through Certificates, Series 2006-AR6, Cl. 3A1, 5.094%, 3/25/36 2 802,537 768,405
-------------
36,427,281
- -------------------------------------------------------------------------------------------------------------------------------
RESIDENTIAL -- 2.9%
Chase Mortgage Finance Trust 2005-S1, Multiclass Mtg. Pass-Through
Certificates, Series 2005-S1, Cl. 1A5, 5.50%, 5/25/35 1,000,000 921,133
- -------------------------------------------------------------------------------------------------------------------------------
Countrywide Alternative Loan Trust 2004-24CB, Mtg. Pass-Through
Certificates, Series 2004-24CB, Cl.1A1, 6%, 11/1/34 1,479,995 1,222,277
- -------------------------------------------------------------------------------------------------------------------------------
Countrywide Alternative Loan Trust 2004-28CB, Mtg. Pass-Through
Certificates, Series 2004-28CB, Cl.3A1, 6%, 1/1/35 1,199,386 1,074,672
26 | OPPENHEIMER BALANCED FUND
PRINCIPAL
AMOUNT VALUE
- -------------------------------------------------------------------------------------------------------------------------------
RESIDENTIAL Continued
Countrywide Alternative Loan Trust 2005-18CB, Mtg. Pass-Through
Certificates, Series 2005-18CB, Cl. A8, 5.50%,5/25/36 $ 2,340,000 $ 2,099,059
- -------------------------------------------------------------------------------------------------------------------------------
Countrywide Alternative Loan Trust 2005-J1, Mtg. Pass-Through Certificates,
Series 2005-J1, Cl. 3A1, 6.50%, 8/25/32 1,955,688 1,734,411
- -------------------------------------------------------------------------------------------------------------------------------
Countrywide Alternative Loan Trust 2005-J3, Mtg. Pass-Through Certificates,
Series 2005-J3, Cl. 3A1, 6.50%, 9/25/34 1,125,577 1,084,386
- -------------------------------------------------------------------------------------------------------------------------------
Morgan Stanley Mortgage Loan Trust 2006-AR, Mtg. Pass-Through
Certificates, Series 2006-AR, Cl. 5A3, 5.426%, 6/25/36 2 1,070,000 991,801
- -------------------------------------------------------------------------------------------------------------------------------
RALI Series 2006-QS13 Trust, Mtg. Asset-Backed Pass-Through Certificates,
Series 2006-QS13, Cl. 1A8, 6%, 9/25/36 1,122,581 1,115,252
- -------------------------------------------------------------------------------------------------------------------------------
RALI Series 2006-QS5 Trust, Mtg. Asset-Backed Pass-Through Certificates,
Series 2006-QS5, Cl. 2A2, 6%, 4/25/08 872,338 873,164
- -------------------------------------------------------------------------------------------------------------------------------
STARM Mortgage Loan Trust 2007-S1, Mtg. Pass-Through Certificates,
Series 2007-S1, Cl. 3A1, 5.007%, 8/1/22 2 4,098,604 3,887,567
- -------------------------------------------------------------------------------------------------------------------------------
WaMu Mortgage Pass-Through Certificates 2006-AR12 Trust, Mtg.
Pass-Through Certificates, Series 2006-AR12, Cl. 2A1, 5.75%, 10/25/36 2 3,967,820 3,708,446
- -------------------------------------------------------------------------------------------------------------------------------
WaMu Mortgage Pass-Through Certificates 2007-HY6 Trust, Mtg.
Pass-Through Certificates, Series 2007-HY6, Cl. 2A1, 5.699%, 6/25/37 2 2,548,014 2,316,846
- -------------------------------------------------------------------------------------------------------------------------------
Washington Mutual Mortgage Pass-Through Certificates, Mtg.
Pass-Through Certificates, Series 2007-1, Cl. 1A8, 6%, 2/25/37 3,883,228 3,822,511
- -------------------------------------------------------------------------------------------------------------------------------
Wells Fargo Mortgage-Backed Securities 2003-6 Trust, Mtg. Pass-Through
Certificates, Series 2003-6, Cl. 1A1, 5%, 6/25/18 1,470,244 1,415,456
- -------------------------------------------------------------------------------------------------------------------------------
Wells Fargo Mortgage-Backed Securities 2006-AR5 Trust, Mtg. Pass-Through
Certificates, Series 2006-AR5, Cl. 2A2, 5.537%, 4/1/36 2 1,579,996 1,184,997
--------------
27,451,978
--------------
Total Mortgage-Backed Obligations (Cost $357,977,028) 359,513,803
- -------------------------------------------------------------------------------------------------------------------------------
NON-CONVERTIBLE CORPORATE BONDS AND NOTES--9.9%
- -------------------------------------------------------------------------------------------------------------------------------
ABN Amro Bank NV (NY Branch), 7.125% Sub. Nts., Series B, 10/15/93 500,000 539,195
- -------------------------------------------------------------------------------------------------------------------------------
Albertson's, Inc., 8% Sr. Unsec. Debs., 5/1/31 1,715,000 1,643,749
- -------------------------------------------------------------------------------------------------------------------------------
Bank of America Corp., 8% Unsec. Perpetual Nts., Series K 9 2,790,000 2,798,984
- -------------------------------------------------------------------------------------------------------------------------------
Barclays Bank plc, 6.278% Perpetual Bonds 9 5,230,000 4,186,092
- -------------------------------------------------------------------------------------------------------------------------------
Belo Corp., 8% Sr. Unsec. Unsub. Nts., 11/1/08 4 3,005,000 3,038,527
- -------------------------------------------------------------------------------------------------------------------------------
Buckeye Partners LP, 4.625% Sr. Nts., 7/15/13 1,115,000 1,099,219
- -------------------------------------------------------------------------------------------------------------------------------
Canadian National Resources Ltd., 5.90% Nts., 2/1/18 375,000 384,520
- -------------------------------------------------------------------------------------------------------------------------------
Capmark Financial Group, Inc.:
3.746% Sr. Unsec. Nts., 5/10/10 2,3 730,000 483,815
5.875% Nts., 5/10/12 3 1,160,000 735,789
- -------------------------------------------------------------------------------------------------------------------------------
Centex Corp., 5.80% Sr. Unsec. Nts., 9/15/09 1,520,000 1,429,279
- -------------------------------------------------------------------------------------------------------------------------------
Chancellor Media CCU, 8% Sr. Unsec. Nts., 11/1/08 1,530,000 1,579,373
- -------------------------------------------------------------------------------------------------------------------------------
CIT Group Funding Co. of Canada, 4.65% Sr. Unsec. Nts., 7/1/10 1,320,000 1,084,313
27 | OPPENHEIMER BALANCED FUND
STATEMENT OF INVESTMENTS Unaudited / Continued
- -------------------------------------------------------------------------------
PRINCIPAL
AMOUNT VALUE
- -------------------------------------------------------------------------------------------------------------------------------
NON-CONVERTIBLE CORPORATE BONDS AND NOTES Continued
- -------------------------------------------------------------------------------------------------------------------------------
Citigroup, Inc., 8.30% Jr. Sub. Bonds, 12/21/57 2 $ 1,815,000 $ 1,793,714
- -------------------------------------------------------------------------------------------------------------------------------
Clear Channel Communications, Inc., 6.25% Nts., 3/15/11 1,425,000 1,258,376
- -------------------------------------------------------------------------------------------------------------------------------
Clorox Co. (The), 5% Sr. Unsec. Nts., 3/1/13 295,000 296,454
- -------------------------------------------------------------------------------------------------------------------------------
Coca-Cola Co. (The), 7.375% Unsec. Debs., 7/29/93 440,000 544,163
- -------------------------------------------------------------------------------------------------------------------------------
Cox Enterprises, Inc., 4.375% Nts., 5/1/08 3 2,140,000 2,140,762
- -------------------------------------------------------------------------------------------------------------------------------
CSC Holdings, Inc., 7.25% Sr. Unsec. Nts., 7/15/08 1,695,000 1,699,238
- -------------------------------------------------------------------------------------------------------------------------------
D.R. Horton, Inc., 8% Sr. Nts., 2/1/09 785,000 775,188
- -------------------------------------------------------------------------------------------------------------------------------
Delhaize America, Inc., 9% Unsub. Debs., 4/15/31 1,187,000 1,432,404
- -------------------------------------------------------------------------------------------------------------------------------
Dillard's, Inc., 6.625% Unsec. Nts., 11/15/08 900,000 902,250
- -------------------------------------------------------------------------------------------------------------------------------
Eastman Kodak Co., 3.625% Nts., Series A, 5/15/08 944,000 944,000
- -------------------------------------------------------------------------------------------------------------------------------
EchoStar DBS Corp., 5.75% Sr. Unsec. Nts., 10/1/08 2,530,000 2,523,675
- -------------------------------------------------------------------------------------------------------------------------------
El Paso Corp., 6.50% Sr. Unsec. Nts., 6/1/08 390,000 392,774
- -------------------------------------------------------------------------------------------------------------------------------
Energy Transfer Partners LP, 5.65% Sr. Unsec. Unsub. Nts., 8/1/12 405,000 407,509
- -------------------------------------------------------------------------------------------------------------------------------
Ford Motor Credit Co., 9.75% Sr. Unsec. Nts., 9/15/10 3,920,000 3,495,742
- -------------------------------------------------------------------------------------------------------------------------------
Gap, Inc. (The), 10.05% Unsub. Nts., 12/15/08 2 228,000 234,840
- -------------------------------------------------------------------------------------------------------------------------------
General Motors Acceptance Corp., 8% Bonds, 11/1/31 1,670,000 1,199,426
- -------------------------------------------------------------------------------------------------------------------------------
Goldman Sachs Capital, Inc. (The), 6.345% Sub. Bonds, 2/15/34 3,665,000 3,182,800
- -------------------------------------------------------------------------------------------------------------------------------
HBOS plc, 6.413% Sub. Perpetual Bonds, Series A 3,9 6,200,000 4,453,001
- -------------------------------------------------------------------------------------------------------------------------------
HSBC Finance Capital Trust IX, 5.911% Nts., 11/30/35 2 5,240,000 4,256,766
- -------------------------------------------------------------------------------------------------------------------------------
Hyundai Motor Manufacturing Alabama LLC, 5.30% Sr. Unsec. Nts., 12/19/08 3 1,140,000 1,152,066
- -------------------------------------------------------------------------------------------------------------------------------
IPALCO Enterprises, Inc., 8.375% Sr. Sec. Nts., 11/14/08 2,4 920,000 936,100
- -------------------------------------------------------------------------------------------------------------------------------
Kaneb Pipe Line Operating Partnership LP, 5.875% Sr. Unsec. Nts., 6/1/13 1,630,000 1,668,735
- -------------------------------------------------------------------------------------------------------------------------------
Lehman Brothers Holdings, Inc., 6.75% Unsec. Sub. Nts., 12/28/17 2,500,000 2,409,173
- -------------------------------------------------------------------------------------------------------------------------------
Lennar Corp., 7.625% Sr. Unsec. Nts., 3/1/09 1,915,000 1,847,975
- -------------------------------------------------------------------------------------------------------------------------------
Liberty Media Corp., 7.875% Sr. Nts., 7/15/09 610,000 615,441
- -------------------------------------------------------------------------------------------------------------------------------
Liberty Media LLC, 7.75% Sr. Nts., 7/15/09 1,835,000 1,848,616
- -------------------------------------------------------------------------------------------------------------------------------
MBIA, Inc., 5.70% Sr. Unsec. Unsub. Nts., 12/1/34 1,100,000 690,483
- -------------------------------------------------------------------------------------------------------------------------------
MetLife, Inc., 6.40% Jr. Unsec. Sub. Bonds, 12/15/66 2 3,430,000 2,734,019
- -------------------------------------------------------------------------------------------------------------------------------
MGM Mirage, Inc., 6% Sr. Sec. Nts., 10/1/09 2,585,000 2,578,538
- -------------------------------------------------------------------------------------------------------------------------------
Monongahela Power Co., 7.36% Unsec. Nts., Series A, 1/15/10 2,035,000 2,181,282
- -------------------------------------------------------------------------------------------------------------------------------
NCR Corp., 7.125% Sr. Unsec. Unsub. Nts., 6/15/09 1,695,000 1,744,848
- -------------------------------------------------------------------------------------------------------------------------------
PF Export Receivables Master Trust, 3.748% Sr. Nts., Series B, 6/1/13 3 438,580 451,054
- -------------------------------------------------------------------------------------------------------------------------------
Popular North America, Inc., 4.70% Nts., 6/30/09 2,540,000 2,546,840
- -------------------------------------------------------------------------------------------------------------------------------
Prudential Holdings LLC, 8.695% Bonds, Series C, 12/18/23 3 2,520,000 3,139,464
- -------------------------------------------------------------------------------------------------------------------------------
Prudential Insurance Co. of America, 8.30% Nts., 7/1/25 3 2,140,000 2,391,332
- -------------------------------------------------------------------------------------------------------------------------------
Pulte Homes, Inc., 4.875% Nts., 7/15/09 885,000 840,750
28 | OPPENHEIMER BALANCED FUND
PRINCIPAL
AMOUNT VALUE
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
NON-CONVERTIBLE CORPORATE BONDS AND NOTES Continued
- -------------------------------------------------------------------------------------------------------------------------------
Qwest Corp.:
5.625% Unsec. Nts., 11/15/08 4 $ 245,000 $ 245,000
8.875% Unsec. Unsub. Nts., 3/15/12 3,555,000 3,643,875
- -------------------------------------------------------------------------------------------------------------------------------
R&B Falcon Corp., 9.50% Sr. Unsec. Nts., 12/15/08 750,000 784,075
- -------------------------------------------------------------------------------------------------------------------------------
SLM Corp.:
3.95% Nts., Series A, 8/15/08 90,000 88,838
4% Nts., 1/15/09 1,765,000 1,589,672
- -------------------------------------------------------------------------------------------------------------------------------
TEPPCO Partners LP, 6.125% Nts., 2/1/13 930,000 943,064
- -------------------------------------------------------------------------------------------------------------------------------
Tribune Co., 5.50% Nts., Series E, 10/6/08 4 1,485,000 1,343,925
- -------------------------------------------------------------------------------------------------------------------------------
Univision Communications, Inc., 3.875% Sr. Unsec. Nts., 10/15/08 590,000 577,463
- -------------------------------------------------------------------------------------------------------------------------------
Valero Logistics Operations LP, 6.05% Nts., 3/15/13 435,000 451,036
- -------------------------------------------------------------------------------------------------------------------------------
Weatherford International Ltd., 5.15% Nts., 3/15/13 365,000 365,870
- -------------------------------------------------------------------------------------------------------------------------------
Westar Energy, Inc., 7.125% Sr. Unsec. Nts., 8/1/09 1,950,000 2,045,008
-------------
Total Non-Convertible Corporate Bonds and Notes (Cost $98,889,622) 92,790,479
- -------------------------------------------------------------------------------------------------------------------------------
CONVERTIBLE CORPORATE BONDS AND NOTES -- 0.2%
- -------------------------------------------------------------------------------------------------------------------------------
Theravance, Inc., 3% Cv. Sub. Nts., 1/15/15 (Cost $2,712,005) 2,712,000 1,915,342
SHARES
- -------------------------------------------------------------------------------------------------------------------------------
INVESTMENT COMPANY -- 6.2%
- -------------------------------------------------------------------------------------------------------------------------------
Oppenheimer Institutional Money Market Fund, Cl. E, 3.29% 10,11
(Cost $58,671,993) 58,671,993 58,671,993
- -------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS, AT VALUE (COST $925,103,395) 105.6% 991,883,177
- -------------------------------------------------------------------------------------------------------------------------------
LIABILITIES IN EXCESS OF OTHER ASSETS (5.6) (52,855,608)
----------------------------
NET ASSETS 100.0% $939,027,569
============================
FOOTNOTES TO STATEMENT OF INVESTMENTS
1. Non-income producing security.
2. Represents the current interest rate for a variable or increasing rate
security.
3. Represents securities sold under Rule 144A, which are exempt from
registration under the Securities Act of 1933, as amended. These securities have
been determined to be liquid under guidelines established by the Board of
Trustees. These securities amount to $15,052,077 or 1.60% of the Fund's net
assets as of March 31, 2008.
4. Illiquid security. The aggregate value of illiquid securities as of March 31,
2008 was $5,897,770, which represents 0.63% of the Fund's net assets. See Note
8 of accompanying Notes.
5. Interest-Only Strips represent the right to receive the monthly interest
payments on an underlying pool of mortgage loans. These securities typically
decline in price as interest rates decline. Most other fixed income securities
increase in price when interest rates decline. The principal amount of the
underlying pool represents the notional amount on which current interest is
calculated. The price of these securities is typically more sensitive to changes
in prepayment rates than traditional mortgage-backed securities (for example,
GNMA pass-throughs). Interest rates disclosed represent current yields based
upon the current cost basis and estimated timing and amount of future cash
flows. These securities amount to $13,801,778 or 1.47% of the Fund's net assets
as of March 31, 2008.
29 | OPPENHEIMER BALANCED FUND
STATEMENT OF INVESTMENTS Unaudited / Continued
- -------------------------------------------------------------------------------
FOOTNOTES TO STATEMENT OF INVESTMENTS Continued
6. Principal-Only Strips represent the right to receive the monthly principal
payments on an underlying pool of mortgage loans. The value of these securities
generally increases as interest rates decline and prepayment rates rise. The
price of these securities is typically more volatile than that of coupon-bearing
bonds of the same maturity. Interest rates disclosed represent current yields
based upon the current cost basis and estimated timing of future cash flows.
These securities amount to $587,126 or 0.06% of the Fund's net assets as of
March 31, 2008.
7. When-issued security or delayed delivery to be delivered and settled after
March 31, 2008. See Note 1 of accompanying Notes.
8. All or a portion of the security is held in collateralized accounts to cover
initial margin requirements on open futures contracts. The aggregate market
value of such securities is $779,979. See Note 6 of accompanying Notes.
9. This bond has no contractual maturity date, is not redeemable and
contractually pays an indefinite stream of interest. Rate reported represents
the current interest rate for this variable rate security.
10. Rate shown is the 7-day yield as of March 31, 2008.
11. Is or was an affiliate, as defined in the Investment Company Act of 1940, at
or during the period ended March 31, 2008, by virtue of the Fund owning at least
5% of the voting securities of the issuer or as a result of the Fund and the
issuer having the same investment adviser. Transactions during the period in
which the issuer was an affiliate are as follows:
SHARES
SHARES GROSS GROSS MARCH 31,
SEPTEMBER 30, 2007 ADDITIONS REDUCTIONS 2008
- ------------------------------------------------------------------------------------------------
Oppenheimer Institutional
Money Market Fund, Cl. E 73,733,633 250,040,526 265,102,166 58,671,993
DIVIDEND
VALUE INCOME
- ------------------------------------------------------------------------------------------------
Oppenheimer Institutional
Money Market Fund, Cl. E $ 58,671,993 $ 1,574,490
- -------------------------------------------------------------------------------
FUTURES CONTRACTS AS OF MARCH 31, 2008 ARE AS FOLLOWS:
- -------------------------------------------------------------------------------
UNREALIZED
NUMBER OF EXPIRATION APPRECIATION
CONTRACT DESCRIPTION BUY/SELL CONTRACTS DATE VALUE (DEPRECIATION)
- -------------------------------------------------------------------------------------------------
U.S. Long Bonds Buy 297 6/19/08 $ 35,282,672 $ 886,046
U.S. Treasury Nts., 2 yr. Sell 601 6/30/08 129,008,406 (618,239)
U.S. Treasury Nts., 5 yr. Buy 77 6/30/08 8,796,047 111,700
U.S. Treasury Nts., 10 yr. Sell 334 6/19/08 39,730,344 (571,485)
---------------
$ (191,978)
===============
30 | OPPENHEIMER BALANCED FUND
- --------------------------------------------------------------------------------
CREDIT DEFAULT SWAP CONTRACTS AS OF MARCH 31, 2008 ARE AS FOLLOWS:
- --------------------------------------------------------------------------------
BUY/SELL NOTIONAL
SWAP CREDIT AMOUNT PAY/RECEIVE TERMINATION PREMIUM
COUNTERPARTY REFERENCE ENTITY PROTECTION (000S) FIXED RATE DATE PAID/(RECEIVED) VALUE
- -----------------------------------------------------------------------------------------------------------------------------------
Barclays Bank
plc:
American
International Group, Inc. Sell $ 3,915 1.850% 9/20/08 $ -- $ --
Beazer Homes USA, Inc. Sell 545 2.100 6/20/08 -- (11,850)
Capmark Financial Group, Inc. Sell 1,020 1.000 6/20/12 -- (384,762)
CDX. NA. IG.9 Index Sell 7,655 0.600 12/20/12 (47,835) (283,165)
Countrywide Home Loans, Inc. Sell 1,360 0.750 9/20/08 -- (35,937)
Dillard's, nc. Sell 750 1.900 12/20/08 -- (7,739)
HCP, Inc. Sell 935 4.600 3/20/09 -- 884
iStar Financial, Inc. Sell 1,000 4.400 12/20/12 -- (133,069)
Lehman Brothers Holdings,
Inc. Sell 2,205 0.490 9/20/10 -- (134,939)
Merrill Lynch & Co., Inc. Sell 4,195 0.680 9/20/08 -- 470
Morgan Stanley Sell 3,425 2.150 9/20/08 -- 22,687
Six Flags, Inc. Sell 1,075 8.250 12/20/08 -- (144,777)
Toys "R" Us, Inc. Sell 1,085 1.450 9/20/08 -- (37,099)
- -----------------------------------------------------------------------------------------------------------------------------------
Credit Suisse
International:
ArvinMeritor, Inc. Sell 1,755 1.550 9/20/08 -- (43,406)
CenturyTel, Inc. Buy 540 1.300 3/20/13 -- 13,794
CenturyTel, Inc. Buy 325 1.740 3/20/13 -- 2,072
Intelsat Ltd. Sell 1,135 3.450 9/20/08 -- (23,600)
iStar Financial, Inc. Sell 340 12.000 3/20/09 -- (4,905)
iStar Financial, Inc. Sell 145 4.000 12/20/12 -- (19,295)
Morgan Stanley Sell 3,680 2.150 9/20/08 -- 24,376
Rite Aid Corp. Sell 1,700 0.875 6/20/08 -- (36,275)
Rite Aid Corp. Sell 260 7.500 3/20/09 -- (3,601)
Saks, Inc. Sell 1,785 2.000 9/20/08 -- 2,779
Sprint Nextel Corp. Sell 2,695 6.300 3/20/09 -- 5,226
The Goodyear Tire & Rubber Co. Sell 1,690 1.550 9/20/08 -- (399)
TXU Corp. Sell 355 5.910 12/20/12 -- (16,165)
TXU Corp. Sell 340 6.050 12/20/12 -- (13,846)
TXU Corp. Sell 355 6.000 12/20/12 -- (15,067)
Vornado Realty LP Sell 615 3.600 3/20/09 -- (1,053)
Wachovia Corp. Sell 1,215 1.000 3/20/09 -- 19
- -----------------------------------------------------------------------------------------------------------------------------------
Deutcshe Bank
AG:
Ambac Assurance Corp. Sell 1,605 4.550 9/20/08 -- (38,114)
ABX. HE. AA. 06-2 Index Sell 470 0.170 5/25/46 (56,396) (273,017)
Allied Waste North
America, Inc. Sell 630 2.000 9/20/09 -- (4,010)
Allied Waste North
America, Inc. Sell 990 2.000 9/20/09 -- (6,301)
Ambac Assurance Corp. Sell 1,270 4.550 9/20/08 -- (30,159)
CDX.NA. IG.9 Index Sell 10,480 0.600 12/20/12 (93,286) (427,332)
Cemex Sell 620 2.000 3/20/09 -- 83
Centex Corp. Sell 280 1.550 9/20/09 -- (16,633)
CenturyTel, Inc. Buy 530 1.300 3/20/13 -- 13,538
CenturyTel, Inc. Buy 820 1.980 3/20/13 -- (3,345)
Countrywide Home Loans, Inc. Sell 885 3.250 9/20/08 -- (12,442)
Dillard's, Inc. Sell 450 0.750 9/20/08 -- (9,229)
Dow Jones CDX. NA. IG.7 Index Buy 3,600 0.400 12/20/11 370 151,297
Georgia-Pacific Corp. Sell 1,690 1.750 9/20/08 -- (15,332)
31 | OPPENHEIMER BALANCED FUND
STATEMENT OF INVESTMENTS Unaudited / Continued
- -------------------------------------------------------------------------------
FOOTNOTES TO STATEMENT OF INVESTMENTS Continued
- -------------------------------------------------------------------------------
CREDIT DEFAULT SWAP CONTRACTS: Continued
- -------------------------------------------------------------------------------
BUY/SELL NOTIONAL
SWAP CREDIT AMOUNT PAY/RECEIVE TERMINATION PREMIUM
COUNTERPARTY REFERENCE ENTITY PROTECTION (000S) FIXED RATE DATE PAID/(RECEIVED) VALUE
- -----------------------------------------------------------------------------------------------------------------------------------
Deutcshe Bank AG:
Continued Intelsat Ltd. Sell $ 455 2.850% 9/20/08 $ -- $ (10,803)
iStar Financial, Inc. Sell 1,205 3.000 12/20/08 -- (93,637)
iStar Financial, Inc. Sell 160 4.320 12/20/12 -- (21,291)
iStar Financial, Inc. Sell 2,075 2.925 12/20/08 -- (162,321)
iStar Financial, Inc. Sell 845 12.000 3/20/09 -- (12,191)
Lehman Brothers Holdings, Inc. Sell 2,035 1.410 9/20/08 -- (51,738)
Levi Strauss & Co. Sell 740 0.900 9/20/08 -- (499)
Levi Strauss & Co. Sell 990 1.000 9/20/08 -- (167)
MBIA, Inc. Sell 1,100 0.520 9/20/08 -- (77,021)
MBIA, Inc. Sell 1,100 0.600 9/20/08 -- (76,594)
Merrill Lynch & Co., Inc. Sell 585 1.850 6/20/08 -- 1,833
Owens-Illinois, Inc. Sell 940 1.250 9/20/08 -- 136
Prudential Financial, Inc. Sell 1,005 2.050 6/20/09 -- (961)
Tenet Healthcare Corp. Sell 1,725 1.600 3/20/09 -- (21,977)
The Bear Stearns Cos., Inc. Sell 4,180 2.350 9/20/08 -- (11,725)
Vornado Realty LP Sell 1,255 3.875 6/20/09 -- 1,256
Wachovia Corp. Sell 2,695 1.000 3/20/09 -- 44
Washington Mutual, Inc. Sell 1,235 4.500 12/20/08 -- (26,147)
Washington Mutual, Inc. Sell 250 4.500 12/20/08 -- (5,293)
- -----------------------------------------------------------------------------------------------------------------------------------
Goldman Sachs
Capital Markets
LP:
ABX.HE.AA.06-2 Index Sell 700 0.170 5/25/46 (276,484) (405,980)
ABX.HE.AA.06-2 Index Sell 165 0.170 5/25/46 (13,595) (95,695)
Capmark Financial Group,
Inc. Sell 1,065 0.950 6/20/12 -- (403,014)
Dole Food Co., Inc. Sell 1,695 3.880 9/20/08 -- (71,405)
First Data Corp. Sell 1,080 1.150 9/20/08 -- (11,029)
iStar Financial, Inc. Sell 165 3.950 12/20/12 -- (21,956)
K. Hovnanian Enterprises, Inc. Sell 645 6.750 9/20/08 -- (25,236)
Merrill Lynch & Co., Inc. Sell 1,345 1.850 6/20/08 -- 4,215
Pulte Homes, Inc. Sell 1,605 2.750 9/20/09 -- (21,761)
Sara Lee Corp. Buy 1,385 0.419 9/20/12 -- 38,236
Smurfit-Stone Container
Enterprises, Inc. Sell 1,685 1.450 9/20/08 -- (51)
- -----------------------------------------------------------------------------------------------------------------------------------
Goldman Sachs
International:
Amkor Technology, Inc. Sell 160 2.650 9/20/08 -- 205
Citigroup, Inc. Sell 1,285 1.250 9/20/08 -- (84,066)
D.R. Horton, Inc. Sell 810 4.210 12/20/08 -- 1,445
General Mills, Inc. Sell 1,430 0.380 12/20/12 -- (1,088)
R.H. Donnelley Corp. Sell 1,350 9.000 3/20/09 -- (46,753)
Sprint Nextel Corp. Sell 970 6.300 3/20/09 -- 1,881
Univision Communications, Inc. Sell 320 5.000 6/20/09 (32,000) (2,939)
- -----------------------------------------------------------------------------------------------------------------------------------
Lehman Brothers
Special
Financing, Inc.:
ABX.HE.AA.06-2 Index Sell 750 0.170 5/25/46 (485,565) (434,362)
Ambac Assurance Corp. Sell 670 4.650 9/20/08 -- (15,580)
Capital One Bank Buy 735 1.800 12/20/12 -- 53,640
CenturyTel, Inc. Buy 630 1.430 3/20/13 -- (12,525)
D.R. Horton, Inc. Sell 1,630 4.200 12/20/08 -- 2,789
General Mills, Inc. Sell 1,730 0.400 12/20/12 -- 213
Genworth Financial, Inc. Sell 1,885 3.250 3/20/09 -- 2,763
32 | OPPENHEIMER BALANCED FUND
- --------------------------------------------------------------------------------
CREDIT DEFAULT SWAP CONTRACTS: Continued
- --------------------------------------------------------------------------------
BUY/SELL NOTIONAL
SWAP CREDIT AMOUNT PAY/RECEIVE TERMINATION PREMIUM
COUNTERPARTY REFERENCE ENTITY PROTECTION (000S) FIXED RATE DATE PAID/(RECEIVED) VALUE
- ------------------------------------------------------------------------------------------------------------------------------------
Lehman Brothers
Special Financing,
Inc.: Continued
Harrah's Operating Co., Inc. Sell $1,445 5.000% 3/20/10 $ (72,250) $ (83,511)
Merrill Lynch & Co., Inc. Sell 675 3.000 9/20/08 -- 7,542
Morgan Stanley Sell 4,235 0.640 9/20/08 -- (1,990)
Nortel Networks Corp. Sell 270 1.850 9/20/08 -- 25
Prudential Financial, Inc. Sell 1,025 2.100 6/20/09 -- (306)
R.H. Donnelley Corp. Sell 200 5.000 3/20/09 (20,000) (19,693)
Residential Capital LLC Sell 965 5.000 6/20/08 (125,450) (184,916)
Sprint Nextel Corp. Sell 1,820 6.300 3/20/09 -- 3,529
The Hartford Financial
Services Group, Inc. Sell 620 2.350 3/20/09 -- 8,182
The Hartford Financial
Services Group, Inc. Sell 645 2.350 3/20/09 -- 8,512
Toys "R" Us, Inc. Sell 260 8.610 3/20/09 -- 9,414
Toys "R" Us, Inc. Sell 120 8.610 3/20/09 -- 4,345
Univision Communications,
Inc. Sell 145 3.000 12/20/08 -- (13,002)
Univision Communications,
Inc. Sell 1,245 3.000 12/20/08 -- (111,640)
Univision Communications,
Inc. Sell 300 5.000 3/20/09 (25,500) (29,044)
Washington Mutual, Inc. Sell 580 4.400 12/20/08 -- (12,698)
- ------------------------------------------------------------------------------------------------------------------------------------
Morgan Stanley
Capital Services,
Inc.:
ABX.HE.AA.06-2 Index Sell 165 0.170 5/25/46 (13,182) (95,560)
ABX.HE.AA.06-2 Index Sell 320 0.170 5/25/46 (31,998) (185,328)
Beazer Homes USA, Inc. Sell 1,165 2.150 6/20/08 -- (25,186)
Capmark Financial Group,
Inc. Sell 225 5.000 6/20/12 (60,750) (63,458)
Countrywide Home Loans,
Inc. Sell 870 0.750 9/20/08 -- (22,989)
Countrywide Home Loans,
Inc. Sell 3,180 0.420 6/20/09 -- (211,378)
First Data Corp. Sell 675 1.350 9/20/08 -- (6,217)
Ford Motor Co. Sell 990 7.050 12/20/16 -- (154,960)
Ford Motor Co. Sell 2,090 7.150 12/20/16 -- (249,082)
General Motors Corp. Sell 1,035 5.800 12/20/16 -- (151,104)
General Motors Corp. Sell 1,005 5.750 12/20/16 -- (148,902)
Harrah's Operating Co., Inc. Sell 905 2.200 9/20/08 -- (19,889)
Inco Ltd. Buy 1,065 0.630 3/20/17 -- 48,413
Inco Ltd. Buy 1,055 0.700 3/20/17 -- 35,104
J.C. Penney Co., Inc. Sell 1,105 1.300 12/20/17 -- (54,681)
J.C. Penney Co., Inc. Sell 1,050 1.070 12/20/17 -- (69,263)
K. Hovnanian Enterprises,
Inc. Sell 525 1.850 6/20/08 -- (18,270)
K. Hovnanian Enterprises,
Inc. Sell 525 1.850 6/20/08 -- (18,270)
Kohl's Corp. Buy 1,655 0.870 12/20/17 -- 88,221
Kohl's Corp. Buy 1,575 0.660 12/20/17 -- 108,349
Lennar Corp. Sell 1,190 2.900 12/20/08 -- (32,576)
Merrill Lynch & Co., Inc. Sell 3,295 3.000 9/20/08 -- 36,815
Merrill Lynch & Co., Inc. Sell 1,270 3.250 9/20/08 -- 16,636
Residential Capital LLC Sell 2,560 6.120 9/20/08 -- (837,491)
Residential Capital LLC Sell 210 5.000 6/20/08 (28,350) (40,241)
Residential Capital LLC Sell 295 5.000 6/20/08 (42,775) (56,529)
Residential Capital LLC Sell 540 5.000 6/20/08 (78,300) (103,476)
33 | OPPENHEIMER BALANCED FUND
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
FOOTNOTES TO STATEMENT OF INVESTMENTS Continued
- --------------------------------------------------------------------------------
CREDIT DEFAULT SWAP CONTRACTS: Continued
- --------------------------------------------------------------------------------
BUY/SELL
SWAP CREDIT NOTIONAL PAY/RECEIVE TERMINATION PREMIUM
COUNTERPARTY REFERENCE ENTITY PROTECTION AMOUNT FIXED RATE DATE PAID/(RECEIVED) VALUE
- ------------------------------------------------------------------------------------------------------------------------------------
Morgan Stanley
Capital Services, Inc.:
Continued
Sara Lee Corp. Buy $ 1,775 0.418% 9/20/12 $ -- $ 49,075
The Hartford Financial
Services Group, Inc. Sell 620 2.400 3/20/09 8,489
Toys "R" Us, Inc. Sell 655 2.550 9/20/08 -- (18,865)
Tribune Co. Sell 1,015 1.000 6/20/08 -- (70,267)
Vale Overseas Ltd. Sell 1,065 1.100 3/20/17 -- (96,149)
Vale Overseas Ltd. Sell 1,055 1.170 3/20/17 -- (90,420)
------------------------------
$ (1,503,346) $(6,931,487)
==============================
- --------------------------------------------------------------------------------
INTEREST RATE SWAP CONTRACTS AS OF MARCH 31, 2008 ARE AS FOLLOWS:
- --------------------------------------------------------------------------------
SWAP NOTIONAL PAID BY RECEIVED BY TERMINATION
COUNTERPARTY AMOUNT THE FUND THE FUND DATE VALUE
- ------------------------------------------------------------------------------------------------------
Credit Suisse Three-Month
International $4,640,000 USD BBA LIBOR 5.428% 8/7/17 $ 499,361
- ------------------------------------------------------------------------------------------------------
Three-Month
Deutsche Bank AG 3,920,000 USD BBA LIBOR 5.445 8/8/17 427,002
-----------
$ 926,363
===========
Abbreviation is as follows:
BBA LIBOR British Bankers' Association London-Interbank Offered Rate
- --------------------------------------------------------------------------------
TOTAL RETURN SWAP CONTRACTS AS OF MARCH 31, 2008 ARE AS FOLLOWS:
- --------------------------------------------------------------------------------
SWAP NOTIONAL PAID BY RECEIVED BY TERMINATION
COUNTERPARTY AMOUNT THE FUND THE FUND DATE VALUE
- ------------------------------------------------------------------------------------------------------------------------------------
If positive, the If negative, the
Total Return of Total Return of the
the Lehman Lehman Brothers
Brothers U.S. CMBS U.S. CMBS AAA
AAA 8.5+ Index 8.5+ Index minus
Barclays Bank plc $ 6,500,000 plus 20 basis points 20 basis points 6/1/08 $ 208,512
- ------------------------------------------------------------------------------------------------------------------------------------
If positive, If negative, the
the Total Total Return
Return of the of the Lehman
Lehman Brothers Brothers U.S.
U.S. CMBS AAA 8.5+ CMBS AAA 8.5+
Index plus 15 Index minus 15
Deutsche Bank AG 4,500,000 basis points basis points 8/1/08 144,542
- ------------------------------------------------------------------------------------------------------------------------------------
Goldman
Sachs Group, Inc. (The):
If positive, If negative, the
the Total Total Return of
Return of the the Lehman
Lehman Brothers Brothers U.S.
U.S. CMBS AAA CMBS AAA
4,500,000 8.5+ Index 8.5+ Index 3/1/09 123,080
34 | OPPENHEIMER BALANCED FUND
- --------------------------------------------------------------------------------
TOTAL RETURN SWAP CONTRACTS: Continued
- --------------------------------------------------------------------------------
SWAP NOTIONAL PAID BY RECEIVED BY TERMINATION
COUNTERPARTY AMOUNT THE FUND THE FUND DATE VALUE
- ------------------------------------------------------------------------------------------------------------------------------------
Goldman
Sachs Group, Inc. (The):
Continued If positive, the If negative, the
Total Return Total Return
of the Lehman of the Lehman
Brothers U.S. CMBS Brothers U.S.
AAA 8.5+ Index CMBSAAA 8.5+
minus 200 basis Index plus 200
$ 2,980,000 points basis points 3/1/09 $ 296,798
- ------------------------------------------------------------------------------------------------------------------------------------
Lehman Brothers
Holdings, Inc.:
If negative, the
If positive, the Total Return of
Total Return of the the Lehman
Lehman Brothers U.S. Brothers U.S.
CMBS AAA 8.5+ CMBS AAA 8.5+
Index plus 30 Index minus 30
12,450,000 basis points basis points 8/1/08 395,502
If negative, the
If positive, the Total Return of
Total Return of the the Lehman
Lehman Brothers U.S. Brothers U.S.
CMBS AAA 8.5+ CMBS AAA 8.5+
Index minus 25 Index plus 25
6,700,000 basis points basis points 2/1/09 90,373
If negative, the
If positive, the Total Return of
Total Return of the the Lehman
Lehman Brothers U.S. Brothers U.S.
CMBS AAA 8.5+ CMBS AAA 8.5+
Index plus 40 Index minus 40
7,600,000 basis points basis points 6/1/08 240,861
If negative, the
If positive, the Total Return of
Total Return of the the Lehman
Lehman Brothers U.S. Brothers U.S.
CMBS AAA 8.5+ CMBS AAA 8.5+
Index plus 20 Index minus 20
6,100,000 basis points basis points 5/1/08 194,237
If negative, the
If positive, the Total Return of
Total Return of the the Lehman
Lehman Brothers U.S. Brothers U.S.
CMBS AAA 8.5+ CMBS AAA 8.5+
Index plus 15 Index minus 15
18,700,000 basis points basis points 8/1/09 596,151
35 | OPPENHEIMER BALANCED FUND
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
FOOTNOTES TO STATEMENT OF INVESTMENTS Continued
- --------------------------------------------------------------------------------
TOTAL RETURN SWAP CONTRACTS: Continued
- --------------------------------------------------------------------------------
SWAP NOTIONAL PAID BY RECEIVED BY TERMINATION
COUNTERPARTY AMOUNT THE FUND THE FUND DATE VALUE
- ------------------------------------------------------------------------------------------------------------------------------------
Lehman Brothers
Holdings, Inc.:
Continued If negative, the
If positive, the Total Return of
Total Return of the the Lehman
Lehman Brothers U.S. Brothers U.S.
CMBS AAA 8.5+ CMBS AAA 8.5+
Index minus 55 Index plus 55
$ 6,533,000 basis points basis points 5/1/08 $ 211,700
If negative, the
If positive, the Total Return of the
Total Return of the Lehman Brothers
Lehman Brothers U.S. U.S. CMBS AAA
2,970,000 CMBS AAA Index Index 3/1/09 95,017
If negative, the
If positive, the Total Return of
Total Return of the the Lehman
Lehman Brothers U.S. Brothers U.S.
CMBS AAA 8.5+ CMBS AAA 8.5+
Index minus 200 Index plus 200
2,980,000 basis points basis points 3/1/09 256,084
If negative, the
If positive, the Total Return of
Total Return of the the Lehman
Lehman Brothers U.S. Brothers U.S.
CMBS AAA 8.5+ CMBS AAA 8.5+
Index minus 45 Index plus 45
8,660,000 basis points basis points 5/1/08 279,976
- ------------------------------------------------------------------------------------------------------------------------------------
Morgan Stanley:
If negative, the
If positive, the Total Return of
Total Return of the the Lehman
Lehman Brothers U.S. Brothers U.S.
CMBS AAA 8.5+ CMBS AAA 8.5+
Index plus 40 Index minus 40
5,400,000 basis points basis points 6/1/08 149,582
If negative, the
If positive, the Total Return
Total Return of of the Lehman
the Lehman Brothers Brothers U.S.
U.S. CMBS AAA 8.5+ CMBS AAA 8.5+
Index minus 90 Index plus 90
6,500,000 basis points basis points 6/1/08 180,115
If positive, the If negative, the
Total Return of Total Return of
the Lehman the Lehman
Brothers U.S. CMBS Brothers U.S. CMBS
1,000,000 AAA 8.5+ Index AAA 8.5+ Index 8/1/08 24,293
36 | OPPENHEIMER BALANCED FUND
- --------------------------------------------------------------------------------
TOTAL RETURN SWAP CONTRACTS: Continued
- --------------------------------------------------------------------------------
SWAP NOTIONAL PAID BY RECEIVED BY TERMINATION
COUNTERPARTY AMOUNT THE FUND THE FUND DATE VALUE
- ------------------------------------------------------------------------------------------------------------------------------------
Morgan Stanley:
Continued If negative, the
If positive, the Total Return of
Total Return of the the Lehman
Lehman Brothers Brothers U.S.
U.S. CMBS CMBS AAA
$ 6,600,000 AAA Index Index 2/1/09 $ 147,573
If positive, the If negative, the
Total Return of the Total Return of
Lehman Brothers the Lehman
U.S. CMBS AAA Brothers U.S.
12,500,000 Index CMBS AAA Index 3/1/09 289,633
If positive, the If negative, the
Total Return of Total Return of
the Lehman the Lehman
Brothers U.S. Brothers U.S.
8.5+ CMBS AAA CMBS AAA 8.5+
Index minus 250 Index plus 250
4,030,000 basis points basis points 3/1/09 334,334
If positive, the If negative, the
Total Return of Total Return of
the Lehman the Lehman
Brothers U.S. Brothers U.S.
CMBS AAA 8.5+ CMBS AAA 8.5+
Index minus 250 Index plus 250
5,530,000 basis points basis points 3/1/09 653,947
If positive, the If negative, the
Total Return of Total Return of
the Lehman the Lehman
Brothers U.S. Brothers U.S.
CMBS AAA 8.5+ CMBS AAA 8.5+
Index minus 350 Index plus 350
5,840,000 basis points basis points 3/1/09 696,620
- ------------------------------------------------------------------------------------------------------------------------------------
If positive, the If negative, the
Total Return of Total Return of
the Lehman the Lehman
Brothers U.S. Brothers U.S.
CMBS AAA 8.5+ CMBS AAA 8.5+
Index plus 20 Index minus 20
UBS AG 4,200,000 basis points basis points 5/1/08 135,062
-------------
$ 5,743,992
=============
Abbreviation is as follows:
CMBS Commercial Mortgage-Backed Securities
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
37 | OPPENHEIMER BALANCED FUND
STATEMENT OF ASSETS AND LIABILITIES Unaudited
- --------------------------------------------------------------------------------
March 31, 2008
- -----------------------------------------------------------------------------------------------------------------------------------
ASSETS
- -----------------------------------------------------------------------------------------------------------------------------------
Investments, at value--see accompanying statement of investments:
Unaffiliated companies (cost $ 866,431,402) $ 933,211,184
Affiliated companies (cost $ 58,671,993) 58,671,993
-----------------
991,883,177
- ------------------------------------------------------------------------------------------------------------------------------------
Cash 2,066,386
- ------------------------------------------------------------------------------------------------------------------------------------
Swaps, at value (net premiums received $ 537,195) 6,991,893
- ------------------------------------------------------------------------------------------------------------------------------------
Receivables and other assets:
Interest, dividends and principal paydowns 4,111,656
Shares of beneficial interest sold 2,419,853
Investments sold (including $779,631 sold on a when-issued or delayed delivery basis) 779,912
Other 106,407
-----------------
Total assets 1,008,359,284
- ------------------------------------------------------------------------------------------------------------------------------------
LIABILITIES
- ------------------------------------------------------------------------------------------------------------------------------------
Swaps, at value (premiums received $ 966,151) 7,253,025
- ------------------------------------------------------------------------------------------------------------------------------------
Payables and other liabilities:
Investments purchased (including $55,155,726 purchased on a when-issued
or delayed delivery basis) 57,562,667
Shares of beneficial interest redeemed 3,522,514
Distribution and service plan fees 534,415
Trustees' compensation 195,717
Transfer and shareholder servicing agent fees 112,334
Shareholder communications 89,031
Futures margins 28,173
Other 33,839
-----------------
Total liabilities 69,331,715
- ------------------------------------------------------------------------------------------------------------------------------------
NET ASSETS $ 939,027,569
=================
- -----------------------------------------------------------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS
- -----------------------------------------------------------------------------------------------------------------------------------
Paid-in capital $ 915,485,672
- ------------------------------------------------------------------------------------------------------------------------------------
Accumulated net investment income 12,196,210
- ------------------------------------------------------------------------------------------------------------------------------------
Accumulated net realized loss on investments and foreign currency transactions (56,490,188)
- ------------------------------------------------------------------------------------------------------------------------------------
Net unrealized appreciation on investments and translation of assets and
liabilities denominated in foreign currencies 67,835,875
-----------------
NET ASSETS $ 939,027,569
=================
38 | OPPENHEIMER BALANCED FUND
- ----------------------------------------------------------------------------------------------------------------
NET ASSET VALUE PER SHARE
- ----------------------------------------------------------------------------------------------------------------
Class A Shares:
Net asset value and redemption price per share (based on net assets
of $ 763,078,702 and 61,771,070 shares of beneficial interest outstanding) $ 12.35
Maximum offering price per share (net asset value plus sales charge of 5.75%
of offering price) $ 13.10
- -----------------------------------------------------------------------------------------------------------------
Class B Shares:
Net asset value, redemption price (excludes applicable contingent deferred sales
charge) and offering price per share (based on net assets of $73,451,253 and
6,104,796 shares of beneficial interest outstanding) $ 12.03
- -----------------------------------------------------------------------------------------------------------------
Class C Shares:
Net asset value, redemption price (excludes applicable contingent deferred sales
charge) and offering price per share (based on net assets of $88,501,029 and
7,316,535 shares of beneficial interest outstanding) $ 12.10
- -----------------------------------------------------------------------------------------------------------------
Class N Shares:
Net asset value, redemption price (excludes applicable contingent deferred sales
charge) and offering price per share (based on net assets of $13,996,585
and 1,146,988 shares of beneficial interest outstanding) $ 12.20
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
39 | OPPENHEIMER BALANCED FUND
STATEMENT OF OPERATIONS Unaudited
- --------------------------------------------------------------------------------
For the Six Months Ended March 31, 2008
- ------------------------------------------------------------------------------------
INVESTMENT INCOME
- ------------------------------------------------------------------------------------
Interest (net of foreign withholding taxes of $449) $ 13,803,817
- ------------------------------------------------------------------------------------
Dividends:
Unaffiliated companies (net of foreign withholding taxes of $75,722) 2,960,295
Affiliated companies 1,574,490
--------------
Total investment income 18,338,602
- ------------------------------------------------------------------------------------
EXPENSES
- ------------------------------------------------------------------------------------
Management fees 3,460,839
- ------------------------------------------------------------------------------------
Distribution and service plan fees:
Class A 875,345
Class B 409,433
Class C 475,780
Class N 40,424
- ------------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees:
Class A 511,952
Class B 90,946
Class C 86,000
Class N 24,463
- ------------------------------------------------------------------------------------
Shareholder communications:
Class A 71,016
Class B 16,548
Class C 10,258
Class N 1,407
- ------------------------------------------------------------------------------------
Trustees' compensation 23,014
- ------------------------------------------------------------------------------------
Custodian fees and expenses 6,208
- ------------------------------------------------------------------------------------
Other 37,687
--------------
Total expenses 6,141,320
Less reduction to custodian expenses (4,505)
Less waivers and reimbursements of expenses (33,077)
--------------
Net expenses 6,103,738
- ------------------------------------------------------------------------------------
NET INVESTMENT INCOME 12,234,864
40 | OPPENHEIMER BALANCED FUND
- ------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
- ------------------------------------------------------------------------------------
Net realized gain (loss) on:
Investments from unaffiliated companies $ (37,178,592)
Closing and expiration of futures contracts (4,291,929)
Foreign currency transactions 4,810,607
Short positions (2,722)
Swap contracts (14,903,254)
---------------
Net realized loss (51,565,890)
- ------------------------------------------------------------------------------------
Net change in unrealized appreciation (depreciation) on:
Investments (57,568,551)
Translation of assets and liabilities denominated in foreign
currencies (1,186,822)
Futures contracts 103,830
Swap contracts 1,269,322
---------------
Net change in unrealized appreciation (57,382,221)
- ------------------------------------------------------------------------------------
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS $ (96,713,247)
===============
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
41 | OPPENHEIMER BALANCED FUND
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
SIX MONTHS YEAR
ENDED ENDED
MARCH 31, 2008 SEPTEMBER 30,
(UNAUDITED) 2007
- ----------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------
OPERATIONS
- ----------------------------------------------------------------------------------------------------
Net investment income $ 12,234,864 $ 23,503,293
- ----------------------------------------------------------------------------------------------------
Net realized gain (loss) (51,565,890) 55,159,489
- ----------------------------------------------------------------------------------------------------
Net change in unrealized appreciation (57,382,221) 38,979,195
----------------------------------
Net increase (decrease) in net assets resulting from operations (96,713,247) 117,641,977
- ----------------------------------------------------------------------------------------------------
DIVIDENDS AND/OR DISTRIBUTIONS TO SHAREHOLDERS
- ----------------------------------------------------------------------------------------------------
Dividends from net investment income:
Class A (5,903,735) (20,079,749)
Class B (370,570) (1,423,760)
Class C (446,117) (1,532,394)
Class N (90,959) (362,666)
----------------------------------
(6,811,381) (23,398,569)
- ----------------------------------------------------------------------------------------------------
Distributions from net realized gain:
Class A (37,194,913) (51,176,462)
Class B (3,833,652) (6,078,031)
Class C (4,413,625) (5,885,017)
Class N (738,584) (1,116,454)
----------------------------------
(46,180,774) (64,255,964)
- ----------------------------------------------------------------------------------------------------
BENEFICIAL INTEREST TRANSACTIONS
- ----------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from
beneficial interest transactions:
Class A 17,997,384 30,877,600
Class B (5,172,995) (9,669,827)
Class C 1,119,142 6,173,205
Class N (1,869,643) 2,816,552
----------------------------------
12,073,888 30,197,530
- ----------------------------------------------------------------------------------------------------
NET ASSETS
- ----------------------------------------------------------------------------------------------------
Total increase (decrease) (137,631,514) 60,184,974
- ----------------------------------------------------------------------------------------------------
Beginning of period 1,076,659,083 1,016,474,109
----------------------------------
End of period (including accumulated net investment
income of $12,196,210 and $6,772,727, respectively) $ 939,027,569 $ 1,076,659,083
==================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
42 | OPPENHEIMER BALANCED FUND
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
SIX MONTHS
ENDED
MARCH 31, 2008 YEAR ENDED SEPTEMBER 30,
CLASS A (UNAUDITED) 2007 2006 2005 2004 2003
- -------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- -------------------------------------------------------------------------------------------------------------------
Net asset value, beginning
of period $ 14.32 $ 13.94 $ 14.51 $ 13.75 $ 12.55 $ 10.51
- -------------------------------------------------------------------------------------------------------------------
Income (loss) from
investment operations:
Net investment income .17 1 .34 1 .30 1 .24 1 .14 .21
Net realized and
unrealized gain (loss) (1.42) 1.27 .21 1.38 1.16 2.08
---------------------------------------------------------------------------------
Total from investment
operations (1.25) 1.61 .51 1.62 1.30 2.29
- -------------------------------------------------------------------------------------------------------------------
Dividends and/or
distributions
to shareholders:
Dividends from net
investment income (.10) (.34) (.29) (.16) (.10) (.22)
Tax return of capital
distribution -- -- -- -- -- (.03)
Distributions from net
realized gain (.62) (.89) (.79) (.70) -- --
---------------------------------------------------------------------------------
Total dividends and/or
distributions
to shareholders (.72) (1.23) (1.08) (.86) (.10) (.25)
- -------------------------------------------------------------------------------------------------------------------
Net asset value, end
of period $ 12.35 $ 14.32 $ 13.94 $ 14.51 $ 13.75 $ 12.55
=================================================================================
- -------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET
VALUE 2 (9.08)% 11.96% 3.86% 12.13% 10.37% 21.98%
- -------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- -------------------------------------------------------------------------------------------------------------------
Net assets, end of period
(in thousands) $ 763,079 $ 865,895 $ 810,738 $ 725,836 $ 651,754 $ 575,799
- -------------------------------------------------------------------------------------------------------------------
Average net assets
(in thousands) $ 818,184 $ 851,017 $ 752,163 $ 694,147 $ 631,041 $ 523,477
- -------------------------------------------------------------------------------------------------------------------
Ratios to average net
assets: 3
Net investment income 2.58% 2.38% 2.16% 1.69% 1.05% 1.78%
Total expenses 1.05% 4 1.05% 4 1.06% 1.05% 1.07% 1.11%
Expenses after payments,
waivers and/or reimbursements
and reduction to custodian
expenses 1.04% 1.04% 1.06% 1.05% 1.06% 1.11%
- -------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 30% 5 74% 5 84% 5 73% 5 61% 5 205%
1. Per share amounts calculated based on the average shares outstanding during
the period.
2. Assumes an investment on the business day before the first day of the fiscal
period, with all dividends and distributions reinvested in additional shares on
the reinvestment date, and redemption at the net asset value calculated on the
last business day of the fiscal period. Sales charges are not reflected in the
total returns. Total returns are not annualized for periods less than one full
year. Returns do not reflect the deduction of taxes that a shareholder would pay
on fund distributions or the redemption of fund shares.
3. Annualized for periods less than one full year.
4. Total expenses including indirect expenses from affiliated fund were as
follows:
Six Months Ended March 31, 2008 1.06%
Year Ended September 30, 2007 1.06%
5. The portfolio turnover rate excludes purchase and sale transactions of To Be
Announced (TBA) mortgage-related securities as follows:
PURCHASE TRANSACTIONS SALE TRANSACTIONS
---------------------------------------------------------------------------
Six Months Ended March 31, 2008 $ 151,442,834 $ 106,878,306
Year Ended September 30, 2007 $ 814,618,659 $ 879,472,606
Year Ended September 30, 2006 $ 1,329,963,782 $ 1,377,730,782
Year Ended September 30, 2005 $ 2,097,453,846 $ 2,135,377,175
Year Ended September 30, 2004 $ 1,069,526,653 $ 1,026,457,980
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
43 | OPPENHEIMER BALANCED FUND
FINANCIAL HIGHLIGHTS Continued
- --------------------------------------------------------------------------------
SIX MONTHS
ENDED
MARCH 31, 2008 YEAR ENDED SEPTEMBER 30,
CLASS B (UNAUDITED) 2007 2006 2005 2004 2003
- --------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- --------------------------------------------------------------------------------------------------------------
Net asset value, beginning
of period $ 13.99 $ 13.64 $ 14.23 $ 13.53 $ 12.40 $ 10.38
- --------------------------------------------------------------------------------------------------------------
Income (loss) from
investment operations:
Net investment income .11 1 .20 1 .17 1 .11 1 .02 .09
Net realized and unrealized
gain (loss) (1.39) 1.25 .20 1.36 1.13 2.07
---------------------------------------------------------------------------
Total from investment
operations (1.28) 1.45 .37 1.47 1.15 2.16
- --------------------------------------------------------------------------------------------------------------
Dividends and/or
distributions to
shareholders:
Dividends from net
investment income (.06) (.21) (.17) (.07) (.02) (.11)
Tax return of capital
distribution -- -- -- -- -- (.03)
Distributions from net
realized gain (.62) (.89) (.79) (.70) -- --
---------------------------------------------------------------------------
Total dividends and/or
distributions to
shareholders (.68) (1.10) (.96) (.77) (.02) (.14)
- --------------------------------------------------------------------------------------------------------------
Net asset value, end
of period $ 12.03 $ 13.99 $ 13.64 $ 14.23 $ 13.53 $ 12.40
===========================================================================
- --------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET
VALUE 2 (9.49)% 10.99% 2.84% 11.17% 9.26% 20.91%
- --------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- --------------------------------------------------------------------------------------------------------------
Net assets, end of period
(in thousands) $ 73,451 $ 90,879 $ 98,021 $ 98,271 $ 84,924 $ 64,944
- --------------------------------------------------------------------------------------------------------------
Average net assets
(in thousands) $ 81,819 $ 95,241 $ 95,979 $ 92,677 $ 77,082 $ 57,836
- --------------------------------------------------------------------------------------------------------------
Ratios to average net
assets: 3
Net investment income 1.67% 1.48% 1.24% 0.76% 0.11% 0.81%
Total expenses 1.96% 4 1.95% 4 1.99% 1.98% 2.02% 2.08%
Expenses after payments,
waivers and/or reimbursements
and reduction to custodian
expenses 1.95% 1.94% 1.99% 1.98% 2.02% 2.08%
- --------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 30% 5 74% 5 84% 5 73% 5 61% 5 205%
1. Per share amounts calculated based on the average shares outstanding during
the period.
2. Assumes an investment on the business day before the first day of the
fiscal period, with all dividends and distributions reinvested in additional
shares on the reinvestment date, and redemption at the net asset value
calculated on the last business day of the fiscal period. Sales charges are not
reflected in the total returns. Total returns are not annualized for periods
less than one full year. Returns do not reflect the deduction of taxes that a
shareholder would pay on fund distributions or the redemption of fund shares.
3. Annualized for periods less than one full year.
4. Total expenses including indirect expenses from affiliated fund were as
follows:
Six Months Ended March 31, 2008 1.97%
Year Ended September 30, 2007 1.96%
5. The portfolio turnover rate excludes purchase and sale transactions of To Be
Announced (TBA) mortgage-related securities as follows:
PURCHASE TRANSACTIONS SALE TRANSACTIONS
---------------------------------------------------------------------------
Six Months Ended March 31, 2008 $ 151,442,834 $ 106,878,306
Year Ended September 30, 2007 $ 814,618,659 $ 879,472,606
Year Ended September 30, 2006 $ 1,329,963,782 $ 1,377,730,782
Year Ended September 30, 2005 $ 2,097,453,846 $ 2,135,377,175
Year Ended September 30, 2004 $ 1,069,526,653 $ 1,026,457,980
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
44 | OPPENHEIMER BALANCED FUND
SIX MONTHS
ENDED
MARCH 31, 2008 YEAR ENDED SEPTEMBER 30,
CLASS C (UNAUDITED) 2007 2006 2005 2004 2003
- ----------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- ----------------------------------------------------------------------------------------------------------------
Net asset value, beginning
of period $ 14.06 $ 13.71 $ 14.29 $ 13.59 $ 12.44 $ 10.42
- ----------------------------------------------------------------------------------------------------------------
Income (loss) from
investment operations:
Net investment income .11 1 .21 1 .18 1 .11 1 .04 .11
Net realized and
unrealized gain (loss) (1.39) 1.25 .21 1.37 1.13 2.06
----------------------------------------------------------------------------
Total from investment
operations (1.28) 1.46 .39 1.48 1.17 2.17
- ----------------------------------------------------------------------------------------------------------------
Dividends and/or
distributions to
shareholders:
Dividends from net
investment income (.06) (.22) (.18) (.08) (.02) (.12)
Tax return of capital
distribution -- -- -- -- -- (.03)
Distributions from net
realized gain (.62) (.89) (.79) (.70) -- --
----------------------------------------------------------------------------
Total dividends and/or
distributions to
shareholders (.68) (1.11) (.97) (.78) (.02) (.15)
- ----------------------------------------------------------------------------------------------------------------
Net asset value, end
of period $ 12.10 $ 14.06 $ 13.71 $ 14.29 $ 13.59 $ 12.44
============================================================================
- ----------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET
VALUE 2 (9.42)% 11.00% 2.97% 11.18% 9.45% 20.98%
- ----------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ----------------------------------------------------------------------------------------------------------------
Net assets, end of period
(in thousands) $ 88,501 $ 101,645 $ 92,782 $ 87,820 $ 68,018 $ 47,212
- ----------------------------------------------------------------------------------------------------------------
Average net assets
(in thousands) $ 95,077 $ 97,640 $ 90,567 $ 78,091 $ 60,095 $ 38,407
- ----------------------------------------------------------------------------------------------------------------
Ratios to average net
assets: 3
Net investment income 1.73% 1.53% 1.30% 0.83% 0.19% 0.90%
Total expenses 1.90% 4 1.90% 4 1.93% 1.91% 1.93% 1.98%
Expenses after payments,
waivers and/or
reimbursements and reduction
to custodian expenses 1.89% 1.89% 1.92% 1.91% 1.93% 1.98%
- ----------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 30% 5 74% 5 84% 5 73% 5 61% 5 205%
1. Per share amounts calculated based on the average shares outstanding during
the period.
2. Assumes an investment on the business day before the first day of the
fiscal period, with all dividends and distributions reinvested in additional
shares on the reinvestment date, and redemption at the net asset value
calculated on the last business day of the fiscal period. Sales charges are not
reflected in the total returns. Total returns are not annualized for periods
less than one full year. Returns do not reflect the deduction of taxes that a
shareholder would pay on fund distributions or the redemption of fund shares.
3. Annualized for periods less than one full year.
4. Total expenses including indirect expenses from affiliated fund were as
follows:
Six Months Ended March 31, 2008 1.91%
Year Ended September 30, 2007 1.91%
5. The portfolio turnover rate excludes purchase and sale transactions of To Be
Announced (TBA) mortgage-related securities as follows:
PURCHASE TRANSACTIONS SALE TRANSACTIONS
---------------------------------------------------------------------------
Six Months Ended March 31, 2008 $ 151,442,834 $ 106,878,306
Year Ended September 30, 2007 $ 814,618,659 $ 879,472,606
Year Ended September 30, 2006 $ 1,329,963,782 $ 1,377,730,782
Year Ended September 30, 2005 $ 2,097,453,846 $ 2,135,377,175
Year Ended September 30, 2004 $ 1,069,526,653 $ 1,026,457,980
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
45 | OPPENHEIMER BALANCED FUND
FINANCIAL HIGHLIGHTS Continued
- --------------------------------------------------------------------------------
SIX MONTHS
ENDED
MARCH 31, 2008 YEAR ENDED SEPTEMBER 30,
CLASS N (UNAUDITED) 2007 2006 2005 2004 2003
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- -------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 14.17 $ 13.80 $ 14.38 $ 13.65 $ 12.49 $ 10.48
- -------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .14 1 .28 1 .24 1 .17 1 .10 .20
Net realized and unrealized gain (loss) (1.41) 1.26 .21 1.38 1.12 2.01
----------------------------------------------------------------------------
Total from investment operations (1.27) 1.54 .45 1.55 1.22 2.21
- -------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions
to shareholders:
Dividends from net investment income (.08) (.28) (.24) (.12) (.06) (.17)
Tax return of capital distribution -- -- -- -- -- (.03)
Distributions from net realized gain (.62) (.89) (.79) (.70) -- --
----------------------------------------------------------------------------
Total dividends and/or distributions
to shareholders (.70) (1.17) (1.03) (.82) (.06) (.20)
- -------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 12.20 $ 14.17 $ 13.80 $ 14.38 $ 13.65 $ 12.49
============================================================================
- -------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2 (9.33)% 11.57% 3.42% 11.66% 9.77% 21.27%
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- -------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 13,997 $ 18,240 $ 14,933 $ 11,803 $ 8,772 $ 3,349
- -------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 16,136 $ 18,038 $ 13,425 $ 10,278 $ 5,701 $ 1,604
- -------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income 2.11% 1.98% 1.76% 1.24% 0.55% 1.24%
Total expenses 1.52% 4 1.45% 4 1.47% 1.50% 1.58% 1.76%
Expenses after payments, waivers and/or
reimbursements and reduction to
custodian expenses 1.51% 1.44% 1.47% 1.50% 1.57% 1.62%
- -------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 30% 5 74% 5 84% 5 73% 5 61% 5 205%
1. Per share amounts calculated based on the average shares outstanding during
the period.
2. Assumes an investment on the business day before the first day of the fiscal
period, with all dividends and distributions reinvested in additional shares on
the reinvestment date, and redemption at the net asset value calculated on the
last business day of the fiscal period. Sales charges are not reflected in the
total returns. Total returns are not annualized for periods less than one full
year. Returns do not reflect the deduction of taxes that a shareholder would pay
on fund distributions or the redemption of fund shares.
3. Annualized for periods less than one full year.
4. Total expenses including indirect expenses from affiliated fund were as
follows:
Six Months Ended March 31, 2008 1.53%
Year Ended September 30, 2007 1.46%
5. The portfolio turnover rate excludes purchase and sale transactions of To Be
Announced (TBA) mortgage-related securities as follows:
PURCHASE TRANSACTIONS SALE TRANSACTIONS
----------------------------------------------------------------------------------------------
Six Months Ended March 31, 2008 $ 151,442,834 $ 106,878,306
Year Ended September 30, 2007 $ 814,618,659 $ 879,472,606
Year Ended September 30, 2006 $ 1,329,963,782 $ 1,377,730,782
Year Ended September 30, 2005 $ 2,097,453,846 $ 2,135,377,175
Year Ended September 30, 2004 $ 1,069,526,653 $ 1,026,457,980
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
46 | OPPENHEIMER BALANCED FUND
NOTES TO FINANCIAL STATEMENTS Unaudited
- --------------------------------------------------------------------------------
1.SIGNIFICANT ACCOUNTING POLICIES
Oppenheimer Balanced Fund (the "Fund") is registered under the Investment
Company Act of 1940, as amended, as an open end management investment company.
The Fund's investment objective is to seek high total investment return
consistent with preservation of principal. The Fund's investment adviser is
OppenheimerFunds, Inc. (the "Manager").
The Fund offers Class A, Class B, Class C and Class N shares. Class A shares
are sold at their offering price, which is normally net asset value plus a
front-end sales charge. Class B, Class C and Class N shares are sold without a
front-end sales charge but may be subject to a contingent deferred sales charge
("CDSC"). Class N shares are sold only through retirement plans. Retirement
plans that offer Class N shares may impose charges on those accounts. All
classes of shares have identical rights and voting privileges with respect to
the Fund in general and exclusive voting rights on matters that affect that
class alone. Earnings, net assets and net asset value per share may differ due
to each class having its own expenses, such as transfer and shareholder
servicing agent fees and shareholder communications, directly attributable to
that class. Class A, B, C and N have separate distribution and/or service plans.
Class B shares will automatically convert to Class A shares 72 months after the
date of purchase.
The following is a summary of significant accounting policies consistently
followed by the Fund.
- --------------------------------------------------------------------------------
SECURITIES VALUATION. The Fund calculates the net asset value of its shares as
of the close of the New York Stock Exchange (the "Exchange"), normally 4:00 P.M.
Eastern time, on each day the Exchange is open for trading. Securities may be
valued primarily using dealer-supplied valuations or a portfolio pricing service
authorized by the Board of Trustees. Securities traded on a registered U.S.
securities exchange are valued based on the last sale price of the security
traded on that exchange prior to the time when the Fund's assets are valued.
Securities whose principal exchange is NASDAQ(R) are valued based on the closing
price reported by NASDAQ prior to the time when the Fund's assets are valued. In
the absence of a sale, the security is valued at the last sale price on the
prior trading day, if it is within the spread of the closing "bid" and "asked"
prices, and if not, at the closing bid price. Securities traded on foreign
exchanges are valued based on the last sale price on the principal exchange on
which the security is traded, as identified by the portfolio pricing service,
prior to the time when the Fund's assets are valued. In the absence of a sale,
the security is valued at the official closing price on the principal exchange.
Corporate, government and municipal debt instruments having a remaining maturity
in excess of sixty days and all mortgage-backed securities, collateralized
mortgage obligations and other asset-backed securities will be valued at the
mean between the "bid" and "asked" prices. Securities for which market
quotations are not readily available are valued at their fair value. Securities
whose values have been materially affected by what the Manager identifies as a
significant event occurring before the Fund's assets are valued but after the
close of their respective exchanges will be fair valued. Fair value is
determined in good faith using consistently applied procedures under the
supervision of the Board of Trustees. Shares of a registered investment company
that are not traded
47 | OPPENHEIMER BALANCED FUND
NOTES TO FINANCIAL STATEMENTS Unaudited (Continued)
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES Continued
on an exchange are valued at the acquired investment company's net asset value
per share. "Money market-type" debt instruments with remaining maturities of
sixty days or less are valued at cost adjusted by the amortization of discount
or premium to maturity (amortized cost), which approximates market value.
- --------------------------------------------------------------------------------
SECURITIES SOLD SHORT. The Fund may short sale when-issued securities for future
settlement. The value of the open short position is recorded as a liability, and
the Fund records an unrealized gain or loss for the value of the open short
position. The Fund records a realized gain or loss when the short position is
closed out.
As of March 31, 2008, the Fund held no securities sold short.
- --------------------------------------------------------------------------------
SECURITIES ON A WHEN-ISSUED OR DELAYED DELIVERY BASIS. The Fund may purchase
securities on a "when-issued" basis, and may purchase or sell securities on a
"delayed delivery" basis. "When-issued" or "delayed delivery" refers to
securities whose terms and indenture are available and for which a market
exists, but which are not available for immediate delivery. Delivery and payment
for securities that have been purchased by the Fund on a when-issued basis
normally takes place within six months and possibly as long as two years or more
after the trade date. During this period, such securities do not earn interest,
are subject to market fluctuation and may increase or decrease in value prior to
their delivery. The purchase of securities on a when-issued basis may increase
the volatility of the Fund's net asset value to the extent the Fund executes
such transactions while remaining substantially fully invested. When the Fund
engages in when-issued or delayed delivery transactions, it relies on the buyer
or seller, as the case may be, to complete the transaction. Their failure to do
so may cause the Fund to lose the opportunity to obtain or dispose of the
security at a price and yield it considers advantageous. The Fund maintains
internally designated assets with a market value equal to or greater than the
amount of its purchase commitments. The Fund may also sell securities that it
purchased on a when-issued basis or forward commitment prior to settlement of
the original purchase.
As of March 31, 2008, the Fund had purchased securities issued on a when-issued
or delayed delivery basis and sold securities issued on a delayed delivery basis
as follows:
WHEN-ISSUED OR DELAYED DELIVERY
BASIS TRANSACTIONS
- --------------------------------------------------------------------------------
Purchased securities $ 55,155,726
Sold securities 779,631
FOREIGN CURRENCY TRANSLATION. The Fund's accounting records are maintained in
U.S. dollars. The values of securities denominated in foreign currencies and
amounts related to the purchase and sale of foreign securities and foreign
investment income are translated into U.S. dollars as of the close of the
Exchange, normally 4:00 P.M. Eastern time, on each day the Exchange is open for
trading. Foreign exchange rates may be valued primarily using a reliable bank,
dealer or service authorized by the Board of Trustees.
48 | OPPENHEIMER BALANCED FUND
Reported net realized gains and losses from foreign currency transactions
arise from sales of portfolio securities, sales and maturities of short-term
securities, sales of foreign currencies, exchange rate fluctuations between the
trade and settlement dates on securities transactions, and the difference
between the amounts of dividends, interest, and foreign withholding taxes
recorded on the Fund's books and the U.S. dollar equivalent of the amounts
actually received or paid. Net unrealized appreciation and depreciation on the
translation of assets and liabilities denominated in foreign currencies arise
from changes in the values of assets and liabilities, including investments in
securities at fiscal period end, resulting from changes in exchange rates.
The effect of changes in foreign currency exchange rates on investments is
separately identified from the fluctuations arising from changes in market
values of securities held and reported with all other foreign currency gains and
losses in the Fund's Statement of Operations.
- --------------------------------------------------------------------------------
INVESTMENT IN OPPENHEIMER INSTITUTIONAL MONEY MARKET FUND. The Fund is permitted
to invest daily available cash balances in an affiliated money market fund. The
Fund may invest the available cash in Class E shares of Oppenheimer
Institutional Money Market Fund ("IMMF") to seek current income while preserving
liquidity. 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 adviser of IMMF. The Fund's
investment in IMMF is included in the Statement of Investments. As a
shareholder, the Fund is subject to its proportional share of IMMF's Class E
expenses, including its management fee. The Manager will waive fees and/or
reimburse Fund expenses in an amount equal to the indirect management fees
incurred through the Fund's investment in IMMF.
- --------------------------------------------------------------------------------
INVESTMENTS WITH OFF-BALANCE SHEET RISK. The Fund 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 Fund'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 Fund intends to comply with provisions of the Internal
Revenue Code applicable to regulated investment companies and to distribute
substantially all of its investment company taxable income, including any net
realized gain on investments not offset by capital loss carryforwards, if any,
to shareholders. Therefore, no federal income or excise tax provision is
required. The Fund files income tax returns in U.S. federal and applicable state
jurisdictions. The statute of limitations on the Fund's tax return filings
generally remain open for the three preceding fiscal reporting period ends.
49 | OPPENHEIMER BALANCED FUND
NOTES TO FINANCIAL STATEMENTS Unaudited/Continued
- --------------------------------------------------------------------------------
1.SIGNIFICANT ACCOUNTING POLICIES Continued
Net investment income (loss) and net realized gain (loss) may differ for
financial statement and tax purposes. The character of dividends and
distributions made during the fiscal year from net investment income or net
realized gains may differ from their ultimate characterization for federal
income tax purposes. Also, due to timing of dividends and distributions, the
fiscal year in which amounts are distributed may differ from the fiscal year in
which the income or net realized gain was recorded by the Fund.
During the fiscal year ended September 30, 2007, the Fund utilized $213,555
of capital loss carryforward to offset capital gains realized in that fiscal
year. As of September 30, 2007, the Fund had available for federal income tax
purposes post-October foreign currency losses of $165 and straddle losses of
$466,900.
As of March 31, 2008, the Fund had available for federal income tax purposes
an estimated capital loss carryforward of $52,032,955 expiring by 2016. 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. During the six
months ended March 31, 2008, it is estimated that the Fund will not utilize any
capital loss carryforward to offset realized capital gains.
The approximate aggregate cost of securities and other investments and the
composition of unrealized appreciation and depreciation of securities and other
investments for federal income tax purposes as of March 31, 2008 are noted
below. The primary difference between book and tax appreciation or depreciation
of securities and other investments, if applicable, is attributable to the tax
deferral of losses.
Federal tax cost of securities $ 926,903,946
Federal tax cost of other investments (125,971,399)
-------------------
Total federal tax cost $ 800,932,547
===================
Gross unrealized appreciation $ 122,213,894
Gross unrealized depreciation (56,184,427)
-------------------
Net unrealized appreciation $ 66,029,467
===================
- --------------------------------------------------------------------------------
TRUSTEES' COMPENSATION. The Fund has adopted an unfunded retirement plan (the
"Plan") for the Fund'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 March 31, 2008, the
Fund's projected benefit obligations, payments to retired trustees and
accumulated liability were as follows:
Projected Benefit Obligations Increased $ 11,731
Payments Made to Retired Trustees 13,413
Accumulated Liability as of March 31, 2008 123,954
50 | OPPENHEIMER BALANCED FUND
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 Fund. For purposes
of determining the amount owed to the Trustee under the plan, deferred amounts
are treated as though equal dollar amounts had been invested in shares of the
Fund or in other Oppenheimer funds selected by the Trustee. The Fund purchases
shares of the funds selected for deferral by the Trustee in amounts equal to his
or her deemed investment, resulting in a Fund asset equal to the deferred
compensation liability. Such assets are included as a component of "Other"
within the asset section of the Statement of Assets and Liabilities. Deferral of
trustees' fees under the plan will not affect the net assets of the Fund, and
will not materially affect the Fund's assets, liabilities or net investment
income per share. Amounts will be deferred until distributed in accordance to
the compensation deferral plan.
- --------------------------------------------------------------------------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS. Dividends and distributions to
shareholders, which are determined in accordance with income tax regulations and
may differ from U.S. generally accepted accounting principles, are recorded on
the ex-dividend date. Income distributions, if any, are declared and paid
quarterly. Capital gain distributions, if any, are declared and paid annually.
- --------------------------------------------------------------------------------
INVESTMENT INCOME. Dividend income is recorded on the ex-dividend date or upon
ex-dividend notification in the case of certain foreign dividends where the
ex-dividend date may have passed. Non-cash dividends included in dividend
income, if any, are recorded at the fair market value of the securities
received. Interest income is recognized on an accrual basis. Discount and
premium, which are included in interest income on the Statement of Operations,
are amortized or accreted daily.
- --------------------------------------------------------------------------------
CUSTODIAN FEES. "Custodian fees and expenses" in the Statement of Operations may
include interest expense incurred by the Fund on any cash overdrafts of its
custodian account during the period. Such cash overdrafts may result from the
effects of failed trades in portfolio securities and from cash outflows
resulting from unanticipated shareholder redemption activity. The Fund pays
interest to its custodian on such cash overdrafts, to the extent they are not
offset by positive cash balances maintained by the Fund, at a rate equal to the
Federal Funds Rate plus 0.50%. The "Reduction to custodian expenses" line item,
if applicable, represents earnings on cash balances maintained by the Fund
during the period. Such interest expense and other custodian fees may be paid
with these earnings.
- --------------------------------------------------------------------------------
SECURITY TRANSACTIONS. Security transactions are recorded on the trade date.
Realized gains and losses on securities sold are determined on the basis of
identified cost.
- --------------------------------------------------------------------------------
INDEMNIFICATIONS. The Fund's organizational documents provide current and former
trustees and officers with a limited indemnification against liabilities arising
in connection with the performance of their duties to the Fund. In the normal
course of business, the Fund may also enter into contracts that provide general
indemnifications. The Fund's maximum exposure under these arrangements is
unknown as this would be dependent on
51 | OPPENHEIMER BALANCED FUND
NOTES TO FINANCIAL STATEMENTS Unaudited/Continued
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES Continued
future claims that may be made against the Fund. The risk of material loss from
such claims is considered remote.
- --------------------------------------------------------------------------------
OTHER. The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America 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 increases and
decreases in net assets from operations during the reporting period. Actual
results could differ from those estimates.
- --------------------------------------------------------------------------------
2.SHARES OF BENEFICIAL INTEREST
The Fund has authorized an unlimited number of no par value shares of beneficial
interest of each class. Transactions in shares of beneficial interest were as
follows:
SIX MONTHS ENDED MARCH 31, 2008 YEAR ENDED SEPTEMBER 30, 2007
SHARES AMOUNT SHARES AMOUNT
- ------------------------------------------------------------------------------------------------------------------------------
CLASS A
Sold 3,506,460 $ 46,833,257 6,131,500 $ 86,517,298
Dividends and/or
distributions reinvested 3,001,223 39,766,196 4,745,903 65,665,433
Redeemed (5,193,960) (68,602,069) (8,582,423) (121,305,131)
------------------------------------------------------------------------------------
Net increase 1,313,723 $ 17,997,384 2,294,980 $ 30,877,600
====================================================================================
- ------------------------------------------------------------------------------------------------------------------------------
CLASS B
Sold 507,980 $ 6,581,363 1,194,731 $ 16,478,946
Dividends and/or
distributions reinvested 308,896 3,997,116 519,741 7,027,431
Redeemed (1,207,625) (15,751,474) (2,404,916) (33,176,204)
------------------------------------------------------------------------------------
Net decrease (390,749) $ (5,172,995) (690,444) $ (9,669,827)
====================================================================================
- ------------------------------------------------------------------------------------------------------------------------------
CLASS C
Sold 773,715 $ 10,124,461 1,379,987 $ 19,118,489
Dividends and/or
distributions reinvested 338,829 4,403,675 494,376 6,720,594
Redeemed (1,025,021) (13,408,994) (1,414,896) (19,665,878)
------------------------------------------------------------------------------------
Net increase 87,523 $ 1,119,142 459,467 $ 6,173,205
====================================================================================
- ------------------------------------------------------------------------------------------------------------------------------
CLASS N
Sold 139,550 $ 1,819,177 544,228 $ 7,636,814
Dividends and/or
distributions reinvested 59,192 776,028 101,356 1,387,392
Redeemed (339,391) (4,464,848) (439,945) (6,207,654)
------------------------------------------------------------------------------------
Net increase (decrease) (140,649) $ (1,869,643) 205,639 $ 2,816,552
====================================================================================
52 | OPPENHEIMER BALANCED FUND
- -------------------------------------------------------------------------------
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
March 31, 2008, were as follows:
PURCHASES SALES
-------------------------------------------------------------------------------
Investment securities $ 253,403,132 $ 287,788,781
U.S. government and
government agency obligations 1,976,639 5,093,137
To Be Announced (TBA)
mortgage-related securities 151,442,834 106,878,306
- -------------------------------------------------------------------------------
4.FEES AND OTHER TRANSACTIONS WITH AFFILIATES
MANAGEMENT FEES. Under the investment advisory agreement, the Fund pays the
Manager a management fee based on the daily net assets of the Fund at an annual
rate as shown in the following table:
FEE SCHEDULE
---------------------------------------
Up to $200 million 0.75%
Next $200 million 0.72
Next $200 million 0.69
Next $200 million 0.66
Next $700 million 0.60
Over $1.5 billion 0.58
- --------------------------------------------------------------------------------
TRANSFER AGENT FEES. OppenheimerFunds Services ("OFS"), a division of the
Manager, acts as the transfer and shareholder servicing agent for the Fund. The
Fund pays OFS a per account fee. For the six months ended March 31, 2008, the
Fund paid $730,063 to OFS for services to the Fund.
- --------------------------------------------------------------------------------
DISTRIBUTION AND SERVICE PLAN (12B-1) FEES. Under its General Distributor's
Agreement with the Fund, OppenheimerFunds Distributor, Inc. (the "Distributor")
acts as the Fund's principal underwriter in the continuous public offering of
the Fund's classes of shares.
- --------------------------------------------------------------------------------
SERVICE PLAN FOR CLASS A SHARES. The Fund has adopted a Service Plan (the
"Plan") for Class A shares under Rule 12b-1 of the Investment Company Act of
1940. Under the Plan, the Fund reimburses the Distributor for a portion of its
costs incurred for services provided to accounts that hold Class A shares.
Reimbursement is made periodically at an annual rate of up to 0.25% of the
average annual net assets of Class A shares of the Fund. The Distributor
currently uses all of those fees to pay dealers, brokers, banks and other
financial institutions periodically for providing personal service and
maintenance of accounts of their customers that hold Class A shares. Any
unreimbursed expenses the Distributor incurs with respect to Class A shares in
any fiscal year cannot be recovered in subsequent periods. Fees incurred by the
Fund under the Plan are detailed in the Statement of Operations.
53 | OPPENHEIMER BALANCED FUND
NOTES TO FINANCIAL STATEMENTS Unaudited/Continued
- --------------------------------------------------------------------------------
4.FEES AND OTHER TRANSACTIONS WITH AFFILIATES Continued
DISTRIBUTION AND SERVICE PLANS FOR CLASS B, CLASS C AND CLASS N SHARES. The Fund
has adopted Distribution and Service Plans (the "Plans") for Class B, Class C
and Class N shares under Rule 12b-1 of the Investment Company Act of 1940 to
compensate the Distributor for its services in connection with the distribution
of those shares and servicing accounts. Under the Plans, the Fund pays the
Distributor an annual asset-based sales charge of 0.75% on Class B and Class C
shares and 0.25% on Class N shares. The Distributor also receives a service fee
of 0.25% per year under each plan. If either the Class B, Class C or Class N
plan is terminated by the Fund or by the shareholders of a class, the Board of
Trustees and its independent trustees must determine whether the Distributor
shall be entitled to payment from the Fund of all or a portion of the service
fee and/or asset-based sales charge in respect to shares sold prior to the
effective date of such termination. The Distributor's aggregate uncompensated
expenses under the Plans at March 31, 2008 for Class B, Class C and Class N
shares were $2,745,071, $2,094,154 and $233,192, respectively. Fees incurred by
the Fund under the Plans are detailed in the Statement of Operations.
- --------------------------------------------------------------------------------
SALES CHARGES. Front-end sales charges and contingent deferred sales charges
("CDSC") do not represent expenses of the Fund. They are deducted from the
proceeds of sales of Fund shares prior to investment or from redemption proceeds
prior to remittance, as applicable. The sales charges retained by the
Distributor from the sale of shares and the CDSC retained by the Distributor on
the redemption of shares is shown in the 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
- ---------------------------------------------------------------------------------------------------------------------
March 31, 2008 $ 166,148 $ 2,212 $ 75,790 $ 4,537 $ 145
- ---------------------------------------------------------------------------------------------------------------------
WAIVERS AND REIMBURSEMENTS OF EXPENSES. OFS has voluntarily agreed to limit
transfer and shareholder servicing agent fees for all classes to 0.35% of
average annual net assets per class. This undertaking may be amended or
withdrawn at any time.
The Manager will waive fees and/or reimburse Fund expenses in an amount
equal to the indirect management fees incurred through the Fund's investment in
IMMF. During the six months ended March 31, 2008, the Manager waived $33,077 for
IMMF management fees.
- --------------------------------------------------------------------------------
5. FOREIGN CURRENCY EXCHANGE CONTRACTS
The Fund may enter into foreign currency exchange contracts ("forward
contracts") for the purchase or sale of a foreign currency at a negotiated rate
at a future date.
54 | OPPENHEIMER BALANCED FUND
Forward contracts are reported on a schedule following the Statement of
Investments. Forward contracts will be valued daily based upon the closing
prices of the forward currency rates determined at the close of the Exchange as
provided by a bank, dealer or pricing service. The resulting unrealized
appreciation (depreciation) is reported in the Statement of Assets and
Liabilities as a receivable or payable and in the Statement of Operations within
the change in unrealized appreciation (depreciation). At contract close, the
difference between the original cost of the contract and the value at the close
date is recorded as a realized gain (loss) in the Statement of Operations.
Risks to the Fund include both market and credit risk. Market risk is the
risk that the value of the forward contract will depreciate due to unfavorable
changes in the exchange rates. Credit risk arises from the possibility that the
counterparty will default. If the counterparty defaults, the Fund's loss will
consist of the net amount of contractual payments that the Fund has not yet
received.
As of March 31, 2008, the Fund had no outstanding forward contracts.
- --------------------------------------------------------------------------------
6. FUTURES CONTRACTS
A futures contract is a commitment to buy or sell a specific amount of a
financial instrument at a negotiated price on a stipulated future date. The Fund
may buy and sell futures contracts and may also buy or write put or call options
on these futures contracts.
Futures contracts traded on a commodities or futures exchange will be valued
at the final settlement price or official closing price on the principal
exchange as reported by such principal exchange at its trading session ending
at, or most recently prior to, the time when the Fund's assets are valued.
Upon entering into a futures contract, the Fund is required to deposit
either cash or securities (initial margin) in an amount equal to a certain
percentage of the contract value. Subsequent payments (variation margin) are
made or received by the Fund each day. The variation margin payments are equal
to the daily changes in the contract value and are recorded as unrealized gains
and losses.
Futures contracts are reported on a schedule following the Statement of
Investments. Securities held in collateralized accounts to cover initial margin
requirements on open futures contracts are noted in the Statement of
Investments. Cash held by the broker to cover initial margin requirements on
open futures contracts and the receivable and/or payable for the daily mark to
market for the variation margin are noted in the Statement of Assets and
Liabilities. The net change in unrealized appreciation and depreciation is
reported in the Statement of Operations. Realized gains (losses) are reported in
the Statement of Operations at the closing or expiration of futures contracts.
Risks of entering into futures contracts (and related options) include the
possibility that there may be an illiquid market where the Fund is unable to
liquidate the contract or enter into an offsetting position and, if used for
hedging purposes, the risk that the price of the contract will correlate
imperfectly with the prices of the Fund's securities.
55 | OPPENHEIMER BALANCED FUND
NOTES TO FINANCIAL STATEMENTS Unaudited/Continued
- --------------------------------------------------------------------------------
7. SWAP CONTRACTS
The Fund may enter into swap contract agreements with a counterparty to exchange
a series of cash flows based on either specified reference rates, or the
occurrence of a credit event, over a specified period. Such contracts may
include interest rate, equity, debt, index, total return, credit and currency
swaps.
Swaps are marked to market daily using primarily quotations from pricing
services, counterparties and brokers. Swap contracts are reported on a schedule
following the Statement of Investments. 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 accrued interest due to (owed
by) the Fund at termination or settlement. The net change in this amount during
the period is included on the Statement of Operations. The Fund 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.
Risks of entering into swap contracts include credit, market and liquidity
risk. Credit risk arises from the possibility that the counterparty will
default. If the counterparty defaults, the Fund's loss will consist of the net
amount of contractual payments that the Fund has not yet received. Market risk
is the risk that the value of the contract will depreciate due to unfavorable
changes in the reference asset. If there is an illiquid market for the
agreement, the Fund may be unable to close the contract prior to contract
termination.
- --------------------------------------------------------------------------------
CREDIT DEFAULT SWAP CONTRACTS. A credit default swap is a bilateral contract
that enables an investor to buy or sell protection against a defined-issuer
credit event. The Fund may enter into credit default swaps on a single security,
or a basket of securities.
In a credit default swap contract, the purchaser of the contract will pay a
periodic interest fee, similar to an insurance premium, on the notional amount
of the swap contract to the counterparty (the seller of the contract). If there
is a credit event (for example, bankruptcy or a failure to timely pay interest
or principal), the purchaser will exercise the contract and will receive a
payment from the seller of the contract equal to the notional value of the
credit default swap contract less the value of the underlying security. In the
event that the credit default swap is exercised due to a credit event, the
difference between the value of the underlying security and the notional amount
is recorded as realized gain (loss) and is included on the Statement of
Operations.
Risks of credit default swaps include, but are not limited to, the cost of
paying for credit protection if there are no credit events, or the cost of
selling protection (paying the notional amount) when a credit event occurs,
pricing transparency when assessing the cost of a credit default swap, and the
need to fund the delivery obligation (either cash or defaulted securities).
- --------------------------------------------------------------------------------
INTEREST RATE SWAP CONTRACTS. An interest rate swap is an agreement between
counterparties to exchange periodic interest payments on the notional amount of
the contract. One cash flow stream will typically be a floating rate payment
based upon a specified index while the other is typically a fixed rate.
56 | OPPENHEIMER BALANCED FUND
Interest rate swap agreements include interest rate risk. There is a risk,
based on future movements of interest rates where the payments made by the Fund
under a swap agreement will be greater than the payments it received.
- --------------------------------------------------------------------------------
TOTAL RETURN SWAP CONTRACTS. A total return swap is an agreement between
counterparties to exchange a set of future cash flows on the notional amount of
the contract. One cash flow is typically 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.
- --------------------------------------------------------------------------------
8. ILLIQUID SECURITIES
As of March 31, 2008, investments in securities included issues that are
illiquid. Investments may be illiquid because they do not have an active trading
market, making it difficult to value them or dispose of them promptly at an
acceptable price. The Fund will not invest more than 10% of its net assets
(determined at the time of purchase and reviewed periodically) in illiquid
securities. Securities that are illiquid are marked with an applicable footnote
on the Statement of Investments.
- --------------------------------------------------------------------------------
9. RECENT ACCOUNTING PRONOUNCEMENT
In September 2006, Financial Accounting Standards Board ("FASB") 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 March
31, 2008, 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.
57 | OPPENHEIMER BALANCED FUND
PORTFOLIO PROXY VOTING POLICIES AND PROCEDURES; UPDATES TO STATEMENTS OF
INVESTMENTS Unaudited
- --------------------------------------------------------------------------------
The Fund has adopted Portfolio Proxy Voting Policies and Procedures under which
the Fund votes proxies relating to securities ("portfolio proxies") held by the
Fund. A description of the Fund's Portfolio Proxy Voting Policies and Procedures
is available (i) without charge, upon request, by calling the Fund toll-free at
1.800.525.7048, (ii) on the Fund's website at www.oppenheimerfunds.com, and
(iii) on the SEC's website at www.sec.gov. In addition, the Fund is required to
file Form N-PX, with its complete proxy voting record for the 12 months ended
June 30th, no later than August 31st of each year. The Fund's voting record is
available (i) without charge, upon request, by calling the Fund toll-free at
1.800.525.7048, and (ii) in the Form N-PX filing on the SEC's website at
www.sec.gov.
The Fund files its complete schedule of portfolio holdings with the SEC for
the first quarter and the third quarter of each fiscal year on Form N-Q. The
Fund's Form N-Q filings are available on the SEC's website at
http://www.sec.gov. Those forms may be reviewed and copied at the SEC's Public
Reference Room in Washington, D.C. Information on the operation of the Public
Reference Room may be obtained by calling 1-800-SEC-0330.
58 | OPPENHEIMER BALANCED 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 03/31/2008, 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 Balanced Fund
By: /s/ John V. Murphy
---------------------------
John V. Murphy
Principal Executive Officer
Date: 05/14/2008
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: 05/14/2008
By: /s/ Brian W. Wixted
---------------------------
Brian W. Wixted
Principal Financial Officer
Date: 05/14/2008