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 811-21915
Oppenheimer Baring SMA International Fund
(Exact name of registrant as specified in charter)
6803 South Tucson Way, Centennial, Colorado 80112-3924
(Address of principal executive offices) (Zip code)
Robert G. Zack, Esq.
OppenheimerFunds, Inc.
Two World Financial Center, New York, New York 10281-1008
(Name and address of agent for service)
Registrant's telephone number, including area code: (303) 768-3200
Date of fiscal year end: May 31
Date of reporting period: 05/31/2009
ITEM 1. REPORTS TO STOCKHOLDERS.
MAY 31, 2009
Oppenheimer Baring SMA International Fund
Annual Report
ANNUAL REPORT
Listing of Top Holdings
Fund Performance Discussion
Listing of Investments
Financial Statements
(OPPENHEIMERFUNDS(R) LOGO)
The Right Way to Invest
TOP HOLDINGS AND ALLOCATIONS
TOP TEN COMMON STOCK HOLDINGS
Centamin Egypt Ltd. 5.2%
Redecard SA 5.2
Peter Hambro Mining plc 5.1
Niko Resources Ltd. 5.1
Oil Search Ltd. 5.1
Israel Chemicals Ltd. 5.0
Muenchener Rueckversicherungs-Gesellschaft AG 4.9
Tokyu Corp. 4.9
Tui Travel plc 4.8
Lonza Group AG 4.8
Portfolio holdings and allocations are subject to change. Percentages are as of
May 31, 2009, and are based on net assets.
TOP TEN GEOGRAPHICAL HOLDINGS
United Kingdom 24.8%
Japan 19.4
Australia 10.6
Switzerland 9.8
Brazil 5.3
Canada 5.3
Israel 5.2
Germany 5.1
Italy 4.9
France 4.8
Portfolio holdings and allocations are subject to change. Percentages are as of
May 31, 2009, and are based on the total market value of investments.
6 | OPPENHEIMER BARING SMA INTERNATIONAL FUND
REGIONAL ALLOCATION
(PIE CHART)
Europe 54.2%
Asia 30.0
Latin America 5.3
United States/Canada 5.3
Middle East/Africa 5.2
Portfolio holdings and allocations are subject to change. Percentages are as of
May 31, 2009, and are based on the total market value of investments.
7 | OPPENHEIMER BARING SMA INTERNATIONAL FUND
FUND PERFORMANCE DISCUSSION
HOW HAS THE FUND PERFORMED? BELOW IS A DISCUSSION OF THE FUND'S PERFORMANCE
DURING ITS FISCAL YEAR ENDED MAY 31, 2009, FOLLOWED BY A GRAPHICAL COMPARISON OF
THE FUND'S PERFORMANCE TO AN APPROPRIATE BROAD-BASED MARKET INDEX.
MANAGEMENT'S DISCUSSION OF FUND PERFORMANCE. The MSCI EAFE Index fell 36.61% for
the 12-month reporting period ended May 31, 2009, in what was a very difficult
period for global equities. The Fund returned -36.34% for the reporting period,
in line with the return of the MSCI EAFE Index. The bulk of the Fund's declines
occurred towards the end of 2008, during the height of the market volatility. In
2009, the Fund had positive returns through the end of the reporting period and
global equities performed much better over the last few months of the period.
Overall, the reporting period will be remembered for its market volatility and
steep declines for the global economy and for global equities.
The banking crisis peaked from September through November 2008, during
which time we witnessed the demise or takeover of many major financial
institutions, including Lehman Brothers, Fortis Bank, AIG, Wachovia, Merrill
Lynch and Halifax Bank of Scotland. It is unusual for the financial sector to
witness this level of turmoil. That it happened over a three month period is
astounding. The financial crisis sent global equities spiraling downwards in
October through November of 2008. Since 2009 began, we have seen some
stabilization in the global equity markets.
The Fund's underweight to Japan detracted from relative performance, as it
was one of the relatively better performing global equity markets for the
reporting period. The Fund's allocation to emerging market stocks hurt relative
performance as well. The Fund's stock selection within the U.K. equity universe
contributed positively to relative performance.
In terms of sector performance, the Fund had weaker relative stock
selection in the financials and industrials sectors. In financials, performance
was impacted by the Fund's position in Emaar Properties (which we exited), as
the broad downturn took its toll on the Middle East. In the industrials sector,
the Fund's transportation stocks performed poorly during the market sell-off.
The performance of the Fund's materials stocks was stronger on a relative basis.
In particular, the Fund's gold mining and agricultural stocks performed
relatively well, particularly in the second half of the reporting period. The
Fund's largest holding at period end, Centamin Egypt Ltd., and another top ten
holding of the Fund, Israel Chemicals Ltd., both rebounded and contributed to
relative Fund performance.
In terms of our strategy at period end, we are encouraged by the global
equity rebound and we have positioned the portfolio to take advantage of what we
see as continued long-term global equity growth. Although we remain overweight
energy, we reduced our weight to the sector after a recovery in oil prices and a
rebound in performance for energy stocks, and locked in some gains. We decided
to remain significantly
8 | OPPENHEIMER BARING SMA INTERNATIONAL FUND
underweight to Japan at period end, as it continued to release poor economic
data. However, we will continue to look for idiosyncratic Japanese growth stocks
to add to our portfolio. At period end, the consumer discretionary sector
remained one of the Fund's largest underweight positions. We think some value
may be starting to emerge in this sector, but for the most part, we have not
found good growth stories to compel us to change our positioning. During the
period, we added gradually to our weighting in the financials sector. We
continue not to hold Western banks, but during the period we added to the Fund's
insurance stock allocation. The Fund remained significantly overweight the
materials sector due to our views on gold and agriculture stocks.
Recently, the Bank of England and the Federal Reserve Board have announced
and implemented quantitative easing measures. Up until now, measures aimed at
monetary expansion have been thwarted by commercial banks unwilling to lend.
Money that commercial banks have received from central banks in exchange for
their assets has promptly gone back on deposit with the central banks and not
into circulation in the wider economy. Quantitative easing though involves the
direct purchase of bonds from investors using newly created money. This enables
longer term interest rates to be held low but also involves a direct injection
of money into the economy.
Direct injection of money into the economy may create some inflation, but
we doubt that it will occur either uniformly or expressly in the areas that the
central bankers would like. Enormous deflationary pressures remain in the world
economy. Overcapacity exists in many areas. At period end, we think there is too
much housing inventory in the West, too much retail space, too much commercial
property, too much steel capacity and too much manufacturing capacity for
consumer goods (cars, electronics and household goods). In these areas we are
unlikely to see inflation and we continue to avoid adding to stocks we think are
strongly affected by these dampening effects.
On the other hand, in areas such as food and energy production, for
example, lack of credit is leading to significant contraction in supply against
relatively stable demand. Here we expect pricing power to expand and inflation
to appear. Similarly, in areas such as technology, health care and industrials,
we are finding defensive growth companies that we expect can exert pricing
power. It is in these latter areas that we continue to largely invest the
portfolio.
Many fiscal and monetary tools have been implemented around the globe in a
very short period of time to try to alleviate the economic crisis. Though it
will take some time to see if these tools are working, we are optimistic that
they will. If they do not help, then further deflation is likely. But, if they
do, we believe the market rebound that was ongoing as of period end will
continue.
9 | OPPENHEIMER BARING SMA INTERNATIONAL FUND
FUND PERFORMANCE DISCUSSION
COMPARING THE FUND'S PERFORMANCE TO THE MARKET. The graph that follows shows the
performance of a hypothetical $10,000 investment in the Fund held until May 31,
2009. Performance is measured from inception of the Fund on July 2, 2007. The
Fund's performance reflects reinvestments of all dividends and capital gains
distributions. Past performance cannot guarantee future results.
The Fund's performance is compared to the performance the Morgan Stanley
Capital International EAFE (Europe, Australasia, Far East) Index, an unmanaged
index that is widely recognized as a measure of international stock performance.
The Index cannot be purchased directly by investors. Index performance reflects
the reinvestment of income but does not consider the effect of transaction
costs, and none of the data in the graphs shows the effect of taxes. The Fund's
performance reflects the effects of the Fund's business and operating expenses.
While index comparisons may be useful to provide a benchmark for the Fund's
performance, it must be noted that the Fund's investments are not limited to the
investments in the Index.
10 | OPPENHEIMER BARING SMA INTERNATIONAL FUND
COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN:
(PERFORMANCE GRAPH)
AVERAGE ANNUAL TOTAL RETURNS OF SHARES OF THE FUND AT 5/31/09 1-Year -36.34%
Since Inception (7/2/07) -20.68%
THE PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE, WHICH DOES NOT
GUARANTEE FUTURE RESULTS. THE INVESTMENT RETURN AND PRINCIPAL VALUE OF AN
INVESTMENT IN THE FUND WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN
REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. CURRENT
PERFORMANCE MAY BE LOWER OR HIGHER THAN THE DATA QUOTED. THE FUND'S TOTAL
RETURNS SHOULD NOT BE EXPECTED TO BE THE SAME AS THE RETURNS OF OTHER FUNDS,
WHETHER OR NOT BOTH FUNDS HAVE THE SAME PORTFOLIO MANAGERS AND/OR SIMILAR NAMES.
FOR PERFORMANCE DATA CURRENT TO THE MOST RECENT MONTH END, YOU MAY CONTACT YOUR
ADVISER OR THE "WRAP-FEE" PROGRAM SPONSOR.
SHARES OF THE FUND MAY BE PURCHASED ONLY BY OR ON BEHALF OF SEPARATELY MANAGED
ACCOUNT CLIENTS ("WRAP-FEE" ACCOUNTS) WHO HAVE RETAINED OFI PRIVATE INVESTMENTS
INC. OR CERTAIN OF ITS AFFILIATES (INDIVIDUALLY OR COLLECTIVELY REFERRED TO AS
"OFI PI"), TO MANAGE THEIR ACCOUNTS PURSUANT TO AN INVESTMENT MANAGEMENT
AGREEMENT WITH OFI PI AND/OR A MANAGED ACCOUNT PROGRAM SPONSOR AS PART OF A
"WRAP-FEE" PROGRAM. INVESTORS IN THE "WRAP-FEE" PROGRAMS PAY A "WRAP-FEE" TO THE
SPONSOR OF THE PROGRAM. THE FUND'S TOTAL RETURNS DO NOT INCLUDE THE CHARGES
ASSOCIATED WITH THE "WRAP-FEE" PROGRAM. SUCH PERFORMANCE WOULD HAVE BEEN LOWER
IF SUCH CHARGES WERE TAKEN INTO ACCOUNT. SEE PAGE 12 FOR FURTHER INFORMATION.
11 | OPPENHEIMER BARING SMA INTERNATIONAL FUND
NOTES
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
ADVISER OR THE "WRAP-FREE" PROGRAM SPONSOR. 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.
The Fund commenced operations on 7/2/07.
An explanation of the calculation of performance is in the Fund's Statement of
Additional Information.
12 | OPPENHEIMER BARING SMA INTERNATIONAL FUND
FUND EXPENSES
FUND EXPENSES. As a shareholder of the Fund, you incur ongoing costs, including
management 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 May 31, 2009.
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, 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, and an assumed rate of return of 5%
per year 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 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), a $12.00 fee imposed annually on
accounts valued at less than $500.00 (subject to exceptions described in the
Statement of Additional Information). Therefore, the "hypothetical"
13 | OPPENHEIMER BARING SMA INTERNATIONAL FUND
FUND EXPENSES Continued
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 DECEMBER 1, 2008 MAY 31, 2009 MAY 31, 2009
- ------ ---------------- ------------ -------------
HYPOTHETICAL $1,000.00 $1,187.90 $0.00
(5% return before expenses)
1,000.00 1,024.93 0.00
Expenses are equal to the Fund's annualized expense ratio, multiplied by the
average account value over the period, multiplied by 182/365 (to reflect the
one-half year period). The annualized expense ratio based on the 6-month period
ended May 31, 2009 is as follows:
EXPENSE RATIO
0.00%
The expense ratio reflects voluntary waivers or reimbursements of expenses by
the Fund's Manager that can be terminated at any time, without advance notice.
The "Financial Highlights" table in the Fund's financial statements, included in
this report, also shows the gross expense ratio, without such waivers or
reimbursements and reduction to custodian expenses, if applicable.
14 | OPPENHEIMER BARING SMA INTERNATIONAL FUND
STATEMENT OF INVESTMENTS May 31, 2009
SHARES VALUE
------- ----------
COMMON STOCKS--97.0%
CONSUMER DISCRETIONARY--4.8%
HOTELS, RESTAURANTS & LEISURE--4.8%
Tui Travel plc 56,517 $ 228,832
----------
CONSUMER STAPLES--13.8%
FOOD & STAPLES RETAILING--4.4%
Seven & I Holdings Co. Ltd. 8,600 208,235
----------
HOUSEHOLD PRODUCTS--9.4%
Reckitt Benckiser
Group plc 5,167 223,734
UNI-CHARM Corp. 3,200 223,342
----------
447,076
ENERGY--15.0%
OIL, GAS & CONSUMABLE FUELS--15.0%
Eni SpA 9,363 226,658
Niko Resources Ltd. 3,471 243,248
Oil Search Ltd. 54,563 239,611
----------
709,517
FINANCIALS--19.0%
CAPITAL MARKETS--4.7%
Julius Baer Holding AG 5,210 221,989
----------
INSURANCE--14.3%
Admiral Group plc 16,073 224,403
Muenchener Rueckversicherungs-Gesellschaft AG 1,681 233,961
Scor Se 10,505 221,520
----------
679,884
SHARES VALUE
------- ----------
HEALTH CARE--9.4%
BIOTECHNOLOGY--4.6%
Grifols SA 12,199 $ 219,539
----------
LIFE SCIENCES TOOLS & SERVICES--4.8%
Lonza Group AG 2,213 228,388
----------
INDUSTRIALS--9.6%
COMMERCIAL SERVICES & SUPPLIES--4.7%
De La Rue plc 16,485 221,226
----------
ROAD & RAIL--4.9%
Tokyu Corp. 51,000 232,189
----------
INFORMATION TECHNOLOGY--5.2%
IT SERVICES--5.2%
Redecard SA 17,000 245,375
----------
MATERIALS--15.4%
CHEMICALS--5.0%
Israel Chemicals Ltd. 21,132 238,914
----------
METALS & MINING--10.4%
Centamin Egypt Ltd. (1) 176,009 247,499
Peter Hambro
Mining plc 22,688 243,744
----------
491,243
TELECOMMUNICATION SERVICES--4.8%
WIRELESS TELECOMMUNICATION SERVICES--4.8%
NTT DoCoMo, Inc. 151 225,834
----------
TOTAL INVESTMENTS, AT VALUE (COST $4,239,243) 97.0% 4,598,241
----------
OTHER ASSETS NET OF LIABILITIES 3.0 141,103
------- ----------
NET ASSETS 100.0% $4,739,344
======= ==========
F1 | OPPENHEIMER BARING SMA INTERNATIONAL FUND
STATEMENT OF INVESTMENTS Continued
FOOTNOTES TO STATEMENT OF INVESTMENTS
1. 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 investment was determined based on the following
inputs as of May 31, 2009:
INVESTMENTS IN OTHER FINANCIAL
VALUATION DESCRIPTION SECURITIES INSTRUMENTS*
-------------- ---------------
Level 1--Quoted Prices $2,090,920 $--
Level 2--Other Significant Observable Inputs 2,507,321 --
Level 3--Significant Unobservable Inputs -- --
---------- ---
Total $4,598,241 $--
========== ===
* 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 written
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.
DISTRIBUTION OF INVESTMENTS REPRESENTING GEOGRAPHIC HOLDINGS, AS A PERCENTAGE OF
TOTAL INVESTMENTS AT VALUE, IS AS FOLLOWS:
GEOGRAPHIC HOLDINGS VALUE PERCENT
- ------------------- ---------- -------
United Kingdom $1,141,939 24.8%
Japan 889,600 19.4
Australia 487,110 10.6
Switzerland 450,377 9.8
Brazil 245,375 5.3
Canada 243,248 5.3
Israel 238,914 5.2
Germany 233,961 5.1
Italy 226,658 4.9
France 221,520 4.8
Spain 219,539 4.8
---------- -----
Total $4,598,241 100.0%
========== =====
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
F2 | OPPENHEIMER BARING SMA INTERNATIONAL FUND
STATEMENT OF ASSETS AND LIABILITIES May 31, 2009
ASSETS
Investments, at value (cost $4,239,243)--see accompanying statement of
investments $ 4,598,241
-----------
Receivables and other assets:
Investments sold 501,918
Dividends 15,752
Other 1,590
-----------
Total assets 5,117,501
LIABILITIES
Bank overdraft 287,146
-----------
Payables and other liabilities:
Shares of beneficial interest redeemed 46,007
Legal, auditing and other professional fees 40,228
Shareholder communications 3,253
Transfer and shareholder servicing agent fees 222
Trustees' compensation 69
Other 1,232
-----------
Total liabilities 378,157
-----------
NET ASSETS $ 4,739,344
===========
COMPOSITION OF NET ASSETS
Par value of shares of beneficial interest $ 820
-----------
Additional paid-in capital 8,511,781
-----------
Accumulated net investment income 89,333
-----------
Accumulated net realized loss on investments and foreign currency
transactions (4,229,343)
-----------
Net unrealized appreciation on investments and translation of
assets and liabilities denominated in foreign currencies 366,753
-----------
NET ASSETS--applicable to 820,430 shares of beneficial interest
outstanding $ 4,739,344
===========
NET ASSET VALUE, REDEMPTION PRICE PER SHARE AND OFFERING PRICE PER SHARE $ 5.78
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
F3 | OPPENHEIMER BARING SMA INTERNATIONAL FUND
STATEMENT OF OPERATIONS For the Year Ended May 31, 2009
INVESTMENT INCOME
Dividends (net of foreign withholding taxes of $13,836) $ 275,951
-----------
Interest 5,249
-----------
Total investment income 281,200
EXPENSES
Management fees 33,321
-----------
Legal, auditing and other professional fees 52,397
-----------
Shareholder communications 19,805
-----------
Transfer and shareholder servicing agent fees 2,092
-----------
Custodian fees and expenses 676
-----------
Trustees' compensation 113
Other 5,004
-----------
Total expenses 113,408
Less waivers and reimbursements of expenses (111,203)
-----------
Net expenses 2,205
-----------
NET INVESTMENT INCOME 278,995
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized loss on:
Investments (2,996,717)
Foreign currency transactions (929,110)
-----------
Net realized loss (3,925,827)
-----------
Net change in unrealized appreciation (depreciation) on:
Investments 107,969
Translation of assets and liabilities denominated in foreign currencies (53,308)
-----------
Net change in unrealized appreciation 54,661
-----------
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS $(3,592,171)
===========
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
F4 | OPPENHEIMER BARING SMA INTERNATIONAL FUND
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED PERIOD ENDED
MAY 31, 2009 MAY 31, 2008(1)
------------ ---------------
OPERATIONS
Net investment income $ 278,995 $ 86,964
----------- ----------
Net realized loss (3,925,827) (205,833)
----------- ----------
Net change in unrealized appreciation 54,661 312,092
----------- ----------
Net increase (decrease) in net assets resulting from operations (3,592,171) 193,223
DIVIDENDS AND/OR DISTRIBUTIONS TO SHAREHOLDERS
Dividends from net investment income (246,899) (31,387)
----------- ----------
Distributions from net realized gain -- (96,023)
BENEFICIAL INTEREST TRANSACTIONS
Net increase in net assets resulting from beneficial interest
transactions 2,780,481 5,632,120
NET ASSETS
Total increase (decrease) (1,058,589) 5,697,933
----------- ----------
Beginning of period 5,797,933 100,000(2)
----------- ----------
End of period (including accumulated net investment income of $89,333
and $55,695, respectively) $ 4,739,344 $5,797,933
=========== ==========
(1.) For the period from July 2, 2007 (commencement of operations) to May 31,
2008.
(2.) Reflects the value of the Manager's initial seed money investment on June
15, 2007.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
F5 | OPPENHEIMER BARING SMA INTERNATIONAL FUND
STATEMENT OF CASH FLOWS For the Year Ended May 31, 2009
CASH FLOWS FROM OPERATING ACTIVITIES
Net decrease in net assets from operations $ (3,592,171)
------------
Adjustments to reconcile net decrease in net assets from operations to
net cash used in operating activities:
Purchase of investment securities (10,066,508)
Proceeds from disposition of investment securities 6,849,399
Short-term investment securities, net 10,737
Net realized loss on investments 3,925,827
Net change in unrealized appreciation on investments (54,661)
Increase in interest receivable (11,942)
Increase in receivable for securities sold (501,918)
Increase in other assets (736)
Increase in payable for accrued expenses 14,214
------------
Net cash used in operating activities (3,427,759)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from shares sold 6,844,929
Proceeds from bank overdraft 287,146
Payments on shares redeemed (4,090,245)
Cash distributions paid (105,806)
------------
Net cash provided by financing activities 2,936,024
------------
Net decrease in cash (491,735)
------------
Cash, beginning balance 491,735
------------
Cash, ending balance $ --
============
Supplemental disclosure of cash flow information:
Noncash financing activities not included herein consist of reinvestment of
dividends and distributions of $141,093.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
F6 | OPPENHEIMER BARING SMA INTERNATIONAL FUND
FINANCIAL HIGHLIGHTS
YEAR ENDED MAY 31, 2009 2008(1)
- ------------------ ------- -------
PER SHARE OPERATING DATA
Net asset value, beginning of period $ 9.48 $10.00
------- ------
Income (loss) from investment operations:
Net investment income(2) .28(3) .31
Net realized and unrealized loss (3.77) (.21)
------- ------
Total from investment operations (3.49) .10
------- ------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.21) (.15)
Distributions from net realized gain -- (.47)
------- ------
Total dividends and/or distributions to shareholders (.21) (.62)
------- ------
Net asset value, end of period $ 5.78 $ 9.48
======= ======
TOTAL RETURN, AT NET ASSET VALUE(4) (36.34)% 0.84%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in thousands) $ 4,739 $5,798
------- ------
Average net assets (in thousands) $ 5,958 $2,677
------- ------
Ratios to average net assets:(5)
Net investment income 4.68%(3) 3.55%
Total expenses 1.90% 2.82%
Expenses after payments, waivers and/or reimbursements and reduction to
custodian expenses 0.04% 0.01%
------- ------
Portfolio turnover rate 126% 83%
(1.) For the period from July 2, 2007 (commencement of operations) to May 31,
2008.
(2.) Per share amounts calculated based on the average shares outstanding during
the period.
(3.) Net investment income per share and the net investment income ratio include
$0.10 and 1.64%, respectively, resulting from a dividend from De La Rue plc
in November 2008.
(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.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
F7 | OPPENHEIMER BARING SMA INTERNATIONAL FUND
NOTES TO FINANCIAL STATEMENTS
1. SIGNIFICANT ACCOUNTING POLICIES
Oppenheimer Baring SMA International Fund (the "Fund") is a registered
investment company organized as a Massachusetts Business Trust. The Fund is
registered as a non-diversified, open-end investment management company under
the Investment Company Act of 1940, as amended. The Fund's investment objective
is to seek long-term capital appreciation. The Fund's investment adviser is
OppenheimerFunds, Inc. (the "Manager"). The Manager has entered into a
sub-advisory agreement with Baring International Investment Limited (the
"Sub-Adviser").
Shares of the Fund may be purchased only by or on behalf of separately
managed account clients ("wrap-fee" accounts) who have retained OFI Private
Investments Inc. or certain of its affiliates (individually or collectively
referred to as "OFI PI"), to manage their accounts pursuant to an investment
management agreement with OFI PI and/or a managed account program sponsor as
part of a "wrap-fee" program.
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.
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
securities 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 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 securities are not necessarily an indication of the
risks associated with investing in those securities. A table summarizing the
Fund's investments under these levels of classification is included following
the Statement of Investments.
Securities are valued using quoted market prices, when available, as
supplied primarily either by portfolio pricing services approved by the Board of
Trustees or dealers. These securities are typically classified within Level 1 or
2; however, they may be designated as Level 3 if the dealer or portfolio pricing
service values a security through an internal model with significant
unobservable inputs.
Securities traded on a registered U.S. securities exchange are valued based
on the last sale price of the security reported on the principal exchange on
which traded, prior to the time when the Fund's assets are valued. Securities
whose principal exchange is NASDAQ(R) are valued based on the official closing
prices reported by NASDAQ prior to the time when the Fund's assets are valued.
In the absence of a sale, the security
F8 | OPPENHEIMER BARING SMA INTERNATIONAL FUND
is valued at the last sale price on the prior trading day, if it is within the
spread of the current day's closing "bid" and "asked" prices, and if not, at the
current day's closing bid price. A foreign security traded on a foreign exchange
is valued based on the last sale price on the principal exchange on which the
security is traded, as identified by the portfolio pricing service used by the
Manager, prior to the time when the Fund's assets are valued. In the absence of
a sale, the security is valued at the most recent official closing price on the
principal exchange on which it is traded.
Shares of a registered investment company that are not traded on an
exchange are valued at that investment company's net asset value per share.
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 are valued
at the mean between the "bid" and "asked" prices.
"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. These
securities are typically designated as Level 2.
In the absence of a readily available quoted market price, including for
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 the securities' respective exchanges, the Manager, acting
through its internal valuation committee, in good faith determines the fair
valuation of that asset using consistently applied procedures under the
supervision of the Board of Trustees (which reviews those fair valuations by the
Manager). Those procedures include certain standardized methodologies to fair
value securities. Such methodologies include, but are not limited to, pricing
securities initially at cost and subsequently adjusting the value based on:
changes in company specific fundamentals, changes in an appropriate securities
index, or changes in the value of similar securities which may be adjusted for
any discounts related to resale restrictions. When possible, such methodologies
use observable market inputs such as quoted prices of similar securities,
observable interest rates, currency rates and yield curves. The methodologies
used for valuing securities are not necessarily an indication of the risks
associated with investing in those securities.
Fair valued securities may be classified as "Level 3" if the Manager's own
assumptions about the inputs that market participants would use in valuing such
securities are significant to the fair value.
There have been no significant changes to the fair valuation methodologies
during the period.
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
F9 | OPPENHEIMER BARING SMA INTERNATIONAL FUND
NOTES TO FINANCIAL STATEMENTS Continued
1. SIGNIFICANT ACCOUNTING POLICIES Continued
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.
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.
The tax components of capital shown in the following table represent
distribution requirements the Fund must satisfy under the income tax
regulations, losses the Fund may be able to offset against income and gains
realized in future years and unrealized appreciation or depreciation of
securities and other investments for federal income tax purposes.
NET UNREALIZED
APPRECIATION
BASED ON COST OF
ACCUMULATED SECURITIES AND
UNDISTRIBUTED UNDISTRIBUTED LOSS OTHER INVESTMENTS
NET INVESTMENT LONG-TERM CARRYFORWARD FOR FEDERAL INCOME
INCOME GAIN (1, 2, 3, 4, 5) TAX PURPOSES
- -------------- ------------- ---------------- -------------------
$89,375 $-- $4,058,221 $195,631
(1.) As of May 31, 2009, the Fund had $1,601,600 of net capital loss
carryforwards available to offset future realized capital gains, if any,
and thereby reduce future taxable gain distributions. As of May 31, 2009,
details of the capital loss carryforward were as follows:
EXPIRING
- --------
2017 $1,601,600
F10 | OPPENHEIMER BARING SMA INTERNATIONAL FUND
(2.) As of May 31, 2009, the Fund had $2,452,983 of post-October losses
available to offset future realized capital gains, if any. Such losses, if
unutilized, will expire in 2018.
(3.) The Fund had $3,638 of post-October foreign currency losses which were
deferred.
(4.) During the fiscal year ended May 31, 2009, the Fund did not utilize any
capital loss carryforward.
(5.) During the fiscal year ended May 31, 2008, the Fund did not utilize any
capital loss carryforward.
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.
Accordingly, the following amounts have been reclassified for May 31, 2009. Net
assets of the Fund were unaffected by the reclassifications.
INCREASE TO INCREASE TO
ACCUMULATED ACCUMULATED NET
NET INVESTMENT REALIZED LOSS
INCOME ON INVESTMENTS
- -------------- ---------------
$1,542 $1,542
The tax character of distributions paid during the year ended May 31, 2009 and
period ended May 31, 2008 was as follows:
YEAR ENDED PERIOD ENDED
MAY 31, 2009 MAY 31, 2008
------------ ------------
Distributions paid from:
Ordinary income $246,899 $127,410
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 May 31, 2009 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 $4,410,365
Federal tax cost of other investments 48,150
----------
Total federal tax cost $4,458,515
==========
Gross unrealized appreciation $ 670,704
Gross unrealized depreciation (475,073)
----------
Net unrealized appreciation $ 195,631
==========
TRUSTEES' COMPENSATION. 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
F11 | OPPENHEIMER BARING SMA INTERNATIONAL FUND
NOTES TO FINANCIAL STATEMENTS Continued
1. SIGNIFICANT ACCOUNTING POLICIES Continued
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.
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
F12 | OPPENHEIMER BARING SMA INTERNATIONAL FUND
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. Transactions in shares of beneficial interest were as
follows:
YEAR ENDED PERIOD ENDED
MAY 31, 2009 MAY 31, 2008(1, 2)
---------------------- --------------------
SHARES AMOUNT SHARES AMOUNT
-------- ----------- ------- ----------
Sold 966,230 $ 6,775,640 614,103 $5,741,631
Dividends and/or
distributions reinvested 28,972 141,093 254 2,498
Redeemed (786,561) (4,136,252) (12,568) (112,009)
-------- ----------- ------- ----------
Net increase 208,641 $ 2,780,481 601,789 $5,632,120
======== =========== ======= ==========
(1.) For the period from July 2, 2007 (commencement of operations) to May 31,
2008.
(2.) The Fund sold 10,000 shares at a value of $100,000 to the Manager upon
seeding of the Fund on June 15, 2007.
3. PURCHASES AND SALES OF SECURITIES
The aggregate cost of purchases and proceeds from sales of securities, other
than short-term obligations, for the year ended May 31, 2009, were as follows:
PURCHASES SALES
----------- ----------
Investment securities $10,066,508 $6,849,399
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES
MANAGEMENT FEES. The Manager has contractually agreed to waive the entire amount
of its advisory fee, which is 0.56% of the average annual net assets of the
Fund. A portion of the "wrap-fee" that investors pay to the "wrap-fee" program
sponsor may be attributed to the management of the Fund.
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 year ended May 31, 2009, the Fund paid
$1,933 to OFS for services to the Fund.
SUB-ADVISER FEES. The Manager retains the Sub-Adviser to provide the day-to-day
portfolio management of the Fund. The Manager, not the Fund, pays the
Sub-Adviser an annual fee under the Sub-Advisory Agreement between the Manager
and the Sub-Adviser. The Manager will pay the Sub-Adviser, in proportion to the
Fund's assets comprising the
F13 | OPPENHEIMER BARING SMA INTERNATIONAL FUND
NOTES TO FINANCIAL STATEMENTS Continued
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES Continued
"wrap-fee" strategy, a fee based on the investment management fee collected by
OFI PI, pursuant to investment management agreements with clients or managed
account program sponsors, who have retained OFI PI as part of a "wrap-fee"
program.
OFFERING AND ORGANIZATIONAL COSTS. The Manager paid all initial offering and
organizational costs associated with the registration and seeding of the Fund.
WAIVERS AND REIMBURSEMENTS OF EXPENSES. The Manager has contractually agreed to
waive all Management Fees and pay or reimburse all expenses of the Fund, except
extraordinary expenses, transfer agent fees and fees paid to the independent
Trustees. This agreement has no fixed term. Investors should be aware that even
though the Fund does not pay any fees or expenses to the Manager, investors will
pay a "wrap fee" to their program sponsor. During the year ended May 31, 2009,
the Manager waived management fees in the amount of $33,321. During the year
ended May 31, 2009, the Manager reimbursed expenses in the amount of $77,882.
OFS has voluntarily agreed to limit transfer and shareholder servicing
agent fees to 0.35% of average annual net assets of the Fund. This undertaking
may be amended or withdrawn at any time.
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.
The Fund has purchased and sold foreign currency exchange contracts of
different currencies in order to acquire currencies to pay for related foreign
securities purchase transactions, or to convert foreign currencies to U.S.
dollars from related foreign securities sale transactions. These foreign
currency exchange contracts are negotiated at the current spot exchange rate
with settlement typically within two business days thereafter.
Additional associated risk to the Fund includes counterparty credit risk.
Counterparty 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 May 31, 2009, the Fund had no outstanding forward contracts.
F14 | OPPENHEIMER BARING SMA INTERNATIONAL FUND
6. PENDING LITIGATION
During 2009, a number of complaints have been filed in federal courts against
the Manager, the Distributor, and certain of the funds in the Oppenheimer family
of funds (the "Defendant Funds") advised by the Manager and distributed by the
Distributor. The complaints naming the Defendant Funds also name certain
officers, trustees and former trustees of the respective Defendant Funds. The
plaintiffs seek class action status on behalf of purchasers of shares of the
respective Defendant Fund during a particular time period. The complaints
against the Defendant Funds raise claims under federal securities laws alleging
that, among other things, the disclosure documents of the respective Defendant
Fund contained misrepresentations and omissions, that such Defendant Fund's
investment policies were not followed, and that such Defendant Fund and the
other defendants violated federal securities laws and regulations. The
plaintiffs seek unspecified damages, equitable relief and an award of attorneys'
fees and litigation expenses. Additionally, a complaint has been brought in
state court against the Manager, the Distributor and another subsidiary of the
Manager (but not the Fund), on behalf of the Oregon College Savings Plan Trust.
The complaint alleges breach of contract, breach of fiduciary duty, negligence
and violation of state securities laws, and seeks compensatory damages,
equitable relief and an award of attorneys' fees and litigation expenses.
Other complaints have been filed in 2008 and 2009 in state and federal
courts, by investors who made investments through an affiliate of the Manager,
against the Manager and certain of its affiliates. Those complaints relate to
the alleged investment fraud perpetrated by Bernard Madoff and his firm
("Madoff") and allege a variety of claims including breach of fiduciary duty,
fraud, negligent misrepresentation, unjust enrichment, and violation of federal
and state securities laws and regulations, among others. They seek unspecified
damages, equitable relief, and an award of attorneys' fees and litigation
expenses. None of the suits have named the Distributor, any of the Oppenheimer
mutual funds or any of their independent Trustees or Directors. None of the
Oppenheimer funds invested in any funds or accounts managed by Madoff.
The Manager believes that the lawsuits described above are without legal
merit and intends to defend them vigorously. The Defendant Funds' Boards of
Trustees have also engaged counsel to defend the suits vigorously on behalf of
those Funds, their boards and the Trustees named in those suits. The Manager
believes that it is premature to render any opinion as to the likelihood of an
outcome unfavorable to it and that no estimate can be made with any degree of
certainty as to the amount or range of any potential loss. The Manager also
believes that these suits should not impair the ability of the Manager or the
Distributor to perform their respective duties to the Fund.
F15 | OPPENHEIMER BARING SMA INTERNATIONAL FUND
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
THE BOARD OF TRUSTEES AND SHAREHOLDERS OF
OPPENHEIMER BARING SMA INTERNATIONAL FUND:
We have audited the accompanying statement of assets and liabilities of
Oppenheimer Baring SMA International Fund, including the statement of
investments, as of May 31, 2009, and the related statement of operations and
cash flows for the year then ended, the statements of changes in net assets, and
the financial highlights for the year then ended and for the period July 2, 2007
(commencemnet of operations) to May 31, 2008. These financial statements and
financial highlights are the responsibility of the Fund's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits.
We conducted our audits in accordance with the standards of the Public
Company Accounting Oversight Board (United States). Those standards require that
we plan and perform the audit to obtain reasonable assurance about whether the
financial statements and financial highlights are free of material misstatement.
An audit includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. Our procedures included
confirmation of securities owned as of May 31, 2009, by correspondence with the
custodian. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of
Oppenheimer Baring SMA International Fund as of May 31, 2009, the results of its
operations and cash flows for the year then ended, the changes in its net assets
and the financial highlights for the year then ended and for the period July 2,
2007 (commencemnet of operations) to May 31, 2008, in conformity with U.S.
generally accepted accounting principles.
KPMG LLP
Denver, Colorado
July 20, 2009
F16 | OPPENHEIMER BARING SMA INTERNATIONAL FUND
FEDERAL INCOME TAX INFORMATION Unaudited
In early 2009, if applicable, shareholders of record received information
regarding all dividends and distributions paid to them by the Fund during
calendar year 2008. Regulations of the U.S. Treasury Department require the Fund
to report this information to the Internal Revenue Service.
Dividends, if any, paid by the Fund during the fiscal year ended May 31,
2009 which are not designated as capital gain distributions should be multiplied
by 2.39% to arrive at the amount eligible for the corporate dividend-received
deduction.
A portion, if any, of the dividends paid by the Fund during the fiscal year
ended May 31, 2009 which are not designated as capital gain distributions are
eligible for lower individual income tax rates to the extent that the Fund has
received qualified dividend income as stipulated by recent tax legislation.
$176,380 of the Fund's fiscal year taxable income may be eligible for the lower
individual income tax rates. In early 2009, shareholders of record received
information regarding the percentage of distributions that are eligible for
lower individual income tax rates.
Recent tax legislation allows a regulated investment company to designate
distributions not designated as capital gain distributions, as either interest
related dividends or short-term capital gain dividends, both of which are exempt
from the U.S. withholding tax applicable to non U.S. taxpayers. For the fiscal
year ended May 31, 2009, $5,210 or 2.00% of the ordinary distributions paid by
the Fund qualifies as an interest related dividend.
The Fund has elected the application of Section 853 of the Internal Revenue
Code to permit shareholders to take a federal income tax credit or deduction, at
their option, on a per share basis for an aggregate amount of $13,179 of foreign
income taxes paid by the Fund during the fiscal year ended May 31, 2009. A
separate notice will be mailed to each shareholder, which will reflect the
proportionate share of such foreign taxes which must be treated by shareholders
as gross income for federal income tax purposes.
Gross income of $293,086 was derived from sources within foreign countries
or possessions of the United States.
The foregoing information is presented to assist shareholders in reporting
distributions received from the Fund to the Internal Revenue Service. Because of
the complexity of the federal regulations which may affect your individual tax
return and the many variations in state and local tax regulations, we recommend
that you consult your tax advisor for specific guidance.
15 | OPPENHEIMER BARING SMA INTERNATIONAL 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 U.S. Securities and Exchange Commission's ("SEC") 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 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 the SEC toll-free at 1-800-SEC-0330.
HOUSEHOLDING--DELIVERY OF SHAREHOLDER DOCUMENTS
This is to inform you about OppenheimerFunds' "householding" policy. If more
than one member of your household maintains an account in a particular fund,
OppenheimerFunds will mail only one copy of the fund's prospectus, annual and
semiannual report and privacy policy. The consolidation of these mailings,
called householding, benefits your fund through reduced mailing expense, and
benefits you by reducing the volume of mail you receive from OppenheimerFunds.
Householding does not affect the delivery of your account statements.
Please note that we will continue to household these mailings for as long
as you remain an OppenheimerFunds shareholder, unless you request otherwise. If
you prefer to receive multiple copies of these materials, please call us at
1.800.CALL-OPP (225-5677) . You may also notify us in writing or via email. We
will begin sending you individual copies of the prospectus, reports and privacy
policy within 30 days of receiving your request to stop householding.
16 | OPPENHEIMER BARING SMA INTERNATIONAL FUND
TRUSTEES AND OFFICERS Unaudited
NAME, POSITION(S) HELD PRINCIPAL OCCUPATION(S) DURING THE PAST 5 YEARS;
WITH THE FUND, LENGTH OF OTHER TRUSTEESHIPS/DIRECTORSHIPS HELD; NUMBER OF
SERVICE, AGE PORTFOLIOS IN THE FUND COMPLEX CURRENTLY OVERSEEN
BRIAN F. WRUBLE, Chairman (since August 2007) and Trustee (since
Chairman of the Board of August 1991) of the Board of Trustees of The Jackson
Trustees (since 2007) and Laboratory (non-profit); Director of Special Value
Trustee (since 2006) Opportunities Fund, LLC (registered investment
Age: 66 company) (affiliate of the Manager's parent company)
(since September 2004); Member of Zurich Financial
Investment Management Advisory Council (insurance)
(since 2004); Treasurer and Trustee of the Institute
for Advanced Study (non-profit educational
institute) (since May 1992); General Partner of
Odyssey Partners, L.P. (hedge fund) (September
1995-December 2007); Special Limited Partner of
Odyssey Investment Partners, LLC (private equity
investment) (January 1999-September 2004). Oversees
64 portfolios in the OppenheimerFunds complex.
DAVID K. DOWNES, Independent Chairman GSK Employee Benefit Trust
Trustee (since 2007) (since April 2006); Director of Correctnet (since
Age: 69 January 2006); Trustee of Employee Trusts (since
January 2006); Chief Executive Officer and Board
Member of CRAFund Advisors, Inc. (investment
management company) (since January 2004); Director
of Internet Capital Group (information technology
company) (since October 2003); Independent Chairman
of the Board of Trustees of Quaker Investment Trust
(registered investment company) (2004-2007);
President of The Community Reinvestment Act
Qualified Investment Fund (investment management
company) (2004-2007); Chief Operating Officer and
Chief Financial Officer of Lincoln National
Investment Companies, Inc. (subsidiary of Lincoln
National Corporation, a publicly traded company) and
Delaware Investments U.S., Inc. (investment
management subsidiary of Lincoln National
Corporation) (1993-2003); President, Chief Executive
Officer and Trustee of Delaware Investment Family of
Funds (1993-2003); President and Board Member of
Lincoln National Convertible Securities Funds, Inc.
and the Lincoln National Income Funds, TDC
(1993-2003); Chairman and Chief Executive Officer of
Retirement Financial Services, Inc. (registered
transfer agent and investment adviser and subsidiary
of Delaware Investments U.S., Inc.) (1993-2003);
President and Chief Executive Officer of Delaware
Service Company, Inc. (1995-2003); Chief
Administrative Officer, Chief Financial Officer,
Vice Chairman and Director of Equitable Capital
Management Corporation (investment subsidiary of
Equitable Life Assurance Society) (1985-1992);
Corporate Controller of Merrill Lynch & Company
(financial services holding company) (1977-1985);
held the following positions at the Colonial Penn
Group, Inc. (insurance company): Corporate Budget
Director (1974-1977), Assistant Treasurer
(1972-1974) and Director of Corporate Taxes
(1969-1972); held the following positions at Price
Waterhouse & Company (financial services firm): Tax
Manager (1967-1969), Tax Senior (1965-1967) and
Staff Accountant (1963-1965); United States Marine
Corps (1957-1959). Oversees 64 portfolios in the
OppenheimerFunds complex.
MATTHEW P. FINK, Trustee of the Committee for Economic Development
Trustee (since 2006) (policy research foundation) (since 2005);
Age: 68 Director of ICI Education Foundation (education
foundation) (October 1991-August 2006); President of
the Investment Company Institute (trade association)
(October 1991-June 2004); Director of ICI Mutual
Insurance Company (insurance company) (October
1991-June 2004). Oversees 54 portfolios in the
OppenheimerFunds complex.
PHILLIP A. GRIFFITHS, Fellow of the Carnegie Corporation (since 2007);
Trustee (since 2006) Distinguished Presidential Fellow for International
Age: 70 Affairs (since 2002) and Member (since 1979) of the
National Academy of Sciences; Council on Foreign
Relations (since 2002); Director of GSI Lumonics
Inc. (precision technology products company) (since
2001); Senior Advisor of The Andrew W. Mellon
Foundation (since 2001); Chair of Science Initiative
Group (since 1999); Member of the American
Philosophical
17 | OPPENHEIMER BARING SMA INTERNATIONAL FUND
TRUSTEES AND OFFICERS Unaudited
PHILLIP A. GRIFFITHS, Society (since 1996); Trustee of Woodward Academy
Continued (since 1983); Foreign Associate of Third World
Academy of Sciences; Director of the Institute for
Advanced Study (1991-2004); Director of Bankers
Trust New York Corporation (1994-1999); Provost at
Duke University (1983-1991). Oversees 54 portfolios
in the OppenheimerFunds complex.
MARY F. MILLER, Trustee of International House (not-for-profit)
Trustee (since 2006) (since June 2007); Trustee of the American Symphony
Age: 66 Orchestra (not-for-profit) (since October 1998); and
Senior Vice President and General Auditor of
American Express Company (financial services
company) (July 1998-February 2003). Oversees 54
portfolios in the OppenheimerFunds complex.
JOEL W. MOTLEY, Managing Director of Public Capital Advisors, LLC
Trustee (since 2006) (privately held financial advisor) (since January
Age: 57 2006); Managing Director of Carmona Motley, Inc.
(privately-held financial advisor) (since January
2002); Director of Columbia Equity Financial Corp.
(privately-held financial advisor) (2002-2007);
Managing Director of Carmona Motley Hoffman Inc.
(privately-held financial advisor) (January
1998-December 2001); Member of the Finance and
Budget Committee of the Council on Foreign
Relations, Member of the Investment Committee of the
Episcopal Church of America, Member of the
Investment Committee and Board of Human Rights Watch
and Member of the Investment Committee of Historic
Hudson Valley. Oversees 54 portfolios in the
OppenheimerFunds complex.
MARY ANN TYNAN, Vice Chair of Board of Trustees of Brigham and
Trustee (since 2008) Women's/Faulkner Hospital (non-profit hospital)
Age: 63 (since 2000); Chair of Board of Directors of
Faulkner Hospital (non-profit hospital) (since
1990); Member of Audit and Compliance Committee of
Partners Health Care System (non-profit) (since
2004); Board of Trustees of Middlesex School
(educational institution) (since 1994); Board of
Directors of Idealswork, Inc. (financial services
provider) (since 2003); Partner, Senior Vice
President and Director of Regulatory Affairs of
Wellington Management Company, LLP (global
investment manager) (1976 to 2002); Vice President
and Corporate Secretary, John Hancock Advisers, Inc.
(mutual fund investment adviser) (1970-1976).
Oversees 57 portfolios in the OppenheimerFunds
complex.
JOSEPH M. WIKLER, Director of C-TASC (bio-statistics services (since
Trustee (since 2006) 2007); Director of the following medical device
Age: 68 companies: Medintec (since 1992) and Cathco (since
1996); Member of the Investment Committee of the
Associated Jewish Charities of Baltimore (since
1994); Director of Lakes Environmental Association
(environmental protection organization) (1996-2008);
Director of Fortis/Hartford mutual funds
(1994-December 2001). Oversees 54 portfolios in the
OppenheimerFunds complex.
PETER I. WOLD, Director and Chairman of Wyoming Enhanced Oil
Trustee (since 2006) Recovery Institute Commission (enhanced oil recovery
Age: 61 study) (since 2004); President of Wold Oil
Properties, Inc. (oil and gas exploration and
production company) (since 1994); Vice President of
American Talc Company, Inc. (talc mining and
milling) (since 1999); Managing Member of
Hole-in-the-Wall Ranch (cattle ranching) (since
1979); Director and Chairman of the Denver Branch of
the Federal Reserve Bank of Kansas City (1993-1999);
and Director of PacifiCorp. (electric utility)
(1995-1999). Oversees 54 portfolios in the
OppenheimerFunds complex.
18 | OPPENHEIMER BARING SMA INTERNATIONAL FUND
INTERESTED TRUSTEE THE ADDRESS OF MR. REYNOLDS IS 6803 S. TUCSON WAY,
CENTENNIAL, COLORADO 80112-3924. MR. REYNOLDS SERVES
FOR AN INDEFINITE TERM, OR UNTIL HIS RESIGNATION,
RETIREMENT, DEATH OR REMOVAL. MR. REYNOLDS IS AN
"INTERESTED TRUSTEE" BECAUSE OF A POTENTIAL
CONSULTING RELATIONSHIP BETWEEN RSR PARTNERS, WHICH
MR. REYNOLDS MAY BE DEEMED TO CONTROL, AND THE
MANAGER.
RUSSELL S. REYNOLDS, JR., Chairman of RSR Partners (formerly "The Directorship
Trustee (since 2006) Search Group, Inc.") (corporate governance
Age: 77 consulting and executive recruiting) (since 1993);
Retired CEO of Russell Reynolds Associates
(executive recruiting) (October 1969-March 1993);
Life Trustee of International House (non-profit
educational organization); Former Trustee of The
Historical Society of the Town of Greenwich; Former
Director of Greenwich Hospital Association. Oversees
54 portfolios in the OppenheimerFunds complex.
INTERESTED TRUSTEE THE ADDRESS OF MR. MURPHY IS TWO WORLD FINANCIAL
AND OFFICER CENTER, 225 LIBERTY STREET, 11TH FLOOR, NEW YORK,
NEW YORK 10281-1008. MR. MURPHY SERVES AS A TRUSTEE
FOR AN INDEFINITE TERM, OR UNTIL HIS RESIGNATION,
RETIREMENT, DEATH OR REMOVAL AND AS AN OFFICER FOR
AN INDEFINITE TERM, OR UNTIL HIS RESIGNATION,
RETIREMENT, DEATH OR REMOVAL. MR. MURPHY IS AN
INTERESTED TRUSTEE DUE TO HIS POSITIONS WITH
OPPENHEIMERFUNDS, INC. AND ITS AFFILIATES.
JOHN V. MURPHY, Chairman and Director of the Manager (since June
President and Principal 2001); Chief Executive Officer of the Manager (June
Executive Officer and 2001-December 2008); President of the Manager
Trustee (since 2006) (September 2000-February 2007); President and
Age: 59 director or trustee of other Oppenheimer funds;
President and Director of Oppenheimer Acquisition
Corp. ("OAC") (the Manager's parent holding company)
and of Oppenheimer Partnership Holdings, Inc.
(holding company subsidiary of the Manager) (since
July 2001); Director of OppenheimerFunds
Distributor, Inc. (subsidiary of the Manager)
(November 2001-December 2006); Chairman and Director
of Shareholder Services, Inc. and of Shareholder
Financial Services, Inc. (transfer agent
subsidiaries of the Manager) (since July 2001);
President and Director of OppenheimerFunds Legacy
Program (charitable trust program established by the
Manager) (since July 2001); Director of the
following investment advisory subsidiaries of the
Manager: OFI Institutional Asset Management, Inc.,
Centennial Asset Management Corporation and Trinity
Investment Management Corporation (since November
2001), HarbourView Asset Management Corporation and
OFI Private Investments, Inc. (since July 2001);
President (since November 2001) and Director (since
July 2001) of Oppenheimer Real Asset Management,
Inc.; Executive Vice President of Massachusetts
Mutual Life Insurance Company (OAC's parent company)
(since February 1997); Director of DLB Acquisition
Corporation (holding company parent of Babson
Capital Management LLC) (since June 1995); Chairman
(since October 2007) and Member of the Investment
Company Institute's Board of Governors (since
October 2003). Oversees 102 portfolios in the
OppenheimerFunds complex.
19 | OPPENHEIMER BARING SMA INTERNATIONAL FUND
TRUSTEES AND OFFICERS Unaudited / Continued
OTHER OFFICERS THE ADDRESSES OF THE OFFICERS IN THE CHART BELOW ARE
OF THE FUND AS FOLLOWS: FOR MR. ZACK, TWO WORLD FINANCIAL
CENTER, 225 LIBERTY STREET, NEW YORK, NEW YORK
10281-1008, FOR MESSRS. VANDEHEY AND WIXTED, 6803 S.
TUCSON WAY, CENTENNIAL, COLORADO 80112-3924. EACH
OFFICER SERVES FOR AN INDEFINITE TERM OR UNTIL HIS
OR HER RESIGNATION, RETIREMENT, DEATH OR REMOVAL.
MARK S. VANDEHEY, Senior Vice President and Chief Compliance Officer
Vice President and Chief of the Manager (since March 2004); Chief Compliance
Compliance Officer Officer of OppenheimerFunds Distributor, Inc.,
(since 2006) Centennial Asset Management and Shareholder
Age: 58 Services, Inc. (since March 2004); Vice President of
OppenheimerFunds Distributor, Inc., Centennial Asset
Management Corporation and Shareholder Services,
Inc. (since June 1983); Former Vice President and
Director of Internal Audit of the Manager
(1997-February 2004). An officer of 102 portfolios
in the OppenheimerFunds complex.
BRIAN W. WIXTED, Senior Vice President of the Manager (since March
Treasurer and Principal 1999); Treasurer of the Manager and the following:
Financial & Accounting HarbourView Asset Management Corporation,
Officer (since 2006) Shareholder Financial Services, Inc., Shareholder
Age: 49 Services, Inc., Oppenheimer Real Asset Management,
Inc. and Oppenheimer Partnership Holdings, Inc.
(March 1999-June 2008), OFI Private Investments,
Inc. (March 2000-June 2008), OppenheimerFunds
International Ltd. and OppenheimerFunds plc (since
May 2000), OFI Institutional Asset Management, Inc.
(since November 2000), and OppenheimerFunds Legacy
Program (charitable trust program established by the
Manager) (since June 2003); Treasurer and Chief
Financial Officer of OFI Trust Company (trust
company subsidiary of the Manager) (since May 2000);
Assistant Treasurer of the following: OAC (March
1999-June 2008), Centennial Asset Management
Corporation (March 1999-October 2003) and
OppenheimerFunds Legacy Program (April 2000-June
2003). An officer of 102 portfolios in the
OppenheimerFunds complex.
ROBERT G. ZACK, Executive Vice President (since January 2004) and
Secretary (since 2006) General Counsel (since March 2002) of the Manager;
Age: 60 General Counsel and Director of the Distributor
(since December 2001); General Counsel of Centennial
Asset Management Corporation (since December 2001);
Senior Vice President and General Counsel of
HarbourView Asset Management Corporation (since
December 2001); Secretary and General Counsel of OAC
(since November 2001); Assistant Secretary (since
September 1997) and Director (since November 2001)
of OppenheimerFunds International Ltd. and
OppenheimerFunds plc; Vice President and Director of
Oppenheimer Partnership Holdings, Inc. (since
December 2002); Director of Oppenheimer Real Asset
Management, Inc. (since November 2001); Senior Vice
President, General Counsel and Director of
Shareholder Financial Services, Inc. and Shareholder
Services, Inc. (since December 2001); Senior Vice
President, General Counsel and Director of OFI
Private Investments, Inc. and OFI Trust Company
(since November 2001); Vice President of
OppenheimerFunds Legacy Program (since June 2003);
Senior Vice President and General Counsel of OFI
Institutional Asset Management, Inc. (since November
2001); Director of OppenheimerFunds International
Distributor Limited (since December 2003); Senior
Vice President (May 1985-December 2003). An officer
of 102 portfolios in the OppenheimerFunds complex.
THE FUND'S STATEMENT OF ADDITIONAL INFORMATION CONTAINS ADDITIONAL INFORMATION
ABOUT THE FUND'S TRUSTEES AND OFFICERS AND IS AVAILABLE WITHOUT CHARGE, UPON
REQUEST, BY CALLING 1.800.525.7048.
20 | OPPENHEIMER BARING SMA INTERNATIONAL FUND
ITEM 2. CODE OF ETHICS.
The registrant has adopted a code of ethics that applies to the registrant's
principal executive officer, principal financial officer, principal accounting
officer or controller or persons performing similar functions.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
The Board of Trustees of the registrant has determined that David Downes, the
Board's Audit Committee Chairman, is an audit committee financial expert and
that Mr. Downes is "independent" for purposes of this Item 3.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
(a) Audit Fees
The principal accountant for the audit of the registrant's annual financial
statements billed $33,400 in fiscal 2009 and $33,400 in fiscal 2008.
(b) Audit-Related Fees
The principal accountant for the audit of the registrant's annual financial
statements billed no such fees for the last two fiscal years.
The principal accountant for the audit of the registrant's annual financial
statements billed $224,200 in fiscal 2009 and $381,236 in fiscal 2008 to the
registrant's investment adviser or any entity controlling, controlled by, or
under common control with the adviser that provides ongoing services to the
registrant.
Such services include: internal control reviews and professional services
relating to FAS 157.
(c) Tax Fees
The principal accountant for the audit of the registrant's annual financial
statements billed $5,515 in fiscal 2009 and $828 in fiscal 2008.
The principal accountant for the audit of the registrant's annual financial
statements billed no such fees to the registrant during the last two fiscal
years to the registrant's investment adviser or any entity controlling,
controlled by, or under common control with the adviser that provides ongoing
services to the registrant.
Such services include: Tax preparation and filings.
(d) All Other Fees
The principal accountant for the audit of the registrant's annual financial
statements billed no such fees during the last two fiscal years.
The principal accountant for the audit of the registrant's annual financial
statements billed no such fees during the last two fiscal years to the
registrant's investment adviser or any entity controlling, controlled by, or
under common control with the adviser that provides ongoing services to the
registrant.
(e) (1) During its regularly scheduled periodic meetings, the registrant's
audit committee will pre-approve all audit, audit-related, tax and other
services to be provided by the principal accountants of the registrant.
The audit committee has delegated pre-approval authority to its Chairman
for any subsequent new engagements that arise between regularly scheduled
meeting dates provided that any fees such pre-approved are presented to the
audit committee at its next regularly scheduled meeting.
Under applicable laws, pre-approval of non-audit services maybe waived
provided that: 1) the aggregate amount of all such services provided
constitutes no more than five percent of the total amount of fees paid by
the registrant to it principal accountant during the fiscal year in which
services are provided 2) such services were not recognized by the
registrant at the time of engagement as non-audit services and 3) such
services are promptly brought to the attention of the audit committee of
the registrant and approved prior to the completion of the audit.
(2) 100%
(f) Not applicable as less than 50%.
(g) The principal accountant for the audit of the registrant's annual financial
statements billed $229,715 in fiscal 2009 and $303,764 in fiscal 2008 to
the registrant and the registrant's investment adviser or any entity
controlling, controlled by, or under common control with the adviser that
provides ongoing services to the registrant related to non-audit fees.
Those billings did not include any prohibited non-audit services as defined
by the Securities Exchange Act of 1934.
(h) The registrant's audit committee of the board of trustees has considered
whether the provision of non-audit services that were rendered to the
registrant's investment adviser, and any entity controlling, controlled by,
or under common control with the investment adviser that provides ongoing
services to the registrant that were not pre-approved pursuant to paragraph
(c)(7)(ii) of Rule 2-01 of Regulation S-X is compatible with maintaining
the principal accountant's independence. No such services were rendered.
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 05/31/2009, 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) Exhibit attached hereto.
(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 Baring SMA International Fund
By: /s/ John V. Murphy
---------------------------------
John V. Murphy
Principal Executive Officer
Date: 07/13/2009
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: 07/13/2009
By: /s/ Brian W. Wixted
---------------------------------
Brian W. Wixted
Principal Financial Officer
Date: 07/13/2009