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 811-21921
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Oppenheimer Transition 2015 Fund
--------------------------------
(Exact name of registrant as specified in charter)
6803 South Tucson Way, Centennial, Colorado 80112-3924
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(Address of principal executive offices) (Zip code)
Robert G. Zack, Esq.
OppenheimerFunds, Inc.
Two World Financial Center, New York, New York 10281-1008
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(Name and address of agent for service)
Registrant's telephone number, including area code: (303) 768-3200
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Date of fiscal year end: February 28
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Date of reporting period: 08/31/2008
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ITEM 1. REPORTS TO STOCKHOLDERS.
AUGUST 31, 2008
Oppenheimer
Transition 2015 Fund
Management Commentaries and Semiannual Report
(GRAPHIC)
MANAGEMENT COMMENTARIES
An Interview with Your Fund's Managers
Listing of Top Holdings
SEMIANNUAL REPORT
Listing of Investments
Financial Statements
(OPPENHEIMERFUNDS(R) LOGO)
The Right Way to Invest
TOP HOLDINGS AND ALLOCATIONS
ASSET CLASS ALLOCATION
(PIE CHART)
- - U.S. Equity Funds 60.5%
- - Fixed Income Funds 21.1
- - Global Equity Funds 12.4
- - Alternative Investment Funds 6.0
- - Money Market Fund 0.0
Portfolio holdings and allocations are subject to change. Percentages are as of
August 31, 2008, and are based on the total market value of investments in
affiliated companies.
11 | OPPENHEIMER TRANSITION 2015 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 12/15/06. Unless
otherwise noted, Class A returns include the current maximum initial sales
charge of 5.75%.
CLASS B shares of the Fund were first publicly offered on 12/15/06. Unless
otherwise noted, Class B returns include the applicable contingent deferred
sales charge of 5% (1-year) and 4% (since inception). Class B shares are subject
to an annual 0.75% asset-based sales charge.
CLASS C shares of the Fund were first publicly offered on 12/15/06. 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 12/15/06. 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 12/15/06. 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 TRANSITION 2015 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 August 31, 2008.
ACTUAL EXPENSES. The first section of the table provides information about
actual account values and actual expenses. You may use the information in this
section for the class of shares you hold, together with the amount you invested,
to estimate the expense that you paid over the period. Simply divide your
account value by $1,000.00 (for example, an $8,600.00 account value divided by
$1,000.00 = 8.60), then multiply the result by the number in the first section
under the heading entitled "Expenses Paid During Period" to estimate the
expenses you paid on your account during this period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES. The second section of the table
provides information about hypothetical account values and hypothetical expenses
based on the Fund's actual expense ratio for each class of shares, and an
assumed rate of return of 5% per year for each class before expenses, which is
not the actual return. The hypothetical account values and expenses may not be
used to estimate the actual ending account balance or expenses you paid for the
period. You may use this information to compare the ongoing costs of investing
in the Fund and other funds. To do so, compare this 5% hypothetical example for
the class of shares you hold with the 5% hypothetical examples that appear in
the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs, such as front-end
or contingent deferred sales charges (loads), or a $12.00 fee imposed annually
on accounts valued at less than $500.00 (subject to exceptions described in the
Statement
13 | OPPENHEIMER TRANSITION 2015 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 MARCH 1, 2008 AUGUST 31, 2008 AUGUST 31, 2008
- ------ ------------- --------------- ---------------
Class A $1,000.00 $ 968.00 $3.03
Class B 1,000.00 964.80 6.61
Class C 1,000.00 963.70 7.15
Class N 1,000.00 968.00 4.13
Class Y 1,000.00 970.20 1.09
HYPOTHETICAL
(5% return before expenses)
Class A 1,000.00 1,022.13 3.11
Class B 1,000.00 1,018.50 6.79
Class C 1,000.00 1,017.95 7.35
Class N 1,000.00 1,021.02 4.24
Class Y 1,000.00 1,024.10 1.12
Expenses are equal to the Fund's annualized expense ratio for that class,
multiplied by the average account value over the period, multiplied by 184/365
(to reflect the one-half year period). Those annualized expense ratios,
excluding indirect expenses from affiliated funds, based on the 6-month period
ended August 31, 2008 are as follows:
CLASS EXPENSE RATIOS
- ----- --------------
Class A 0.61%
Class B 1.33
Class C 1.44
Class N 0.83
Class Y 0.22
The expense ratios reflect reduction to custodian expenses and voluntary waivers
or reimbursements of expenses by the Fund's Manager and Distributor 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 TRANSITION 2015 FUND
STATEMENT OF INVESTMENTS August 31, 2008 / Unaudited
SHARES VALUE
------- ------------
INVESTMENT COMPANIES--100.0% (1)
ALTERNATIVE INVESTMENT FUND--5.9%
Oppenheimer Commodity Strategy Total Return Fund, Cl. Y 167,279 $ 1,430,233
FIXED INCOME FUNDS--21.1%
Oppenheimer Core Bond Fund, Cl. Y 470,301 4,359,692
Oppenheimer International Bond Fund, Cl. Y 112,673 710,966
-----------
5,070,658
GLOBAL EQUITY FUNDS--12.4%
Oppenheimer International Growth Fund, Cl. Y 88,609 2,327,778
Oppenheimer Quest International Value Fund, Inc., Cl. A 41,558 664,097
-----------
2,991,875
MONEY MARKET FUND--0.0%
Oppenheimer Institutional Money Market Fund, Cl. E,
2.76% (2) 2,814 2,814
U.S. EQUITY FUNDS--60.6%
Oppenheimer Capital Appreciation Fund, Cl. Y 41,452 1,951,174
Oppenheimer Main Street Fund, Cl. Y 73,221 2,375,287
Oppenheimer MidCap Fund, Cl. Y(3) 108,087 1,986,630
Oppenheimer Small- & Mid- Cap Value Fund, Cl. Y 109,801 3,542,197
Oppenheimer Value Fund, Cl. Y 206,462 4,703,205
-----------
14,558,493
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TOTAL INVESTMENTS, AT VALUE (COST $25,415,170) 100.0% 24,054,073
-----------
LIABILITIES IN EXCESS OF OTHER ASSETS (0.0) (10,161)
------- -----------
NET ASSETS 100.0% $24,043,912
======= ===========
FOOTNOTES TO STATEMENT OF INVESTMENTS
(1.) Is or was an affiliate, as defined in the Investment Company Act of 1940,
at or during the period ended August 31, 2008, by virtue of the Fund owning
at least 5% of the voting securities of the issuer or as a result of the
Fund and the issuer having the same investment adviser. Transactions during
the period in which the issuer was an affiliate are as follows:
SHARES SHARES
FEBRUARY GROSS GROSS AUGUST 31,
29, 2008 ADDITIONS REDUCTIONS 2008
-------- --------- ---------- ----------
Oppenheimer Capital Appreciation Fund, Cl. Y 26,373 25,133 10,054 41,452
Oppenheimer Commodity Strategy
Total Return Fund, Cl. Y 101,327 79,300 13,348 167,279
Oppenheimer Core Bond Fund, Cl. Y 200,942 316,143 46,784 470,301
Oppenheimer Institutional Money Market
Fund, Cl. E 202,998 8,844,452 9,044,636 2,814
Oppenheimer International Bond Fund, Cl. Y -- 124,065 11,392 112,673
Oppenheimer International Growth Fund, Cl. Y 44,433 53,250 9,074 88,609
Oppenheimer Main Street Fund, Cl. Y 36,256 44,587 7,622 73,221
Oppenheimer MidCap Fund, Cl. Y 64,678 65,349 21,940 108,087
Oppenheimer Quest International Value
Fund, Inc., Cl. A 31,028 27,330 16,800 41,558
Oppenheimer Small- & Mid- Cap Value
Fund, Cl. Y 53,970 67,338 11,507 109,801
Oppenheimer Value Fund, Cl. Y 101,652 126,297 21,487 206,462
F1 | OPPENHEIMER TRANSITION 2015 FUND
STATEMENT OF INVESTMENTS Unaudited / Continued
FOOTNOTES TO STATEMENT OF INVESTMENTS Continued
DIVIDEND REALIZED
VALUE INCOME LOSS
----------- -------- --------
Oppenheimer Capital Appreciation Fund, Cl. Y $ 1,951,174 $ -- $ 57,257
Oppenheimer Commodity Strategy Total Return Fund, Cl. Y 1,430,233 -- 5,530
Oppenheimer Core Bond Fund, Cl. Y 4,359,692 102,080 26,302
Oppenheimer Institutional Money Market Fund, Cl. E 2,814 1,200 --
Oppenheimer International Bond Fund, Cl. Y 710,966 10,052 2,216
Oppenheimer International Growth Fund, Cl. Y 2,327,778 -- 35,896
Oppenheimer Main Street Fund, Cl. Y 2,375,287 -- 81,460
Oppenheimer MidCap Fund, Cl. Y 1,986,630 -- 64,471
Oppenheimer Quest International Value Fund, Inc., Cl. A 664,097 -- 85,623
Oppenheimer Small- & Mid- Cap Value Fund, Cl. Y 3,542,197 -- 107,141
Oppenheimer Value Fund, Cl. Y 4,703,205 -- 131,353
----------- -------- --------
$24,054,073 $113,332 $597,249
=========== ======== ========
(2.) Rate shown is the 7-day yield as of August 31, 2008.
(3.) Non-income producing security.
VALUATION INPUTS
Various data inputs are used in determining the value of each of the Fund's
investments as of the reporting period end.
These data inputs are categorized in the following hierarchy under applicable
financial accounting standards:
1) Level 1--quoted prices in active markets for identical assets or
liabilities (including securities actively traded on a securities
exchange).
2) Level 2--inputs other than quoted prices that are observable for the
asset (such as quoted prices for similar assets and market
corroborated inputs such as interest rates, prepayment speeds, credit
risks, etc.).
3) Level 3--unobservable inputs (including the Manager's own judgments
about assumptions that market participants would use in pricing the
asset).
The market value of the Fund's investments was determined based on the following
inputs as of August 31, 2008:
INVESTMENTS OTHER FINANCIAL
VALUATION DESCRIPTION IN SECURITIES INSTRUMENTS*
- --------------------- ------------- ---------------
Level 1--Quoted Prices $24,054,073 $--
Level 2--Other Significant Observable Inputs -- --
Level 3--Significant Unobservable Inputs -- --
----------- ---
Total $24,054,073 $--
=========== ===
* Other financial instruments include options written, currency contracts,
futures, forwards and swap contracts. Currency contracts and forwards are
reported at their unrealized appreciation/depreciation at measurement date,
which represents the change in the contract's value from trade date.
Futures are reported at their variation margin at measurement date, which
represents the amount due to/from the Fund at that date. Options and swaps
are reported at their market value at measurement date.
SEE THE ACCOMPANYING NOTES FOR FURTHER DISCUSSION OF THE METHODS USED IN
DETERMINING VALUE OF THE FUND'S INVESTMENTS, AND A SUMMARY OF CHANGES TO THE
VALUATION TECHNIQUES, IF ANY, DURING THE REPORTING PERIOD.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
F2 | OPPENHEIMER TRANSITION 2015 FUND
STATEMENT OF ASSETS AND LIABILITIES Unaudited
August 31, 2008
ASSETS
Investments, at value--affiliated companies (cost $25,415,170)--
see accompanying statement of investments $24,054,073
Cash 9,104
Receivables and other assets:
Shares of beneficial interest sold 26,489
Dividends 26,314
Other 4,643
-----------
Total assets 24,120,623
LIABILITIES
Payables and other liabilities:
Investments purchased 38,998
Shareholder communications 13,935
Legal, auditing and other professional fees 11,205
Distribution and service plan fees 8,362
Transfer and shareholder servicing agent fees 2,426
Trustees' compensation 259
Shares of beneficial interest redeemed 42
Other 1,484
-----------
Total liabilities 76,711
-----------
NET ASSETS $24,043,912
===========
COMPOSITION OF NET ASSETS
Par value of shares of beneficial interest $ 2,567
Additional paid-in capital 25,863,703
Accumulated net investment income 38,303
Accumulated net realized loss on investments (499,564)
Net unrealized depreciation on investments (1,361,097)
-----------
NET ASSETS $24,043,912
===========
F3 | OPPENHEIMER TRANSITION 2015 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
$13,082,682 and 1,393,351 shares of beneficial interest outstanding) $9.39
Maximum offering price per share (net asset value plus sales charge of
5.75% of offering price) $9.96
Class B Shares:
Net asset value, redemption price (excludes applicable contingent deferred
sales charge) and offering price per share (based on net assets of $2,186,484
and 234,693 shares of beneficial interest outstanding) $9.32
Class C Shares:
Net asset value, redemption price (excludes applicable contingent deferred
sales charge) and offering price per share (based on net assets of $3,270,844
and 351,544 shares of beneficial interest outstanding) $9.30
Class N Shares:
Net asset value, redemption price (excludes applicable contingent deferred
sales charge) and offering price per share (based on net assets of $5,332,444
and 569,217 shares of beneficial interest outstanding) $9.37
Class Y Shares:
Net asset value, redemption price and offering price per share (based on
net assets of $171,458 and 18,178 shares of beneficial interest outstanding) $9.43
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
F4 | OPPENHEIMER TRANSITION 2015 FUND
STATEMENT OF OPERATIONS Unaudited
For the Six Months Ended August 31, 2008
INVESTMENT INCOME
Dividends from affiliated companies $ 113,332
Interest 119
---------
Total investment income 113,451
EXPENSES
Distribution and service plan fees:
Class A 12,919
Class B 9,836
Class C 13,261
Class N 6,548
Transfer and shareholder servicing agent fees:
Class A 7,133
Class B 1,419
Class C 2,591
Class N 2,285
Class Y 67
Shareholder communications:
Class A 4,250
Class B 613
Class C 1,602
Class N 331
Class Y 11
Legal, auditing and other professional fees 10,278
Trustees' compensation 287
Custodian fees and expenses 40
Other 2,182
---------
Total expenses 75,653
Less reduction to custodian expenses (36)
Less waivers and reimbursements of expenses (484)
---------
Net expenses 75,133
NET INVESTMENT INCOME 38,318
REALIZED AND UNREALIZED LOSS
Net realized loss on investments from affiliated companies (597,249)
Net change in unrealized depreciation on investments (223,696)
---------
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS $(782,627)
=========
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
F5 | OPPENHEIMER TRANSITION 2015 FUND
STATEMENTS OF CHANGES IN NET ASSETS
SIX MONTHS
ENDED YEAR
AUGUST 31, ENDED
2008 FEBRUARY 29,
(UNAUDITED) 2008
----------- ------------
OPERATIONS
Net investment income $ 38,318 $ 113,085
Net realized gain (loss) (597,249) 282,540
Net change in unrealized depreciation (223,696) (1,146,287)
----------- -----------
Net decrease in net assets resulting from operations (782,627) (750,662)
DIVIDENDS AND/OR DISTRIBUTIONS TO SHAREHOLDERS
Dividends from net investment income:
Class A -- (173,172)
Class B -- (20,356)
Class C -- (36,066)
Class N -- (36,346)
Class Y -- (4,264)
----------- -----------
-- (270,204)
BENEFICIAL INTEREST TRANSACTIONS
Net increase (decrease) in net assets resulting from
beneficial interest transactions:
Class A 5,956,620 5,908,174
Class B 1,009,668 1,223,386
Class C 1,388,016 2,079,156
Class N 3,992,069 1,660,378
Class Y (7,566) 202,939
----------- -----------
12,338,807 11,074,033
NET ASSETS
Total increase 11,556,180 10,053,167
Beginning of period 12,487,732 2,434,565
----------- -----------
End of period (including accumulated net investment
income (loss) of $38,303 and $(15), respectively) $24,043,912 $12,487,732
=========== ===========
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
F6 | OPPENHEIMER TRANSITION 2015 FUND
FINANCIAL HIGHLIGHTS
SIX MONTHS
ENDED
AUGUST 31, YEAR ENDED PERIOD ENDED
2008 FEBRUARY 29, FEBRUARY 28,
CLASS A (UNAUDITED) 2008 2007(1)
- ----------------------------------------------------- ----------- ------------ ------------
PER SHARE OPERATING DATA
Net asset value, beginning of period $ 9.70 $10.18 $10.00
Income (loss) from investment operations:
Net investment income(2) .03 .15 .01
Net realized and unrealized gain (loss) (.34) (.34) .17
------- ------ ------
Total from investment operations (.31) (.19) .18
Dividends and/or distributions to shareholders:
Dividends from net investment income -- (.29) --
------- ------ ------
Net asset value, end of period $ 9.39 $ 9.70 $10.18
======= ====== ======
TOTAL RETURN, AT NET ASSET VALUE(3) (3.20)% (2.12)% 1.80%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in thousands) $13,083 $7,533 $2,177
Average net assets (in thousands) $10,309 $5,227 $1,362
Ratios to average net assets:(4)
Net investment income 0.66% 1.45% 0.25%
Total expenses(5) 0.61% 1.03% 6.99%(6)
Expenses after payments, waivers and/or
reimbursements and reduction to custodian expenses 0.61% 0.83% 0.87%
Portfolio turnover rate 18% 24% 0%
(1.) For the period from December 15, 2006 (commencement of operations) to
February 28, 2007.
(2.) Per share amounts calculated based on the average shares outstanding
during the period.
(3.) Assumes an investment on the business day before the first day of the
fiscal period, with all dividends and distributions reinvested in
additional shares on the reinvestment date, and redemption at the net asset
value calculated on the last business day of the fiscal period. Sales
charges are not reflected in the total returns. Total returns are not
annualized for periods less than one full year. Returns do not reflect the
deduction of taxes that a shareholder would pay on fund distributions or
the redemption of fund shares.
(4.) Annualized for periods less than one full year.
(5.) Total expenses including all underlying fund expenses were as follows:
Six Months Ended August 31, 2008 1.25%
Year Ended February 29, 2008 1.66%
Period Ended February 28, 2007 7.62%
(6.) The fiscal 2007 total expenses ratio is higher than the anticipated total
expense ratio of the class for future years due to the Fund's limited
operating history at February 28, 2007.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
F7 | OPPENHEIMER TRANSITION 2015 FUND
FINANCIAL HIGHLIGHTS Continued
SIX MONTHS
ENDED YEAR ENDED PERIOD ENDED
AUGUST 31, 2008 FEBRUARY 29, FEBRUARY 28,
CLASS B (UNAUDITED) 2008 2007(1)
- ----------------------------------------------------- --------------- ------------ ------------
PER SHARE OPERATING DATA
Net asset value, beginning of period $ 9.66 $10.17 $10.00
Income (loss) from investment operations:
Net investment income (loss)(2) --(3) .10 (.01)
Net realized and unrealized gain (loss) (.34) (.38) .18
------ ------ ------
Total from investment operations (.34) (.28) .17
Dividends and/or distributions to shareholders:
Dividends from net investment income -- (.23) --
------ ------ ------
Net asset value, end of period $ 9.32 $ 9.66 $10.17
====== ====== ======
TOTAL RETURN, AT NET ASSET VALUE(4) (3.52)% (2.92)% 1.70%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in thousands) $2,187 $1,263 $ 139
Average net assets (in thousands) $1,961 $ 623 $ 20
Ratios to average net assets:(5)
Net investment income (loss) (0.07)% 0.95% (0.57)%
Total expenses(6) 1.34% 2.49% 52.30%(7)
Expenses after payments, waivers and/or
reimbursements and reduction to custodian expenses 1.33% 1.62% 1.55%
Portfolio turnover rate 18% 24% 0%
(1.) For the period from December 15, 2006 (commencement of operations) to
February 28, 2007.
(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 all underlying fund expenses were as follows:
Six Months Ended August 31, 2008 1.98%
Year Ended February 29, 2008 3.12%
Period Ended February 28, 2007 52.93%
(7.) The fiscal 2007 total expenses ratio is higher than the anticipated total
expense ratio of the class for future years due to the Fund's limited
operating history at February 28, 2007.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
F8 | OPPENHEIMER TRANSITION 2015 FUND
SIX MONTHS
ENDED YEAR ENDED PERIOD ENDED
AUGUST 31, 2008 FEBRUARY 29, FEBRUARY 28,
CLASS C (UNAUDITED) 2008 2007(1)
- ----------------------------------------------------- --------------- ------------ ------------
PER SHARE OPERATING DATA
Net asset value, beginning of period $ 9.65 $10.17 $10.00
Income (loss) from investment operations:
Net investment income (loss)(2) (.01) .17 (.01)
Net realized and unrealized gain (loss) (.34) (.44) .18
------ ------ ------
Total from investment operations (.35) (.27) .17
Dividends and/or distributions to shareholders:
Dividends from net investment income -- (.25) --
------ ------ ------
Net asset value, end of period $ 9.30 $ 9.65 $10.17
====== ====== ======
TOTAL RETURN, AT NET ASSET VALUE(3) (3.63)% (2.88)% 1.70%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in thousands) $3,271 $1,994 $ 99
Average net assets (in thousands) $2,645 $ 862 $ 60
Ratios to average net assets:(4)
Net investment income (loss) (0.18)% 1.67% (0.65)%
Total expenses(5) 1.45% 2.03% 17.07%(6)
Expenses after payments, waivers and/or
reimbursements and reduction to custodian expenses 1.44% 1.52% 1.62%
Portfolio turnover rate 18% 24% 0%
(1.) For the period from December 15, 2006 (commencement of operations) to
February 28, 2007.
(2.) Per share amounts calculated based on the average shares outstanding during
the period.
(3.) Assumes an investment on the business day before the first day of the
fiscal period, with all dividends and distributions reinvested in
additional shares on the reinvestment date, and redemption at the net asset
value calculated on the last business day of the fiscal period. Sales
charges are not reflected in the total returns. Total returns are not
annualized for periods less than one full year. Returns do not reflect the
deduction of taxes that a shareholder would pay on fund distributions or
the redemption of fund shares.
(4.) Annualized for periods less than one full year.
(5.) Total expenses including all underlying fund expenses were as follows:
Six Months Ended August 31, 2008 2.09%
Year Ended February 29, 2008 2.66%
Period Ended February 28, 2007 17.70%
(6.) The fiscal 2007 total expenses ratio is higher than the anticipated total
expense ratio of the class for future years due to the Fund's limited
operating history at February 28, 2007.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
F9 | OPPENHEIMER TRANSITION 2015 FUND
FINANCIAL HIGHLIGHTS Continued
SIX MONTHS
ENDED YEAR ENDED PERIOD ENDED
AUGUST 31, 2008 FEBRUARY 29, FEBRUARY 28,
CLASS N (UNAUDITED) 2008 2007(1)
- ----------------------------------------------------- --------------- ------------ ------------
PER SHARE OPERATING DATA
Net asset value, beginning of period $ 9.68 $10.18 $10.00
Income (loss) from investment operations:
Net investment income(2) .02 .20 --(3)
Net realized and unrealized gain (loss) (.33) (.44) .18
------ ------ ------
Total from investment operations (.31) (.24) .18
Dividends and/or distributions to shareholders:
Dividends from net investment income -- (.26) --
------ ------ ------
Net asset value, end of period $ 9.37 $ 9.68 $10.18
====== ====== ======
TOTAL RETURN, AT NET ASSET VALUE(4) (3.20)% (2.52)% 1.80%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in thousands) $5,332 $1,510 $ 19
Average net assets (in thousands) $2,626 $ 783 $ 5
Ratios to average net assets:(5)
Net investment income 0.45% 1.95% 0.02%
Total expenses(6) 0.84% 1.16% 42.59%(7)
Expenses after payments, waivers and/or
reimbursements and reduction to custodian expenses 0.83% 1.09% 1.12%
Portfolio turnover rate 18% 24% 0%
(1.) For the period from December 15, 2006 (commencement of operations) to
February 28, 2007.
(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 all underlying fund expenses were as follows:
Six Months Ended August 31, 2008 1.48%
Year Ended February 29, 2008 1.79%
Period Ended February 28, 2007 43.22%
(7.) The fiscal 2007 total expenses ratio is higher than the anticipated total
expense ratio of the class for future years due to the Fund's limited
operating history at February 28, 2007.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
F10 | OPPENHEIMER TRANSITION 2015 FUND
SIX MONTHS
ENDED YEAR ENDED PERIOD ENDED
AUGUST 31, 2008 FEBRUARY 29, FEBRUARY 28,
CLASS Y (UNAUDITED) 2008 2007(1)
- -------------------------------------------------- --------------- ------------ ------------
PER SHARE OPERATING DATA
Net asset value, beginning of period $ 9.72 $10.19 $ 10.00
Income (loss) from investment operations:
Net investment income(2) .05 .22 .01
Net realized and unrealized gain (loss) (.34) (.40) .18
------ ------ -------
Total from investment operations (.29) (.18) .19
Dividends and/or distributions to shareholders:
Dividends from net investment income -- (.29) --
------ ------ -------
NET ASSET VALUE, END OF PERIOD $ 9.43 $ 9.72 $ 10.19
====== ====== =======
TOTAL RETURN, AT NET ASSET VALUE(3) (2.98)% (2.02)% 1.90%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in thousands) $ 171 $ 188 $ 1
Average net assets (in thousands) $ 206 $ 74 $ 1
Ratios to average net assets:(4)
Net investment income 1.03% 2.08% 0.48%
Total expenses(5) 0.22% 0.75% 110.56%(6)
Expenses after payments, waivers and/or
reimbursements and reduction to custodian expenses 0.22% 0.61% 0.55%
Portfolio turnover rate 18% 24% 0%
(1.) For the period from December 15, 2006 (commencement of operations) to
February 28, 2007.
(2.) Per share amounts calculated based on the average shares outstanding during
the period.
(3.) Assumes an investment on the business day before the first day of the
fiscal period, with all dividends and distributions reinvested in
additional shares on the reinvestment date, and redemption at the net asset
value calculated on the last business day of the fiscal period. Sales
charges are not reflected in the total returns. Total returns are not
annualized for periods less than one full year. Returns do not reflect the
deduction of taxes that a shareholder would pay on fund distributions or
the redemption of fund shares.
(4.) Annualized for periods less than one full year.
(5.) Total expenses including all underlying fund expenses were as follows:
Six Months Ended August 31, 2008 0.86%
Year Ended February 29, 2008 1.38%
Period Ended February 28, 2007 111.19%
(6.) The fiscal 2007 total expenses ratio is higher than the anticipated total
expense ratio of the class for future years due to the Fund's limited
operating history at February 28, 2007.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
F11 | OPPENHEIMER TRANSITION 2015 FUND
NOTES TO FINANCIAL STATEMENTS Unaudited
1. SIGNIFICANT ACCOUNTING POLICIES
Oppenheimer Transition 2015 Fund (the "Fund") is registered under the Investment
Company Act of 1940, as amended, as an open-end management investment company.
The Fund's investment objective is to seek total return until the target
retirement date included in its name and then seeks income and secondarily
capital growth. The Fund is a special type of mutual fund known as a "fund of
funds" because it invests in other mutual funds. The Fund normally invests in a
portfolio consisting of a target weighted allocation in Class Y shares of other
Oppenheimer funds (the "Underlying Funds"). 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
based upon the net asset value of the applicable Underlying Fund. For each
Underlying Fund, the net asset value per share for a class of shares is
determined 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 by dividing the value of the Underlying Fund's net assets
attributable to that class by the number of outstanding shares of that class on
that day.
Effective for fiscal periods beginning after November 15, 2007, FASB
Statement of Financial Accounting Standards No. 157, Fair Value Measurements,
establishes a hierarchy for measuring fair value of assets and liabilities. As
required by the standard, each investment asset or liability of the Fund is
assigned a level at measurement date based on the significance and source of the
inputs to its valuation. Quoted prices in active markets for identical assets or
liabilities are classified as "Level 1", inputs other than quoted prices for an
asset that are observable are classified as "Level 2" and unobservable inputs,
including
F12 | OPPENHEIMER TRANSITION 2015 FUND
the Manager's judgment about the assumptions that a market participant would use
in pricing an asset or liability are classified as "Level 3". The inputs used
for valuing assets and liabilities are not necessarily an indication of the
risks associated with investing in those assets or liabilities. A table
summarizing the Fund's investments under these levels of classification is
included following the Statement of Investments.
The Fund classifies each of its investments in the Underlying Funds as
Level 1, without consideration as to the classification level of the specific
investments held by the Underlying Funds.
To determine their net asset values, the Underlying Funds' assets are
valued primarily on the basis of current market quotations. In the absence of a
readily available quoted market price, including for assets whose values have
been materially affected by what the Manager identifies as a significant event
occurring before the Underlying Fund's assets are valued but after the close of
their respective exchanges, the Manager, acting through its internal valuation
committee, in good faith determines the fair valuation of that Underlying Fund's
assets using consistently applied procedures under the supervision of the Board
of Trustees. The methodologies used for valuing assets are not necessarily an
indication of the risks associated with investing in those Underlying Funds.
The Underlying Funds' investments are classified as Level 1, Level 2 or
Level 3 based on the inputs used in determining their value. Investments held by
the Underlying Funds are typically classified as Level 1 or Level 2.
Fair valued assets may be classified as "Level 3" if the valuation
primarily reflects the Manager's own assumptions about the inputs that market
participants would use in valuing such securities.
There have been no significant changes to the fair valuation methodologies
during the period.
RISKS OF INVESTING IN THE UNDERLYING FUNDS. Each of the Underlying Funds in
which the Fund invests has its own investment risks, and those risks can affect
the value of the Fund's investments and therefore the value of the Fund's
shares. To the extent that the Fund invests more of its assets in one Underlying
Fund than in another, the Fund will have greater exposure to the risks of that
Underlying Fund.
INVESTMENT IN OPPENHEIMER INSTITUTIONAL MONEY MARKET FUND. The Fund is permitted
to invest daily available cash balances in an affiliated money market fund. The
Fund may invest the available cash in Class E shares of Oppenheimer
Institutional Money Market Fund ("IMMF") to seek current income while preserving
liquidity. IMMF is a registered open-end management investment company,
regulated as a money market fund under the Investment Company Act of 1940, as
amended. The Manager is also the investment adviser of IMMF. The Fund's
investment in IMMF is included in the Statement of Investments. As a
shareholder, the Fund is subject to its proportional share of IMMF's Class E
expenses, including its management fee.
F13 | OPPENHEIMER TRANSITION 2015 FUND
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
1. SIGNIFICANT ACCOUNTING POLICIES Continued
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.
As of August 31, 2008, the Fund had available for federal income tax
purposes an estimated capital loss carryforward of $597,249. 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 August 31, 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 August 31, 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 $25,830,007
===========
Gross unrealized appreciation $ 103,920
Gross unrealized depreciation (1,879,854)
-----------
Net unrealized depreciation $(1,775,934)
===========
F14 | OPPENHEIMER TRANSITION 2015 FUND
TRUSTEES' COMPENSATION. The Fund has adopted an unfunded retirement plan (the
"Plan") for the Fund's independent trustees. Benefits are based on years of
service and fees paid to each trustee during their period of service. The Plan
was frozen with respect to adding new participants effective December 31, 2006
(the "Freeze Date") and existing Plan Participants as of the Freeze Date will
continue to receive accrued benefits under the Plan. Active independent trustees
as of the Freeze Date have each elected a distribution method with respect to
their benefits under the Plan. During the six months ended August 31, 2008, the
Fund's projected benefit obligations, payments to retired trustees and
accumulated liability were as follows:
Projected Benefit Obligations Increased $160
Payments Made to Retired Trustees --
Accumulated Liability as of August 31, 2008 160
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.
F15 | OPPENHEIMER TRANSITION 2015 FUND
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
1. SIGNIFICANT ACCOUNTING POLICIES Continued
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 $0.001 par value shares of
beneficial interest of each class. Transactions in shares of beneficial interest
were as follows:
SIX MONTHS ENDED YEAR ENDED
AUGUST 31, 2008 FEBRUARY 29, 2008
-------------------- ----------------------
SHARES AMOUNT SHARES AMOUNT
------- ---------- -------- -----------
CLASS A
Sold 701,825 $6,779,044 683,235 $ 7,225,902
Dividends and/or distributions reinvested -- -- 16,055 168,420
Redeemed (85,418) (822,424) (136,138) (1,486,148)
------- ---------- -------- -----------
Net increase 616,407 $5,956,620 563,152 $ 5,908,174
======= ========== ======== ===========
F16 | OPPENHEIMER TRANSITION 2015 FUND
SIX MONTHS ENDED YEAR ENDED
AUGUST 31, 2008 FEBRUARY 29, 2008
---------------------- --------------------
SHARES AMOUNT SHARES AMOUNT
-------- ----------- ------- ----------
CLASS B
Sold 118,549 $ 1,152,167 127,657 $1,332,860
Dividends and/or distributions reinvested -- -- 1,877 20,067
Redeemed (14,699) (142,499) (12,334) (129,541)
-------- ----------- ------- ----------
Net increase 103,850 $ 1,009,668 117,200 $1,223,386
======== =========== ======= ==========
CLASS C
Sold 187,333 $ 1,786,255 207,400 $2,185,546
Dividends and/or distributions reinvested -- -- 3,297 34,452
Redeemed (42,444) (398,239) (13,748) (140,842)
-------- ----------- ------- ----------
Net increase 144,889 $ 1,388,016 196,949 $2,079,156
======== =========== ======= ==========
CLASS N
Sold 675,175 $ 6,508,588 219,066 $2,331,873
Dividends and/or distributions reinvested -- -- 3,455 36,238
Redeemed (261,832) (2,516,519) (68,554) (707,733)
-------- ----------- ------- ----------
Net increase 413,343 $ 3,992,069 153,967 $1,660,378
======== =========== ======= ==========
CLASS Y
Sold 9,394 $ 96,864 23,372 $ 247,714
Dividends and/or distributions reinvested -- -- 403 4,236
Redeemed (10,525) (104,430) (4,566) (49,011)
-------- ----------- ------- ----------
Net increase (decrease) (1,131) $ (7,566) 19,209 $ 202,939
======== =========== ======= ==========
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
August 31, 2008, were as follows:
PURCHASES SALES
----------- ----------
Investment securities $15,769,493 $3,218,410
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES
MANAGEMENT FEES. Under the investment advisory agreement, the Manager does not
charge a management fee, but rather collects indirect management fees from
investments in the Underlying Funds and the Fund's investment in IMMF. The
weighted indirect management fees collected from the Underlying Funds and the
Fund's investment in IMMF, as a percent of average daily net assets of the Fund
for the six months ended August 31, 2008 was 0.56%.
F17 | OPPENHEIMER TRANSITION 2015 FUND
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES Continued
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 August 31, 2008, the
Fund paid $12,276 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.
SERVICE PLAN FOR CLASS A SHARES. The Fund has adopted a Service Plan (the
"Plan") for Class A shares under Rule 12b-1 of the Investment Company Act of
1940. Under the Plan, the Fund reimburses the Distributor for a portion of its
costs incurred for services provided to accounts that hold Class A shares.
Reimbursement is made periodically at an annual rate of up to 0.25% of the
average annual net assets of Class A shares of the Fund. The Distributor
currently uses all of those fees to pay dealers, brokers, banks and other
financial institutions periodically for providing personal service and
maintenance of accounts of their customers that hold Class A shares. Any
unreimbursed expenses the Distributor incurs with respect to Class A shares in
any fiscal year cannot be recovered in subsequent periods. Fees incurred by the
Fund under the Plan are detailed in the Statement of Operations.
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 June 30, 2008 for Class B, Class C and Class N
shares were $26,340, $18,415 and $39,271, respectively. Fees incurred by the
Fund under the Plans are detailed in the Statement of Operations.
F18 | OPPENHEIMER TRANSITION 2015 FUND
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
RETAINED BY RETAINED BY RETAINED BY RETAINED BY RETAINED BY
SIX MONTHS ENDED DISTRIBUTOR DISTRIBUTOR DISTRIBUTOR DISTRIBUTOR DISTRIBUTOR
- ---------------- ------------- ------------- ------------- ------------- -------------
August 31, 2008 $23,830 $-- $5,107 $76 $--
WAIVERS AND REIMBURSEMENTS OF EXPENSES. The Manager has voluntarily agreed to a
total expense limitation on the aggregate amount of combined direct
(fund-of-funds level) and indirect expense so that as a percentage of average
daily net assets they will not exceed the following annual rates: 1.50%, 2.25%,
2.25%, 1.75% and 1.25%, for Class A, Class B, Class C, Class N and Class Y,
respectively. During the six months ended August 31, 2008, the Manager
reimbursed the Fund $83 and $103 for the Class B and Class C shares,
respectively. The Manager may modify or terminate this undertaking at any time
without notice to shareholders.
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.
Prior to August 1, 2008, the Manager waived fees and/or reimbursed Fund
expenses in an amount equal to the indirect management fees incurred through the
Fund's investment in IMMF. During the six months ended August 31, 2008, the
Manager waived $40 for IMMF management fees.
The Distributor reimbursed Fund expenses in an amount equal to the
distribution and service plan fees incurred through the Fund's investment in the
Class A shares of Oppenheimer Quest International Value Fund, Inc. which, for
the six months ended August 31, 2008, was $258.
5. RECENT ACCOUNTING PRONOUNCEMENT
In March 2008, the Financial Accounting Standards Board ("FASB") issued
Statement on Financial Accounting Standards ("SFAS") No. 161, DISCLOSURES ABOUT
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES. This standard requires enhanced
disclosures about derivative and hedging activities, including qualitative
disclosures about how and why the Fund uses derivative instruments, how these
activities are accounted for, and their effect on the Fund's financial position,
financial performance and cash flows. SFAS No. 161 is effective for financial
statements issued for fiscal years and interim periods beginning after November
15, 2008. At this time, management is evaluating the implications of SFAS No.
161 and its impact on the Fund's financial statements and related disclosures.
F19 | OPPENHEIMER TRANSITION 2015 FUND
THIS PAGE INTENTIONALLY LEFT BLANK.
F20 | OPPENHEIMER TRANSITION 2015 FUND
BOARD APPROVAL OF THE FUND'S INVESTMENT ADVISORY AGREEMENT Unaudited
Each year, the Board of Trustees (the "Board"), including a majority of the
independent Trustees, is required to determine whether to renew the Fund's
investment advisory agreement (the "Agreement"). The Investment Company Act of
1940, as amended, requires that the Board request and evaluate, and that the
Manager provide, such information as may be reasonably necessary to evaluate the
terms of the Agreement. The Board employs an independent consultant to prepare a
report that provides information, including comparative information, the Board
requests for that purpose. In addition, the Board receives information
throughout the year regarding Fund services, fees, expenses and performance.
The Manager and the independent consultant provided information to the
Board on the following factors: (i) the nature, quality and extent of the
Manager's services, (ii) the investment performance of the Fund and the Manager,
(iii) the fees and expenses of the Fund, including comparative expense
information, (iv) the profitability of the Manager and its affiliates, including
an analysis of the cost of providing services, (v) whether economies of scale
are realized as the Fund grows and whether fee levels reflect these economies of
scale for Fund investors and (vi) other benefits to the Manager from its
relationship with the Fund. The Board was aware that there are alternatives to
retaining the Manager.
Outlined below is a summary of the principal information considered by the
Board as well as the Board's conclusions.
NATURE, QUALITY AND EXTENT OF SERVICES. The Board considered information
about the nature and extent of the services provided to the Fund and information
regarding the Manager's key personnel who provide such services. The Manager's
duties include providing the Fund with the services of the portfolio managers
and the Manager's asset allocation team, who provide research, analysis and
other advisory services in regard to the Fund's investments; oversight of third
party service providers; monitoring compliance with applicable Fund policies and
procedures and adherence to the Fund's investment restrictions. The Manager is
responsible for providing certain administrative services to the Fund as well.
Those services include providing and supervising all administrative and clerical
personnel who are necessary in order to provide effective corporate
administration for the Fund; compiling and maintaining records with respect to
the Fund's operations; preparing and filing reports required by the Securities
and Exchange Commission; preparing periodic reports regarding the operations of
the Fund for its shareholders; preparing proxy materials for shareholder
meetings; and preparing the registration statements required by Federal and
state securities laws for the sale of the Fund's shares. The Manager also
provides the Fund with office space, facilities and equipment.
15 | OPPENHEIMER TRANSITION 2015 FUND
BOARD APPROVAL OF THE FUND'S INVESTMENT ADVISORY AGREEMENT Unaudited / Continued
The Board also considered the quality of the services provided and the
quality of the Manager's resources that are available to the Fund. The Board
took account of the fact that the Manager has had over forty years of experience
as an investment adviser and that its assets under management rank it among the
top mutual fund managers in the United States. The Board evaluated the Manager's
advisory, administrative, accounting, legal and compliance services, and
information the Board has received regarding the experience and professional
qualifications of the Manager's key personnel and the size and functions of its
staff. In its evaluation of the quality of the portfolio management services
provided, the Board considered the experience of Rudi Schadt, Jerry Webman, Kurt
Wolfgruber, Christopher Leavy and Alex Kurinets, the portfolio managers for the
Fund, and the experience of the portfolio managers and the investment
performance of the investment companies in which the Fund may invest (the
"Underlying Funds"). The Board members also considered the totality of their
experiences with the Manager as directors or trustees of the Fund and other
funds advised by the Manager. The Board considered information regarding the
quality of services provided by affiliates of the Manager, which its members
have become knowledgeable about in connection with the renewal of the Fund's
service agreements. The Board concluded, in light of the Manager's experience,
reputation, personnel, operations and resources, that the Fund benefits from the
services provided under the Agreement.
INVESTMENT PERFORMANCE OF THE MANAGER AND THE FUND. Throughout the year,
the Manager provided information on the investment performance of the Fund and
the Manager, including comparative performance information. The Board also
reviewed information, prepared by the Manager and by the independent consultant,
comparing the Fund's historical performance to relevant market indices and to
the performance of other retail front-end and no-load mixed-asset target 2020
funds including fund of funds advised by other investment advisers. The Board
noted that the Fund's one-year performance was better than its peer group
median.
COSTS OF SERVICES BY THE MANAGER. The Board reviewed the fees paid to the
Manager and its affiliates and the other expenses borne by the Fund. The Board
noted that the Fund does not pay a direct management fee but that the Fund
indirectly bears its share of the management fees of the Underlying Funds. The
Board also considered the comparability of the fees charged and the services
provided to the Fund to the fees and services for other clients or accounts
advised by the Manager. The independent consultant provided comparative data in
regard to the fees and expenses of the Fund, other mixed-asset target 2020 funds
of funds and other passively managed affiliated funds of funds with comparable
asset levels and distribution features. The Board noted that the Manager
16 | OPPENHEIMER TRANSITION 2015 FUND
does not collect a management fee, but rather collects indirect management fees
from investments in the Underlying Funds. The Board also noted that the Manager
has agreed to voluntarily limit the aggregate amount of combined direct (fund of
funds level) and indirect expense so that as a percentage of average daily net
assets they will not exceed the following annual rates: 1.50% for Class A, 2.25%
for Class B, 2.25% for Class C, 1.75% for Class N and 1.25% for Class Y. The
Manager may modify or terminate this undertaking at any time without notice to
shareholders. The Board noted that the Fund's total expenses (direct and
indirect) are higher than its peer group median.
ECONOMIES OF SCALE. The Board considered information regarding the
Manager's costs in serving as the Fund's investment adviser, including the costs
associated with the personnel and systems necessary to manage the Fund, and
information regarding the Manager's profitability from its relationship with the
Fund. The Board reviewed whether the Manager may realize economies of scale in
managing and supporting the Fund and the Underlying Funds, and the extent to
which those economies of scale would benefit the Fund's shareholders.
OTHER BENEFITS TO THE MANAGER. In addition to considering the profits
realized by the Manager, the Board considered information that was provided
regarding the direct and indirect benefits the Manager receives as a result of
its relationship with the Fund, including compensation paid to the Manager's
affiliates. The Board also considered that the Manager must be able to pay and
retain experienced professional personnel at competitive rates to provide
quality services to the Fund and that maintaining the financial viability of the
Manager is important in order for the Manager to continue to provide significant
services to the Fund and its shareholders.
CONCLUSIONS. These factors were also considered by the independent Trustees
meeting separately from the full Board, assisted by experienced counsel to the
Fund and to the independent Trustees. Fund counsel and the independent Trustees'
counsel are independent of the Manager within the meaning and intent of the
Securities and Exchange Commission Rules.
Based on its review of the information it received and its evaluations
described above, the Board, including a majority of the independent Trustees,
decided to continue the Agreement for another year. In arriving at this
decision, the Board did not single out any factor or factors as being more
important than others, but considered all of the above information, and
considered the terms and conditions of the Agreement, in light of all of the
surrounding circumstances.
17 | OPPENHEIMER TRANSITION 2015 FUND
PORTFOLIO PROXY VOTING POLICIES AND PROCEDURES; UPDATES TO STATEMENTS OF
INVESTMENTS Unaudited
The Fund and each underlying fund have adopted Portfolio Proxy Voting Policies
and Procedures under which the Fund votes proxies relating to securities
("portfolio proxies") held. A description of the Fund and each underlying fund
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 and each underlying fund are 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.
18 | OPPENHEIMER TRANSITION 2015 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.
a) Not applicable.
b) Not applicable.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.
Not applicable.
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
THE FUND'S GOVERNANCE COMMITTEE PROVISIONS WITH RESPECT TO NOMINATIONS OF
DIRECTORS/TRUSTEES TO THE RESPECTIVE BOARDS
1. The Fund's Governance Committee (the "Committee") will evaluate potential
Board candidates to assess their qualifications. The Committee shall have
the authority, upon approval of the Board, to retain an executive search
firm to assist in this effort. The Committee may consider recommendations
by business and personal contacts of current Board members and by executive
search firms which the Committee may engage from time to time and may also
consider shareholder recommendations. The Committee may consider the advice
and recommendation of the Funds' investment manager and its affiliates in
making the selection.
2. The Committee shall screen candidates for Board membership. The Committee
has not established specific qualifications that it believes must be met by
a trustee nominee. In evaluating trustee nominees, the Committee considers,
among other things, an individual's background, skills, and experience;
whether the individual is
an "interested person" as defined in the Investment Company Act of 1940;
and whether the individual would be deemed an "audit committee financial
expert" within the meaning of applicable SEC rules. The Committee also
considers whether the individual's background, skills, and experience will
complement the background, skills, and experience of other nominees and
will contribute to the Board. There are no differences in the manner in
which the Committee evaluates nominees for trustees based on whether the
nominee is recommended by a shareholder.
3. The Committee may consider nominations from shareholders for the Board at
such times as the Committee meets to consider new nominees for the Board.
The Committee shall have the sole discretion to determine the candidates to
present to the Board and, in such cases where required, to shareholders.
Recommendations for trustee nominees should, at a minimum, be accompanied
by the following:
- 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 08/31/2008, the registrant's principal executive officer and
principal financial officer found the registrant's disclosure controls and
procedures to provide reasonable assurances that information required to be
disclosed by the registrant in the reports that it files under the Securities
Exchange Act of 1934 (a) is accumulated and communicated to registrant's
management, including its principal executive officer and principal financial
officer, to allow timely decisions regarding required disclosure, and (b) is
recorded, processed, summarized and reported, within the time periods specified
in the rules and forms adopted by the U.S. Securities and Exchange Commission.
There have been no changes in the registrant's internal controls over financial
reporting that occurred during the registrant's second fiscal quarter of the
period covered by this report that have materially affected, or are reasonably
likely to materially affect, the registrant's internal control over financial
reporting.
ITEM 12. EXHIBITS.
(a) (1) Not applicable to semiannual reports.
(2) Exhibits attached hereto.
(3) Not applicable.
(b) Exhibit attached hereto.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
Oppenheimer Transition 2015 Fund
By: /s/ John V. Murphy
---------------------------
John V. Murphy
Principal Executive Officer
Date: 10/13/2008
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: 10/13/2008
By: /s/ Brian W. Wixted
---------------------------
Brian W. Wixted
Principal Financial Officer
Date: 10/13/2008