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 811-21953
OPPENHEIMER BARING CHINA 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 China 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 INDUSTRIES
Commercial Banks 12.3%
Oil, Gas & Consumable Fuels 11.9
Metals & Mining 6.6
Marine 6.5
Insurance 6.4
Wireless Telecommunication Services 6.4
Real Estate Management & Development 5.7
Hotels, Restaurants & Leisure 3.8
Construction & Engineering 3.8
Food Products 3.0
Portfolio holdings and allocations are subject to change. Percentages are as of
May 31, 2009, and are based on net assets.
TOP TEN COMMON STOCK HOLDINGS
China Mobile Ltd. 6.4%
China Petroleum & Chemical Corp. 3.8
China Merchants Bank Co. Ltd. 3.7
Industrial & Commercial Bank of China Ltd. 3.3
Ping An Insurance Co. of China Ltd. 3.2
Ctrip.com International Ltd., ADR 2.8
China Everbright Ltd. 2.6
Yanlord Land Group Ltd. 2.5
PetroChina Co. Ltd. 2.5
China Oilfield Services Ltd. 2.5
Portfolio holdings and allocations are subject to change. Percentages are as of
May 31, 2009, and are based on net assets.
For more current Fund holdings, please visit www.oppenheimerfunds.com.
7 | OPPENHEIMER BARING CHINA FUND
TOP HOLDINGS AND ALLOCATIONS
SECTOR ALLOCATION
(PIE CHART)
Financials 28.2%
Commercial Banks 12.9
Insurance 6.7
Real Estate Management & Development 6.0
Diversified Financial Services 2.6
Industrials 18.0
Energy 15.1
Materials 12.4
Consumer Discretionary 11.0
Telecommunication Services 8.7
Information Technology 3.3
Consumer Staples 3.2
Utilities 0.1
Portfolio holdings and allocations are subject to change. Percentages are as of
May 31, 2009, and are based on the total market value of common stocks.
8 | OPPENHEIMER BARING CHINA 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 reporting period was a
difficult one for equity markets around the world and for the markets in which
the Fund invests. The Chinese equity market reached its low point in late 2008
when fears about the global recession, deteriorating global credit markets and
the economic slowdown in China were at their most intense. Against this
tumultuous backdrop, Oppenheimer Baring China Fund's Class A shares (without
sales charge) returned -15.90% during the reporting period, compared to the MSCI
China Index (the "Index"), which returned -22.59%, and the MSCI Zhong Hua Index,
which returned -22.68% during the same time frame. However, the equity markets
rallied in the first quarter of 2009, signaling that perhaps the worst is behind
us.
Relative to the MSCI China Index, the Fund outperformed in the financials,
industrials and consumer discretionary sectors, mostly due to favorable stock
selection. Within financials, better stock selection in the real estate
management and development subsector, as well an overweight to the subsector,
benefited relative Fund performance. The Fund's overweight position in real
estate management and development companies China Overseas Land & Investment
Ltd. and China Resources Land Ltd. helped performance versus the Index, as they
both had a relatively strong reporting period. We exited our position in China
Resources Land Ltd. by period end. The Fund also benefited by maintaining an
underweight position in commercial bank China Merchants Bank Co. Ltd. during the
most volatile months of the reporting period. The Fund increased its exposure to
China Merchants Bank Co. Ltd. when the equity markets began to rebound in March
2009, shifting to an overweight position in April. This shift benefited relative
performance, as the security performed very well in the last three months of the
reporting period. At period end, the company is among the top five holdings of
the Fund.
Within industrials, the Fund benefited from its underweight position in the
marine subsector in the first half of the reporting period, including
underweighting shipping companies China COSCO Holdings Co. Ltd. and China
Shipping Development Co. Ltd. Similar to its allocation strategy with China
Merchants Bank, the Fund began drastically increasing its exposure to its
holdings in the marine subsector when the markets began to rebound, shifting to
an overweight position in May 2009. This shift contributed to relative Fund
performance, as the sector performed well in the last three months of the
reporting period. In consumer discretionary, the Fund's overweight to Dongfeng
Motor Group Co. Ltd., one of the three large auto makers in China, added to
relative
9 | OPPENHEIMER BARING CHINA FUND
FUND PERFORMANCE DISCUSSION
performance as it had a strong reporting period. The Fund's underweight in the
hard hit specialty retail subsector also helped produce relative outperformance
versus the Index.
The Fund's overweight position to the information technology and materials
sectors, as well as stock selection within them, hurt relative performance
versus the Index. In terms of information technology, not holding stocks in the
electronic equipment instruments and components subsector detracted from
relative performance, as it held up well during the reporting period. Within
materials, the Fund's overweight positions in construction materials company
Anhui Conch Cement Co. Ltd., and metals and mining companies Angang New Steel
Co. Ltd. and Zijin Mining Group Co. Ltd., hurt relative performance, as they
suffered declines during the reporting period. At period end, the Fund
maintained an overweight position in the materials sector, as we believe it will
benefit from the Chinese government's stimulus package and policy moves.
In terms of market capitalization, during the early part of the reporting
period, we reduced the Fund's exposure to small- and mid-cap stocks, as we
expected them to experience further weakness. We began to rebuild our exposure
to them after the massive equity market sell-off in October 2008. We also
increased our emphasis on companies' cash flows and solvency ratios. As of the
reporting period's end, we remained focused on quality companies with good cash
flows and strong balance sheets, which we think may benefit from the demand
created by consumption and infrastructure spending in China.
We remain optimistic on the long-term outlook for Hong Kong and China. We
believe the valuation of Chinese equities at period end has largely priced in
market pessimism over the global economic slowdown and recession. Despite the
recent Chinese equity rally, we think certain valuations remain compelling after
a period of compressed earnings growth. In the medium term, we think China's
market will remain resilient, given the government's support through monetary
easing and infrastructure packages. With favorable liquidity conditions and a
stabilization in the U.S. financial markets, Chinese macroeconomic conditions
and corporate earnings growth may have already reached their lows for 2009. We
think the market will continue to react favorably to more of the RMB4 trillion
stimulus package set to be deployed into the Chinese economy, as well as a
loosening monetary policy.
COMPARING THE FUND'S PERFORMANCE TO THE MARKET. The graphs that follow show the
performance of a hypothetical $10,000 investment in each class of shares of the
Fund held until May 31, 2009. In the case of Class A, Class B, Class C, Class N
and Class Y shares, performance is measured from inception of the classes on
January 31, 2007. The Fund's performance reflects the deduction of the maximum
initial sales charge on Class A shares,
10 | OPPENHEIMER BARING CHINA FUND
the applicable contingent deferred sales charge on Class B, Class C and Class N
shares, and reinvestments of all dividends and capital gains distributions. Past
performance cannot guarantee future results.
The Fund's performance is compared to the performance of the MSCI Zhong Hua
Index and the MSCI China Index. The MSCI Zhong Hua Index is an unmanaged index
which is a free float-adjusted market capitalization index that is designed to
measure developed market equity performance of China and Hong Kong and is an
aggregate of the MSCI Hong Kong Index (a capitalization-weighted index that
monitors the performance of stocks from Hong Kong), and the MSCI China Free
Index. The MSCI China Index is a free float-adjusted market
capitalization-weighted index of Chinese equities. Index performance reflects
the reinvestment of income but does not consider the effect of transaction
costs, and none of the data in the graph 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.
11 | OPPENHEIMER BARING CHINA FUND
FUND PERFORMANCE DISCUSSION
CLASS A SHARES
COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN:
(PERFORMANCE GRAPH)
Oppenheimer
Baring
China Fund MSCI Zhong MSCI China
(Class A) Hua Index Index
----------- ---------- ----------
1/31/2007 9425 10000 10000
2/28/2007 9689 9787 9824
5/31/2007 11470 10900 11385
8/31/2007 15071 13337 15021
11/30/2007 16758 16243 18167
2/29/2008 12951 13691 15084
5/31/2008 12296 13436 14556
8/31/2008 9966 11125 12013
11/30/2008 6788 7172 7725
2/28/2009 6615 7064 7579
5/31/2009 10342 10389 11282
AVERAGE ANNUAL TOTAL RETURNS OF CLASS A SHARES WITH SALES CHARGE OF THE FUND AT
5/31/09
1-Year -20.73%
Since Inception (1/31/07) 1.45%
12 | OPPENHEIMER BARING CHINA FUND
CLASS B SHARES
COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN:
(PERFORMANCE GRAPH)
Oppenheimer
Baring
China Fund MSCI Zhong MSCI China
(Class B) Hua Index Index
----------- ---------- ----------
1/31/2007 10000 10000 10000
2/28/2007 10270 9787 9824
5/31/2007 12130 10900 11385
8/31/2007 15900 13337 15021
11/30/2007 17640 16243 18167
2/29/2008 13606 13691 15084
5/31/2008 12903 13436 14556
8/31/2008 10439 11125 12013
11/30/2008 7098 7172 7725
2/28/2009 6905 7064 7579
5/31/2009 10475 10389 11282
AVERAGE ANNUAL TOTAL RETURNS OF CLASS B SHARES WITH SALES CHARGE OF THE FUND AT
5/31/09
1-Year -20.67%
Since Inception (1/31/07) 2.01%
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 PERFORMANCE QUOTED. FOR PERFORMANCE
DATA CURRENT TO THE MOST RECENT MONTH END, VISIT US AT WWW.OPPENHEIMERFUNDS.COM,
OR CALL US AT 1.800.525.7048. FUND RETURNS INCLUDE CHANGES IN SHARE PRICE,
REINVESTED DISTRIBUTIONS, AND THE APPLICABLE SALES CHARGE: FOR CLASS A SHARES,
THE CURRENT MAXIMUM INITIAL SALES CHARGE OF 5.75%; FOR CLASS B SHARES, THE
CONTINGENT DEFERRED SALES CHARGE OF 5% (1-YEAR) AND 3% (SINCE INCEPTION); AND
FOR CLASS C AND N SHARES, THE CONTINGENT 1% DEFERRED SALES CHARGE FOR THE 1-YEAR
PERIOD. SEE PAGE 17 FOR FURTHER INFORMATION.
13 | OPPENHEIMER BARING CHINA FUND
FUND PERFORMANCE DISCUSSION
CLASS C SHARES
COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN:
(PERFORMANCE GRAPH)
Oppenheimer
Baring
China Fund MSCI Zhong MSCI China
(Class C) Hua Index Index
----------- ---------- ----------
1/31/2007 10000 10000 10000
2/28/2007 10280 9787 9824
5/31/2007 12130 10900 11385
8/31/2007 15900 13337 15021
11/30/2007 17650 16243 18167
2/29/2008 13619 13691 15084
5/31/2008 12906 13436 14556
8/31/2008 10439 11125 12013
11/30/2008 7095 7172 7725
2/28/2009 6901 7064 7579
5/31/2009 10775 10389 11282
AVERAGE ANNUAL TOTAL RETURNS OF CLASS C SHARES WITH SALES CHARGE OF THE FUND AT
5/31/09
1-Year -17.34%
Since Inception (1/31/07) 3.25%
14 | OPPENHEIMER BARING CHINA FUND
CLASS N SHARES
COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN:
(PERFORMANCE GRAPH)
Oppenheimer
Baring
China Fund MSCI Zhong MSCI China
(Class N) Hua Index Index
----------- ---------- ----------
1/31/2007 10000 10000 10000
2/28/2007 10280 9787 9824
5/31/2007 12150 10900 11385
8/31/2007 15950 13337 15021
11/30/2007 17720 16243 18167
2/29/2008 13690 13691 15084
5/31/2008 12987 13436 14556
8/31/2008 10520 11125 12013
11/30/2008 7166 7172 7725
2/28/2009 6973 7064 7579
5/31/2009 10897 10389 11282
AVERAGE ANNUAL TOTAL RETURNS OF CLASS N SHARES WITH SALES CHARGE OF THE FUND AT
5/31/09
1-Year -16.93%
Since Inception (1/31/07) 3.75%
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 PERFORMANCE QUOTED. FOR PERFORMANCE
DATA CURRENT TO THE MOST RECENT MONTH END, VISIT US AT WWW.OPPENHEIMERFUNDS.COM,
OR CALL US AT 1.800.525.7048. FUND RETURNS INCLUDE CHANGES IN SHARE PRICE,
REINVESTED DISTRIBUTIONS, AND THE APPLICABLE SALES CHARGE: FOR CLASS A SHARES,
THE CURRENT MAXIMUM INITIAL SALES CHARGE OF 5.75%; FOR CLASS B SHARES, THE
CONTINGENT DEFERRED SALES CHARGE OF 5% (1-YEAR) AND 3% (SINCE INCEPTION); AND
FOR CLASS C AND N SHARES, THE CONTINGENT 1% DEFERRED SALES CHARGE FOR THE 1-YEAR
PERIOD. SEE PAGE 17 FOR FURTHER INFORMATION.
15 | OPPENHEIMER BARING CHINA FUND
FUND PERFORMANCE DISCUSSION
CLASS Y SHARES
COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN:
(PERFORMANCE GRAPH)
Oppenheimer
Baring
China Fund MSCI Zhong MSCI China
(Class N) Hua Index Index
----------- ---------- ----------
1/31/2007 10000 10000 10000
2/28/2007 10290 9787 9824
5/31/2007 12180 10900 11385
8/31/2007 16000 13337 15021
11/30/2007 17800 16243 18167
2/29/2008 13779 13691 15084
5/31/2008 13104 13436 14556
8/31/2008 10628 11125 12013
11/30/2008 7242 7172 7725
2/28/2009 7068 7064 7579
5/31/2009 11048 10389 11282
AVERAGE ANNUAL TOTAL RETURNS OF CLASS Y SHARES OF THE FUND AT 5/31/09
1-Year -15.69%
Since Inception (1/31/07) 4.36%
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 PERFORMANCE QUOTED. FOR PERFORMANCE
DATA CURRENT TO THE MOST RECENT MONTH END, VISIT US AT WWW.OPPENHEIMERFUNDS.COM,
OR CALL US AT 1.800.525.7048. FUND RETURNS INCLUDE CHANGES IN SHARE PRICE,
REINVESTED DISTRIBUTIONS, AND THE APPLICABLE SALES CHARGE: FOR CLASS A SHARES,
THE CURRENT MAXIMUM INITIAL SALES CHARGE OF 5.75%; FOR CLASS B SHARES, THE
CONTINGENT DEFERRED SALES CHARGE OF 5% (1-YEAR) AND 3% (SINCE INCEPTION); AND
FOR CLASS C AND N SHARES, THE CONTINGENT 1% DEFERRED SALES CHARGE FOR THE 1-YEAR
PERIOD. SEE PAGE 17 FOR FURTHER INFORMATION.
16 | OPPENHEIMER BARING CHINA FUND
NOTES
Total returns and the ending account values in the graphs include changes
in share price and reinvestment of dividends and capital gains
distributions in a hypothetical investment for the periods shown. The
Fund's total returns shown do not reflect the deduction of income taxes on
an individual's investment. Taxes may reduce your actual investment returns
on income or gains paid by the Fund or any gains you may realize if you
sell your shares.
INVESTORS SHOULD CONSIDER THE FUND'S INVESTMENT OBJECTIVES, RISKS, AND
OTHER CHARGES AND EXPENSES CAREFULLY BEFORE INVESTING. THE FUND'S
PROSPECTUS CONTAINS THIS AND OTHER INFORMATION ABOUT THE FUND, AND MAY BE
OBTAINED BY ASKING YOUR FINANCIAL ADVISOR, CALLING US AT 1.800.525.7048 OR
VISITING OUR WEBSITE AT WWW.OPPENHEIMERFUNDS.COM. READ THE PROSPECTUS
CAREFULLY BEFORE INVESTING.
The Fund's investment strategy and focus can change over time. The mention
of specific fund holdings does not constitute a recommendation by
OppenheimerFunds, Inc.
CLASS A shares of the Fund were first publicly offered on 1/31/07. 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 1/31/07. Unless
otherwise noted, Class B returns include the applicable contingent deferred
sales charge of 5% (1-year) and 3% (since inception). Class B shares are
subject to an annual 0.75% asset-based sales charge.
CLASS C shares of the Fund were first publicly offered on 1/31/07. 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 1/31/07. 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.
17 | OPPENHEIMER BARING CHINA FUND
NOTES
CLASS Y shares of the Fund were first publicly offered on 1/31/07. 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.
18 | OPPENHEIMER BARING CHINA 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 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 for the class of shares you hold, together with the amount you
invested, to estimate the expense that you paid over the period. Simply
divide your account value by $1,000.00 (for example, an $8,600.00 account
value divided by $1,000.00 = 8.60), then multiply the result by the number
in the first section under the heading entitled "Expenses Paid During
Period" to estimate the expenses you paid on your account during this
period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES. The second section of the
table provides information about hypothetical account values and
hypothetical expenses based on the Fund's actual expense ratio for each
class of shares, and an assumed rate of return of 5% per year for each
class before expenses, which is not the actual return. The hypothetical
account values and expenses may not be used to estimate the actual ending
account balance or expenses you paid for the period. You may use this
information to compare the ongoing costs of investing in the Fund and other
funds. To do so, compare this 5% hypothetical example for the class of
shares you hold with the 5% hypothetical examples that appear in the
shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight
your ongoing costs only and do not reflect any transactional costs, such as
front-end or contingent deferred sales charges (loads), redemption fees, or
a $12.00 fee imposed annually on accounts valued at less than $500.00
(subject to exceptions described in the Statement of Additional
Information). Therefore,
19 | OPPENHEIMER BARING CHINA FUND
FUND EXPENSES Continued
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
DECEMBER MAY ENDED MAY
1, 2008 31, 2009 31, 2009
--------- --------- -----------
ACTUAL
Class A $1,000.00 $1,523.40 $11.17
Class B 1,000.00 1,517.90 14.95
Class C 1,000.00 1,518.70 15.27
Class N 1,000.00 1,520.60 12.68
Class Y 1,000.00 1,525.40 8.65
HYPOTHETICAL
(5% return before expenses)
Class A 1,000.00 1,016.11 8.94
Class B 1,000.00 1,013.11 11.96
Class C 1,000.00 1,012.86 12.22
Class N 1,000.00 1,014.91 10.15
Class Y 1,000.00 1,018.10 6.92
Expenses are equal to the Fund's annualized expense ratio for that class,
multiplied by the average account value over the period, multiplied by 182/365
(to reflect the one-half year period). Those annualized expense ratios based on
the 6-month period ended May 31, 2009 are as follows:
EXPENSE
CLASS RATIOS
- ------- -------
Class A 1.77%
Class B 2.37
Class C 2.42
Class N 2.01
Class Y 1.37
The expense ratios reflect voluntary waivers or reimbursements of expenses by
the Fund's Manager and Transfer Agent that can be terminated at any time,
without advance notice. The "Financial Highlights" tables in the Fund's
financial statements, included in this report, also show the gross expense
ratios, without such waivers or reimbursements and reduction to custodian
expenses, if applicable.
20 | OPPENHEIMER BARING CHINA FUND
STATEMENT OF INVESTMENTS May 31, 2009
SHARES VALUE
----------- -----------
COMMON STOCKS--95.5%
CONSUMER DISCRETIONARY--10.5%
AUTOMOBILES--2.0%
Denway Motors Ltd. 628,000 $ 305,054
Dongfeng Motor Group Co. Ltd. 958,000 922,694
-----------
1,227,748
-----------
DIVERSIFIED CONSUMER SERVICES--1.2%
New Oriental Education & Technology Group,
Inc., Sponsored ADR(1) 13,900 763,944
-----------
HOTELS, RESTAURANTS & LEISURE--3.8%
China Travel International Investment Hong Kong Ltd. 2,818,000 676,124
Ctrip.com International Ltd., ADR 42,300 1,732,185
-----------
2,408,309
-----------
HOUSEHOLD DURABLES--1.1%
Techtronic Industries Co. Ltd. 898,500 676,635
-----------
LEISURE EQUIPMENT & PRODUCTS--1.3%
Li Ning Co. Ltd. 340,500 836,443
-----------
TEXTILES, APPAREL & LUXURY GOODS--1.1%
Ports Design Ltd. 354,500 707,827
-----------
CONSUMER STAPLES--3.0%
FOOD PRODUCTS--3.0%
China Mengniu Dairy Co. Ltd.(1) 577,000 1,226,754
Xiwang Sugar Holdings Co. Ltd.(1) 3,128,000 674,707
-----------
1,901,461
-----------
ENERGY--14.4%
ENERGY EQUIPMENT & SERVICES--2.5%
China Oilfield Services Ltd. 1,434,000 1,581,847
-----------
OIL, GAS & CONSUMABLE FUELS--11.9%
China Petroleum & Chemical Corp. 2,924,000 2,384,235
China Shenhua Energy Co. Ltd. 447,500 1,494,041
SHARES VALUE
----------- -----------
OIL, GAS & CONSUMABLE FUELS Continued
CNOOC Ltd. 677,000 $894,991
CNPC Hong Kong Ltd. 610,000 425,696
PetroChina Co. Ltd. 1,374,000 1,582,788
Yanzhou Coal Mining Co. Ltd. 574,000 723,157
-----------
7,504,908
-----------
FINANCIALS--27.0%
COMMERCIAL BANKS--12.3%
China CITIC Bank 1,338,000 753,788
China Construction Bank 2,396,000 1,563,586
China Merchants Bank Co. Ltd. 1,121,900 2,299,363
Industrial & Commercial Bank of China (Asia) Ltd. 588,000 1,057,334
Industrial & Commercial Bank of China Ltd. 3,329,000 2,103,777
-----------
7,777,848
-----------
DIVERSIFIED FINANCIAL SERVICES--2.6%
China Everbright Ltd. 668,000 1,612,185
-----------
INSURANCE--6.4%
China Insurance International Holdings Co. Ltd.(1) 514,000 965,710
China Life Insurance Co. Ltd. 295,000 1,079,226
Ping An Insurance Co. of China Ltd. 285,000 1,984,864
-----------
4,029,800
-----------
REAL ESTATE MANAGEMENT & DEVELOPMENT--5.7%
China Overseas Land & Investment Ltd. 353,680 747,956
Hopefluent Group Holdings Ltd.(1) 2,444,000 695,999
Sino-Ocean Land Holdings Ltd. 526,000 540,586
Yanlord Land Group Ltd. 1,045,000 1,592,397
-----------
3,576,938
F1 | OPPENHEIMER BARING CHINA FUND
STATEMENT OF INVESTMENTS Continued
SHARES VALUE
----------- -----------
INDUSTRIALS--17.2%
AIRLINES--1.2%
China Southern Airlines Co. Ltd.(1) 2,402,000 $ 740,722
-----------
CONSTRUCTION & ENGINEERING--3.8%
China Communications Construction Co. Ltd. 1,018,000 1,414,165
China Railway Construction Corp.(1) 678,500 973,256
-----------
2,387,421
-----------
ELECTRICAL EQUIPMENT--1.7%
Dongfang Electrical Co. Ltd. 276,800 1,078,648
-----------
MACHINERY--2.4%
China National Materials Co. 1,159,000 1,005,376
Sinotruk Hong Kong Ltd.(1) 419,000 490,623
-----------
1,495,999
-----------
MARINE--6.5%
China COSCO Holdings Co. Ltd.(1) 740,000 1,016,995
China Shipping Development Co. Ltd. 602,000 894,675
Orient Overseas International Ltd. 164,000 710,597
Shun Tak Holdings Ltd. 1,228,000 863,355
Sinotrans Shipping Ltd. 1,211,000 633,152
-----------
4,118,774
-----------
ROAD & RAIL--1.4%
Guangshen Railway Co. Ltd. 1,832,000 873,475
-----------
TRADING COMPANIES & DISTRIBUTORS--0.2%
CITIC Resources Holdings Ltd.(1) 402,000 115,611
-----------
INFORMATION TECHNOLOGY--3.2%
COMPUTERS & PERIPHERALS--1.8%
Lenovo Group Ltd. 2,802,000 1,138,972
-----------
INTERNET SOFTWARE & SERVICES--1.4%
Alibaba.com Ltd.(1) 83,500 164,393
Tencent Holdings Ltd. 61,600 689,983
-----------
854,376
-----------
SHARES VALUE
----------- -----------
MATERIALS--11.8%
CHEMICALS--2.7%
Sinofert Holdings Ltd.(1) 2,410,000 $ 1,173,831
Taiwan Fertilizer Co. Ltd. 164,000 527,516
-----------
1,701,347
-----------
CONSTRUCTION MATERIALS--2.5%
Anhui Conch Cement Co. Ltd. 132,000 949,922
China Shanshui Cement Group 1,068,000 662,752
-----------
1,612,674
-----------
METALS & MINING--6.6%
Aluminum Corp. of China Ltd. 662,000 640,665
Angang New Steel Co. Ltd. 794,000 1,183,143
Fushan International Energy Group Ltd.(1) 266,000 106,923
Shougang Concord International Enterprises Co. Ltd. 7,946,000 1,398,563
Zijin Mining Group Co. Ltd. 886,000 805,424
-----------
4,134,718
-----------
TELECOMMUNICATION SERVICES--8.3%
DIVERSIFIED TELECOMMUNICATION SERVICES--1.9%
China Telecom Corp. Ltd. 2,572,000 1,221,247
-----------
WIRELESS TELECOMMUNICATION SERVICES--6.4%
China Mobile Ltd. 408,500 4,002,438
-----------
UTILITIES--0.1%
ENERGY TRADERS--0.1%
China Power International Development Ltd.(1) 122,000 33,521
-----------
Total Common Stocks
(Cost $48,899,241) 60,115,836
F2 | OPPENHEIMER BARING CHINA FUND
SHARES VALUE
----------- -----------
STRUCTURED SECURITIES--0.9%
JPMorgan International Derivatives Ltd., Daqin
Railway Low Exercise Price Option/Warrant,
Exp. 8/3/09(2)
(Cost $1,054,023) 442,066 $ 601,064
-----------
TOTAL INVESTMENTS, AT VALUE
(COST $49,953,264) 96.4% 60,716,900
-----------
OTHER ASSETS NET
OF LIABILITIES 3.6 2,254,979
------- -----------
NET ASSETS 100.0% $62,971,879
======= ===========
FOOTNOTES TO STATEMENT OF INVESTMENTS
(1.) Non-income producing security.
(2.) Represents securities sold under Rule 144A, which are exempt from
registration under the Securities Act of 1933, as amended. These securities
have been determined to be liquid under guidelines established by the Board
of Trustees. These securities amount to $601,064 or 0.95% of the Fund's net
assets as of May 31, 2009.
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 OTHER FINANCIAL
VALUATION DESCRIPTION IN SECURITIES INSTRUMENTS*
- --------------------- ------------- ---------------
Level 1--Quoted Prices $ 5,662,060 $--
Level 2--Other Significant Observable Inputs 55,054,840 --
Level 3--Significant Unobservable Inputs -- --
----------- ---
Total $60,716,900 $--
=========== ===
* 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.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
F3 | OPPENHEIMER BARING CHINA FUND
STATEMENT OF ASSETS AND LIABILITIES May 31, 2009
ASSETS
Investments, at value (cost $49,953,264)--see accompanying
statement of investments $ 60,716,900
------------
Cash--foreign currencies (cost $ 1,215,716) 1,216,318
------------
Receivables and other assets:
Investments sold 1,175,154
Dividends 542,935
Shares of beneficial interest sold 293,297
Other 4,470
------------
Total assets 63,949,074
============
LIABILITIES
Bank overdraft 41,504
------------
Payables and other liabilities:
Investments purchased 746,245
Shares of beneficial interest redeemed 74,099
Legal, auditing and other professional fees 56,170
Shareholder communications 23,339
Distribution and service plan fees 16,477
Transfer and shareholder servicing agent fees 14,032
Trustees' compensation 1,105
Other 4,224
------------
Total liabilities 977,195
============
NET ASSETS $ 62,971,879
============
COMPOSITION OF NET ASSETS
Par value of shares of beneficial interest $ 5,892
Additional paid-in capital 91,607,973
Accumulated net investment income 330,081
Accumulated net realized loss on investments and foreign currency
transactions (39,736,361)
Net unrealized appreciation on investments and translation of
assets and liabilities denominated in foreign currencies 10,764,294
------------
NET ASSETS $ 62,971,879
============
F4 | OPPENHEIMER BARING CHINA FUND
NET ASSET VALUE PER SHARE
Class A Shares:
Net asset value and redemption price per share
(based on net assets of $41,454,894 and 3,861,050
shares of beneficial interest outstanding) $ 10.74
Maximum offering price per share (net asset value
plus sales charge of 5.75% of offering price) $ 11.40
Class B Shares:
Net asset value, redemption price (excludes
applicable contingent deferred sales charge) and
offering price per share (based on net assets
of $6,572,538 and 621,281 shares of beneficial
interest outstanding) $ 10.58
Class C Shares:
Net asset value, redemption price (excludes
applicable contingent deferred sales charge) and
offering price per share (based on net assets of
$11,993,935 and 1,135,151 shares of beneficial
interest outstanding) $ 10.57
Class N Shares:
Net asset value, redemption price (excludes
applicable contingent deferred sales charge) and
offering price per share (based on net assets of
$1,468,316 and 137,393 shares of beneficial
interest outstanding) $ 10.69
Class Y Shares:
Net asset value, redemption price and offering price
per share (based on net assets of $1,482,196 and
137,194 shares of beneficial interest outstanding) $ 10.80
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
F5 | OPPENHEIMER BARING CHINA FUND
STATEMENT OF OPERATIONS For the Year Ended May 31, 2009
INVESTMENT INCOME
Dividends (net of foreign withholding taxes of
$47,366) $ 1,082782
Interest (net of foreign withholding taxes of $3,479) 42,367
Other income 780
------------
Total investment income 1,125,929
============
EXPENSES
Management fees 461,205
Distribution and service plan fees:
Class A 74,759
Class B 46,447
Class C 88,735
Class N 5,392
Transfer and shareholder servicing agent fees:
Class A 143,157
Class B 35,464
Class C 41,732
Class N 6,398
Class Y 2,482
Shareholder communications:
Class A 22,133
Class B 10,185
Class C 8,975
Class N 820
Class Y 128
Legal, auditing and other professional fees 73,042
Custodian fees and expenses 9,604
Trustees' compensation 1,541
Other 8,727
------------
Total expenses 1,040,926
Less waivers and reimbursements of expenses (203,067)
------------
Net expenses 837,859
============
NET INVESTMENT INCOME 288,070
F6 | OPPENHEIMER BARING CHINA FUND
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) on:
Investments $(20,835,627)
Foreign currency transactions 342,292
------------
Net realized loss (20,493,335)
Net change in unrealized appreciation on:
Investments 8,009,446
Translation of assets and liabilities denominated in
foreign currencies 106,266
------------
Net change in unrealized appreciation 8,115,712
============
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS $(12,089,553)
============
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
F7 | OPPENHEIMER BARING CHINA FUND
STATEMENTS OF CHANGES IN NET ASSETS
YEAR ENDED MAY 31, 2009 2008
- ------------------ ------------ ------------
OPERATIONS
Net investment income (loss) $ 288,070 $ (210,125)
Net realized loss (20,493,335) (17,383,644)
Net change in unrealized appreciation 8,115,712 (406,186)
------------ ------------
Net decrease in net assets resulting from
operations (12,089,553) (17,999,955)
============ ============
DIVIDENDS AND/OR DISTRIBUTIONS TO SHAREHOLDERS
Dividends from net investment income:
Class A -- (90,428)
Class B -- --
Class C -- (6,370)
Class N -- (700)
Class Y -- (4,854)
------------ ------------
-- (102,352)
Tax return of capital distribution from net
investment income:
Class A -- (133,253)
Class B -- --
Class C -- (9,387)
Class N -- (1,030)
Class Y -- (7,153)
------------ ------------
-- (150,823)
Distributions from net realized gain:
Class A -- (1,243,536)
Class B -- (149,583)
Class C -- (303,295)
Class N -- (31,172)
Class Y -- (47,987)
------------ ------------
-- (1,775,573)
============ ============
BENEFICIAL INTEREST TRANSACTIONS
Net increase (decrease) in net assets resulting
from beneficial interest transactions:
Class A (1,073,975) 42,002,972
Class B 367,755 7,814,342
Class C (5,890) 17,581,864
Class N 72,750 1,824,268
Class Y (505,173) 3,479,123
------------ ------------
(1,144,533) 72,702,569
============ ============
NET ASSETS
Total increase (decrease) (13,234,086) 52,673,866
Beginning of period 76,205,965 23,532,099
------------ ------------
End of period (including accumulated net
investment income (loss) of $ 330,081 and
$(1,287), respectively) $ 62,971,879 $ 76,205,965
============ ============
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
F8 | OPPENHEIMER BARING CHINA FUND
FINANCIAL HIGHLIGHTS
CLASS A YEAR ENDED MAY 31, 2009 2008 2007(1)
- -------------------------- ------- ------- -------
PER SHARE OPERATING DATA
Net asset value, beginning of period $ 12.77 $ 12.17 $ 10.00
------- ------- -------
Income (loss) from investment operations:
Net investment income (loss)(2) .08 (.02) .06
Net realized and unrealized gain (loss) (2.11) .95 2.11
------- ------- -------
Total from investment operations (2.03) .93 2.17
------- ------- -------
Dividends and/or distributions to shareholders:
Dividends from net investment income -- (.02) --
Distributions from net realized gain -- (.28) --
Tax return of capital distribution -- (.03) --
------- ------- -------
Total dividends and/or distributions to shareholders -- (.33) --
------- ------- -------
Net asset value, end of period $ 10.74 $ 12.77 $ 12.17
======= ======= =======
TOTAL RETURN, AT NET ASSET VALUE(3) (15.90)% 7.20% 21.70%
======= ======= =======
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in thousands) $41,455 $51,053 $21,086
------- ------- -------
Average net assets (in thousands) $29,926 $54,526 $15,024
------- ------- -------
Ratios to average net assets:(4)
Net investment income (loss) 0.86% (0.11)% 1.75%
Total expenses 2.00% 1.54% 1.90%
Expenses after payments, waivers and/or
reimbursements and reduction to custodian
expenses 1.60% 1.54% 1.60%
------- ------- -------
Portfolio turnover rate 191% 173% 25%
(1.) For the period from January 31, 2007 (commencement of operations) to May
31, 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.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
F9 | OPPENHEIMER BARING CHINA FUND
FINANCIAL HIGHLIGHTS Continued
CLASS B YEAR ENDED MAY 31, 2009 2008 2007(1)
- -------------------------- ------- ------ -------
PER SHARE OPERATING DATA
Net asset value, beginning of period $ 12.67 $12.13 $10.00
------- ------ ------
Income (loss) from investment operations:
Net investment income (loss)(2) .01 (.13) .09
Net realized and unrealized gain (loss) (2.10) .95 2.04
------- ------ ------
Total from investment operations (2.09) .82 2.13
------- ------ ------
Dividends and/or distributions to shareholders:
Dividends from net investment income -- -- --
Distributions from net realized gain -- (.28) --
Tax return of capital distribution -- -- --
------- ------ ------
Total dividends and/or distributions to shareholders -- (.28) --
------- ------ ------
Net asset value, end of period $ 10.58 $12.67 $12.13
======= ====== ======
TOTAL RETURN, AT NET ASSET VALUE(3) (16.50)% 6.38% 21.30%
======= ====== ======
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in thousands) $ 6,573 $7,101 $1,250
------- ------ ------
Average net assets (in thousands) $ 4,687 $6,132 $ 492
------- ------ ------
Ratios to average net assets:(4)
Net investment income (loss) 0.07% (0.87)% 2.48%
Total expenses 3.17% 2.63% 4.33%(5)
Expenses after payments, waivers and/or
reimbursements and reduction to custodian
expenses 2.35% 2.35% 2.35%
------- ------ ------
Portfolio turnover rate 191% 173% 25%
(1.) For the period from January 31, 2007 (commencement of operations) to May
31, 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.) The fiscal 2007 total expenses ratio is higher due to the Fund's limited
operating history.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
F10 | OPPENHEIMER BARING CHINA FUND
CLASS C YEAR ENDED MAY 31, 2009 2008 2007(1)
- -------------------------- ------- ------- -------
PER SHARE OPERATING DATA
Net asset value, beginning of period $ 12.66 $ 12.13 $10.00
------- ------- ------
Income (loss) from investment operations:
Net investment income (loss)(2) .01 (.13) .08
Net realized and unrealized gain (loss) (2.10) .95 2.05
------- ------- ------
Total from investment operations (2.09) .82 2.13
------- ------- ------
Dividends and/or distributions to shareholders:
Dividends from net investment income -- --(3) --
Distributions from net realized gain -- (.28) --
Tax return of capital distribution -- (.01) --
------- ------- ------
Total dividends and/or distributions to shareholders -- (.29) --
------- ------- ------
Net asset value, end of period $ 10.57 $ 12.66 $12.13
======= ======= ======
TOTAL RETURN, AT NET ASSET VALUE(4) (16.51)% 6.39% 21.30%
======= ======= ======
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in thousands) $11,994 $13,853 $ 933
------- ------- ------
Average net assets (in thousands) $ 8,887 $11,395 $ 445
------- ------- ------
Ratios to average net assets:(5)
Net investment income (loss) 0.09% (0.85)% 2.21%
Total expenses 2.77% 2.40% 4.15%(6)
Expenses after payments, waivers and/or
reimbursements and reduction to custodian
expenses 2.35% 2.35% 2.35%
------- ------- ------
Portfolio turnover rate 191% 173% 25%
(1.) For the period from January 31, 2007 (commencement of operations) to May
31, 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.) The fiscal 2007 total expenses ratio is higher due to the Fund's limited
operating history.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
F11 | OPPENHEIMER BARING CHINA FUND
FINANCIAL HIGHLIGHTS Continued
CLASS N YEAR ENDED MAY 31, 2009 2008 2007(1)
- -------------------------- ------- ------ -------
PER SHARE OPERATING DATA
Net asset value, beginning of period $ 12.74 $12.15 $10.00
------- ------ ------
Income (loss) from investment operations:
Net investment income (loss)(2) .04 (.06) .12
Net realized and unrealized gain (loss) (2.09) .95 2.03
------- ------ ------
Total from investment operations (2.05) .89 2.15
------- ------ ------
Dividends and/or distributions to shareholders:
Dividends from net investment income -- (.01) --
Distributions from net realized gain -- (.28) --
Tax return of capital distribution -- (.01) --
------- ------ ------
Total dividends and/or distributions to shareholders -- (.30) --
------- ------ ------
Net asset value, end of period $ 10.69 $12.74 $12.15
======= ====== ======
TOTAL RETURN, AT NET ASSET VALUE(3) (16.09)% 6.89% 21.50%
======= ====== ======
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in thousands) $ 1,468 $1,642 $ 256
------- ------ ------
Average net assets (in thousands) $ 1,106 $1,595 $ 102
------- ------ ------
Ratios to average net assets:(4)
Net investment income (loss) 0.51% (0.37)% 3.09%
Total expenses 2.34% 1.92% 2.71%
Expenses after payments, waivers and/or
reimbursements and reduction to custodian
expenses 1.85% 1.85% 1.85%
------- ------ ------
Portfolio turnover rate 191% 173% 25%
(1.) For the period from January 31, 2007 (commencement of operations) to May
31, 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.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
F12 | OPPENHEIMER BARING CHINA FUND
CLASS Y YEAR ENDED MAY 31, 2009 2008 2007(1)
- -------------------------- ------- ------ --------
PER SHARE OPERATING DATA
Net asset value, beginning of period $ 12.81 $12.18 $10.00
------- ------ ------
Income (loss) from investment operations:
Net investment income(2) .07 .07 .12
Net realized and unrealized gain (loss) (2.08) .91 2.06
------- ------ ------
Total from investment operations (2.01) .98 2.18
------- ------ ------
Dividends and/or distributions to shareholders:
Dividends from net investment income -- (.03) --
Distributions from net realized gain -- (.28) --
Tax return of capital distribution -- (.04) --
------- ------ ------
Total dividends and/or distributions to shareholders -- (.35) --
------- ------ ------
Net asset value, end of period $ 10.80 $12.81 $12.18
======= ====== ======
TOTAL RETURN, AT NET ASSET VALUE(3) (15.69)% 7.58% 21.80%
======= ====== ======
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in thousands) $ 1,482 $2,557 $ 7
------- ------ ------
Average net assets (in thousands) $ 1,553 $1,808 $ 4
------- ------ ------
Ratios to average net assets:(4)
Net investment income 0.83% 0.45% 3.16%
Total expenses 1.36% 1.12% 1.83%
Expenses after payments, waivers and/or
reimbursements and reduction to custodian
expenses 1.26% 1.12% 1.35%
------- ------ ------
Portfolio turnover rate 191% 173% 25%
(1.) For the period from January 31, 2007 (commencement of operations) to May
31, 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.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
F13 | OPPENHEIMER BARING CHINA FUND
NOTES TO FINANCIAL STATEMENTS
1. SIGNIFICANT ACCOUNTING POLICIES
Oppenheimer Baring China Fund (the "Fund"), is an open-end management investment
company registered under the Investment Company Act of 1940, as amended. The
Fund's investment objective is to seek 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 Asset Management, Inc.
(the "Sub-Adviser").
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. Prior to January 1, 2009, the Fund assessed a
2% fee on the proceeds of fund shares that were redeemed (either by selling or
exchanging to another Oppenheimer fund) within 30 days of their purchase. The
fee, which was retained by the Fund, is accounted for as an addition to paid-in
capital.
The following is a summary of significant accounting policies consistently
followed by the Fund.
SECURITIES VALUATION. The Fund calculates the net asset value of its shares as
of the close of the New York Stock Exchange (the "Exchange"), normally 4:00 P.M.
Eastern time, on each day the Exchange is open for trading.
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.
F14 | OPPENHEIMER BARING CHINA FUND
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 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.
F15 | OPPENHEIMER BARING CHINA FUND
NOTES TO FINANCIAL STATEMENTS Continued
1. SIGNIFICANT ACCOUNTING POLICIES Continued
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.
STRUCTURED SECURITIES. The Fund invests in structured securities whose market
values, interest rates and/or redemption prices are linked to the performance of
underlying foreign currencies, interest rate spreads, stock market indices,
prices of individual securities, commodities or other financial instruments or
the occurrence of other specific events. The structured securities are often
leveraged, increasing the volatility of each note's market value relative to the
change in the underlying linked financial element or event. Fluctuations in
value of these securities are recorded as unrealized gains and losses in the
accompanying Statement of Operations. The Fund records a realized gain or loss
when a structured security is sold or matures.
FOREIGN CURRENCY TRANSLATION. The Fund's accounting records are maintained in
U.S. dollars. The values of securities denominated in foreign currencies and
amounts related to the purchase and sale of foreign securities and foreign
investment income are translated into U.S. dollars as of the close of the
Exchange, normally 4:00 P.M. Eastern time, on each day the Exchange is open for
trading. Foreign exchange rates may be valued primarily using a reliable bank,
dealer or service authorized by the Board of Trustees.
Reported net realized gains and losses from foreign currency transactions
arise from sales of portfolio securities, sales and maturities of short-term
securities, sales of foreign currencies, exchange rate fluctuations between the
trade and settlement dates on securities transactions, and the difference
between the amounts of dividends, interest, and foreign withholding taxes
recorded on the Fund's books and the U.S. dollar equivalent of the amounts
actually received or paid. Net unrealized appreciation and depreciation on the
translation of assets and liabilities denominated in foreign currencies arise
from changes in the values of assets and liabilities, including investments in
securities at fiscal period end, resulting from changes in exchange rates.
The effect of changes in foreign currency exchange rates on investments is
separately identified from the fluctuations arising from changes in market
values of securities held and reported with all other foreign currency gains and
losses in the Fund's Statement of Operations.
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.
F16 | OPPENHEIMER BARING CHINA FUND
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
SECURITIES AND
UNDISTRIBUTED UNDISTRIBUTED OTHER INVESTMENTS
NET INVESTMENT LONG-TERM ACCUMULATED LOSS FOR FEDERAL INCOME
INCOME GAIN CARRYFORWARD(1,2,3,4) TAX,PURPOSES
- -------------- ------------- --------------------- -------------------
$330,965 $-- $35,146,332 $6,174,265
(1.) As of May 31, 2009, the Fund had $30,807,297 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 $30,807,297
(2.) As of May 31, 2009, the Fund had $4,339,035 of post-October losses
available to offset future realized capital gains, if any. Such losses, if
unutilized, will expire in 2018.
(3.) During the fiscal year ended May 31, 2009, the Fund did not utilize any
capital loss carryforward.
(4.) 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
REDUCTION TO NET INVESTMENT REALIZED LOSS
PAID-IN CAPITAL INCOME ON INVESTMENTS
- --------------- -------------- ---------------
$22,876 $43,298 $20,422
F17 | OPPENHEIMER BARING CHINA FUND
NOTES TO FINANCIAL STATEMENTS Continued
1.SIGNIFICANT ACCOUNTING POLICIES Continued
The tax character of distributions paid during the years ended May 31, 2009 and
May 31, 2008 was as follows:
YEAR ENDED YEAR ENDED
MAY 31, 2009 MAY 31, 2008
------------ ------------
Distributions paid from:
Ordinary income $-- $1,877,925
Return of capital -- 150,823
--- ----------
Total $-- $2,028,748
=== ==========
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 $ 54,543,293
Federal tax cost of other investments 1,215,716
------------
Total federal tax cost $ 55,759,009
============
Gross unrealized appreciation $ 7,735,588
Gross unrealized depreciation (1,561,323)
------------
Net unrealized appreciation $ 6,174,265
============
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 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.
F18 | OPPENHEIMER BARING CHINA FUND
INVESTMENT INCOME. Dividend income is recorded on the ex-dividend date or upon
ex-dividend notification in the case of certain foreign dividends where the
ex-dividend date may have passed. Non-cash dividends included in dividend
income, if any, are recorded at the fair market value of the securities
received. Interest income is recognized on an accrual basis. Discount and
premium, which are included in interest income on the Statement of Operations,
are amortized or accreted daily.
CUSTODIAN FEES. "Custodian fees and expenses" in the Statement of Operations may
include interest expense incurred by the Fund on any cash overdrafts of its
custodian account during the period. Such cash overdrafts may result from the
effects of failed trades in portfolio securities and from cash outflows
resulting from unanticipated shareholder redemption activity. The Fund pays
interest to its custodian on such cash overdrafts, to the extent they are not
offset by positive cash balances maintained by the Fund, at a rate equal to the
Federal Funds Rate plus 0.50%. The "Reduction to custodian expenses" line item,
if applicable, represents earnings on cash balances maintained by the Fund
during the period. Such interest expense and other custodian fees may be paid
with these earnings.
SECURITY TRANSACTIONS. Security transactions are recorded on the trade date.
Realized gains and losses on securities sold are determined on the basis of
identified cost.
INDEMNIFICATIONS. The Fund's organizational documents provide current and former
trustees and officers with a limited indemnification against liabilities arising
in connection with the performance of their duties to the Fund. In the normal
course of business, the Fund may also enter into contracts that provide general
indemnifications. The Fund's maximum exposure under these arrangements is
unknown as this would be dependent on future claims that may be made against the
Fund. The risk of material loss from such claims is considered remote.
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:
YEAR ENDED MAY 31, 2009 YEAR ENDED MAY 31, 2008
------------------------- -------------------------
SHARES AMOUNT SHARES AMOUNT
---------- ------------ ---------- ------------
CLASS A
Sold 2,925,783 $ 25,602,127 6,971,462 $113,730,463
Dividends and/or
distributions reinvested -- -- 81,018 1,254,121
Redeemed (3,063,991) (26,676,102)(1) (4,786,454) (72,981,612)(2)
---------- ------------ ---------- ------------
Net increase (decrease) (138,208) $ (1,073,975) 2,266,026 $ 42,002,972
========== ============ ========== ============
F19 | OPPENHEIMER BARING CHINA FUND
NOTES TO FINANCIAL STATEMENTS Continued
2.SHARES OF BENEFICIAL INTEREST Continued
YEAR ENDED MAY 31, 2009 YEAR ENDED MAY 31, 2008
------------------------- -------------------------
SHARES AMOUNT SHARES AMOUNT
---------- ------------ ---------- ------------
CLASS B
Sold 428,202 $ 3,608,181 781,029 $ 12,536,961
Dividends and/or
distributions reinvested -- -- 9,306 143,406
Redeemed (367,433) (3,240,426)(1) (332,817) (4,866,025)(2)
--------- ------------ --------- ------------
Net increase 60,769 $ 367,755 457,518 $ 7,814,342
========= ============ ========= ============
CLASS C
Sold 619,066 $ 5,302,313 1,766,162 $ 29,091,628
Dividends and/or
distributions reinvested -- -- 19,077 293,788
Redeemed (578,443) (5,308,203)(1) (767,614) (11,803,552)(2)
--------- ------------ --------- ------------
Net increase (decrease) 40,623 $ (5,890) 1,017,625 $ 17,581,864
========= ============ ========= ============
CLASS N
Sold 98,075 $ 906,231 245,542 $ 3,940,268
Dividends and/or
distributions reinvested -- -- 2,119 32,776
Redeemed (89,614) (833,481)(1) (139,843) (2,148,776)(2)
--------- ------------ --------- ------------
Net increase 8,461 $ 72,750 107,818 $ 1,824,268
========= ============ ========= ============
CLASS Y
Sold 183,653 $ 1,518,760 291,965 $ 4,822,024
Dividends and/or
distributions reinvested -- -- 3,866 59,880
Redeemed (246,101) (2,023,933)(1) (96,739) (1,402,781)(2)
--------- ------------ --------- ------------
Net increase (decrease) (62,448) $ (505,173) 199,092 $ 3,479,123
========= ============ ========= ============
(1.) Net of redemption fees of $2,967, $465, $881, $110, and $154 for Class A,
Class B, Class C, Class N and Class Y, respectively.
(2.) Net of redemption fees of $51,718, $5,817, $10,808, $1,513, and $1,715 for
Class A, Class B, Class C, Class N, and Class Y, respectively.
3. PURCHASES AND SALES OF SECURITIES
The aggregate cost of purchases and proceeds from sales of securities, other
than short-term obligations, for the year ended May 31, 2009, were as follows:
PURCHASES SALES
----------- -----------
Investment securities $88,031,411 $89,650,262
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES
MANAGEMENT FEES. Under the investment advisory agreement, the Fund pays the
Manager a management fee based on the daily net assets of the Fund at an annual
rate as shown in the following table:
FEE SCHEDULE
- ------------
Up to $250 million 1.00%
Next $250 million 0.95
Next $500 million 0.90
Over $1.0 billion 0.85
F20 | OPPENHEIMER BARING CHINA FUND
SUB-ADVISER FEES. The Manager retains the Sub-Adviser to provide the day-to-day
portfolio management of the Fund. The Manager pays the Sub-Adviser an annual fee
equal to 40% of the management fee received by the Manager from the Fund. For
the year ended May 31, 2009, the Manager paid $174,819 to the Sub-Adviser for
its services to 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
$157,323 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. Fees incurred by the Fund under the Plans
are detailed in the Statement of Operations. The Distributor's aggregate
uncompensated expenses under the Plans at March 31, 2009 were as follows:
Class B $ 94,462
Class C 156,967
Class N 38,445
F21 | OPPENHEIMER BARING CHINA FUND
NOTES TO FINANCIAL STATEMENTS Continued
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES Continued
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
YEAR ENDED DISTRIBUTOR DISTRIBUTOR DISTRIBUTOR DISTRIBUTOR DISTRIBUTOR
---------- ------------- ------------- ------------- ------------- -------------
May 31, 2009 $36,936 $22,001 $38,596 $7,822 $10
WAIVERS AND REIMBURSEMENTS OF EXPENSES. The Manager has agreed to waive its
management fees and/or reimburse expenses such that "Expenses after waivers,
payments and/or reimbursements and reduction to custodian expenses" will not
exceed 1.60% for Class A shares, 2.35% for Class B shares and Class C shares,
1.85% for Class N shares and 1.35% for Class Y shares, respectively. During the
year ended May 31, 2009, the Manager reimbursed the Fund $71,389, $17,919,
$23,877, $2,602 and $125 for Class A, Class B, Class C, Class N and Class Y
shares, respectively. These undertakings are voluntary and may be amended or
withdrawn at any time.
The Manager has agreed to reimburse the Fund certain costs incurred by the
Fund in connection with the pending reorganization as described below. During
the year ended May 31, 2009, the Manager reimbursed the Fund $11,536 for
reorganization-related costs.
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.
During the year ended May 31, 2009, OFS waived transfer and shareholder
servicing agent fees as follows:
Class A $41,384
Class B 19,229
Class C 11,393
Class N 2,549
Class Y 1,064
5. FOREIGN CURRENCY EXCHANGE CONTRACTS
The Fund may enter into current and forward foreign currency exchange contracts
for the purchase or sale of a foreign currency at a negotiated rate at a future
date.
Foreign currency exchange contracts are reported on a schedule following
the Statement of Investments. These contracts will be valued daily based upon
the closing prices of the currency rates determined at the close of the Exchange
as provided by a bank, dealer or
F22 | OPPENHEIMER BARING CHINA FUND
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.
6. PENDING AGREEMENT AND PLAN OF REORGANIZATION
The Board of Trustees of the Fund has determined that it is in the best interest
of the Fund's shareholders that the Fund reorganize with and into Oppenheimer
Developing Markets Fund ("Developing Markets"). The Fund's Board unanimously
approved an Agreement and Plan of Reorganization (the "Agreement") to be entered
into between the Fund and Developing Markets. Pursuant to the Agreement,
Developing Markets will acquire substantially all of the assets and assume
certain liabilities of the Fund in exchange for shares of Developing Markets
(the "Reorganization"). If the Reorganization takes place, Fund shareholders
will receive shares of Developing Markets equal in value to the value of the net
assets of the shares of the Fund they held immediately prior to the
Reorganization. Following the Reorganization, the Fund will liquidate, dissolve
and terminate its registration as an investment company under the Investment
Company Act of 1940.
The Reorganization is conditioned upon, among other things, approval by the
Fund's shareholders. The shareholder meeting is scheduled for July 31, 2009. If
approved by the shareholders and certain conditions required by the Agreement
are satisfied, the Reorganization is expected to take place on or about August
7, 2009.
7. 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
F23 | OPPENHEIMER BARING CHINA FUND
NOTES TO FINANCIAL STATEMENTS Continued
7. PENDING LITIGATION Continued
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.
F24 | OPPENHEIMER BARING CHINA FUND
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
THE BOARD OF TRUSTEES AND SHAREHOLDERS OF OPPENHEIMER BARING CHINA FUND:
We have audited the accompanying statement of assets and liabilities of
Oppenheimer Baring China Fund, including the statement of investments, as of May
31, 2009, and the related statement of operations for the year then ended, the
statements of changes in net assets for each of the years in the two-year period
then ended, and the financial highlights for each of the years in the two-year
period then ended and for the period January 31, 2007 (commencement of
operations) to May 31, 2007. 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 and brokers or by other appropriate auditing procedures where replies
from brokers were not received. 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 China Fund as of May 31, 2009, the results of its operations
for the year then ended, the changes in its net assets for each of the years in
the two-year period then ended, and the financial highlights for each of the
years in the two-year period then ended and for the period January 31, 2007
(commencement of operations) to May 31, 2007, in conformity with U.S. generally
accepted accounting principles.
KPMG LLP
Denver, Colorado
July 20, 2009
F25 | OPPENHEIMER BARING CHINA FUND
THIS PAGE INTENTIONALLY LEFT BLANK.
F26 | OPPENHEIMER BARING CHINA 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.
None of the dividends paid by the Fund during the fiscal year ended May 31,
2009 are 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.
$888,089 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, $3,380 or 20.12% 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 $16,798 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 $354,944 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.
21 | OPPENHEIMER BARING CHINA 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.
22 | OPPENHEIMER BARING CHINA FUND
TRUSTEES AND OFFICERS Unaudited
PRINCIPAL OCCUPATION(S) DURING THE PAST 5 YEARS; OTHER
NAME, POSITION(S) HELD WITH THE TRUSTEESHIPS/DIRECTORSHIPS HELD; NUMBER OF PORTFOLIOS IN THE FUND
FUND, LENGTH OF SERVICE, AGE COMPLEX CURRENTLY OVERSEEN
- ------------------------------- -------------------------------------------------------------------
BRIAN F. WRUBLE, Chairman (since August 2007) and Trustee (since August 1991) of
Chairman of the Board of the Board of Trustees of The Jackson Laboratory (non-profit);
Trustees (since 2007) and Director of Special Value Opportunities Fund, LLC (registered
Trustee (since 2006) investment company) (affiliate of the Manager's parent company)
Age: 66 (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 (since April
Trustee (since 2007) 2006); Director of Correctnet (since January 2006); Trustee of
Age: 69 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 (policy research
Trustee (since 2006) foundation) (since 2005); Director of ICI Education Foundation
Age: 68 (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); Distinguished
Trustee (since 2006) Presidential Fellow for International Affairs (since 2002) and
Age: 70 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
23 | OPPENHEIMER BARING CHINA FUND
TRUSTEES AND OFFICERS Unaudited / Continued
PHILLIP A. GRIFFITHS, Initiative Group (since 1999); Member of the American
Continued Philosophical Society (since 1996); Trustee of Woodward Academy
(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) (since June 2007);
Trustee (since 2006) Trustee of the American Symphony Orchestra (not-for-profit) (since
Age: 66 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 (privately held
Trustee (since 2006) financial advisor) (since January 2006); Managing Director of
Age: 57 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 Women's/Faulkner
Trustee (since 2008) Hospital (non-profit hospital) (since 2000); Chair of Board of
Age: 63 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 2007); Director
Trustee (since 2006) of the following medical device companies: Medintec (since 1992)
Age: 68 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 Recovery Institute
Trustee (since 2006) Commission (enhanced oil recovery study) (since 2004); President
Age: 61 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.
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.
24 | OPPENHEIMER BARING CHINA FUND
RUSSELL S. REYNOLDS, JR., Chairman of RSR Partners (formerly "The Directorship Search Group,
Trustee (since 2006) Inc.") (corporate governance consulting and executive recruiting)
Age: 77 (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 CENTER, 225
AND OFFICER 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 2001); Chief
President and Principal Executive Officer of the Manager (June 2001-December 2008);
Executive Officer and Trustee President of the Manager (September 2000-February 2007); President
(since 2006) and director or trustee of other Oppenheimer funds; President and
Age: 59 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.
OTHER OFFICERS OF THE FUND THE ADDRESSES OF THE OFFICERS IN THE CHART BELOW ARE 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 of the Manager
Vice President and Chief (since March 2004); Chief Compliance Officer of OppenheimerFunds
Compliance Officer Distributor, Inc., Centennial Asset Management and Shareholder
(since 2006) Services, Inc. (since March 2004); Vice President of
Age: 58 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.
25 | OPPENHEIMER BARING CHINA FUND
TRUSTEES AND OFFICERS Unaudited / Continued
BRIAN W. WIXTED, Senior Vice President of the Manager (since March 1999); Treasurer
Treasurer and Principal of the Manager and the following: HarbourView Asset Management
Financial & Accounting Corporation, Shareholder Financial Services, Inc., Shareholder
Officer (since 2006) Services, Inc., Oppenheimer Real Asset Management, Inc. and
Age: 49 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 General Counsel
Secretary (since 2006) (since March 2002) of the Manager; General Counsel and Director of
Age: 60 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.
26 | OPPENHEIMER BARING CHINA 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 $21,300 in fiscal 2009 and $21,300 in fiscal 2008.
(b) Audit-Related Fees
The principal accountant for the audit of the registrant's annual financial
statements billed $5,750 in fiscal 2009 no such fees in fiscal 2008.
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 $5,000 in fiscal 2009 and no such fees 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 $234,950 in fiscal 2009 and $381,236 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 China 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