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 811-5225
Oppenheimer Quest for Value Funds
--------------------------------------------------
(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: October 31
Date of reporting period: 04/30/2008
================================================================================
ITEM 1. REPORTS TO STOCKHOLDERS.
April 30, 2008
- --------------------------------------------------------------------------------
Oppenheimer Management
Quest Balanced Commentaries
Fund(SM) and
Semiannual Report
- --------------------------------------------------------------------------------
MANAGEMENT COMMENTARIES
An Interview with Your Fund's Managers
Listing of Top Holdings
SEMI ANNUAL REPORT
Listing of Investments
Financial Statements
[OPPENHEIMERFUNDS LOGO]
TOP HOLDINGS AND ALLOCATIONS
TOP TEN COMMON STOCK INDUSTRIES
Oil, Gas & Consumable Fuels 11.3%
----
Pharmaceuticals 7.5
----
Aerospace & Defense 5.5
----
Food & Staples Retailing 5.1
----
Consumer Finance 3.4
----
Capital Markets 3.3
----
Diversified Financial Services 3.3
----
IT Services 3.0
----
Health Care Providers & Services 3.0
----
Household Durables 2.6
Portfolio holdings and allocations are subject to change. Percentages are as of
April 30, 2008, and are based on net assets.
TOP TEN COMMON STOCK HOLDINGS
ConocoPhillips 6.9%
---
Boeing Co. 5.5
---
Roche Holding Ltd., Sponsored ADR 4.0
---
Schering-Plough Corp. 3.5
---
Wal-Mart Stores, Inc. 3.3
---
WellPoint, Inc. 3.0
---
Google, Inc., Cl. A 2.6
---
Yum! Brands, Inc. 2.3
---
Lehman Brothers Holdings, Inc. 2.2
---
Washington Mutual, Inc. 2.2
Portfolio holdings and allocations are subject to change. Percentages are as of
April 30, 2008, and are based on net assets.
For up-to-date Top 10 Fund Holdings, please visit www.oppenheimerfunds.com.
9 | OPPENHEIMER QUEST BALANCED FUND
TOP HOLDINGS AND ALLOCATIONS
PORTFOLIO ALLOCATION
[LOGO]
- - Stocks 56.3%
- - Bonds and Notes 25.5
- - Cash Equivalents 18.2
Portfolio holdings and allocations are subject to change. Percentages are as of
April 30, 2008, and are based on the total market value of investments.
10 | OPPENHEIMER QUEST 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 11/1/91.
Unless otherwise noted, Class A returns include the current maximum
initial sales charge of 5.75%. Class A shares are subject to a
maximum annual 0.15% asset-based sales charge. However, there is a
voluntary waiver of the Class A asset-based sales charge as
described in the Prospectus.
CLASS B shares of the Fund were first publicly offered on 9/1/93.
Unless otherwise noted, Class B returns include the applicable
contingent deferred sales charges 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 does not include any
contingent deferred sales charge on redemptions and 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 9/1/93.
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
11 | OPPENHEIMER QUEST BALANCED FUND
NOTES
deferred sales charge of 1% for the 1-year period. Class N shares
are subject to an annual 0.25% asset-based sales charge.
CLASS Y shares of the Fund were first publicly offered on 5/1/00.
Class Y shares are offered only to certain institutional investors
under a special agreement with the Distributor, and to present or
former officers, directors, trustees or employees (and their
eligible family members) of the Fund, the Manager, its affiliates,
its parent company and the subsidiaries of its parent company, and
retirement plans established for the benefit of such individuals.
An explanation of the calculation of performance is in the Fund's
Statement of Additional Information.
12 | OPPENHEIMER QUEST 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
April 30, 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
13 | OPPENHEIMER QUEST BALANCED FUND
FUND EXPENSES Continued
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 NOVEMBER 1, 2007 APRIL 30, 2008 APRIL 30, 2008
- ------ ---------------- -------------- --------------
Class A $ 1,000.00 $ 888.60 $ 5.79
-------------- ------------ -------------
Class B 1,000.00 884.80 9.56
-------------- ------------ -------------
Class C 1,000.00 885.30 9.28
-------------- ------------ -------------
Class N 1,000.00 887.40 7.07
-------------- ------------ -------------
Class Y 1,000.00 889.40 4.62
HYPOTHETICAL
(5% return before expenses)
Class A 1,000.00 1,018.75 6.19
-------------- ------------ -------------
Class B 1,000.00 1,014.77 10.22
-------------- ------------ -------------
Class C 1,000.00 1,015.07 9.92
-------------- ------------ -------------
Class N 1,000.00 1,017.40 7.55
-------------- ------------ -------------
Class Y 1,000.00 1,019.99 4.93
Expenses are equal to the Fund's annualized expense ratio for that class,
multiplied by the average account value over the period, multiplied by 182/366
(to reflect the one-half year period). Those annualized expense ratios, based on
the 6-month period ended April 30, 2008 are as follows:
CLASS EXPENSE RATIOS
- ----- --------------
Class A 1.23%
----
Class B 2.03
----
Class C 1.97
----
Class N 1.50
----
Class Y 0.98
The expense ratios reflect reduction to custodian expenses. 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.
14 | OPPENHEIMER QUEST BALANCED FUND
STATEMENT OF INVESTMENTS April 30, 2008 / Unaudited
SHARES VALUE
--------- ------------
COMMON STOCKS--66.9%
CONSUMER DISCRETIONARY--8.7%
HOTELS, RESTAURANTS & LEISURE--2.3%
Yum! Brands, Inc. 2,300,000 $ 93,564,000
--------- ------------
HOUSEHOLD DURABLES--2.6%
Centex Corp. (1) 1,683,000 35,040,060
--------- ------------
D.R. Horton, Inc. (1) 1,715,400 26,571,546
--------- ------------
Lennar Corp., Cl. A (1) 1,350,149 24,869,745
--------- ------------
Pulte Homes, Inc. 1,790,100 23,342,904
------------
109,824,255
------------
MULTILINE RETAIL--2.0%
Family Dollar Stores, Inc. 3,860,000 82,604,000
--------- ------------
SPECIALTY RETAIL--1.8%
PetSmart, Inc. 3,300,000 73,854,000
--------- ------------
CONSUMER STAPLES--5.1%
FOOD & STAPLES RETAILING--5.1%
Sysco Corp. 2,500,000 76,425,000
--------- ------------
Wal-Mart Stores, Inc. 2,347,000 136,079,060
------------
212,504,060
------------
ENERGY--11.3%
OIL, GAS & CONSUMABLE FUELS--11.3%
Cameco Corp. 1,370,000 47,936,300
--------- ------------
Chevron Corp. 753,000 72,400,950
--------- ------------
ConocoPhillips 3,330,000 286,879,500
--------- ------------
Valero Energy Corp. 1,200,000 58,620,000
------------
465,836,750
------------
FINANCIALS--16.9%
CAPITAL MARKETS--3.3%
Bank of New York Mellon Corp. 1,032,000 44,922,960
--------- ------------
Lehman Brothers Holdings, Inc. (1) 2,100,000 92,904,000
------------
137,826,960
------------
COMMERCIAL BANKS--1.1%
National City Corp. (1) 7,118,000 44,843,400
--------- ------------
CONSUMER FINANCE--3.4%
American Express Co. 1,650,000 79,233,000
--------- ------------
Capital One Financial Corp. (1) 1,143,000 60,579,000
------------
139,812,000
------------
15 | OPPENHEIMER QUEST BALANCED FUND
STATEMENT OF INVESTMENTS Unaudited / Continued
SHARES VALUE
--------- ------------
DIVERSIFIED FINANCIAL SERVICES--3.3%
CIT Group, Inc. (1) 6,180,100 $ 67,301,289
--------- ------------
Citigroup, Inc. 2,724,000 68,835,480
------------
136,136,769
------------
INSURANCE--2.0%
American International Group, Inc. 1,345,000 62,139,000
--------- ------------
MBIA, Inc. (1) 2,045,000 21,268,000
------------
83,407,000
------------
REAL ESTATE INVESTMENT TRUSTS--1.4%
Annaly Mortgage Management, Inc. (1) 3,530,000 59,162,800
--------- ------------
THRIFTS & MORTGAGE FINANCE--2.4%
PMI Group, Inc. (The) (1) 1,100,000 6,193,000
--------- ------------
Washington Mutual, Inc. (1) 7,369,000 90,565,010
------------
96,758,010
------------
HEALTH CARE--12.2%
BIOTECHNOLOGY--1.7%
Regeneron Pharmaceuticals, Inc. (1,2) 1,700,000 33,354,000
--------- ------------
Theravance, Inc. (2) 1,700,000 21,233,000
--------- ------------
Vertex Pharmaceuticals, Inc. (2) 592,078 15,109,831
------------
69,696,831
------------
HEALTH CARE PROVIDERS & SERVICES--3.0%
WellPoint, Inc. (2) 2,482,900 123,524,275
--------- ------------
PHARMACEUTICALS--7.5%
Roche Holding Ltd., Sponsored ADR 1,980,000 163,963,800
--------- ------------
Schering-Plough Corp. 7,874,000 144,960,340
------------
308,924,140
------------
INDUSTRIALS--5.5%
AEROSPACE & DEFENSE--5.5%
Boeing Co. 2,700,000 229,122,000
--------- ------------
INFORMATION TECHNOLOGY--5.6%
INTERNET SOFTWARE & SERVICES--2.6%
Google, Inc., Cl. A (2) 184,000 105,669,360
--------- ------------
IT SERVICES--3.0%
Infosys Technologies Ltd., Sponsored ADR (1) 1,500,000 65,535,000
--------- ------------
Visa, Inc., Cl. A. (2) 715,000 59,666,750
------------
125,201,750
------------
16 | OPPENHEIMER QUEST BALANCED FUND
SHARES VALUE
---------- --------------
TELECOMMUNICATION SERVICES--1.6%
WIRELESS TELECOMMUNICATION SERVICES--1.6%
NII Holdings, Inc. (2) 750,000 $ 34,305,000
---------- --------------
Sprint Nextel Corp. 4,084,000 32,631,160
---------- --------------
66,936,160
--------------
Total Common Stocks (Cost $ 2,938,184,292) 2,765,208,520
PREFERRED STOCKS--1.2%
CIT Group, Inc., 8.75% Cv., Series C (2) 466,873 26,028,170
---------- --------------
Lehman Brothers Holdings, Inc.,7.25% Cv., Series P, Non-Vtg. (2) 19,650 24,051,600
---------- --------------
Total Preferred Stocks (Cost $43,818,134) 50,079,770
PRINCIPAL
AMOUNT
-------------
MORTGAGE-BACKED OBLIGATIONS--14.0%
Credit Suisse Commercial Mortgage Trust,
Series 2007-C2, Commercial Mtg. Pass-Through Certificates,
Series 2007-C2, Cl. A2, 5.448%, 1/1/49 $ 13,400,000 13,334,801
------------- -------------
Federal National Mortgage Assn., 5.50%, 5/1/37 (3) 58,975,000 59,297,534
------------- -------------
Federal National Mortgage Assn., Gtd.Real Estate
Mtg.Investment Conduit Pass-Through Certificates:
Trust 2006-83, Cl. FH, 3.335%, 9/25/36 (4) 12,718,056 12,535,350
Trust 2006-93, Cl. MF, 3.295%, 10/25/36 (4) 25,635,438 25,374,211
------------- -------------
Government National Mortgage Assn.,5.50%, 5/1/38 (3) 404,765,000 410,014,397
------------- -------------
GS Mortgage Securities Corp. II, Commercial Mtg.
Obligations, Series 2006-GG8, Cl. A2, 5.479%, 11/1/39 14,755,000 14,785,654
------------- -------------
JPMorgan Chase Commercial Mortgage Securities Corp.,
Commercial Mtg. Pass-Through Certificates,
Series 2007-C1, Cl. A4, 5.716%, 11/1/17 24,565,000 24,143,241
------------- -------------
JPMorgan Chase Commercial Mortgage Securities Trust 2004-CB8,
Commercial Mtg. Pass-Through Certificates,
Series 2004-CB8, Cl. A1A, 4.158%, 1/1/39 17,890,055 17,039,830
------------- -------------
Total Mortgage-Backed Obligations (Cost $ 573,754,571) 576,525,018
U.S. GOVERNMENT OBLIGATIONS--1.7%
Federal Farm Credit Bank Nts.:
4.75%, 5/7/10 19,660,000 20,421,805
4.80%, 4/25/11 49,010,000 51,174,478
-------------
Total U.S. Government Obligations (Cost $ 68,187,598) 71,596,283
17 | OPPENHEIMER QUEST BALANCED FUND
STATEMENT OF INVESTMENTS Unaudited / Continued
PRINCIPAL
AMOUNT VALUE
------------- --------------
NON-CONVERTIBLE CORPORATE BONDS AND NOTES--15.2%
American Express Co., 7% Sr. Unsec. Nts., 3/19/18 $ 10,505,000 $ 11,328,382
------------- --------------
American Express Credit Corp., 5% Nts., Series B, 12/2/10 (1) 34,230,000 34,759,641
------------- --------------
Ameriprise Financial, Inc., 5.35% Sr. Unsec. Nts., 11/15/10 39,120,000 39,568,354
------------- --------------
Bank of America Corp., 4.375% Sr. Unsec. Nts.,12/1/10 (1) 53,980,000 54,400,828
------------- --------------
CIT Group, Inc., 4.75% Sr. Nts., 12/15/10 24,575,000 21,075,864
------------- --------------
Citigroup, Inc.:
4.625% Nts., 8/3/10 19,640,000 19,442,991
6% Nts., 2/21/12 15,000,000 15,346,800
6.875% Sr. Unsec. Bonds, 3/5/38 (1) 14,760,000 15,333,884
Duke Capital Corp., 7.50% Bonds, 10/1/09 30,455,000 31,438,605
------------- --------------
E.I. du Pont de Nemours & Co., 4.125% Nts., 4/30/10 (1) 44,000,000 44,376,024
------------- --------------
General Dynamics Corp., 4.50% Sr. Unsec. Nts., 8/15/10 22,700,000 23,027,130
------------- --------------
General Electric Capital Corp., 6% Nts., 6/15/12 19,700,000 20,732,398
------------- --------------
Goldman Sachs Group, Inc. (The):
5.70% Sr. Unsec. Nts., 9/1/12 33,880,000 34,605,845
6.75% Unsec. Sub. Nts., 10/1/37 29,530,000 29,064,076
------------- --------------
Household Finance Corp.:
4.125% Unsec. Nts., 11/16/09 19,640,000 19,606,533
7% Sr. Unsec. Unsub. Nts., 5/15/12 20,000,000 21,141,720
------------- --------------
Lehman Brothers Holdings, Inc., 6.875% Unsec. Sub. Nts., 7/17/37 (1) 14,750,000 13,732,103
------------- --------------
Morgan Stanley, 6.625% Sr. Unsec. Nts., Series F, 4/1/18 (1) 14,765,000 15,347,524
------------- --------------
News America Holdings, Inc., 9.25% Sr. Debs., 2/1/13 (1) 10,465,000 12,079,844
------------- --------------
SLM Corp., 4.50% Nts., Series A, 7/26/10 39,250,000 35,029,448
------------- --------------
Time Warner Entertainment Co. LP, 7.25% Sr. Unsec. Debs., 9/1/08 19,640,000 19,790,541
------------- --------------
U.S. Bancorp, 4.50% Sr. Nts., Series P, 7/29/10 15,610,000 15,979,520
------------- --------------
Verizon Global Funding Corp.:
7.25% Sr. Unsec. Unsub. Nts., 12/1/10 14,630,000 15,657,553
7.375% Sr. Nts., 9/1/12 15,000,000 16,485,825
------------- --------------
Wachovia Corp., 4.375% Nts., 6/1/10 39,280,000 39,221,237
------------- --------------
Waste Management, Inc., 6.50% Sr. Unsub. Nts., 11/15/08 8,740,000 8,872,321
--------------
Total Non-Convertible Corporate Bonds and Notes (Cost $ 620,674,108) 627,444,991
SHORT-TERM NOTES--12.6%
Federal Home Loan Bank, 1.75%, 5/1/08 (Cost $519,365,000) 519,365,000 519,365,000
------------- --------------
Total Investments, at Value (excluding Investments Purchased with
Cash Collateral from Securities Loaned) (Cost $4,763,983,703) 4,610,219,582
18 | OPPENHEIMER QUEST BALANCED FUND
PRINCIPAL
AMOUNT VALUE
----------- -----------------
INVESTMENTS PURCHASED WITH CASH COLLATERAL FROM SECURITIES LOANED--9.5% (5)
Undivided interest of 0.85% in joint repurchase agreement (Principal Amount/
Value $7,000,000,000 with a maturity value of $7,000,388,889) with Barclays
Capital, 2%, dated 4/30/08, to be repurchased at $59,166,463 on 5/1/08,
collateralized by U.S. Agency Mortgages, 0%-7%, 6/4/12-4/25/38, with
a value of $ 7,140,000,000 $ 59,163,176 $ 59,163,176
------------ -----------------
Undivided interest of 8.17% in joint repurchase agreement (Principal Amount/
Value $4,100,000,000 with a maturity value of $4,100,300,382) with Barclays
Capital, 2.6375%, dated 4/30/08, to be repurchased at $335,024,543 on 5/1/08,
collateralized by Private Label CMOs, 0%-6.53%, 5/15/11-11/20/56, with
a value of $ 4,305,000,000 335,000,000 335,000,000
-----------------
Total Investments Purchased with Cash Collateral from Securities Loaned
(Cost $ 394,163,176) 394,163,176
-----------------
TOTAL INVESTMENTS, AT VALUE (COST $ 5,158,146,879) 121.1% 5,004,382,758
------------ -----------------
LIABILITIES IN EXCESS OF OTHER ASSETS (21.1) (872,132,805)
------------ -----------------
NET ASSETS 100.0% $ 4,132,249,953
============ =================
FOOTNOTES TO STATEMENT OF INVESTMENTS
1. Partial or fully-loaned security. See Note 5 of accompanying Notes.
2. Non-income producing security.
3. When-issued security or delayed delivery to be delivered and settled after
April 30, 2008. See Note 1 of accompanying Notes.
4. Represents the current interest rate for a variable or increasing rate
security.
5. The security/securities have been segregated to satisfy the forward
commitment to return the cash collateral received in securities lending
transactions upon the borrower's return of the securities loaned. See Note
5 of accompanying Notes.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
19 | OPPENHEIMER QUEST BALANCED FUND
STATEMENT OF ASSETS AND LIABILITIES Unaudited
April 30, 2008
ASSETS
Investments, at value (cost $5,158,146,879)--see accompanying statement of investments $ 5,004,382,758
-----------------
Cash 1,612,875
-----------------
Receivables and other assets:
Interest and dividends 13,255,368
Investments sold 10,384,032
Other 409,910
-----------------
Total assets 5,030,044,943
LIABILITIES
Return of collateral for securities loaned 394,419,465
-----------------
Payables and other liabilities:
Investments purchased (including $471,681,107 purchased on a when-issued or
delayed delivery basis) 483,403,744
Shares of beneficial interest redeemed 16,960,909
Trustees' compensation 1,114,174
Transfer and shareholder servicing agent fees 815,922
Distribution and service plan fees 580,086
Shareholder communications 404,743
Other 95,947
-----------------
Total liabilities 897,794,990
NET ASSETS $ 4,132,249,953
=================
COMPOSITION OF NET ASSETS
Par value of shares of beneficial interest $ 2,796,787
-----------------
Additional paid-in capital 4,622,859,930
-----------------
Accumulated net investment income 10,819,034
-----------------
Accumulated net realized loss on investments (350,461,677)
-----------------
Net unrealized depreciation on investments (153,764,121)
-----------------
NET ASSETS $ 4,132,249,953
=================
20 | OPPENHEIMER QUEST BALANCED FUND
NET ASSET VALUE PER SHARE
Class A Shares:
Net asset value and redemption price per share (based on net assets of
$2,453,962,180 and 164,819,779 shares of beneficial interest outstanding) $ 14.89
--------
Maximum offering price per share (net asset value plus sales charge of
5.75% of offering price) $ 15.80
--------
Class B Shares:
Net asset value, redemption price (excludes applicable contingent deferred
sales charge) and offering price per share (based on net assets of
$746,900,158 and 51,257,006 shares of beneficial interest outstanding) $ 14.57
--------
Class C Shares:
Net asset value, redemption price (excludes applicable contingent deferred
sales charge) and offering price per share (based on net assets of
$630,945,300 and 43,293,271 shares of beneficial interest outstanding) $ 14.57
--------
Class N Shares:
Net asset value, redemption price (excludes applicable contingent deferred
sales charge) and offering price per share (based on net assets of
$131,411,159 and 8,951,450 shares of beneficial interest outstanding) $ 14.68
--------
Class Y Shares:
Net asset value, redemption price and offering price per share (based on net
assets of $169,031,156 and 11,357,196 shares of beneficial interest outstanding) $ 14.88
--------
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
21 | OPPENHEIMER QUEST BALANCED FUND
STATEMENT OF OPERATIONS Unaudited
FOR THE SIX MONTHS ENDED APRIL 30, 2008
INVESTMENT INCOME
Interest $ 36,937,715
-------------
Dividends (net of foreign withholding taxes of $680,893) 29,749,835
-------------
Portfolio lending fees 2,408,608
-------------
Total investment income 69,096,158
EXPENSES
Management fees 17,128,793
-------------
Distribution and service plan fees:
Class A 3,054,581
Class B 4,715,459
Class C 3,581,230
Class N 356,972
-------------
Transfer and shareholder servicing agent fees:
Class A 2,702,471
Class B 1,101,765
Class C 677,772
Class N 161,826
Class Y 206,573
-------------
Shareholder communications:
Class A 229,735
Class B 152,464
Class C 63,948
Class N 6,873
Class Y 129
-------------
Trustees' compensation 282,712
-------------
Custodian fees and expenses 19,756
-------------
Administration service fees 750
-------------
Other 159,857
-------------
Total expenses 34,603,666
Less reduction to custodian expenses (13,167)
-------------
Net expenses 34,590,499
NET INVESTMENT INCOME 34,505,659
REALIZED AND UNREALIZED LOSS
Net realized loss on investments (347,314,555)
-------------
Net change in unrealized depreciation on investments (297,575,805)
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS $(610,384,701)
=============
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
22 | OPPENHEIMER QUEST BALANCED FUND
STATEMENTS OF CHANGES IN NET ASSETS
SIX MONTHS YEAR
ENDED ENDED
APRIL 30, 2008 OCTOBER 31,
(UNAUDITED) 2007
---------------- ---------------
OPERATIONS
Net investment income $ 34,505,659 $ 58,073,973
---------------- ---------------
Net realized gain (loss) (347,314,555) 723,071,694
---------------- ---------------
Net change in unrealized appreciation (depreciation) (297,575,805) (355,283,690)
---------------- ---------------
Net increase (decrease) in net assets resulting from operations (610,384,701) 425,861,977
DIVIDENDS AND/OR DISTRIBUTIONS TO SHAREHOLDERS
Dividends from net investment income:
Class A (23,267,446) (38,823,680)
Class B (3,854,123) (7,986,941)
Class C (3,499,225) (5,482,242)
Class N (1,061,202) (1,869,026)
Class Y (1,980,312) (4,597,368)
---------------- ---------------
(33,662,308) (58,759,257)
---------------- ---------------
Distributions from net realized gain:
Class A (341,185,281) (108,511,577)
Class B (135,784,614) (66,078,509)
Class C (99,519,966) (36,754,728)
Class N (19,443,639) (7,512,570)
Class Y (25,395,320) (9,946,135)
---------------- ---------------
(621,328,820) (228,803,519)
BENEFICIAL INTEREST TRANSACTIONS
Net increase (decrease) in net assets resulting from
beneficial interest transactions:
Class A 165,582,064 (128,740,215)
Class B (274,901,309) (596,771,964)
Class C (52,127,595) (160,197,800)
Class N (929,040) (39,783,676)
Class Y (5,720,157) (59,198,820)
---------------- ---------------
(168,096,037) (984,692,475)
NET ASSETS
Total decrease (1,433,471,866) (846,393,274)
---------------- ---------------
Beginning of period 5,565,721,819 6,412,115,093
---------------- ---------------
End of period (including accumulated net investment income of
$10,819,034 and $9,975,683, respectively) $ 4,132,249,953 $ 5,565,721,819
================ ===============
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
23 | OPPENHEIMER QUEST BALANCED FUND
FINANCIAL HIGHLIGHTS
SIX MONTHS
ENDED
APRIL 30, 2008 YEAR ENDED OCTOBER 31,
CLASS A (UNAUDITED) 2007 2006 2005 2004 2003
----------- ---------- ---------- ----------- ----------- -----------
PER SHARE OPERATING DATA
Net asset value, beginning of period $ 19.18 $ 18.82 $ 17.79 $ 17.19 $ 15.69 $ 12.02
----------- ---------- ---------- ----------- ----------- -----------
Income (loss) from investment operations:
Net investment income .14(1) .24(1) .21(1) .11(1) .07 .16
Net realized and unrealized gain (loss) (2.10) 1.05 1.66 .49 1.46 3.64
----------- ---------- ---------- ----------- ----------- -----------
Total from investment operations (1.96) 1.29 1.87 .60 1.53 3.80
----------- ---------- ---------- ----------- ----------- -----------
Dividends and/or distributions to
shareholders:
Dividends from net investment income (.14) (.25) (.23) -- (.03) (.13)
Distributions from net realized gain (2.19) (.68) (.61) -- -- --
----------- ---------- ---------- ----------- ----------- -----------
Total dividends and/or distributions
to shareholders (2.33) (.93) (.84) -- (.03) (.13)
Net asset value, end of period $ 14.89 $ 19.18 $ 18.82 $ 17.79 $ 17.19 $ 15.69
----------- ---------- ---------- ----------- ----------- -----------
TOTAL RETURN, AT NET ASSET VALUE (2) (11.14)% 6.97% 10.77% 3.49% 9.79% 31.87%
----------- ---------- ---------- ----------- ----------- -----------
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in thousands) $ 2,453,962 $2,988,971 $3,058,131 $ 3,277,261 $ 3,054,761 $ 2,287,707
----------- ---------- ---------- ----------- ----------- -----------
Average net assets (in thousands) $ 2,619,018 $3,068,221 $3,215,973 $ 3,285,181 $ 2,759,594 $ 1,902,499
----------- ---------- ---------- ----------- ----------- -----------
Ratios to average net assets: (3)
Net investment income 1.79% 1.26% 1.13% 0.61% 0.38% 1.60%
Total expenses 1.23% 1.16% 1.17% 1.17% 1.21% 1.38%
Expenses after payments, waivers and/or
reimbursements and reduction to
custodian expenses 1.23% 1.14% 1.17% 1.17% 1.21% 1.38%
----------- ---------- ---------- ----------- ----------- -----------
Portfolio turnover rate 45%(4) 112% 63% 89% 106% 92%
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. 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 April 30,2008 $ 879,201,581 $ 412,242,585
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
24 | OPPENHEIMER QUEST BALANCED FUND
SIX MONTHS
ENDED
APRIL 30,
2008 YEAR ENDED OCTOBER 31,
CLASS B (UNAUDITED) 2007 2006 2005 2004 2003
---------- ----------- ----------- ----------- ----------- ------------
PER SHARE OPERATING DATA
Net asset value, beginning of period $ 18.81 $ 18.46 $ 17.46 $ 17.01 $ 15.61 $ 11.98
---------- ----------- ----------- ----------- ----------- ------------
Income (loss) from investment
operations:
Net investment income (loss) .07(1) .09(1) .06(1) (.03)(1) (.07) .06
Net realized and unrealized gain (loss) (2.05) 1.03 1.63 .48 1.47 3.63
---------- ----------- ----------- ----------- ----------- ------------
Total from investment operations (1.98) 1.12 1.69 .45 1.40 3.69
---------- ----------- ----------- ----------- ----------- ------------
Dividends and/or distributions to
shareholders:
Dividends from net investment income (.07) (.09) (.08) -- -- (.06)
Distributions from net realized gain (2.19) (.68) (.61) -- -- --
---------- ----------- ----------- ----------- ----------- ------------
Total dividends and/or distributions
to shareholders (2.26) (.77) (.69) -- -- (.06)
---------- ----------- ----------- ----------- ----------- ------------
Net asset value, end of period $ 14.57 $ 18.81 $ 18.46 $ 17.46 $ 17.01 $ 15.61
========== =========== =========== =========== =========== ============
TOTAL RETURN, AT NET ASSET VALUE (2) (11.52)% 6.17% 9.90% 2.65% 8.97% 30.89%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in thousands) $ 746,900 $ 1,294,217 $1,847,651 $ 2,205,679 $ 2,549,069 $ 2,306,366
---------- ----------- ----------- ----------- ----------- ------------
Average net assets (in thousands) $ 946,050 $ 1,649,062 $2,014,712 $ 2,470,464 $ 2,495,872 $ 1,985,215
---------- ----------- ----------- ----------- ----------- ------------
Ratios to average net assets: (3)
Net investment income (loss) 0.97% 0.48% 0.35% (0.17)% (0.40)% 0.84%
Total expenses 2.03% 1.94% 1.95% 1.96% 2.00% 2.15%
Expenses after payments, waivers and/or
reimbursements and reduction
to custodian expenses 2.03% 1.92% 1.95% 1.96% 2.00% 2.15%
---------- ----------- ----------- ----------- ----------- ------------
Portfolio turnover rate 45%(4) 112% 63% 89% 106% 92%
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. 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 April 30, 2008 $ 879,201,581 $ 412,242,585
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
25 | OPPENHEIMER QUEST BALANCED FUND
FINANCIAL HIGHLIGHTS Continued
SIX MONTHS
ENDED
APRIL 30,
2008 YEAR ENDED OCTOBER 31,
CLASS C (UNAUDITED) 2007 2006 2005 2004 2003
----------- ------------ ----------- ---------- ---------- ---------
PER SHARE OPERATING DATA
Net asset value, beginning of period $ 18.81 $ 18.48 $ 17.48 $ 17.02 $ 15.60 $ 11.97
----------- ------------ ----------- ---------- ---------- ---------
Income (loss) from investment operations:
Net investment income (loss) .08(1) .10(1) .07(1) (.02)(1) (.06) .07
Net realized and unrealized gain (loss) (2.05) 1.02 1.64 .48 1.48 3.62
Total from investment operations (1.97) 1.12 1.71 .46 1.42 3.69
----------- ------------ ----------- ---------- ---------- ---------
Dividends and/or distributions
to shareholders:
Dividends from net investment income (.08) (.11) (.10) -- -- (.06)
Distributions from net realized gain (2.19) (.68) (.61) -- -- --
----------- ------------ ----------- ---------- ---------- ---------
Total dividends and/or distributions
to shareholders (2.27) (.79) (.71) -- -- (.06)
----------- ------------ ----------- ---------- ---------- ---------
Net asset value, end of period $ 14.57 $ 18.81 $ 18.48 $ 17.48 $ 17.02 $ 15.60
=========== ============ =========== ========== ========== =========
TOTAL RETURN, AT NET ASSET VALUE (2) (11.47)% 6.15% 9.97% 2.70% 9.10% 30.99%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in thousands) $ 630,946 $ 883,839 $ 1,022,881 $1,191,400 $1,207,729 $ 982,288
----------- ------------ ----------- ---------- ---------- ---------
Average net assets (in thousands) $ 719,636 $ 979,278 $ 1,122,088 $1,248,447 $1,129,522 $ 835,198
----------- ------------ ----------- ---------- ---------- ---------
Ratios to average net assets: (3)
Net investment income (loss) 1.03% 0.53% 0.41% (0.11)% (0.34)% 0.92%
Total expenses 1.97% 1.89% 1.89% 1.89% 1.94% 2.08%
Expenses after payments, waivers and/or
reimbursements and reduction
to custodian expenses 1.97% 1.87% 1.89% 1.89% 1.94% 2.08%
----------- ------------ ----------- ---------- ---------- ---------
Portfolio turnover rate 45%(4) 112% 63% 89% 106% 92%
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. 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 April 30, 2008 $879,201,581 $412,242,585
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
26 | OPPENHEIMER QUEST BALANCED FUND
SIX MONTHS
ENDED
APRIL 30,
2008 YEAR ENDED OCTOBER 31,
CLASS N (UNAUDITED) 2007 2006 2005 2004 2003
------------ ---------- --------- --------- --------- ----------
PER SHARE OPERATING DATA
Net asset value, beginning of period $ 18.94 $ 18.59 $ 17.58 $ 17.05 $ 15.58 $ 11.94
------------ ---------- --------- --------- --------- ----------
Income (loss) from investment operations:
Net investment income .12(1) .18(1) .15(1) .05(1) .03 .11
Net realized and unrealized gain (loss) (2.07) 1.03 1.64 .48 1.45 3.63
------------ ---------- --------- --------- --------- ----------
Total from investment operations (1.95) 1.21 1.79 .53 1.48 3.74
------------ ---------- --------- --------- --------- ----------
Dividends and / or distributions
to shareholders:
Dividends from net investment income (.12) (.18) (.17) -- (.01) (.10)
Distributions from net realized gain (2.19) (.68) (.61) -- -- --
------------ ---------- --------- --------- --------- ----------
Total dividends and / or distributions
to shareholders (2.31) (.86) (.78) -- (.01) (.10)
------------ ---------- --------- --------- --------- ----------
Net asset value, end of period $ 14.68 $ 18.94 $ 18.59 $ 17.58 $ 17.05 $ 15.58
============ ========== ========= ========= ========= ==========
TOTAL RETURN, AT NET ASSET VALUE (2) (11.26)% 6.66% 10.45% 3.11% 9.47% 31.50%
RATIOS / SUPPLEMENTAL DATA
Net assets, end of period (in thousands) $ 131,411 $ 171,675 $ 207,130 $ 216,843 $ 207,450 $ 142,866
------------ ---------- --------- --------- --------- ----------
Average net assets (in thousands) $ 144,133 $ 193,216 $ 215,652 $ 219,040 $ 180,201 $ 112,416
------------ ---------- --------- --------- --------- ----------
Ratios to average net assets: (3)
Net investment income 1.51% 0.95% 0.83% 0.30% 0.04% 1.23%
Total expenses 1.50% 1.46% 1.48% 1.49% 1.55% 1.74%
Expenses after payments, waivers and / or
reimbursements and reduction to
custodian expenses 1.50% 1.44% 1.48% 1.49% 1.55% 1.70%
------------ ---------- --------- --------- --------- ----------
Portfolio turnover rate 45%(4) 112% 63% 89% 106% 92%
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. 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 April 30, 2008 $879,201,581 $412,242,585
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
27 | OPPENHEIMER QUEST BALANCED FUND
FINANCIAL HIGHLIGHTS Continued
SIX MONTHS
ENDED
APRIL 30, 2008 YEAR ENDED OCTOBER 31,
CLASS Y (UNAUDITED) 2007 2006 2005 2004 2003
-------------- ---------- ---------- ---------- --------- ------------
PER SHARE OPERATING DATA
Net asset value, beginning of period $ 19.18 $ 18.82 $ 17.79 $ 17.14 $ 15.62 $ 11.96
-------------- ---------- ---------- ---------- --------- ------------
Income (loss) from investment operations:
Net investment income .16(1) .30(1) .26(1) .17(1) .12 .20
Net realized and unrealized gain (loss) (2.10) 1.04 1.66 .48 1.46 3.64
-------------- ---------- ---------- ---------- --------- ------------
Total from investment operations (1.94) 1.34 1.92 .65 1.58 3.84
-------------- ---------- ---------- ---------- --------- ------------
Dividends and/or distributions
to shareholders:
Dividends from net investment income (.17) (.30) (.28) -- (.06) (.18)
Distributions from net realized gain (2.19) (.68) (.61) -- -- --
-------------- ---------- ---------- ---------- --------- ------------
Total dividends and/or distributions
to shareholders (2.36) (.98) (.89) -- (.06) (.18)
-------------- ---------- ---------- ---------- --------- ------------
Net asset value, end of period $ 14.88 $ 19.18 $ 18.82 $ 17.79 $ 17.14 $ 15.62
============== ========== ========== ========== ========= ============
TOTAL RETURN, AT NET ASSET VALUE (2) (11.06)% 7.29% 11.11% 3.79% 10.17% 32.40%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in thousands) $ 169,031 $ 227,020 $ 276,322 $ 270,335 $ 238,775 $ 182,409
-------------- ---------- ---------- ---------- --------- ------------
Average net assets (in thousands) $ 191,005 $ 294,643 $ 276,812 $ 253,220 $ 216,973 $ 145,793
-------------- ---------- ---------- ---------- --------- ------------
Ratios to average net assets: (3)
Net investment income 2.02% 1.56% 1.43% 0.93% 0.70% 1.89%
Total expenses 0.98% 0.86% 0.87% 0.85% 0.90% 1.05%
Expenses after payments, waivers and/or
reimbursements and reduction
to custodian expenses 0.98% 0.84% 0.87% 0.85% 0.90% 1.05%
-------------- ---------- ---------- ---------- --------- ------------
Portfolio turnover rate 45%(4) 112% 63% 89% 106% 92%
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. 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 April 30, 2008 $ 879,201,581 $ 412,242,585
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
28| OPPENHEIMER QUEST BALANCED FUND
NOTES TO FINANCIAL STATEMENTS Unaudited
1. SIGNIFICANT ACCOUNTING POLICIES
Oppenheimer Quest Balanced Fund (the "Fund"), a series of Oppenheimer Quest For
Value Funds, is an open-end management investment company registered under the
Investment Company Act of 1940, as amended. The Fund's investment objective is
to seek a combination of growth of capital and investment income. The Fund's
primary objective is growth of capital. The Fund's investment adviser is
OppenheimerFunds, Inc. (the "Manager"). The Manager has entered into a
sub-advisory agreement with Oppenheimer Capital LLC.
The Fund offers Class A, Class B, Class C, Class N and Class Y shares.
Class A shares are sold at their offering price, which is normally net asset
value plus a front-end sales charge. Class B, Class C and Class N shares are
sold without a front-end sales charge but may be subject to a contingent
deferred sales charge ("CDSC"). Class N shares are sold only through retirement
plans. Retirement plans that offer Class N shares may impose charges on those
accounts. Class Y shares are sold to certain institutional investors without
either a front-end sales charge or a CDSC, however, the institutional investor
may impose charges on those accounts. All classes of shares have identical
rights and voting privileges with respect to the Fund in general and exclusive
voting rights on matters that affect that class alone. Earnings, net assets and
net asset value per share may differ due to each class having its own expenses,
such as transfer and shareholder servicing agent fees and shareholder
communications, directly attributable to that class. Class A, B, C and N have
separate distribution and/or service plans. No such plan has been adopted for
Class Y shares. Class B shares will automatically convert to Class A shares 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
29 | OPPENHEIMER QUEST BALANCED FUND
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
1. SIGNIFICANT ACCOUNTING POLICIES Continued
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 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 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 April 30, 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 $ 471,681,107
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,
30 | OPPENHEIMER QUEST BALANCED FUND
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.
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.
JOINT REPURCHASE AGREEMENTS. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission, the Fund, along with other affiliated funds
advised by the Manager, may transfer uninvested cash balances into joint trading
accounts on a daily basis. These balances are invested in one or more repurchase
agreements. Securities pledged as collateral for repurchase agreements are held
by a custodian bank until the agreements mature. Each agreement requires that
the market value of the collateral be sufficient to cover payments of interest
and principal. If the seller of the agreement defaults and the value of the
collateral declines, or if the seller enters an insolvency proceeding,
realization of the value of the collateral by the Fund may be delayed or
limited.
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.
During the fiscal year ended October 31, 2007, the Fund did not utilize
any capital loss carryforward to offset capital gains realized in that fiscal
year.
31 | OPPENHEIMER QUEST BALANCED FUND
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
1. SIGNIFICANT ACCOUNTING POLICIES Continued
As of April 30, 2008, the Fund had available for federal income tax
purposes an estimated capital loss carryforward of $347,314,555 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 April 30, 2008, it is estimated that the Fund will not utilize
any capital loss carryforward to offset realized capital gains.
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.
The aggregate cost of securities and other investments and the composition of
unrealized appreciation and depreciation of securities and other investments for
federal income tax purposes as of April 30, 2008 are noted in the following
table. The primary difference between book and tax appreciation or depreciation
of securities and other investments, if applicable, is attributable to the tax
deferral of losses or tax realization of financial statement unrealized gain or
loss.
Federal tax cost of securities $ 5,159,627,467
==================
Gross unrealized appreciation $ 256,196,031
Gross unrealized depreciation (411,440,740)
------------------
Net unrealized depreciation $ (155,244,709)
==================
TRUSTEES' COMPENSATION. On November 19, 2007, the Fund's Board of Trustees voted
to freeze participation in the retirement plan for the Board's independent
trustees by not adding new participants to the plan after December 31, 2007.
Active independent trustees who have accrued benefits under the plan prior to
the freeze date will elect a distribution method with respect to their benefits.
Benefits already accrued under the plan for Trustees who were participants prior
to that freeze date are not affected.
During the six months ended April 30, 2008, the Fund's projected benefit
obligations, payments to retired trustees and accumulated liability were as
follows:
Projected Benefit Obligations Increased $ 201,238
Payments Made to Retired Trustees 36,174
Accumulated Liability as of April 30, 2008 1,062,789
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
32 | OPPENHEIMER QUEST BALANCED FUND
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 future claims that may be made against the
Fund. The risk of material loss from such claims is considered remote.
33 | OPPENHEIMER QUEST BALANCED FUND
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
1. SIGNIFICANT ACCOUNTING POLICIES Continued
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 $0.01 par value shares of
beneficial interest of each class. Transactions in shares of beneficial interest
were as follows:
SIX MONTHS ENDED APRIL 30, 2008 YEAR ENDED OCTOBER 31, 2007
SHARES AMOUNT SHARES AMOUNT
---------------- -------------- ----------- ---------------
CLASS A
Sold 25,298,833 $ 407,654,980 35,489,027 $ 687,676,079
Dividends and/or
distributions reinvested 20,280,336 329,110,038 7,123,507 133,921,031
Redeemed (36,622,162) (571,182,954) (49,248,174) (950,337,325)
---------------- -------------- ----------- ---------------
Net increase (decrease) 8,957,007 $ 165,582,064 (6,635,640) $ (128,740,215)
================ ============== =========== ===============
CLASS B
Sold 3,549,431 $ 54,763,205 5,750,763 $ 108,295,990
Dividends and/or
distributions reinvested 7,348,346 117,114,928 3,323,312 61,171,684
Redeemed (28,463,221) (446,779,442) (40,324,642) (766,239,638)
---------------- -------------- ----------- ---------------
Net decrease (17,565,444) $ (274,901,309) (31,250,567) $ (596,771,964)
================ ============== =========== ===============
CLASS C
Sold 2,361,037 $ 36,391,641 4,047,727 $ 76,381,348
Dividends and/or
distributions reinvested 5,362,569 85,430,351 1,895,049 34,917,394
Redeemed (11,407,909) (173,949,587) (14,322,061) (271,496,542)
---------------- -------------- ----------- ---------------
Net decrease (3,684,303) $ (52,127,595) (8,379,285) $ (160,197,800)
================ ============== =========== ===============
CLASS N
Sold 892,552 $ 13,824,743 2,122,976 $ 40,397,741
Dividends and/or
distributions reinvested 1,211,763 19,411,432 479,235 8,888,151
Redeemed (2,217,893) (34,165,215) (4,677,872) (89,069,568)
---------------- -------------- ----------- ---------------
Net decrease (113,578) $ (929,040) (2,075,661) $ (39,783,676)
================ ============== =========== ===============
CLASS Y
Sold 683,382 $ 10,944,913 5,595,917 $ 106,380,498
Dividends and/or
distributions reinvested 1,420,118 23,021,776 619,383 11,649,549
Redeemed (2,585,627) (39,686,846) (9,060,364) (177,228,867)
---------------- -------------- ----------- ---------------
Net decrease (482,127) $ (5,720,157) (2,845,064) $ (59,198,820)
================ ============== =========== ===============
34|OPPENHEIMER QUEST 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
April 30, 2008, were as follows:
PURCHASES SALES
-------------- --------------
Investment securities $1,840,725,765 $2,475,342,259
U.S. government and
government agency obligations 171,770,285 787,092,565
To Be Announced (TBA)
mortgage-related securities 879,201,581 412,242,585
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 $1.0 billion 0.80%
Next $2.0 billion 0.76
Next $1.0 billion 0.71
Next $1.0 billion 0.66
Next $1.0 billion 0.60
Next $1.0 billion 0.55
Next $2.0 billion 0.50
Over $9.0 billion 0.48
ADMINISTRATION SERVICE FEES. The Fund pays the Manager a fee of $1,500 per year
for preparing and filing the Fund's tax returns.
SUB-ADVISER FEES. The Manager retains Oppenheimer Capital LLC (the
"Sub-Adviser") to provide the day-to-day portfolio management of the Fund. Under
the Sub-Advisory Agreement, the Manager, not the Fund, pays the Sub-Adviser an
annual fee in monthly installments, based on the average daily net assets of the
Fund. The fee is calculated as a percentage of the fee the Fund pays the
Manager. The rate is 30% of the advisory fee collected by the Manager based on
the net assets of the Fund. For the six months ended April 30, 2008, the Manager
paid $5,424,604 to the Sub-Adviser for its services to the Fund, which shall be
calculated after any investment management fee waivers (voluntary or otherwise).
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 April 30, 2008, the
Fund paid $5,000,457 to OFS for services to the Fund.
Additionally, Class Y shares are subject to minimum fees of $10,000
annually for assets of $10 million or more. The Class Y shares are subject to
the minimum fees in the event
35 | OPPENHEIMER QUEST BALANCED FUND
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES Continued
that the per account fee does not equal or exceed the applicable minimum fees.
OFS may voluntarily waive the minimum fees.
DISTRIBUTION AND SERVICE PLAN (12B-1) FEES. Under its General Distributor's
Agreement with the Fund, OppenheimerFunds Distributor, Inc. (the "Distributor")
acts as the Fund's principal underwriter in the continuous public offering of
the Fund's classes of shares.
DISTRIBUTION AND SERVICE PLAN FOR CLASS A SHARES. The Fund has adopted a
Distribution and Service Plan for Class A shares. Under the plan, the Fund pays
a service fee to the Distributor of 0.25% of the average annual net assets of
Class A shares. The Distributor currently uses all of those fees to pay dealers,
brokers, banks and other financial institutions periodically for providing
personal services and maintenance of accounts of their customers that hold Class
A shares. Under the plan, the Fund may also pay an asset-based sales charge to
the Distributor. Beginning January 1, 2003, the Board of Trustees set the annual
asset-based sales charge rate at zero. Fees incurred by the Fund under the plan
are detailed in the Statement of Operations.
DISTRIBUTION AND SERVICE PLANS FOR CLASS B, CLASS C AND CLASS N SHARES. The Fund
has adopted Distribution and Service Plans (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 $31,666,813, $28,313,155 and $5,522,381, 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.
36 | OPPENHEIMER QUEST BALANCED FUND
CLASS A CLASS B CLASS C CLASS N
CLASS A CONTINGENT CONTINGENT CONTINGENT CONTINGENT
FRONT-END DEFERRED DEFERRED DEFERRED DEFERRED
SALES CHARGES SALES CHARGES SALES CHARGES SALES CHARGES SALES CHARGES
RETAINED BY RETAINED BY RETAINED BY RETAINED BY RETAINED BY
SIX MONTHS ENDED DISTRIBUTOR DISTRIBUTOR DISTRIBUTOR DISTRIBUTOR DISTRIBUTOR
- ----------------- ------------- ------------- ------------- ------------- -------------
April 30, 2008 $ 390,430 $ 10,912 $ 873,066 $ 25,722 $ 486
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.
5. SECURITIES LENDING
The Fund lends portfolio securities from time to time in order to earn
additional income in the form of fees or interest on securities received as
collateral or the investment of any cash received as collateral. The loans are
secured by collateral (either securities, letters of credit, or cash) in an
amount not less than 100% of the market value of the loaned securities during
the period of the loan. The market value of the loaned securities is determined
at the close of each business day and any additional required collateral is
delivered to the Fund on the next business day. If the borrower defaults on its
obligation to return the securities loaned because of insolvency or other
reasons, the Fund could experience delays and cost in recovering the securities
loaned or in gaining access to the collateral. The Fund continues to receive the
economic benefit of interest or dividends paid on the securities loaned in the
form of a substitute payment received from the borrower and recognizes the gain
or loss in the fair value of the securities loaned that may occur during the
term of the loan. The Fund has the right under the lending agreement to recover
the securities from the borrower on demand. As of April 30, 2008, the Fund had
on loan securities valued at $394,163,176. Collateral of $394,419,465 was
received for the loans, all of which was received in cash and subsequently
invested in approved instruments or held as cash.
6. 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 April
30, 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.
37 | OPPENHEIMER QUEST 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.
38 | OPPENHEIMER QUEST BALANCED FUND
April 30, 2008
- --------------------------------------------------------------------------------
Oppenheimer Management
QUEST OPPORTUNITY Commentaries
VALUE FUND (SM) and
Semiannual
Report
- --------------------------------------------------------------------------------
MANAGEMENT COMMENTARIES
An Interview with Your Fund's Manager
Listing of Top Holdings
SEMIANNUAL REPORT
Listing of Investments
Financial Statements
[OPPENHEIMERFUNDS LOGO]
TOP HOLDINGS AND ALLOCATIONS
TOP TEN COMMON STOCK INDUSTRIES
Software 13.6%
----
Oil, Gas & Consumable Fuels 5.4
----
Tobacco 4.4
----
Media 4.1
----
Pharmaceuticals 2.6
----
Food Products 2.5
----
Capital Markets 2.1
----
Aerospace & Defense 2.1
----
Internet Software & Services 2.0
----
Insurance 1.8
Portfolio holdings and allocations are subject to change. Percentages are as of
April 30, 2008, and are based on net assets.
TOP TEN COMMON STOCK HOLDINGS
Take-Two Interactive Software, Inc. 8.2%
---
Exxon Mobil Corp. 2.6
---
Liberty Global, Inc., Series C 2.3
---
THQ, Inc. 2.3
---
Philip Morris International, Inc. 2.1
---
Credit Suisse Group, ADR 2.1
---
Nestle SA 2.1
---
Petroleo Brasileiro SA, ADR 1.9
---
Liberty Global, Inc., Series A 1.8
---
Navistar International Corp. 1.8
Portfolio holdings and allocations are subject to change. Percentages are as of
April 30, 2008, and are based on net assets.
For up-to-date Top 10 Fund Holdings, please visit www.oppenheimerfunds.com.
9 | OPPENHEIMER QUEST OPPORTUNITY VALUE FUND
TOP HOLDINGS AND ALLOCATIONS
PORTFOLIO ALLOCATION
[PIE CHART]
Stocks 54.1%
Investment Company 44.5
Structured Securities 0.8
Derivatives 0.4
Convertible Corporate Bonds and Notes 0.2
Portfolio holdings and allocations are subject to change. Percentages are as of
April 30, 2008, and are based on the total market value of investments.
10 | OPPENHEIMER QUEST OPPORTUNITY VALUE 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 consti-tute a recommendation by
OppenheimerFunds, Inc.
CLASS A shares of the Fund were first publicly offered on 1/3/89. Unless
otherwise noted, Class A returns include the current maximum initial sales
charge of 5.75%. Class A shares are subject to a maximum annual 0.25%
asset-based sales charge. There is a voluntary waiver of the Class A
asset-based sales charge, as described in the Prospectus.
CLASS B shares of the Fund were first publicly offered on 9/1/93. Unless
otherwise noted, Class B returns include the applicable contingent
deferred sales charges 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 9/1/93. 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.
11 | OPPENHEIMER QUEST OPPORTUNITY VALUE FUND
NOTES
CLASS N shares of the Fund were first publicly offered on 3/1/01. Class N
shares are offered only through retirement plans. Unless otherwise noted,
Class N returns include the contingent deferred sales charge of 1% for the
1-year period. Class N shares are subject to an annual 0.25% asset-based
sales charge.
CLASS Y shares of the Fund were first publicly offered on 12/16/96. Class
Y shares are offered only to certain institutional investors under a
special agreement with the Distributor, and to present or former officers,
directors, trustees or employees (and their eligible family members) of
the Fund, the Manager, its affiliates, its parent company and the
subsidiaries of its parent company, and retirement plans established for
the benefit of such individuals.
An explanation of the calculation of performance is in the Fund's
Statement of Additional Information.
12 | OPPENHEIMER QUEST OPPORTUNITY VALUE FUND
FUND EXPENSES
FUND EXPENSES. As a shareholder of the Fund, you incur two types of costs:
(1) transaction costs, which may include sales charges (loads) on purchase
payments, contingent deferred sales charges on redemptions; and redemption
fees (if 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 April
30, 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
13 | OPPENHEIMER QUEST OPPORTUNITY VALUE FUND
FUND EXPENSES Continued
Statement of Additional Information). Therefore, the "hypotheti-cal"
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 NOVEMBER 1, 2007 APRIL 30, 2008 APRIL 30, 2008
- -------------------------- ---------------- -------------- --------------
Class A $ 1,000.00 $ 993.10 $ 7.51
---------- ---------- --------
Class B 1,000.00 989.10 11.34
---------- ---------- --------
Class C 1,000.00 989.10 11.34
---------- ---------- --------
Class N 1,000.00 991.30 9.10
---------- ---------- --------
Class Y 1,000.00 994.00 6.42
HYPOTHETICAL
(5% return before expenses)
Class A 1,000.00 1,017.35 7.60
---------- ----------- --------
Class B 1,000.00 1,013.53 11.48
---------- ----------- --------
Class C 1,000.00 1,013.53 11.48
---------- ----------- --------
Class N 1,000.00 1,015.76 9.21
---------- ----------- --------
Class Y 1,000.00 1,018.45 6.49
Expenses are equal to the Fund's annualized expense ratio for that class,
multiplied by the average account value over the period, multiplied by 182/366
(to reflect the one-half year period). Those annualized expense ratios,
excluding indirect expenses from affiliated fund, based on the 6-month period
ended April 30, 2008 are as follows:
CLASS EXPENSE RATIOS
Class A 1.51%
--------
Class B 2.28
--------
Class C 2.28
--------
Class N 1.83
--------
Class Y 1.29
The expense ratios reflect reduction to custodian expenses and voluntary waivers
or reimbursements of expenses by the Fund's Manager and Transfer Agent that can
be terminated at any time, without advance notice. The "Financial Highlights"
tables in the Fund's financial statements, included in this report, also show
the gross expense ratios, without such waivers or reimbursements and reduction
to custodian expenses, if applicable.
14 | OPPENHEIMER QUEST OPPORTUNITY VALUE FUND
STATEMENTS OF INVESTMENTS April 30, 2008 / Unaudited
SHARES VALUE
----------- -------------
COMMON STOCKS--55.9%
CONSUMER ISCRETIONARY--4.1%
MEDIA--4.1%
Liberty Global, Inc., Series A (1,2) 758,258 $ 26,834,751
----------- -------------
Liberty Global, Inc.,Series C (1,2) 1,058,628 35,146,450
-------------
61,981,201
CONSUMER STAPLES--6.9%
FOOD PRODUCTS--2.5%
ConAgra Foods, Inc. (2) 259,400 6,111,464
----------- -------------
Nestle SA 64,931 31,144,822
-------------
37,256,286
TOBACCO--4.4%
Altria Group, Inc. (2) 625,600 12,512,000
----------- -------------
Loews Corp./Carolina Group (2) 326,400 21,434,688
----------- -------------
Philip Morris International, Inc. (1,2) 625,600 31,924,368
-------------
65,871,056
ENERGY--5.4%
OIL, GAS & CONSUMABLE FUELS--5.4%
Alpha Natural Resources, Inc. (1) 82,000 3,989,300
----------- -------------
BP plc, ADR (2) 143,900 10,474,481
----------- -------------
Exxon Mobil Corp. (2) 420,400 39,126,628
----------- -------------
Petroleo Brasileiro SA, ADR (2) 232,400 28,218,008
-------------
81,808,417
FINANCIALS--4.5%
CAPITAL MARKETS--2.1%
Credit Suisse Group, ADR 584,000 31,156,400
----------- -------------
CONSUMER FINANCE--0.6%
American Express Co. (2) 186,800 8,970,136
----------- -------------
INSURANCE--1.8%
Everest Re Group Ltd. 247,400 22,352,590
National Financial Partners Corp. (2) 211,400 5,690,888
-------------
28,043,478
HEALTH CARE--6.2%
BIOTECHNOLOGY--1.4%
Amicus Therapeutics, Inc. (1,2) 432,832 4,562,049
----------- -------------
deCODE genetics, Inc. (1) 555,100 854,854
----------- -------------
Human Genome Sciences, Inc. (1) 749,800 4,911,190
----------- -------------
Orexigen Therapeutics, Inc. (1,2) 484,880 5,149,426
----------- -------------
Theravance, Inc. (1) 218,300 2,726,567
----------- -------------
Vanda Pharmaceuticals, Inc. (1) 827,760 2,921,993
-------------
21,126,079
HEALTH CARE PROVIDERS & SERVICES--1.6%
Medco Health Solutions, Inc. (1) 183,700 9,100,498
----------- -------------
Skilled Healthcare Group, Inc.,
Cl. A (1,2) 449,900 5,443,790
----------- -------------
WellPoint, Inc. (1,2) 189,200 9,412,700
-------------
23,956,988
LIFE SCIENCES TOOLS & SERVICES--0.6%
Waters Corp. (1) 158,700 9,753,702
----------- -------------
PHARMACEUTICALS--2.6%
Abbott Laboratories (2) 165,600 8,735,400
----------- -------------
Medicines Co. (The) (1,2) 530,400 10,475,400
----------- -------------
Mylan Laboratories, Inc. (2) 763,000 10,048,710
----------- -------------
Schering-Plough Corp. (2) 523,500 9,637,635
38,897,145
-------------
15 | OPPENHEIMER QUEST OPPORTUNITY VALUE FUND
STATEMENTS OF INVESTMENTS Unaudited / Continued
SHARES VALUE
----------- -------------
INDUSTRIALS--5.2%
AEROSPACE & DEFENSE--2.1%
Orbital Sciences Corp. (1,2) 212,000 $ 5,704,920
----------- -------------
United Technologies Corp. (2) 347,600 25,190,572
-------------
30,895,492
COMMERCIAL SERVICES & SUPPLIES--0.2%
Sinomem Technology Ltd. (1) 5,596,000 3,167,310
----------- -------------
INDUSTRIAL CONGLOMERATES--1.2%
Siemens AG, Sponsored ADR (2) 148,000 17,530,600
----------- -------------
MACHINERY--1.7%
Navistar International Corp. (1,2) 400,800 26,352,600
----------- -------------
INFORMATION TECHNOLOGY--18.7%
COMMUNICATIONS EQUIPMENT--0.9%
Cisco Systems, Inc. (1,2) 553,900 14,201,996
----------- -------------
COMPUTERS & PERIPHERALS--1.2%
International Business Machines Corp. (2) 142,800 17,235,960
----------- -------------
INTERNET SOFTWARE & SERVICES--2.0%
eBay, Inc. (1,2) 419,900 13,138,671
----------- -------------
Google, Inc., Cl. A (1,2) 12,800 7,350,912
----------- -------------
Yahoo!, Inc. (1,2) 356,200 9,763,442
-------------
30,253,025
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT
- --1.0%
Texas Instruments, Inc. 510,100 14,874,516
----------- -------------
SOFTWARE--13.6%
Microsoft Corp. (2) 914,000 26,067,280
----------- -------------
Novell, Inc. (1,2) 1,186,600 7,451,848
----------- -------------
Synopsys, Inc. (1,2) 522,100 12,065,731
----------- -------------
Take-Two Interactive Software,
Inc. (1,2,3) 4,722,550 123,919,712
----------- -------------
THQ, Inc. (1) 1,636,478 34,824,252
-------------
204,328,823
MATERIALS--2.5%
CHEMICALS--0.3%
Lubrizol Corp. (The) (2) 75,100 4,379,832
----------- -------------
CONSTRUCTION MATERIALS--0.4%
Texas Industries, Inc. (2) 80,400 6,223,764
----------- -------------
METALS & MINING--1.8%
Carpenter Technology Corp. (2) 197,177 10,111,237
----------- -------------
Companhia Vale do Rio Doce, Sponsored
ADR (2) 548,100 17,451,504
-------------
27,562,741
TELECOMMUNICATION SERVICES--1.5%
DIVERSIFIED TELECOMMUNICATION SERVICES--1.1%
AT&T, Inc. (2) 415,700 16,091,747
----------- -------------
WIRELESS TELECOMMUNICATION SERVICES--0.4%
Sprint Nextel Corp. (2) 799,400 6,387,206
----------- -------------
UTILITIES--0.9%
ENERGY TRADERS--0.9%
AES Corp. (The) (1,2) 468,800 8,138,368
----------- -------------
Dynegy, Inc., Cl. A (1) 624,500 5,383,190
-------------
13,521,558
-------------
Total Common Stocks
(Cost $705,296,008) 841,828,058
PRINCIPAL
AMOUNT
-----------
CONVERTIBLE CORPORATE BONDS AND NOTES--0.2%
Theravance, Inc., 3% Cv.
Sub. Nts., 1/15/15
(Cost $3,692,000) $ 3,692,000 2,736,692
----------- -------------
STRUCTURED SECURITIES--0.9%
Fhu-Jin Ltd.
Catastrophe Linked Nts.,
Cl. B, 7.012%, 8/10/11 (4,5) 3,000,000 3,063,900
----------- -------------
Fremantle Ltd.
Catastrophe Linked Nts.,
Cl. B, 4.599%, 6/28/10 (5,6) 1,000,000 1,004,100
----------- -------------
Successor Cal Quake
Parametric Ltd.
Catastrophe Linked
Nts., Cl. A-I,
10.258%, 6/6/08 (4,5) 3,000,000 3,004,200
16 | OPPENHEIMER QUEST OPPORTUNITY VALUE FUND
PRINCIPAL
AMOUNT VALUE
----------- -------------
STRUCTURED SECURITIES Continued
Successor Euro Wind Ltd.
Catastrophe Linked
Nts., Cl. A-I, 8.258%,
6/6/08 (5,6) $ 3,000,000 $ 3,009,450
----------- -------------
Successor Japan Quake Ltd.
Catastrophe Linked Nts.,
Cl. A-I, 7.258%, 6/6/08 (5,6) 3,000,000 3,002,850
-------------
Total Structured Securities
(Cost $13,000,000) 13,084,500
EXPIRATION STRIKE
DATE PRICE CONTRACTS VALUE
---------- -------- --------- ---------
OPTIONS PURCHASED--0.1%
CarMax, Inc. Put,1
(Cost $1,321,994) 7/21/08 $ 20 4,000 $ 760,000
EXERCISE NOTIONAL
RATE AMOUNT
-------- --------------
SWAPTIONS PURCHASED--0.3%
Goldman Sachs International Call; Paid: Option
premium payment of Euro 2,450,000;
Received: The greater of 0 or [(30 year
EUR-ISDA-EURIBOR -2 year EUR-ISDA-EURIBOR)
- -74.5 basis points] (1) 4/19/10 0.745% $1,000,000,000 2,966,913
---------- -------- -------------- ----------
Lehman Brothers International (Europe) Call;
Paid: Option premium of USD 3,500,000;
Received: The greater of 0 or [(30 year
EUR-ISDA-EURIBOR) -74 basis points] (1) 4/13/10 0.740 982,600,000 2,439,508
----------
Total Swaptions Purchased (Cost $7,365,857) 5,406,421
SHARES
------------
INVESTMENT COMPANY--45.9%
Oppenheimer Institutional Money Market Fund,
Cl. E, 2.90%3,7 (Cost $ 691,168,853) 691,168,853 691,168,853
------------ ---------------
TOTAL INVESTMENTS, AT VALUE
(COST $ 1,421,844,712) 103.3% 1,554,984,524
------------ ---------------
LIABILITIES IN EXCESS OF OTHER ASSETS (3.3) (49,643,858)
------------ ---------------
NET ASSETS 100.0% $ 1,505,340,666
============ ===============
FOOTNOTES TO STATEMENT OF INVESTMENTS
Abbreviations are as follows:
EURIBOR Euro Interbank Offered Rate
ISDA International Swaps & Derivatives Assn., Inc.
1. Non-income producing security
17 | OPPENHEIMER QUEST OPPORTUNITY VALUE FUND
STATEMENT OF INVESTMENTS Unaudited / Continued
FOOTNOTES TO STATEMENT OF INVESTMENTS Continued
2. All or a portion of the security was segregated by the Fund in the amount
of $640,026,339, which represented 290.00% of the market value of securities
sold short. See Note 1 of accompanying Notes.
3. Is or was an affiliate, as defined in the Investment Company Act of 1940,
at or during the period ended April 30, 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 GROSS GROSS SHARES
OCTOBER 31, 2007 ADDITIONS REDUCTIONS APRIL 30, 2008
---------------- ----------- ----------- --------------
Oppenheimer Institutional
Money Market Fund, Cl. E 393,707,214 673,078,908 375,617,269 691,168,853
Take-Two Interactive Software, Inc. 4,722,550 -- -- 4,722,550
DIVIDEND
VALUE INCOME
------------- -------------
Oppenheimer Institutional
Money Market Fund, Cl. E $ 691,168,853 $ 11,392,132
Take-Two Interactive Software, Inc. 123,919,712 --
------------- ------------
$ 815,088,565 $ 11,392,132
============= ============
4. Illiquid security. The aggregate value of illiquid securities as of April 30,
2008 was $6,068,100, which represents 0.40% of the Fund's net assets. See Note 8
of accompanying Notes.
5. Represents the current interest rate for a variable or increasing rate
security.
6. Represents securities sold under Rule 144A, which are exempt from
registration under the Securities Act of 1933, as amended. These securities have
been determined to be liquid under guidelines established by the Board of
Trustees. These securities amount to $7,016,400 or 0.47% of the Fund's net
assets as of April 30, 2008.
7. Rate shown is the 7-day yield as of April 30, 2008.
SHARES
SOLD SHORT VALUE
----------- -------------
SECURITIES SOLD SHORT--(14.7)%
Arch Coal, Inc. (77,700) $ (4,456,872)
---------- --------------
Fidelity NASDAQ Composite Index-Tracking Stock (1,403,600) (132,850,740)
---------- --------------
PowerShares QQQ (800,000) (37,768,000)
---------- --------------
Standard & Poor's Depositary Receipts Trust Series 1 (330,000) (45,625,800)
--------------
Total Securities Sold Short (Proceeds $ 205,485,246) $ (220,701,412)
==============
CREDIT DEFAULT SWAP CONTRACTS AS OF APRIL 30, 2008 ARE AS FOLLOWS:
PAY/
BUY/SELL NOTIONAL RECEIVE
SWAP REFERENCE CREDIT AMOUNT FIXED TERMINATION
COUNTERPARTY ENTITY PROTECTION (000S) RATE DATE VALUE
- ----------------- ---------------------------------------- ---------- ---------- -------- ----------- --------------
Deutsche Bank AG,
London Branch:
Custom Basket of Asset-Backed Securities Buy $ 22,800 3.244% 11/25/37 $ 18,232,951
Custom Basket of Asset-Backed Securities Sell 20,000 15.423 4/25/36 (19,228,401)
Custom Basket of Asset-Backed Securities Buy 105,166 2.910 4/25/36 72,636,260
Custom Basket of Asset-Backed Securities Sell 7,630 19.250 2/25/36 (7,220,544)
Custom Basket of Asset-Backed Securities Buy 118,858 3.150 2/25/36 87,512,837
Lehman Brothers
International
(Europe) CDX.NA.IG.8 Index Buy 10,000 2.870 6/20/14 1,428,357
---------------
$ 153,361,460
===============
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
18 | OPPENHEIMER QUEST OPPORTUNITY VALUE FUND
STATEMENT OF ASSETS AND LIABILITIES Unaudited
April 30, 2008
ASSETS
Investments, at value--see accompanying statement of investments:
Unaffiliated companies (cost $ 628,711,371) $ 739,895,959
Affiliated companies (cost $ 793,133,341) 815,088,565
-----------------
1,554,984,524
-----------------
Cash 9,115,428
-----------------
Cash--foreign currencies (cost $ 97) 97
-----------------
Swaps, at value 179,810,405
-----------------
Receivables and other assets:
Investments sold 8,417,933
Interest and dividends 4,527,803
Shares of beneficial interest sold 2,577,718
Other 93,083
-----------------
Total assets 1,759,526,991
LIABILITIES
Short positions, at value (proceeds of $205,485,246)--see accompanying
statement of investments 220,701,412
-----------------
Swaps, at value 26,448,945
Payables and other liabilities:
-----------------
Investments purchased 4,199,914
Shares of beneficial interest redeemed 1,480,950
Distribution and service plan fees 298,542
Trustees' compensation 278,722
Shareholder communications 257,233
Transfer and shareholder servicing agent fees 207,754
Other 312,853
-----------------
Total liabilities 254,186,325
NET ASSETS $ 1,505,340,666
=================
COMPOSITION OF NET ASSETS
Par value of shares of beneficial interest $ 537,298
-----------------
Additional paid-in capital 1,451,250,720
-----------------
Accumulated net investment loss (136,335,809)
-----------------
Accumulated net realized loss on investments and foreign currency transactions (81,466,730)
Net unrealized appreciation on investments and translation of assets and
liabilities denominated in foreign currencies 271,355,187
-----------------
NET ASSETS $ 1,505,340,666
=================
19 | OPPENHEIMER QUEST OPPORTUNITY VALUE FUND
STATEMENT OF ASSETS AND LIABILITIES Unaudited / Continued
NET ASSET VALUE PER SHARE
Class A Shares:
Net asset value and redemption price per share (based on net assets of
$ 1,210,577,404 and 42,857,976 shares of beneficial interest outstanding) $ 28.25
Maximum offering price per share (net asset value plus sales charge of
5.75% of offering price) $ 29.97
-----------------
Class B Shares:
Net asset value, redemption price (excludes applicable contingent deferred
sales charge) and offering price per share (based on net assets of $ 115,611,
702 and 4,275,281 shares of beneficial interest outstanding) $ 27.04
-----------------
Class C Shares:
Net asset value, redemption price (excludes applicable contingent deferred
sales charge) and offering price per share (based on net assets of
$ 139,966,399 and 5,200,330 shares of beneficial interest outstanding) $ 26.91
-----------------
Class N Shares:
Net asset value, redemption price (excludes applicable contingent deferred
sales charge) and offering price per share (based on net assets of
$ 20,626,127 and 742,768 shares of beneficial interest outstanding) $ 27.77
-----------------
Class Y Shares:
Net asset value, redemption price and offering price per share (based on net
assets of $ 18,559,034 and 653,476 shares of beneficial interest outstanding) $ 28.40
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
20 | OPPENHEIMER QUEST OPPORTUNITY VALUE FUND
STATEMENT OF OPERATIONS Unaudited
For the Six Months Ended April 30, 2008
INVESTMENT INCOME
Dividends:
Unaffiliated companies (net of foreign withholding taxes of $ 440,324) $ 7,089,833
Affiliated companies 11,392,132
-------------
Interest 3,053,364
-------------
Portfolio lending fees 323
-------------
Total investment income 21,535,652
EXPENSES
Management fees 5,973,251
-------------
Distribution and service plan fees:
Class A 1,402,614
Class B 602,249
Class C 664,947
Class N 51,334
-------------
Transfer and shareholder servicing agent fees:
Class A 966,838
Class B 92,248
Class C 124,378
Class N 28,924
Class Y 15,504
-------------
Shareholder communications:
Class A 127,305
Class B 36,887
Class C 14,531
Class N 1,415
Class Y 42
-------------
Dividends on short sales 931,108
-------------
Financing expense from short sales 888,984
-------------
Trustees' compensation 66,243
-------------
Custodian fees and expenses 22,103
-------------
Administration service fees 750
-------------
Other 95,565
-------------
Total expenses 12,107,220
Less reduction to custodian expenses (7,573)
Less waivers and reimbursements of expenses (283,841)
-------------
Net expenses 11,815,806
NET INVESTMENT INCOME 9,719,846
21 | OPPENHEIMER QUEST OPPORTUNITY VALUE FUND
STATEMENT OF OPERATIONS Unaudited / Continued
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) on:
Investments from unaffiliated companies (including premiums on options
exercised) (92,907,529)
Closing and expiration of option contracts written 61,598
Foreign currency transactions 9,215,822
Short positions (3,221,046)
Swap contracts 7,884,289
--------------
Net realized loss (78,966,866)
Net change in unrealized appreciation (depreciation) on:
Investments (29,574,851)
Translation of assets and liabilities denominated in foreign currencies (1,134,257)
Option contracts written 4,407,451
Short positions 40,917,382
Swap contracts 44,560,623
--------------
Net change in unrealized appreciation 59,176,348
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS $ (10,070,672)
==============
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
22 | OPPENHEIMER QUEST OPPORTUNITY VALUE FUND
STATEMENTS OF CHANGE IN NET ASSETS
SIX MONTHS YEAR
ENDED ENDED
APRIL 30, 2008 OCTOBER 31,
(UNAUDITED) 2007
--------------- ----------------
OPERATIONS
Net investment income $ 9,719,846 $ 21,310,950
--------------- ----------------
Net realized gain (loss) (78,966,866) 89,214,123
--------------- ----------------
Net change in unrealized appreciation 59,176,348 151,231,264
--------------- ----------------
Net increase (decrease) in net assets resulting from operations (10,070,672) 261,756,337
DIVIDENDS AND/OR DISTRIBUTIONS TO SHAREHOLDERS
Dividends from net investment income:
Class A (115,477,807) (14,746,168)
Class B (12,420,769) (809,496)
Class C (13,430,135) (806,208)
Class N (2,168,220) (190,528)
Class Y (1,511,547) (214,516)
--------------- ----------------
(145,008,478) (16,766,916)
--------------- ----------------
Distributions from net realized gain:
Class A (76,092,158) (46,068,957)
Class B (8,918,222) (6,486,147)
Class C (9,528,248) (5,923,177)
Class N (1,470,686) (876,962)
Class Y (980,315) (626,139)
--------------- ----------------
(96,989,629) (59,981,382)
BENEFICIAL INTEREST TRANSACTIONS
Net increase (decrease) in net assets resulting from beneficial interest
transactions:
Class A 243,962,699 (126,775,122)
Class B 1,817,588 (40,312,003)
Class C 24,441,337 (19,374,057)
Class N 2,502,191 (2,113,092)
Class Y 6,334,919 (4,950,598)
--------------- ----------------
279,058,734 (193,524,872)
NET ASSETS
Total increase (decrease) 26,989,955 (8,516,833)
--------------- ----------------
Beginning of period 1,478,350,711 1,486,867,544
--------------- ----------------
End of period (including accumulated net investment loss of
$136,335,809 and $1,047,177, respectively) $ 1,505,340,666 $ 1,478,350,711
=============== ================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
23 | OPPENHEIMER QUEST OPPORTUNITY VALUE FUND
FINANCIAL HIGHLIGHTS
SIX MONTHS
ENDED
APRIL 30, 2008 YEAR ENDED OCTOBER 31,
CLASS A (UNAUDITED) 2007 2006 2005 2004 2003
- -------------------------------------- -------------- ------------ ------------- ------------- ----------- -----------
PER SHARE OPERATING DATA
Net asset value, beginning of
period $ 34.21 $ 30.15 $ 32.58 $ 32.41 $ 30.00 $ 26.41
------------ ----------- ------------ ------------ ----------- -----------
Income (loss) from investment
operations:
Net investment income .22(1) .51(1) .36(1) .17(1) .07(1) .14
Net realized and unrealized
gain (loss) (.49) 5.17 1.67 2.27 2.41 3.71
------------ ----------- ------------ ------------ ----------- -----------
Total from investment operations (.27) 5.68 2.03 2.44 2.48 3.85
------------ ----------- ------------ ------------ ----------- -----------
Dividends and/or distributions to
shareholders:
Dividends from net investment
income (3.43) (.39) (.24) (.04) (.07) (.26)
Distributions from net
realized gain (2.26) (1.23) (4.22) (2.23) -- --
------------ ----------- ------------ ------------ ----------- -----------
Total dividends and/or
distributions to shareholders (5.69) (1.62) (4.46) (2.27) (.07) (.26)
------------ ----------- ------------ ------------ ----------- -----------
Net asset value, end of period $ 28.25 $ 34.21 $ 30.15 $ 32.58 $ 32.41 $ 30.00
============ =========== ============ ============ =========== ===========
TOTAL RETURN, AT NET ASSET VALUE (2) (0.69)% 19.65% 7.00% 7.79% 8.30% 14.70%
Net assets, end of period
(in thousands) $ 1,210,578 $ 1,164,793 $ 1,146,503 $ 1,378,475 $ 1,459,053 $ 1,429,157
------------ ----------- ------------ ------------ ----------- -----------
Average net assets (in thousands) $ 1,146,879 $ 1,142,058 $ 1,238,504 $ 1,465,797 $ 1,497,594 $ 1,292,117
------------ ----------- ------------ ------------ ----------- -----------
Ratios to average net assets: (3)
Net investment income 1.50% 1.61% 1.22% 0.53% 0.23% 0.53%
Total expenses 1.55%(4) 1.40%(4) 1.43%(4) 1.33% 1.32% 1.44%
Expenses after payments,
waivers and/or reimbursements
and reduction to
custodian expenses 1.51% 1.37% 1.43% 1.28% 1.32% 1.44%
------------ ----------- ------------ ------------ ----------- -----------
Portfolio turnover rate 25% 51% 66% 100% 64% 63%
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 April 30, 2008 1.59%
Year Ended October 31, 2007 1.43%
Year Ended October 31, 2006 1.43%
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
24 | OPPENHEIMER QUEST OPPORTUNITY VALUE FUND
SIX MONTHS
ENDED
APRIL 30, 2008 YEAR ENDED OCTOBER 31,
CLASS B (UNAUDITED) 2007 2006 2005 2004 2003
- ---------------------------------- -------------- --------- -------- ---------- --------- ---------
PER SHARE OPERATING DATA
Net asset value, beginning
of period $ 32.82 $ 28.97 $ 31.44 $ 31.55 $ 29.36 $ 25.79
-------------- --------- -------- ---------- --------- ---------
Income (loss) from investment
operations:
Net investment income (loss) .10 (1) .26 (1) .13 (1) (.08) (1) (.17) (1) (.11)
Net realized and unrealized gain (.47) 4.97 1.62 2.20 2.36 3.68
(loss)
Total from investment operations (.37) 5.23 1.75 2.12 2.19 3.57
-------------- --------- -------- ---------- --------- ---------
Dividends and/or distributions
to shareholders:
Dividends from net investment
income (3.15) (.15) -- -- -- --
Distributions from net
realized gain (2.26) (1.23) (4.22) (2.23) -- --
-------------- --------- -------- ---------- --------- ---------
Total dividends and/or
distributions to shareholders (5.41) (1.38) (4.22) (2.23) -- --
-------------- --------- -------- ---------- --------- ---------
Net asset value, end of period $ 27.04 $ 32.82 $ 28.97 $ 31.44 $ 31.55 $ 29.36
============== ========= ======== ========== ========= =========
TOTAL RETURN, AT NET ASSET
VALUE(2) (1.09)% 18.74% 6.22% 6.94% 7.46% 13.84%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(in thousands) $ 115,612 $ 136,745 $159,147 $ 210,856 $ 278,215 $ 424,121
-------------- --------- -------- ---------- --------- ---------
Average net assets
(in thousands) $ 121,202 $ 146,748 $178,815 $ 247,951 $ 342,847 $ 527,653
-------------- --------- -------- ---------- --------- ---------
Ratios to average net assets:(3)
Net investment income (loss) 0.73% 0.84% 0.47% (0.27)% (0.54)% (0.19)%
Total expenses 2.32% (4) 2.17% (4) 2.18% (4) 2.12% 2.11% 2.20%
Expenses after payments,
waivers and/or reimbursements
and reduction to custodian
expenses 2.28% 2.14% 2.18% 2.07% 2.11% 2.20%
-------------- --------- -------- ---------- --------- ---------
Portfolio turnover rate 25% 51% 66% 100% 64% 63%
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 April 30, 2008 2.36%
Year Ended October 31, 2007 2.20%
Year Ended October 31, 2006 2.18%
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
25 | OPPENHEIMER QUEST OPPORTUNITY VALUE FUND
FINANCIAL HIGHLIGHTS Continued
SIX MONTHS
ENDED
APRIL 30, 2008 YEAR ENDED OCTOBER 31,
CLASS C (UNAUDITED) 2007 2006 2005 2004 2003
- ------------------------------------- -------------- --------- --------- -------- --------- ---------
PER SHARE OPERATING DATA
Net asset value, beginning of
period $ 32.73 $ 28.91 $ 31.38 $ 31.48 $ 29.29 $ 25.77
-------------- --------- --------- -------- --------- ---------
Income (loss) from investment
operations:
Net investment income
(loss) .10 (1) .26 (1) .13 (1) (.07) (1) (.16) (1) (.06)
Net realized and unrealized gain
(loss) (.48) 4.96 1.62 2.20 2.35 3.63
-------------- --------- --------- -------- --------- ---------
Total from investment operations (.38) 5.22 1.75 2.13 2.19 3.57
-------------- --------- --------- -------- --------- ---------
Dividends and/or distributions to
shareholders:
Dividends from net investment income (3.18) (.17) -- -- -- (.05)
Distributions from net realized gain (2.26) (1.23) (4.22) (2.23) -- --
-------------- --------- --------- -------- --------- ---------
Total dividends and/or distributions
to shareholders (5.44) (1.40) (4.22) (2.23) -- (.05)
-------------- --------- --------- -------- --------- ---------
Net asset value, end of period $ 26.91 $ 32.73 $ 28.91 $ 31.38 $ 31.48 $ 29.29
============== ========= ========= ======== ========= =========
TOTAL RETURN, AT NET ASSET VALUE (2) (1.09)% 18.73% 6.23% 6.99% 7.48% 13.88%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(in thousands) $ 139,966 $ 140,022 $ 141,981 $174,735 $ 190,426 $ 205,336
-------------- --------- --------- -------- --------- ---------
Average net assets (in thousands) $ 133,896 $ 139,758 $ 154,404 $187,520 $ 203,073 $ 198,226
-------------- --------- --------- -------- --------- ---------
Ratios to average net assets: (3)
Net investment income (loss) 0.73% 0.85% 0.47% (0.22)% (0.51)% (0.19)%
Total expenses 2.32% (4) 2.16% (4) 2.18% (4) 2.08% 2.06% 2.17%
Expenses after payments, waivers
and/or
reimbursements and reduction to
custodian expenses 2.28% 2.13% 2.18% 2.02% 2.06% 2.17%
-------------- --------- --------- -------- --------- ---------
Portfolio turnover rate 25% 51% 66% 100% 64% 63%
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 April 30, 2008 2.36%
Year Ended October 31, 2007 2.19%
Year Ended October 31, 2006 2.18%
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
26 | OPPENHEIMER QUEST OPPORTUNITY VALUE FUND
SIX MONTHS
ENDED
APRIL 30, 2008 YEAR ENDED OCTOBER 31,
CLASS N (UNAUDITED) 2007 2006 2005 2004 2003
- --------------------------------------- -------------- --------- --------- -------- --------- ---------
PER SHARE OPERATING DATA
Net asset value, beginning of period $ 33.68 $ 29.68 $ 32.12 $ 32.06 $ 29.72 $ 26.21
-------------- --------- --------- -------- --------- ---------
Income (loss) from investment
operations:
Net investment income (loss) .17 (1) .40 (1) .25 (1) .05 (1) (.05) (1) .09
Net realized and unrealized gain (loss) (.49) 5.10 1.66 2.24 2.39 3.65
-------------- --------- --------- -------- --------- ---------
Total from investment operations (.32) 5.50 1.91 2.29 2.34 3.74
-------------- --------- --------- -------- --------- ---------
Dividends and/or distributions to
shareholders:
Dividends from net investment income (3.33) (.27) (.13) -- -- (2) (.23)
Distributions from net realized gain (2.26) (1.23) (4.22) (2.23) -- --
-------------- --------- --------- -------- --------- ---------
Total dividends and/or distributions
to shareholders (5.59) (1.50) (4.35) (2.23) -- (.23)
-------------- --------- --------- -------- --------- ---------
Net asset value, end of period $ 27.77 $ 33.68 $ 29.68 $ 32.12 $ 32.06 $ 29.72
============== ========= ========= ======== ========= =========
TOTAL RETURN, AT NET ASSET VALUE (3) (0.87)% 19.26% 6.64% 7.39% 7.89% 14.39%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in thousands) $ 20,626 $ 22,007 $ 21,431 $ 25,539 $ 26,382 $ 19,538
-------------- --------- --------- -------- --------- ---------
Average net assets (in thousands) $ 20,647 $ 21,086 $ 24,755 $ 27,162 $ 23,702 $ 17,677
-------------- --------- --------- -------- --------- ---------
Ratios to average net assets: (4)
Net investment income (loss) 1.18% 1.28% 0.87% 0.17% (0.15)% 0.23%
Total expenses 1.91%(5) 1.73% (5) 1.77% (5) 1.69% 1.73% 2.14%
Expenses after payments, waivers and/or
reimbursements and reduction to
custodian expenses 1.83% 1.70% 1.77% 1.64% 1.69% 1.73%
-------------- --------- --------- -------- --------- ---------
Portfolio turnover rate 25% 51% 66% 100% 64% 63%
1. Per share amounts calculated based on the average shares outstanding
during the period.
2. Less than $0.005 per share.
3. Assumes an investment on the business day before the first day of the
fiscal period, with all dividends and distributions reinvested in additional
shares on the reinvestment date, and redemption at the net asset value
calculated on the last business day of the fiscal period. Sales charges are not
reflected in the total returns. Total returns are not annualized for periods
less than one full year. Returns do not reflect the deduction of taxes that a
shareholder would pay on fund distributions or the redemption of fund shares.
4. Annualized for periods less than one full year.
5. Total expenses including indirect expenses from affiliated fund were as
follows:
Six Months Ended April 30, 2008 1.95%
Year Ended October 31, 2007 1.76%
Year Ended October 31, 2006 1.77%
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
27 | OPPENHEIMER QUEST OPPORTUNITY VALUE FUND
FINANCIAL HIGHLIGHTS Continued
SIX MONTHS
ENDED
APRIL 30, 2008 YEAR ENDED OCTOBER 31,
CLASS Y (UNAUDITED) 2007 2006 2005 2004 2003
- ---------------------------------------- -------------- -------- -------- -------- ------- ----------
PER SHARE OPERATING DATA
Net asset value, beginning of period $ 34.39 $ 30.28 $ 32.70 $ 32.52 $ 30.11 $ 26.53
-------------- -------- -------- -------- ------- ----------
Income (loss) from investment operations:
Net investment income .25 (1) .561 .41 (1) .22 (1) .12 (1) .20
Net realized and unrealized gain (loss) (.50) 5.20 1.69 2.28 2.41 3.72
-------------- -------- -------- -------- ------- ----------
Total from investment operations (.25) 5.76 2.10 2.50 2.53 3.92
-------------- -------- -------- -------- ------- ----------
Dividends and/or distributions to
shareholders:
Dividends from net investment income (3.48) (.42) (.30) (.09) (.12) (.34)
Distributions from net realized gain (2.26) (1.23) (4.22) (2.23) -- --
-------------- -------- -------- -------- ------- ----------
Total dividends and/or distributions
to shareholders (5.74) (1.65) (4.52) (2.32) (.12) (.34)
-------------- -------- -------- -------- ------- ----------
Net asset value, end of period $ 28.40 $ 34.39 $ 30.28 $ 32.70 $ 32.52 $ 30.11
============== ======== ======== ======== ======= ==========
TOTAL RETURN, AT NET ASSET VALUE (2) (0.60)% 19.85% 7.21% 7.98% 8.42% 14.97%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in thousands) $ 18,559 $ 14,784 $ 17,806 $ 28,100 $30,831 $ 30,124
-------------- -------- -------- -------- ------- ----------
Average net assets (in thousands) $ 15,199 $ 15,189 $ 23,687 $ 29,815 $30,649 $ 27,078
-------------- -------- -------- -------- ------- ----------
Ratios to average net assets: (3)
Net investment income 1.74% 1.77% 1.39% 0.69% 0.38% 0.74%
Total expenses 1.33% (4) 1.25% (4) 1.24% (4) 1.17% 1.16% 1.33%
Expenses after payments, waivers and/or
reimbursements and reduction to
custodian expenses 1.29% 1.21% 1.23% 1.12% 1.16% 1.23%
-------------- -------- -------- -------- ------- ----------
Portfolio turnover rate 25% 51% 66% 100% 64% 63%
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 April 30, 2008 1.37%
Year Ended October 31, 2007 1.28%
Year Ended October 31, 2006 1.24%
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
28 | OPPENHEIMER QUEST OPPORTUNITY VALUE FUND
NOTES TO FINANCIAL STATEMENTS Unaudited
1. SIGNIFICANT ACCOUNTING POLICIES
Oppenheimer Quest Opportunity Value Fund (the "Fund"), a series of Oppenheimer
Quest For Value Funds, is an open-end management investment company registered
under the Investment Company Act of 1940, as amended. The Fund's investment
objective is to seek growth of capital. The Fund's investment adviser is
OppenheimerFunds, Inc. (the "Manager").
The Fund offers Class A, Class B, Class C, Class N and Class Y shares.
Class A shares are sold at their offering price, which is normally net asset
value plus a front-end sales charge. Class B, Class C and Class N shares are
sold without a front-end sales charge but may be subject to a contingent
deferred sales charge ("CDSC"). Class N shares are sold only through retirement
plans. Retirement plans that offer Class N shares may impose charges on those
accounts. Class Y shares are sold to certain institutional investors without
either a front-end sales charge or a CDSC, however, the institutional investor
may impose charges on those accounts. All classes of shares have identical
rights and voting privileges with respect to the Fund in general and exclusive
voting rights on matters that affect that class alone. Earnings, net assets and
net asset value per share may differ due to each class having its own expenses,
such as transfer and shareholder servicing agent fees and shareholder
communications, directly attributable to that class. Class A, B, C and N have
separate distribution and/or service plans. No such plan has been adopted for
Class Y shares. Class B shares will automatically convert to Class A shares 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
29 | OPPENHEIMER QUEST OPPORTUNITY VALUE FUND
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
1. SIGNIFICANT ACCOUNTING POLICIES Continued
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 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.
STRUCTURED SECURITIES. The Fund invests in structured securities whose market
values, interest rates and/or redemption prices are linked to the performance of
underlying foreign currencies, interest rate spreads, stock market indices,
prices of individual securities, commodities or other financial instruments or
the occurrence of other specific events. The structured securities are often
leveraged, increasing the volatility of each note's market value relative to the
change in the underlying linked financial element or event. Fluctuations in
value of these securities are recorded as unrealized gains and losses in the
accompanying Statement of Operations. The Fund records a realized gain or loss
when a structured security is sold or matures.
SECURITIES SOLD SHORT. The Fund sells securities that it does not own, and it
will therefore be obligated to purchase such securities at a future date. Upon
entering into a short position, the Fund is required to segregate securities at
its custodian with a value equal to a certain percentage of the value of the
securities that it sold short. Securities that have been segregated for this
purpose are disclosed as such in the Statement of Investments. The value of the
open short position is recorded as a liability, and the Fund records an
unrealized gain or loss to the extent of the difference between the proceeds
received and the value of the open short position. The Fund records a realized
gain or loss when the short position is closed out. By entering into short
sales, the Fund bears the market risk of increases in value of the security sold
short in excess of the proceeds received. Until the security is replaced, the
Fund is required to pay the lender any dividend or interest earned. Dividend
expense on short sales is treated as an expense in the Statement of Operations.
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.
30 | OPPENHEIMER QUEST OPPORTUNITY VALUE 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.
INVESTMENTS 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
31 | OPPENHEIMER QUEST OPPORTUNITY VALUE FUND
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
1. SIGNIFICANT ACCOUNTING POLICIES Continued
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.
During the fiscal year ended October 31, 2007, the Fund did not utilize
any capital loss carryforward to offset capital gains realized in that fiscal
year. As of October 31, 2007, the Fund had available for federal income tax
purposes straddle losses of $169,405.
As of April 30, 2008, the Fund had available for federal income tax
purposes an estimated capital loss carryforward of $79,136,271 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 April 30, 2008, it is estimated that the Fund will not utilize
any capital loss carryforward to offset realized capital gains.
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.
The aggregate cost of securities and other investments and the composition of
unrealized appreciation and depreciation of securities and other investments for
federal income tax purposes as of April 30, 2008 are noted in the following
table. The primary difference between book and tax appreciation or depreciation
of securities and other investments, if applicable, is attributable to the tax
deferral of losses or tax realization of financial statement unrealized gain or
loss.
Federal tax cost of securities $ 1,424,490,918
Federal tax cost of other investments (205,485,247)
---------------
Total federal tax cost $ 1,219,005,671
===============
Gross unrealized appreciation $ 349,626,868
Gross unrealized depreciation (80,987,967)
---------------
Net unrealized appreciation $ 268,638,901
===============
TRUSTEES' COMPENSATION. On November 19, 2007, the Fund's Board of Trustees voted
to freeze participation in the retirement plan for the Board's independent
trustees by not adding new participants to the plan after December 31, 2007.
Active independent trustees who have accrued benefits under the plan prior to
the freeze date will elect a distribution method with respect to their benefits.
Benefits already accrued under the plan for Trustees who were participants prior
to that freeze date are not affected.
32 | OPPENHEIMER QUEST OPPORTUNITY VALUE FUND
During the six months ended April 30, 2008, the Fund's projected benefit
obligations, payments to retired trustees and accumulated liability were as
follows:
Projected Benefit Obligations Increased $ 46,894
Payments Made to Retired Trustees 3,024
Accumulated Liability as of April 30, 2008 256,964
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 and capital gain distributions, if any, are
declared and paid annually or at other times as deemed necessary by the Manager.
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.
33 | OPPENHEIMER QUEST OPPORTUNITY VALUE FUND
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
1. SIGNIFICANT ACCOUNTING POLICIES Continued
INDEMNIFICATIONS. The Fund's organizational documents provide current and former
trustees and officers with a limited indemnification against liabilities arising
in connection with the performance of their duties to the Fund. In the normal
course of business, the Fund may also enter into contracts that provide general
indemnifications. The Fund's maximum exposure under these arrangements is
unknown as this would be dependent on future claims that may be made against the
Fund. The risk of material loss from such claims is considered remote.
OTHER. The preparation of financial statements in conformity with 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 $0.01 par value shares of
beneficial interest of each class. Transactions in shares of beneficial interest
were as follows:
SIX MONTHS ENDED APRIL 30, 2008 YEAR ENDED OCTOBER 31, 2007
SHARES AMOUNT SHARES AMOUNT
------------ ---------------- ----------- --------------
CLASS A
Sold 5,892,189 $ 165,629,293 2,510,817 $ 78,501,341
Dividends and/or
distributions reinvested 6,457,469 181,261,162 1,935,781 57,666,925
Redeemed (3,536,731) (102,927,756) (8,427,993) (262,943,388)
------------ ---------------- ----------- --------------
Net increase (decrease) 8,812,927 $ 243,962,699 (3,981,395) $ (126,775,122)
============ ================ =========== ==============
CLASS B
Sold 411,121 $ 11,317,118 419,426 $ 12,661,988
Dividends and/or
distributions reinvested 771,964 20,803,968 245,156 7,053,152
Redeemed (1,073,699) (30,303,498) (1,992,292) (60,027,143)
------------ ---------------- ----------- --------------
Net increase (decrease) 109,386 $ 1,817,588 (1,327,710) $ (40,312,003)
============ ================ =========== ==============
CLASS C
Sold 623,331 $ 16,898,445 296,492 $ 8,943,128
Dividends and/or
distributions reinvested 791,797 21,235,996 216,370 6,207,650
Redeemed (492,324) (13,693,104) (1,147,201) (34,524,835)
------------ ---------------- ----------- --------------
Net increase (decrease) 922,804 $ 24,441,337 (634,339) $ (19,374,057)
============ ================ =========== ==============
34 | OPPENHEIMER QUEST OPPORTUNITY VALUE FUND
SIX MONTHS ENDED APRIL 30, 2008 YEAR ENDED OCTOBER 31, 2007
SHARES AMOUNT SHARES AMOUNT
------------ --------------- --------- --------------
CLASS N
Sold 93,583 $ 2,641,637 139,625 $ 4,317,651
Dividends and/or
distributions reinvested 131,039 3,620,481 36,261 1,066,438
Redeemed (135,248) (3,759,927) (244,641) (7,497,181)
------------ --------------- --------- --------------
Net increase (decrease) 89,374 $ 2,502,191 (68,755) $ (2,113,092)
============ =============== ========= ==============
CLASS Y
Sold 172,731 $ 4,940,465 111,107 $ 3,500,038
Dividends and/or
distributions reinvested 88,364 2,491,862 28,115 840,655
Redeemed (37,511) (1,097,408) (297,418) (9,291,291)
------------ --------------- --------- --------------
Net increase (decrease) 223,584 $ 6,334,919 (158,196) $ (4,950,598)
============ =============== ========= ==============
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
April 30, 2008, were as follows:
PURCHASES SALES
-------------- --------------
Investment securities $ 324,577,975 $ 377,032,846
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 $1.0 billion 0.85%
Next $500 million 0.80
Next $500 million 0.75
Next $500 million 0.70
Next $500 million 0.65
Next $500 million 0.60
Next $500 million 0.55
Over $4.0 billion 0.50
ADMINISTRATION SERVICE FEES. The Fund pays the Manager a fee of $1,500 per year
for preparing and filing the Fund's tax returns.
TRANSFER AGENT FEES. OppenheimerFunds Services ("OFS"), a division of the
Manager, acts as the transfer and shareholder servicing agent for the Fund. The
Fund pays OFS a per account fee. For the six months ended April 30, 2008, the
Fund paid $1,260,871 to OFS for services to the Fund.
35 | OPPENHEIMER QUEST OPPORTUNITY VALUE FUND
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES Continued
Additionally, Class Y shares are subject to minimum fees of $10,000
annually for assets of $10 million or more. The Class Y shares are subject to
the minimum fees in the event that the per account fee does not equal or exceed
the applicable minimum fees. OFS may voluntarily waive the minimum fees.
DISTRIBUTION AND SERVICE PLAN (12B-1) FEES. Under its General Distributor's
Agreement with the Fund, OppenheimerFunds Distributor, Inc. (the "Distributor")
acts as the Fund's principal underwriter in the continuous public offering of
the Fund's classes of shares.
DISTRIBUTION AND SERVICE PLAN FOR CLASS A SHARES. The Fund has adopted a
Distribution and Service Plan for Class A shares. Under the plan, the Fund pays
a service fee to the Distributor of 0.25% of the average annual net assets of
Class A shares. The Distributor currently uses all of those fees to pay dealers,
brokers, banks and other financial institutions periodically for providing
personal services and maintenance of accounts of their customers that hold Class
A shares. Under the plan, the Fund may also pay an asset-based sales charge to
the Distributor. Beginning January 1, 2003, the Board of Trustees set the annual
asset-based sales charge rate at zero. Fees incurred by the Fund under the plan
are detailed in the Statement of Operations.
DISTRIBUTION AND SERVICE PLANS FOR CLASS B, CLASS C AND CLASS N SHARES. The Fund
has adopted Distribution and Service Plans (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 C and Class N shares were
$8,688,664 and $677,709, 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.
36 | OPPENHEIMER QUEST OPPORTUNITY VALUE FUND
CLASS A CLASS B CLASS C CLASS N
CLASS A CONTINGENT CONTINGENT CONTINGENT CONTINGENT
FRONT-END DEFERRED DEFERRED DEFERRED DEFERRED
SALES CHARGES SALES CHARGES SALES CHARGES SALES CHARGES SALES CHARGES
SIX MONTHS RETAINED BY RETAINED BY RETAINED BY RETAINED BY RETAINED BY
ENDED DISTRIBUTOR DISTRIBUTOR DISTRIBUTOR DISTRIBUTOR DISTRIBUTOR
- ------------------ ------------- ------------- ------------- ------------- -------------
April 30, 2008 $137,784 $1,830 $90,674 $2,420 $499
WAIVERS AND REIMBURSEMENTS OF EXPENSES. OFS has voluntarily agreed to limit
transfer and shareholder servicing agent fees for all classes to 0.35% of
average annual net assets per class. During the six months ended April 30, 2008,
OFS waived $3,565 for Class N shares. 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 April 30, 2008, the Manager waived $280,276
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.
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 April 30, 2008, the Fund had no outstanding forward contracts.
6. OPTION ACTIVITY
The Fund may buy and sell put and call options, or write put and covered call
options. When an option is written, the Fund receives a premium and becomes
obligated to sell or purchase the underlying security at a fixed price, upon
exercise of the option.
Options are valued daily based upon the last sale price on the principal
exchange on which the option is traded. The difference between the premium
received or paid, and market value of the option, is recorded as unrealized
appreciation or depreciation. The net change in unrealized appreciation or
depreciation is reported in the Statement of
37 | OPPENHEIMER QUEST OPPORTUNITY VALUE FUND
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
6. OPTION ACTIVITY Continued
Operations. When an option is exercised, the cost of the security purchased or
the proceeds of the security sale are adjusted by the amount of premium received
or paid. Upon the expiration or closing of the option transaction, a gain or
loss is reported in the Statement of Operations.
Securities designated to cover outstanding call or put options are noted
in the Statement of Investments where applicable. Options written are reported
in a schedule following the Statement of Investments and as a liability in the
Statement of Assets and Liabilities.
The risk in writing a call option is that the Fund gives up the
opportunity for profit if the market price of the security increases and the
option is exercised. The risk in writing a put option is that the Fund may incur
a loss if the market price of the security decreases and the option is
exercised. The risk in buying an option is that the Fund pays a premium whether
or not the option is exercised. The Fund also has the additional risk that there
may be an illiquid market where the Fund is unable to close the contract.
Written option activity for the six months ended April 30, 2008 was as follows:
PUT OPTIONS
------------------------
NUMBER OF AMOUNT OF
CONTRACTS PREMIUMS
- ----------------------------------------- --------- ------------
Options outstanding as of October 31, 2007 6,568 $ 949,389
Options written -- --
Options closed or expired (550) (61,598)
Options exercised (6,018) (887,791)
--------- ------------
Options outstanding as of April 30, 2008 -- $ --
========= ============
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.
38 | OPPENHEIMER QUEST OPPORTUNITY VALUE FUND
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).
TOTAL RETURN SWAP CONTRACTS. A total return swap is an agreement between
counterpar-ties 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.
As of April 30, 2008, the Fund had no outstanding total return swap
agreements.
8. ILLIQUID SECURITIES
As of April 30, 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 15% 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.
39 | OPPENHEIMER QUEST OPPORTUNITY VALUE FUND
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
9. SECURITIES LENDING
The Fund lends portfolio securities from time to time in order to earn
additional income in the form of fees or interest on securities received as
collateral or the investment of any cash received as collateral. The loans are
secured by collateral (either securities, letters of credit, or cash) in an
amount not less than 100% of the market value of the loaned securities during
the period of the loan. The market value of the loaned securities is determined
at the close of each business day and any additional required collateral is
delivered to the Fund on the next business day. If the borrower defaults on its
obligation to return the securities loaned because of insolvency or other
reasons, the Fund could experience delays and cost in recovering the securities
loaned or in gaining access to the collateral. The Fund continues to receive the
economic benefit of interest or dividends paid on the securities loaned in the
form of a substitute payment received from the borrower and recognizes the gain
or loss in the fair value of the securities loaned that may occur during the
term of the loan. The Fund has the right under the lending agreement to recover
the securities from the borrower on demand.
As of April 30, 2008, the Fund had no securities on loan.
10. 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 April
30, 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.
40 | OPPENHEIMER QUEST OPPORTUNITY VALUE 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.
41 | OPPENHEIMER QUEST OPPORTUNITY VALUE FUND
APRIL 30, 2008
- --------------------------------------------------------------------------------
Oppenheimer Management
Small- & Mid- Cap Commentaries
Value Fund and
Semiannual
Report
- --------------------------------------------------------------------------------
MANAGEMENT COMMENTARIES
An Interview with Your Fund's Manager
Listing of Top Holdings
SEMIANNUAL REPORT
Listing of Investments
Financial Statements
[OPPENHEIMERFUNDS LOGO]
TOP HOLDINGS AND ALLOCATIONS
- --------------------------------------------------------------------------------
TOP TEN COMMON STOCK INDUSTRIES
- --------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
Insurance 7.6%
- ------------------------------------------------------------------------------
Chemicals 5.9
- ------------------------------------------------------------------------------
Software 5.0
- ------------------------------------------------------------------------------
Energy Traders 4.6
- ------------------------------------------------------------------------------
Oil, Gas & Consumable Fuels 4.4
- ------------------------------------------------------------------------------
Health Care Providers & Services 4.4
- ------------------------------------------------------------------------------
Semiconductors & Semiconductor Equipment 4.1
- ------------------------------------------------------------------------------
Machinery 3.4
- ------------------------------------------------------------------------------
Real Estate Investment Trusts 2.9
- ------------------------------------------------------------------------------
Media 2.9
Portfolio holdings and allocations are subject to change. Percentages are as of
April 30, 2008, and are based on net assets.
TOP TEN COMMON STOCK HOLDINGS
- --------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
Navistar International Corp. 2.3%
- ------------------------------------------------------------------------------
Protective Life Corp. 2.1
- ------------------------------------------------------------------------------
Everest Re Group Ltd. 2.0
- ------------------------------------------------------------------------------
NewAlliance Bancshares, Inc. 1.9
- ------------------------------------------------------------------------------
NII Holdings, Inc. 1.8
- ------------------------------------------------------------------------------
CMS Energy Corp. 1.7
- ------------------------------------------------------------------------------
Atlas Air Worldwide Holdings, Inc. 1.7
- ------------------------------------------------------------------------------
Carpenter Technology Corp. 1.6
- ------------------------------------------------------------------------------
Affiliated Managers Group, Inc. 1.6
- ------------------------------------------------------------------------------
FMC Corp. 1.6
Portfolio holdings and allocations are subject to change. Percentages are as of
April 30, 2008, and are based on net assets.
For more current Fund holdings, please visit www.oppenheimerfunds.com.
10 | OPPENHEIMER SMALL- & MID- CAP VALUE FUND
SECTOR ALLOCATION
[PIE CHART]
Financials 19.7%
Information Technology 16.2
Consumer Discretionary 11.3
Industrials 11.3
Materials 9.4
Utilities 9.4
Health Care 7.4
Energy 7.2
Consumer Staples 6.2
Telecommunication Services 1.9
Portfolio holdings and allocations are subject to change. Percentages are as of
April 30, 2008, and are based on the total market value of common stocks.
11 | OPPENHEIMER SMALL- & MID- CAP VALUE 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 1/3/89. Unless
otherwise noted, Class A returns include the current maximum initial sales
charge of 5.75%. Class A shares are subject to a maximum annual 0.25%
asset-based sales charge, however, the Board of Trustees has set the rate
at zero.
CLASS B shares of the Fund were first publicly offered on 9/1/93. Unless
otherwise noted, Class B returns include the applicable contingent deferred
sales charges 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 9/1/93. 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.
12 | OPPENHEIMER SMALL- & MID- CAP VALUE FUND
CLASS Y shares of the Fund were first publicly offered on 10/24/05. Class Y
shares are offered only to certain institutional investors under a special
agreement with the Distributor, and to present or former officers,
directors, trustees or employees (and their eligible family members) of the
Fund, the Manager, its affiliates, its parent company and the subsidiaries
of its parent company, and retirement plans established for the benefit of
such individuals.
An explanation of the calculation of performance is in the Fund's Statement
of Additional Information.
13 | OPPENHEIMER SMALL- & MID- CAP VALUE FUND
FUND EXPENSES
- -------------------------------------------------------------------------------
FUND EXPENSES. As a shareholder of the Fund, you incur two types of costs:
(1) transaction costs, which may include sales charges (loads) on purchase
payments, contingent deferred sales charges on redemptions; and redemption
fees (if 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 April
30, 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), redemption fees, or
a $12.00 fee imposed annually on
14 | OPPENHEIMER SMALL- & MID- CAP VALUE FUND
accounts valued at less than $500.00 (subject to exceptions described in
the Statement 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 NOVEMBER 1, 2007 APRIL 30, 2008 APRIL 30, 2008
- ---------------------------------------------------------------------------------------
Class A $ 1,000.00 $ 884.10 $ 5.31
- ---------------------------------------------------------------------------------------
Class B 1,000.00 880.60 9.12
- ---------------------------------------------------------------------------------------
Class C 1,000.00 880.60 8.88
- ---------------------------------------------------------------------------------------
Class N 1,000.00 882.80 7.00
- ---------------------------------------------------------------------------------------
Class Y 1,000.00 885.70 3.62
HYPOTHETICAL
(5% return before expenses)
- ----------------------------------------------------------------------------------------
Class A 1,000.00 1,019.24 5.69
- ----------------------------------------------------------------------------------------
Class B 1,000.00 1,015.22 9.77
- ----------------------------------------------------------------------------------------
Class C 1,000.00 1,015.47 9.52
- ----------------------------------------------------------------------------------------
Class N 1,000.00 1,017.45 7.50
- ----------------------------------------------------------------------------------------
Class Y 1,000.00 1,021.03 3.88
Expenses are equal to the Fund's annualized expense ratio for that class,
multiplied by the average account value over the period, multiplied by 182/366
(to reflect the one-half year period). Those annualized expense ratios,
excluding indirect expenses from affiliated fund, based on the 6-month period
ended April 30, 2008 are as follows:
CLASS EXPENSE RATIOS
- ---------------------------
Class A 1.13%
- ---------------------------
Class B 1.94
- ---------------------------
Class C 1.89
- ---------------------------
Class N 1.49
- ---------------------------
Class Y 0.77
The expense ratios reflect reduction to custodian expenses and voluntary waivers
or reimbursements of expenses by the Fund's Manager and Transfer Agent that can
be terminated at any time, without advance notice. The "Financial Highlights"
tables in the Fund's financial statements, included in this report, also show
the gross expense ratios, without such waivers or reimbursements and reduction
to custodian expenses, if applicable.
15 | OPPENHEIMER SMALL- & MID- CAP VALUE FUND
STATEMENT OF INVESTMENTS April 30, 2008 / Unaudited
- --------------------------------------------------------------------------------
SHARES VALUE
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
COMMON STOCKS--93.1%
- --------------------------------------------------------------------------------
CONSUMER DISCRETIONARY--10.5%
- --------------------------------------------------------------------------------
AUTO COMPONENTS--1.3%
Goodyear Tire & Rubber Co. (The) 1 2,000,000 $ 53,560,000
- --------------------------------------------------------------------------------
HOTELS,RESTAURANTS & LEISURE--2.8%
Gaylord Entertainment Co., Cl. A 1 1,800,000 53,316,000
- --------------------------------------------------------------------------------
Pinnacle
Entertainment, Inc. 1 2,500,000 38,800,000
- --------------------------------------------------------------------------------
Scientific Games Corp., Cl. A 1 900,000 25,344,000
---------------
117,460,000
- --------------------------------------------------------------------------------
HOUSEHOLD DURABLES--0.7%
Jarden Corp. 1 1,300,000 27,716,000
- --------------------------------------------------------------------------------
LEISURE EQUIPMENT & PRODUCTS--0.7%
Mattel, Inc. 1,600,000 30,000,000
- --------------------------------------------------------------------------------
MEDIA--2.9%
Cinemark Holdings, Inc. 1,500,000 22,215,000
- --------------------------------------------------------------------------------
Liberty Global,Inc., Series A 1 1,400,000 49,546,000
- --------------------------------------------------------------------------------
Liberty Global,Inc., Series C 1 1,400,000 46,480,000
---------------
118,241,000
- --------------------------------------------------------------------------------
SPECIALTY RETAIL--1.8%
Advance Auto Parts, Inc. 1,200,000 41,616,000
- --------------------------------------------------------------------------------
OfficeMax, Inc. 1,850,000 33,799,500
---------------
75,415,500
- --------------------------------------------------------------------------------
TEXTILES, APPAREL & LUXURY GOODS--0.3%
Phillips/Van Heusen Corp. 325,000 13,718,250
- --------------------------------------------------------------------------------
CONSUMER STAPLES--5.8%
- --------------------------------------------------------------------------------
FOOD & STAPLES RETAILING--0.8%
Longs Drug Stores, Inc. 800,000 32,048,000
- --------------------------------------------------------------------------------
FOOD PRODUCTS--2.3%
Chiquita Brands International, Inc. 1 800,000 18,200,000
- --------------------------------------------------------------------------------
ConAgra Foods, Inc. 2,000,000 47,120,000
- --------------------------------------------------------------------------------
Pilgrim's Pride Corp. 1,200,000 29,004,000
---------------
94,324,000
- --------------------------------------------------------------------------------
HOUSEHOLD PRODUCTS--1.1%
Energizer Holdings, Inc. 1 600,000 47,436,000
- --------------------------------------------------------------------------------
PERSONAL PRODUCTS--0.6%
Herbalife Ltd. 600,000 26,268,000
- --------------------------------------------------------------------------------
TOBACCO--1.0%
Loews Corp./Carolina Group 600,000 39,402,000
- --------------------------------------------------------------------------------
ENERGY--6.7%
- --------------------------------------------------------------------------------
ENERGY EQUIPMENT & SERVICES--2.3%
Exterran Holdings, Inc. 1 700,000 46,753,000
- --------------------------------------------------------------------------------
National Oilwell Varco, Inc. 1 350,000 23,957,500
- --------------------------------------------------------------------------------
Weatherford International Ltd. 1 300,000 24,201,000
---------------
94,911,500
- --------------------------------------------------------------------------------
OIL, GAS & CONSUMABLE FUELS--4.4%
Capital Product Partners LP 2 1,000,000 20,000,000
- --------------------------------------------------------------------------------
Delta Petroleum Corp. 1 1,500,000 36,810,000
- --------------------------------------------------------------------------------
Murphy Oil Corp. 500,000 45,170,000
- --------------------------------------------------------------------------------
Peabody Energy Corp. 750,000 45,847,500
- --------------------------------------------------------------------------------
Range Resources Corp. 400,000 26,552,000
- --------------------------------------------------------------------------------
Sunoco, Inc. 200,000 9,282,000
---------------
183,661,500
- --------------------------------------------------------------------------------
FINANCIALS--18.3%
- --------------------------------------------------------------------------------
CAPITAL MARKETS--2.7%
Affiliated Managers Group, Inc. 1 675,000 67,054,500
- --------------------------------------------------------------------------------
Investment Technology Group, Inc. 1 920,900 44,442,634
---------------
111,497,134
16 | OPPENHEIMER SMALL- & MID- CAP VALUE FUND
SHARES VALUE
- --------------------------------------------------------------------------------
COMMERCIAL BANKS--0.9%
Colonial BancGroup, Inc. (The) 2,250,000 $ 18,315,000
- --------------------------------------------------------------------------------
East West Bancorp, Inc. 1,400,000 19,936,000
---------------
38,251,000
- --------------------------------------------------------------------------------
DIVERSIFIED FINANCIAL SERVICES--2.3%
Liberty Acquisition Holdings Corp. 1 5,000,000 51,000,000
- --------------------------------------------------------------------------------
Trian Acquisition I Corp. 1 4,500,000 44,100,000
---------------
95,100,000
- --------------------------------------------------------------------------------
INSURANCE--7.6%
ACE Ltd. 1,000,000 60,290,000
- --------------------------------------------------------------------------------
Everest Re Group Ltd. 925,000 83,573,750
- --------------------------------------------------------------------------------
Fidelity National Title Group, Inc., Cl. A 2,050,000 32,779,500
- --------------------------------------------------------------------------------
National Financial Partners Corp. 3 1,925,000 51,821,000
- --------------------------------------------------------------------------------
Protective Life Corp. 2,000,000 85,240,000
---------------
313,704,250
- --------------------------------------------------------------------------------
REAL ESTATE INVESTMENT TRUSTS--2.9%
BioMed Realty Trust, Inc. 1,000,000 26,000,000
- --------------------------------------------------------------------------------
General Growth Properties, Inc. 1,200,000 49,152,000
- --------------------------------------------------------------------------------
SL Green Realty Corp. 500,000 46,400,000
---------------
121,552,000
- --------------------------------------------------------------------------------
THRIFTS & MORTGAGE FINANCE--1.9%
NewAlliance Bancshares, Inc. 2 6,000,000 80,760,000
- --------------------------------------------------------------------------------
HEALTH CARE--6.9%
- --------------------------------------------------------------------------------
HEALTH CARE EQUIPMENT & SUPPLIES--1.0%
Hospira, Inc. 1 1,000,000 41,150,000
- --------------------------------------------------------------------------------
HEALTH CARE PROVIDERS & SERVICES--4.4%
Community Health Systems, Inc. 1 1,500,000 56,295,000
- --------------------------------------------------------------------------------
DaVita, Inc. 1 1,100,000 57,651,000
- --------------------------------------------------------------------------------
Health Net, Inc. 1 2,250,000 65,902,500
---------------
179,848,500
- --------------------------------------------------------------------------------
LIFE SCIENCES TOOLS & SERVICES--1.5%
Affymetrix, Inc. 1 600,000 6,546,000
- --------------------------------------------------------------------------------
Waters Corp. 1 925,000 56,850,500
---------------
63,396,500
- --------------------------------------------------------------------------------
INDUSTRIALS- 10.5%
- --------------------------------------------------------------------------------
AEROSPACE & DEFENSE--1.2%
Goodrich Corp. 750,000 51,112,500
- --------------------------------------------------------------------------------
AIR FREIGHT & LOGISTICS--1.7%
Atlas Air Worldwide Holdings, Inc. 1,2 1,200,000 72,816,000
- --------------------------------------------------------------------------------
CONSTRUCTION & ENGINEERING--1.1%
Granite Construction, Inc. 1,329,800 45,612,140
- --------------------------------------------------------------------------------
ELECTRICAL EQUIPMENT--1.4%
AMETEK, Inc. 1,200,000 58,224,000
- --------------------------------------------------------------------------------
MACHINERY--3.4%
Joy Global, Inc. 600,000 44,550,000
- --------------------------------------------------------------------------------
Navistar International Corp. 1 1,450,000 95,337,500
---------------
139,887,500
- --------------------------------------------------------------------------------
MARINE--0.6%
Eagle Bulk Shipping, Inc. 800,000 23,544,000
- --------------------------------------------------------------------------------
TRADING COMPANIES & DISTRIBUTORS--1.1%
Aircastle Ltd. 3,200,000 44,736,000
- --------------------------------------------------------------------------------
INFORMATION TECHNOLOGY--15.1%
- --------------------------------------------------------------------------------
COMMUNICATIONS EQUIPMENT--1.1%
ADC Telecommunications, Inc. 1 3,200,000 44,864,000
- --------------------------------------------------------------------------------
COMPUTERS & PERIPHERALS--0.6%
Sun Microsystems, Inc. 1 1,500,000 23,490,000
- --------------------------------------------------------------------------------
ELECTRONIC EQUIPMENT & INSTRUMENTS--2.8%
Agilent Technologies, Inc. 1 2,000,000 60,420,000
- --------------------------------------------------------------------------------
Amphenol Corp., Cl. A 1,200,000 55,416,000
---------------
115,836,000
17 | OPPENHEIMER SMALL- & MID- CAP VALUE FUND
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
SHARES VALUE
- --------------------------------------------------------------------------------
IT SERVICES--1.5%
Affiliated Computer Services, Inc., Cl. A 1 1,200,000 $ 63,564,000
- --------------------------------------------------------------------------------
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT--4.1%
ASML Holding NV 1,800,000 51,048,000
- --------------------------------------------------------------------------------
Lam Research Corp. 1 1,200,000 49,008,000
- --------------------------------------------------------------------------------
Maxim Integrated Products, Inc. 700,000 14,721,000
- --------------------------------------------------------------------------------
Varian Semiconductor Equipment Associates, Inc. 1 1,500,000 54,945,000
---------------
169,722,000
- --------------------------------------------------------------------------------
SOFTWARE--5.0%
Amdocs Ltd. 1 1,500,000 47,070,000
- --------------------------------------------------------------------------------
Electronic Arts, Inc. 1 1,200,000 61,764,000
- --------------------------------------------------------------------------------
McAfee, Inc. 1 1,800,000 59,850,000
- --------------------------------------------------------------------------------
THQ, Inc. 1 1,891,400 40,248,992
---------------
208,932,992
- --------------------------------------------------------------------------------
MATERIALS--8.8%
- --------------------------------------------------------------------------------
CHEMICALS--5.9%
Albemarle Corp. 1,750,000 65,467,500
- --------------------------------------------------------------------------------
Eastman Chemical Co. 700,000 51,450,000
- --------------------------------------------------------------------------------
FMC Corp. 1,050,000 65,919,000
- --------------------------------------------------------------------------------
Lubrizol Corp. (The) 1,025,000 59,778,000
---------------
242,614,500
- --------------------------------------------------------------------------------
CONSTRUCTION MATERIALS--1.3%
Texas Industries, Inc. 700,000 54,187,000
- --------------------------------------------------------------------------------
METALS & MINING--1.6%
Carpenter Technology Corp. 1,325,000 67,946,000
- --------------------------------------------------------------------------------
TELECOMMUNICATION SERVICES--1.8%
- --------------------------------------------------------------------------------
WIRELESS TELECOMMUNICATION SERVICES--1.8%
NII Holdings, Inc. 1 1,600,000 73,184,000
- --------------------------------------------------------------------------------
UTILITIES--8.7%
- --------------------------------------------------------------------------------
ELECTRIC UTILITIES--1.2%
Cleco Corp. 2,000,000 48,020,000
- --------------------------------------------------------------------------------
ENERGY TRADERS--4.6%
AES Corp. (The) 1 2,500,000 43,400,000
- --------------------------------------------------------------------------------
Dynegy, Inc., Cl. A 1 6,000,000 51,720,000
- --------------------------------------------------------------------------------
Mirant Corp. 1 1,200,000 49,332,000
- --------------------------------------------------------------------------------
NRG Energy, Inc. 1 1,050,000 46,147,500
---------------
190,599,500
- --------------------------------------------------------------------------------
GAS UTILITIES--1.2%
Southern Union Co. 2,000,000 51,240,000
- --------------------------------------------------------------------------------
MULTI-UTILITIES--1.7%
CMS Energy Corp. 5,000,000 72,900,000
---------------
Total Common Stocks (Cost $ 3,717,600,994) 3,862,453,266
- --------------------------------------------------------------------------------
INVESTMENT COMPANIES--5.0%
- --------------------------------------------------------------------------------
iShares Russell Midcap Value Index Fund 300,000 40,905,000
- --------------------------------------------------------------------------------
Oppenheimer Institutional Money Market Fund, Cl.
E, 2.90% 2,4 165,490,062 165,490,062
---------------
Total Investment Companies (Cost $ 206,425,782) 206,395,062
EXPIRATION STRIKE
DATE PRICE CONTRACTS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
OPTIONS PURCHASED--0.1%
- --------------------------------------------------------------------------------
National Financial Partners
Corp. Call 1
(Cost $2,116,000) 3/18/09 $ 19.50 5,750 5,216,055
- --------------------------------------------------------------------------------
TOTAL INVESTMENTS, AT VALUE
(COST $3,926,142,776) 98.2% 4,074,064,383
--------------------------------------
OTHER ASSETS NET OF
LIABILITIES 1.8 72,749,209
--------------------------------------
NET ASSETS 100.0% $ 4,146,813,592
======================================
18 | OPPENHEIMER SMALL- & MID- CAP VALUE FUND
FOOTNOTES TO STATEMENT OF INVESTMENTS
1. Non-income producing security.
2. Is or was an affiliate, as defined in the Investment Company Act of 1940, at
or during the period ended April 30, 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 GROSS GROSS SHARES
OCTOBER 31, 2007 ADDITIONS REDUCTIONS APRIL 30, 2008
- -------------------------------------------------------------------------------------------------------
Atlas Air Worldwide Holdings, Inc. 540,000 660,000 -- 1,200,000
Capital Product Partners LP 1,000,000 -- -- 1,000,000
Chiquita Brands International, Inc. a 2,250,000 -- 1,450,000 800,000
Cleco Corp. a 3,000,000 -- 1,000,000 2,000,000
Greenbrier Cos., Inc. 1,600,000 -- 1,600,000 --
Information Services Group, Inc. 2,300,000 -- 2,300,000 --
NewAlliance Bancshares, Inc. 5,000,000 1,000,000 -- 6,000,000
Oppenheimer Institutional
Money Market Fund, Cl. E 125,541,232 846,134,963 806,186,133 165,490,062
Pantry, Inc. (The) 1,800,000 208,700 2,008,700 --
Vanda Pharmaceuticals, Inc. 1,600,000 -- 1,600,000 --
DIVIDEND REALIZED
VALUE INCOME GAIN (LOSS)
- -----------------------------------------------------------------------------------------------------
Atlas Air Worldwide Holdings, Inc. $ 72,816,000 $ -- $ --
Capital Product Partners LP 20,000,000 780,000 --
Chiquita Brands International, Inc. a -- b -- 9,968,040
Cleco Corp. a -- b 450,000 (539,786)
Greenbrier Cos., Inc. -- 256,000 (15,174,196)
Information Services Group, Inc. -- -- 2,155,161
NewAlliance Bancshares, Inc. 80,760,000 725,192 --
Oppenheimer Institutional Money Market Fund, Cl. E 165,490,062 3,352,113 --
Pantry, Inc. (The) -- -- (63,618,997)
Vanda Pharmaceuticals, Inc. -- -- (31,760,780)
----------------------------------------------
$ 339,066,062 $ 5,563,305 $ (98,970,558)
==============================================
A. No longer an affiliate as of April 30, 2008.
B. The security is no longer an affiliate, therefore, the value has been
excluded from this table.
3. A sufficient amount of liquid assets has been designated to cover
outstanding written put options.
4. Rate shown is the 7-day yield as of April 30, 2008.
- --------------------------------------------------------------------------------
WRITTEN OPTIONS AS OF APRIL 30, 2008 ARE AS FOLLOWS:
- --------------------------------------------------------------------------------
NUMBER OF EXERCISE EXPIRATION PREMIUMS
DESCRIPTION TYPE CONTRACTS PRICE DATE RECEIVED VALUE
- ------------------------------------------------------------------------------------------------------
National Financial Partners Corp. Put 5,750 $ 19.50 3/18/09 $ 2,202,250 $ 1,059,150
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
19 | OPPENHEIMER SMALL- & MID- CAP VALUE FUND
STATEMENT OF ASSETS AND LIABILITIES Unaudited
- --------------------------------------------------------------------------------
April 30, 2008
- ---------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------
ASSETS
- ---------------------------------------------------------------------------------------------
Investments, at value--see accompanying statement of investments:
Unaffiliated companies (cost $3,580,012,814) $ 3,734,998,321
Affiliated companies (cost $346,129,962) 339,066,062
------------------
4,074,064,383
- ---------------------------------------------------------------------------------------------
Cash 104,475
- ---------------------------------------------------------------------------------------------
Receivables and other assets:
Investments sold 84,340,240
Shares of beneficial interest sold 2,248,807
Dividends 1,834,574
Other 137,825
------------------
Total assets 4,162,730,304
- ---------------------------------------------------------------------------------------------
LIABILITIES
Options written, at value (premiums received $2,202,250)--see
accompanying statement of investments 1,059,150
- ---------------------------------------------------------------------------------------------
Payables and other liabilities:
Shares of beneficial interest redeemed 11,549,166
Investments purchased 975,720
Transfer and shareholder servicing agent fees 833,871
Trustees' compensation 601,461
Distribution and service plan fees 531,177
Shareholder communications 333,340
Other 32,827
------------------
Total liabilities 15,916,712
- ---------------------------------------------------------------------------------------------
NET ASSETS $ 4,146,813,592
==================
- ---------------------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS
- ---------------------------------------------------------------------------------------------
Par value of shares of beneficial interest $ 1,242,580
- ---------------------------------------------------------------------------------------------
Additional paid-in capital 4,047,157,286
- ---------------------------------------------------------------------------------------------
Accumulated net investment loss (5,485,535)
- ---------------------------------------------------------------------------------------------
Accumulated net realized loss on investments (45,165,446)
- ---------------------------------------------------------------------------------------------
Net unrealized appreciation on investments 149,064,707
------------------
NET ASSETS $ 4,146,813,592
==================
20 | OPPENHEIMER SMALL- & MID- CAP VALUE FUND
- -----------------------------------------------------------------------
NET ASSET VALUE PER SHARE
- -----------------------------------------------------------------------
Class A Shares:
Net asset value and redemption price per share (based
on net assets of $2,819,394,043 and 81,830,825 shares
of beneficial interest outstanding) $ 34.45
Maximum offering price per share (net asset value
plus sales charge of 5.75% of offering price) $ 36.55
- -----------------------------------------------------------------------
Class B Shares:
Net asset value, redemption price (excludes
applicable contingent deferred sales charge) and
offering price per share (based on net assets
of $266,476,450 and 8,825,663 shares of beneficial
interest outstanding) $ 30.19
- -----------------------------------------------------------------------
Class C Shares:
Net asset value, redemption price (excludes applicable
contingent deferred sales charge) and offering price
per share (based on net assets of $623,938,841 and
20,663,855 shares of beneficial interest outstanding) $ 30.19
- -----------------------------------------------------------------------
Class N Shares:
Net asset value, redemption price (excludes applicable
contingent deferred sales charge) and offering price
per share (based on net assets of $341,150,675 and
10,187,946 shares of beneficial interest outstanding) $ 33.49
- -----------------------------------------------------------------------
Class Y Shares:
Net asset value, redemption price and offering price per
share (based on net assets of $95,853,583 and 2,749,667
shares of beneficial interest outstanding) $ 34.86
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
21 | OPPENHEIMER SMALL- & MID- CAP VALUE FUND
STATEMENT OF OPERATIONS Unaudited
- --------------------------------------------------------------------------------
For the Six Months Ended April 30, 2008
- -----------------------------------------------------------------------------
INVESTMENT INCOME
- -----------------------------------------------------------------------------
Dividends:
Unaffiliated companies (net of foreign
withholding taxes of $ 106,110) $ 18,046,437
Affiliated companies 5,563,305
- -----------------------------------------------------------------------------
Interest 23,135
----------------
Total investment income 23,632,877
- -----------------------------------------------------------------------------
EXPENSES
- -----------------------------------------------------------------------------
Management fees 13,547,126
- -----------------------------------------------------------------------------
Distribution and service plan fees:
Class A 3,419,411
Class B 1,470,964
Class C 3,355,570
Class N 857,658
- -----------------------------------------------------------------------------
Transfer and shareholder servicing agent fees:
Class A 3,553,070
Class B 382,946
Class C 759,541
Class N 692,302
Class Y 57,508
- -----------------------------------------------------------------------------
Shareholder communications:
Class A 202,913
Class B 54,524
Class C 60,669
Class N 9,221
Class Y 493
- -----------------------------------------------------------------------------
Trustees' compensation 234,014
- -----------------------------------------------------------------------------
Custodian fees and expenses 11,673
- -----------------------------------------------------------------------------
Administration service fees 750
- -----------------------------------------------------------------------------
Other 178,547
----------------
Total expenses 28,848,900
Less reduction to custodian expenses (7,128)
Less waivers and reimbursements of expenses (176,356)
----------------
Net expenses 28,665,416
- -----------------------------------------------------------------------------
NET INVESTMENT LOSS (5,032,539)
22 | OPPENHEIMER SMALL- & MID- CAP VALUE FUND
- ------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
- ------------------------------------------------------------------------------
Net realized gain (loss) on:
Investments:
Unaffiliated companies $ 65,414,813
Affiliated companies (98,970,558)
-----------------
Net realized loss (33,555,745)
- ------------------------------------------------------------------------------
Net change in unrealized appreciation (depreciation) on:
Investments (571,709,958)
Option contracts written 1,143,100
-----------------
Net change in unrealized appreciation (570,566,858)
- ------------------------------------------------------------------------------
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS $(609,155,142)
=================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
23 | OPPENHEIMER SMALL- & MID- CAP VALUE FUND
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
SIX MONTHS YEAR
ENDED ENDED
APRIL 30, 2008 OCTOBER 31,
(UNAUDITED) 2007
- --------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------
OPERATIONS
- --------------------------------------------------------------------------------------------
Net investment loss $ (5,032,539) $ (18,110,201)
- --------------------------------------------------------------------------------------------
Net realized gain (loss) (33,555,745) 534,582,036
- --------------------------------------------------------------------------------------------
Net change in unrealized appreciation (570,566,858) 319,653,275
--------------------------------------
Net increase (decrease) in net assets
resulting from operations (609,155,142) 836,125,110
- --------------------------------------------------------------------------------------------
DIVIDENDS AND/OR DISTRIBUTIONS TO SHAREHOLDERS
- --------------------------------------------------------------------------------------------
Distributions from net realized gain:
Class A (300,805,725) (134,183,398)
Class B (34,296,201) (20,095,320)
Class C (77,557,135) (34,120,436)
Class N (35,173,894) (13,524,392)
Class Y (8,265,179) (2,073,838)
--------------------------------------
(456,098,134) (203,997,384)
- --------------------------------------------------------------------------------------------
BENEFICIAL INTEREST TRANSACTIONS
- --------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
resulting from
beneficial interest transactions:
Class A 325,806 747,231,246
Class B (23,697,703) (8,849,004)
Class C (13,948,585) 177,562,311
Class N 25,935,707 124,137,481
Class Y 21,891,426 50,475,978
--------------------------------------
10,506,651 1,090,558,012
- --------------------------------------------------------------------------------------------
NET ASSETS
- --------------------------------------------------------------------------------------------
Total increase (decrease) (1,054,746,625) 1,722,685,738
- --------------------------------------------------------------------------------------------
Beginning of period 5,201,560,217 3,478,874,479
--------------------------------------
End of period (including accumulated net investment
loss of $5,485,535 and $452,996, respectively) $ 4,146,813,592 $ 5,201,560,217
======================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
24 | OPPENHEIMER SMALL- & MID- CAP VALUE FUND
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
SIX MONTHS
ENDED
APRIL 30, 2008 YEAR ENDED OCTOBER 31,
CLASS A (UNAUDITED) 2007 2006 2005 2004 2003
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 42.78 $ 36.95 $ 33.08 $ 30.08 $ 26.11 $ 19.18
- -----------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss) (.01) 1 (.08) 1 .05 1 (.04) 1 (.17) 1 (.04)
Net realized and unrealized gain (loss) (4.61) 7.97 5.69 6.22 5.42 6.97
---------------------------------------------------------------------------------------
Total from investment operations (4.62) 7.89 5.74 6.18 5.25 6.93
- -----------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to
shareholders:
Distributions from net realized gain (3.71) (2.06) (1.87) (3.18) (1.28) --
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 34.45 $ 42.78 $ 36.95 $ 33.08 $ 30.08 $ 26.11
=======================================================================================
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2 (11.59)% 22.18% 18.04% 21.87% 20.90% 36.13%
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- -----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $2,819,394 $3,530,371 $2,343,715 $1,298,204 $ 543,999 $330,215
- -----------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $2,968,275 $3,150,544 $1,884,099 $ 893,501 $ 436,617 $245,319
- -----------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income (loss) (0.04)% (0.19)% 0.13% (0.11)% (0.61)% (0.12)%
Total expenses 1.13% 4 1.08% 4 1.14% 4 1.23% 1.35% 1.59%
Expenses after payments, waivers and/or
reimbursements and reduction
to custodian expenses 1.13% 1.08% 1.14% 1.23% 1.35% 1.56%
- -----------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 39% 115% 136% 121% 163% 163%
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 April 30, 2008 1.13%
Year Ended October 31, 2007 1.08%
Year Ended October 31, 2006 1.14%
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
25 | OPPENHEIMER SMALL- & MID- CAP VALUE FUND
FINANCIAL HIGHLIGHTS Continued
- --------------------------------------------------------------------------------
SIX MONTHS
ENDED
APRIL 30, 2008 YEAR ENDED OCTOBER 31,
CLASS B (UNAUDITED) 2007 2006 2005 2004 2003
- ---------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- ---------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of
period $ 38.10 $ 33.38 $ 30.29 $ 28.01 $ 24.59 $ 18.20
- ---------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment
operations:
Net investment loss (.13) 1 (.36) 1 (.22) 1 (.29) 1 (.37) 1 (.17)
Net realized and unrealized
gain (loss) (4.07) 7.14 5.18 5.75 5.07 6.56
---------------------------------------------------------------------------------------
Total from investment operations (4.20) 6.78 4.96 5.46 4.70 6.39
- ---------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to
shareholders:
Distributions from net realized
gain (3.71) (2.06) (1.87) (3.18) (1.28) --
- ---------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 30.19 $ 38.10 $ 33.38 $ 30.29 $ 28.01 $ 24.59
=======================================================================================
- ---------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2 (11.94)% 21.18% 17.08% 20.82% 19.91% 35.11%
- ---------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ---------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in
thousands) $ 266,476 $ 367,688 $ 327,908 $ 272,643 $ 198,971 $ 171,896
- ---------------------------------------------------------------------------------------------------------------------------
Average net assets (in
thousands) $ 295,934 $ 370,633 $ 307,618 $ 243,754 $ 190,251 $ 137,734
- ---------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment loss (0.84)% (1.00)% (0.71)% (0.98)% (1.43)% (0.85)%
Total expenses 1.94% 4 1.90% 4 1.97% 4 2.09% 2.18% 2.42%
Expenses after payments, waivers
and/or reimbursements and reduction
to custodian expenses 1.94% 1.90% 1.97% 2.09% 2.18% 2.29%
- ---------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 39% 115% 136% 121% 163% 163%
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 April 30, 2008 1.94%
Year Ended October 31, 2007 1.90%
Year Ended October 31, 2006 1.97%
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
26 | OPPENHEIMER SMALL- & MID- CAP VALUE FUND
SIX MONTHS
ENDED
APRIL 30, 2008 YEAR ENDED OCTOBER 31,
CLASS C (UNAUDITED) 2007 2006 2005 2004 2003
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 38.10 $ 33.36 $ 30.25 $ 27.97 $ 24.55 $ 18.17
- ------------------------------------------------------------------------------------------------------------------------------------
Income(loss) from investment operations:
Net investment loss (.12) 1 (.34) 1 (.20) 1 (.27) 1 (.37) 1 (.13)
Net realized and unrealized gain (loss) (4.08) 7.14 5.18 5.73 5.07 6.51
----------------------------------------------------------------------------------
Total from investment operations (4.20) 6.80 4.98 5.46 4.70 6.38
- ------------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Distributions from net realized gain (3.71) (2.06) (1.87) (3.18) (1.28) --
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 30.19 $ 38.10 $ 33.36 $ 30.25 $ 27.97 $ 24.55
==================================================================================
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2 (11.94)% 21.25% 17.17% 20.85% 19.95% 35.11%
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 623,939 $ 812,430 $ 542,273 $ 292,689 $122,329 $71,779
- ------------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 673,393 $ 725,723 $ 429,214 $ 199,650 $ 96,555 $53,649
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment loss (0.80)% (0.95)% (0.64)% (0.91)% (1.42)% (0.85)%
Total expenses 1.89% 4 1.84% 4 1.92% 4 2.03% 2.16% 2.40%
Expenses after payments, waivers and/or
reimbursements and reduction to
custodian expenses 1.89% 1.84% 1.92% 2.03% 2.16% 2.30%
- ------------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 39% 115% 136% 121% 163% 163%
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 April 30, 2008 1.89%
Year Ended October 31, 2007 1.84%
Year Ended October 31, 2006 1.92%
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
27 | OPPENHEIMER SMALL- & MID- CAP VALUE FUND
FINANCIAL HIGHLIGHTS Continued
- --------------------------------------------------------------------------------
SIX MONTHS
ENDED
APRIL 30, 2008 YEAR ENDED OCTOBER 31,
CLASS N (UNAUDITED) 2007 2006 2005 2004 2003
- ------------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 41.75 $ 36.24 $ 32.58 $ 29.77 $ 25.98 $ 19.13
- ------------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment
operations:
Net investment loss (.07) 1 (.22) 1 (.08) 1 (.14) 1 (.26) 1 (.11)
Net realized and unrealized gain (loss) (4.48) 7.79 5.61 6.13 5.33 6.96
----------------------------------------------------------------------------------
Total from investment operations (4.55) 7.57 5.53 5.99 5.07 6.85
- ------------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to
shareholders:
Distributions from net realized gain (3.71) (2.06) (1.87) (3.18) (1.28) --
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 33.49 $ 41.75 $ 36.24 $ 32.58 $ 29.77 $ 25.98
==================================================================================
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2 (11.72)% 21.71% 17.65% 21.42% 20.29% 35.81%
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 341,151 $ 397,075 $ 229,340 $ 102,971 $ 36,322 $11,216
- ------------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 344,793 $ 325,526 $ 171,305 $ 68,779 $ 21,951 $ 6,722
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment loss (0.41)% (0.55)% (0.22)% (0.44)% (0.93)% (0.36)%
Total expenses 1.55% 4 1.45% 4 1.50% 4 1.57% 1.70% 2.01%
Expenses after payments, waivers and/or
reimbursements and reduction to
custodian expenses 1.49% 1.45% 1.50% 1.57% 1.66% 1.80%
- ------------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 39% 115% 136% 121% 163% 163%
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 April 30, 2008 1.55%
Year Ended October 31, 2007 1.45%
Year Ended October 31, 2006 1.50%
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
28 | OPPENHEIMER SMALL- & MID- CAP VALUE FUND
SIX MONTHS
ENDED
APRIL 30, 2008 YEAR ENDED OCTOBER 31,
CLASS Y (UNAUDITED) 2007 2006 2005 1
- --------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- --------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 43.17 $ 37.14 $ 33.08 $ 33.38
- --------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss) 2 .05 .07 .26 -- 3
Net realized and unrealized gain (loss) (4.65) 8.02 5.67 (.30)
------------------------------------------------------------------------
Total from investment operations (4.60) 8.09 5.93 (.30)
- --------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Distributions from net realized gain (3.71) (2.06) (1.87) --
- --------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 34.86 $ 43.17 $ 37.14 $ 33.08
========================================================================
- --------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 4 (11.43)% 22.63% 18.64% (0.90)%
- --------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- --------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 95,854 $ 93,996 $ 35,638 $ 1
- --------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 93,844 $ 63,467 $ 12,164 $ 1
- --------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 5
Net investment income (loss) 0.29% 0.18% 0.76% (0.32)%
Total expenses 0.77% 6,7,8 0.72% 6,7,8 0.68% 6,7,8 0.90% 7
- --------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 39% 115% 136% 121%
1. For the period from October 24, 2005 (inception of offering) to October 31,
2005.
2. Per share amounts calculated based on the average shares outstanding during
the period.
3. Less than $0.005 per share.
4. Assumes an investment on the business day before the first day of the fiscal
period, with all dividends and distributions reinvested in additional shares on
the reinvestment date, and redemption at the net asset value calculated on the
last business day of the fiscal period. Sales charges are not reflected in the
total returns. Total returns are not annualized for periods less than one full
year. Returns do not reflect the deduction of taxes that a shareholder would pay
on fund distributions or the redemption of fund shares.
5. Annualized for periods less than one full year.
6. Total expenses including indirect expenses from affiliated fund were as
follows:
Six Months Ended April 30, 2008 0.77%
Year Ended October 31, 2007 0.72%
Year Ended October 31, 2006 0.68%
7. Reduction to custodian expenses less than 0.005%.
8. Waiver or reimbursement of indirect management fees less than 0.005%.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
29 | OPPENHEIMER SMALL- & MID- CAP VALUE FUND
NOTES TO FINANCIAL STATEMENTS Unaudited
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
Oppenheimer Small- & Mid- Cap Value Fund (the "Fund"), a series of Oppenheimer
Quest For Value Funds, is an open-end management investment company registered
under the Investment Company Act of 1940, as amended. The Fund's investment
objective is to seek capital appreciation. The Fund's investment adviser is
OppenheimerFunds, Inc. (the "Manager").
The Fund offers Class A, Class B, Class C, Class N and Class Y shares.
Class A shares are sold at their offering price, which is normally net asset
value plus a front-end sales charge. Class B, Class C and Class N shares are
sold without a front-end sales charge but may be subject to a contingent
deferred sales charge ("CDSC"). Class N shares are sold only through retirement
plans. Retirement plans that offer Class N shares may impose charges on those
accounts. Class Y shares are sold to certain institutional investors without
either a front-end sales charge or a CDSC, however, the institutional investor
may impose charges on those accounts. All classes of shares have identical
rights and voting privileges with respect to the Fund in general and exclusive
voting rights on matters that affect that class alone. Earnings, net assets and
net asset value per share may differ due to each class having its own expenses,
such as transfer and shareholder servicing agent fees and shareholder
communications, directly attributable to that class. Class A, B, C and N have
separate distribution and/or service plans. No such plan has been adopted for
Class Y shares. Class B shares will automatically convert to Class A shares 72
months after the date of purchase. The Fund assesses a 2% fee on the proceeds of
fund shares that are redeemed (either by selling or exchanging to another
Oppenheimer fund) within 30 days of their purchase. The fee, which is retained
by the Fund, is accounted for as an addition to paid-in capital.
The following is a summary of significant accounting policies consistently
followed by the Fund.
- --------------------------------------------------------------------------------
SECURITIES VALUATION. The Fund calculates the net asset value of its shares as
of the close of the New York Stock Exchange (the "Exchange"), normally 4:00 P.M.
Eastern time, on each day the Exchange is open for 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
30 | OPPENHEIMER SMALL- & MID- CAP VALUE FUND
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 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.
- --------------------------------------------------------------------------------
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.
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.
- --------------------------------------------------------------------------------
INVESTMENTS 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.
31 | OPPENHEIMER SMALL- & MID- CAP VALUE FUND
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES Continued
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.
During the fiscal year ended October 31, 2007, the Fund did not utilize
any capital loss carryforward to offset capital gains realized in that fiscal
year.
As of April 30, 2008, the Fund had available for federal income tax
purposes an estimated capital loss carryforward of $33,555,745 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 April 30, 2008, it is estimated that the Fund
will not utilize any capital loss carryforward to offset realized capital
gains.
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.
The aggregate cost of securities and other investments and the composition
of unrealized appreciation and depreciation of securities and other investments
for federal income tax purposes as of April 30, 2008 are noted in the following
table. The primary difference between book and tax appreciation or depreciation
of securities and other investments, if applicable, is attributable to the tax
deferral of losses or tax realization of financial statement unrealized gain or
loss.
32 | OPPENHEIMER SMALL- & MID- CAP VALUE FUND
Federal tax cost of securities $ 3,942,284,317
Federal tax cost of other investments (2,202,250)
-----------------------
Total federal tax cost $ 3,940,082,067
=======================
Gross unrealized appreciation $ 480,397,839
Gross unrealized depreciation (347,474,673)
-----------------------
Net unrealized appreciation $ 132,923,166
=======================
- --------------------------------------------------------------------------------
TRUSTEES' COMPENSATION. On November 19, 2007, the Fund's Board of Trustees voted
to freeze participation in the retirement plan for the Board's independent
trustees by not adding new participants to the plan after December 31, 2007.
Active independent trustees who have accrued benefits under the plan prior to
the freeze date will elect a distribution method with respect to their benefits.
Benefits already accrued under the plan for Trustees who were participants prior
to that freeze date are not affected.
During the six months ended April 30, 2008, the Fund's projected benefit
obligations, payments to retired trustees and accumulated liability were as
follows:
Projected Benefit Obligations Increased $171,907
Payments Made to Retired Trustees 8,941
Accumulated Liability as of April 30, 2008 588,540
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 and capital gain distributions, if any, are
declared and paid annually or at other times as deemed necessary by the Manager.
- --------------------------------------------------------------------------------
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
33 | OPPENHEIMER SMALL- & MID- CAP VALUE FUND
NOTES TO FINANCIAL STATEMENTS Unaudited /Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES Continued
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 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 $0.01 par value shares of
beneficial interest of each class. Transactions in shares of beneficial interest
were as follows:
SIX MONTHS ENDED APRIL 30, 2008 YEAR ENDED OCTOBER 31, 2007
SHARES AMOUNT SHARES AMOUNT
- -------------------------------------------------------------------------------------------------------------------------------
CLASS A
Sold 7,321,862 $ 261,226,652 35,296,465 $ 1,413,973,807
Dividends and/or distributions reinvested 6,926,771 262,386,097 3,138,182 116,865,940
Redeemed (14,942,296) (523,286,943) 1 (19,334,484) (783,608,501) 2
--------------------------------------------------------------------------------
Net increase (decrease) (693,663) $ 325,806 19,100,163 $ 747,231,246
================================================================================
34 | OPPENHEIMER SMALL- & MID- CAP VALUE FUND
SIX MONTHS ENDED APRIL 30, 2008 YEAR ENDED OCTOBER 31, 2007
SHARES AMOUNT SHARES AMOUNT
- ------------------------------------------------------------------------------------------------------------------------
CLASS B
Sold 353,285 $ 11,045,779 2,354,173 $ 83,945,046
Dividends and/or
distributions reinvested 922,341 30,713,946 536,345 17,919,301
Redeemed (2,100,353) (65,457,428) 1 (3,063,581) (110,713,351) 2
----------------------------------------------------------------------------------
Net decrease (824,727) $ (23,697,703) (173,063) $ (8,849,004)
==================================================================================
- ------------------------------------------------------------------------------------------------------------------------
CLASS C
Sold 1,438,892 $ 45,952,184 8,127,707 $ 289,824,285
Dividends and/or
distributions reinvested 1,615,742 53,788,047 704,284 23,516,054
Redeemed (3,717,115) (113,688,816) 1 (3,761,916) (135,778,028) 2
----------------------------------------------------------------------------------
Net increase (decrease) (662,481) $ (13,948,585) 5,070,075 $ 177,562,311
==================================================================================
- ------------------------------------------------------------------------------------------------------------------------
CLASS N
Sold 1,618,307 $ 55,916,224 5,367,554 $ 211,159,602
Dividends and/or
distributions reinvested 783,162 28,867,361 305,817 11,153,148
Redeemed (1,723,194) (58,847,878) 1 (2,492,279) (98,175,269) 2
----------------------------------------------------------------------------------
Net increase 678,275 $ 25,935,707 3,181,092 $ 124,137,481
==================================================================================
- ------------------------------------------------------------------------------------------------------------------------
CLASS Y
Sold 1,070,408 $ 38,317,707 1,491,531 $ 61,957,864
Dividends and/or
distributions reinvested 175,077 6,700,208 55,375 2,073,776
Redeemed (673,343) (23,126,489) 1 (329,064) (13,555,662) 2
----------------------------------------------------------------------------------
Net increase 572,142 $ 21,891,426 1,217,842 $ 50,475,978
==================================================================================
1. Net of redemption fees of $13,759, $1,372, $3,122, $1,598 and $435 for
Class A, Class B, Class C, Class N and Class Y, respectively.
2. Net of redemption fees of $55,972, $6,585, $12,893, $5,783 and $1,128 for
Class A, Class B, Class C, Class N and Class Y, respectively.
- --------------------------------------------------------------------------------
3. PURCHASES AND SALES OF SECURITIES
The aggregate cost of purchases and proceeds from sales of securities, other
than short-term obligations and investments in IMMF, for the six months ended
April 30, 2008, were as follows:
PURCHASES SALES
------------------------------------------------------------------
Investment securities $ 1,694,129,568 $ 2,186,333,033
- --------------------------------------------------------------------------------
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:
35 | OPPENHEIMER SMALL- & MID- CAP VALUE FUND
NOTES TO FINANCIAL STATEMENTS Unaudited /Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
4.FEES AND OTHER TRANSACTIONS WITH AFFILIATES Continued
FEE SCHEDULE
------------------------------
Up to $400 million 0.80%
Next $400 million 0.75
Next $1.2 billion 0.60
Next $4.0 billion 0.58
Over $6.0 billion 0.56
- --------------------------------------------------------------------------------
ADMINISTRATION SERVICE FEES. The Fund pays the Manager a fee of $1,500 per year
for preparing and filing the Fund's tax returns.
- --------------------------------------------------------------------------------
TRANSFER AGENT FEES. OppenheimerFunds Services ("OFS"), a division of the
Manager, acts as the transfer and shareholder servicing agent for the Fund. The
Fund pays OFS a per account fee. For the six months ended April 30, 2008, the
Fund paid $5,422,201 to OFS for services to the Fund.
Additionally, Class Y shares are subject to minimum fees of $10,000
annually for assets of $10 million or more. The Class Y shares are subject to
the minimum fees in the event that the per account fee does not equal or exceed
the applicable minimum fees. OFS may voluntarily waive the minimum fees.
- --------------------------------------------------------------------------------
DISTRIBUTION AND SERVICE PLAN (12B-1) FEES. Under its General Distributor's
Agreement with the Fund, OppenheimerFunds Distributor, Inc. (the "Distributor")
acts as the Fund's principal underwriter in the continuous public offering of
the Fund's classes of shares.
- --------------------------------------------------------------------------------
DISTRIBUTION AND SERVICE PLAN FOR CLASS A SHARES. The Fund has adopted a
Distribution and Service Plan for Class A shares. Under the plan, the Fund pays
a service fee to the Distributor of 0.25% of the average annual net assets of
Class A shares. The Distributor currently uses all of those fees to pay dealers,
brokers, banks and other financial institutions periodically for providing
personal services and maintenance of accounts of their customers that hold Class
A shares. Under the plan, the Fund may also pay an asset-based sales charge to
the Distributor. Beginning January 1, 2003, the Board of Trustees set the annual
asset-based sales charge rate at zero. Fees incurred by the Fund under the plan
are detailed in the Statement of Operations.
- --------------------------------------------------------------------------------
DISTRIBUTION AND SERVICE PLANS FOR CLASS B, CLASS C AND CLASS N SHARES. The Fund
has adopted Distribution and Service Plans (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
36 | OPPENHEIMER SMALL- & MID- CAP VALUE FUND
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 $1,118,464,
$7,569,979 and $3,193,639, 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
- -----------------------------------------------------------------------------------------------------------
April 30, 2008 $209,248 $41,276 $265,205 $74,717 $1,662
- -----------------------------------------------------------------------------------------------------------
WAIVERS AND REIMBURSEMENTS OF EXPENSES. OFS has voluntarily agreed to limit
transfer and shareholder servicing agent fees for all classes to 0.35% of
average annual net assets per class. During the six months ended April 30, 2008,
OFS waived $96,740 for Class N shares. 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 April 30, 2008, the Manager waived $79,616 for
IMMF management fees.
- --------------------------------------------------------------------------------
5. OPTION ACTIVITY
The Fund may buy and sell put and call options, or write put and covered call
options. When an option is written, the Fund receives a premium and becomes
obligated to sell or purchase the underlying security at a fixed price, upon
exercise of the option.
Options are valued daily based upon the last sale price on the principal
exchange on which the option is traded. The difference between the premium
received or paid, and market value of the option, is recorded as unrealized
appreciation or depreciation. The net change in unrealized appreciation or
depreciation is reported in the Statement of Operations. When an option is
exercised, the cost of the security purchased or the proceeds of the security
sale are adjusted by the amount of premium received or paid. Upon the expiration
or closing of the option transaction, a gain or loss is reported in the
Statement of Operations.
Securities designated to cover outstanding call or put options are noted
in the Statement of Investments where applicable. Options written are reported
in a schedule following the Statement of Investments and as a liability in the
Statement of Assets and Liabilities.
37 | OPPENHEIMER SMALL- & MID- CAP VALUE FUND
NOTES TO FINANCIAL STATEMENTS Unaudited /Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
5. OPTION ACTIVITY Continued
The risk in writing a call option is that the Fund gives up the
opportunity for profit if the market price of the security increases and the
option is exercised. The risk in writing a put option is that the Fund may incur
a loss if the market price of the security decreases and the option is
exercised. The risk in buying an option is that the Fund pays a premium whether
or not the option is exercised. The Fund also has the additional risk that there
may be an illiquid market where the Fund is unable to close the contract.
Written option activity for the six months ended April 30, 2008 was as follows:
PUT OPTIONS
---------------------------
NUMBER OF AMOUNT OF
CONTRACTS PREMIUMS
- --------------------------------------------------------
Options outstanding as of
October 31, 2007 -- $ --
Options written 5,750 2,202,250
----------------------------
Options outstanding as of
April 30, 2008 5,750 $ 2,202,250
============================
- --------------------------------------------------------------------------------
6. RECENT ACCOUNTING PRONOUNCEMENTS
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 April
30, 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.
38 | OPPENHEIMER SMALL- & MID- CAP VALUE 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.
39 | OPPENHEIMER SMALL- & MID- CAP VALUE FUND
ITEM 2. CODE OF ETHICS.
Not applicable to semiannual reports.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
Not applicable to semiannual reports.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Not applicable to semiannual reports.
ITEM 5. 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 AUDIT COMMITTEE PROVISIONS WITH RESPECT TO NOMINATIONS OF
DIRECTORS/TRUSTEES TO THE RESPECTIVE BOARDS
1. The Fund's Audit 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:
- the name, address, and business, educational, and/or other pertinent
background of the person being recommended;
- a statement concerning whether the person is an "interested person"
as defined in the Investment Company Act of 1940;
- 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
- 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 04/30/2008, 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 Quest for Value Funds
By: /s/ John V. Murphy
---------------------------
John V. Murphy
Principal Executive Officer
Date: 06/10/2008
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: 06/10/2008
By: /s/ Brian W. Wixted
---------------------------
Brian W. Wixted
Principal Financial Officer
Date: 06/10/2008