N-Q 1 d110557dnq.htm OPPENHEIMER DEVELOPING MARKETS FUND Oppenheimer Developing Markets Fund

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM N-Q

QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED

MANAGEMENT INVESTMENT COMPANY

Investment Company Act file number 811-07657

Oppenheimer Developing Markets Fund

(Exact name of registrant as specified in charter)

6803 South Tucson Way, Centennial, Colorado 80112-3924

(Address of principal executive offices) (Zip code)

Arthur S. Gabinet

OFI Global Asset Management, Inc.

225 Liberty Street, 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: August 31

Date of reporting period: 11/30/2015

Item 1. Schedule of Investments.

STATEMENT OF INVESTMENTS November 30, 2015 Unaudited

 

     Shares       Value    

 

  

Common Stocks—91.9%

  

   

 

  

Consumer Discretionary—20.8%

  

   

 

  

Automobiles—0.9%

  

Astra

      

International Tbk PT

      630,018,800          $ 269,250,334     
     

 

  

Diversified Consumer Services—2.8%

  

   
Estacio Participacoes SA1      46,187,550           160,086,598     

 

  
Kroton Educacional SA1      115,616,536           276,415,859     

 

  
New Oriental Education & Technology Group, Inc., Sponsored ADR1      14,173,562           411,316,769     
     

 

 

  
        847,819,226     
     

 

  

Hotels, Restaurants & Leisure—5.1%

  

   
China Lodging Group Ltd., ADR2      1,682,369           47,981,164     

 

  
Genting Bhd1      219,961,100           370,360,947     

 

  
Genting Malaysia Bhd      118,532,400           121,922,304     

 

  
Homeinns Hotel Group, ADR1,2      6,717,713           207,241,446     

 

  
Jollibee Foods Corp.      46,318,793           197,368,901     

 

  
Las Vegas Sands Corp.      6,437,550           283,638,453     

 

  
Melco Crown Entertainment Ltd., ADR      19,794,484           321,660,365     
     

 

 

  
            1,550,173,580     
     

 

  

Household Durables—0.1%

  

   
Cyrela Brazil Realty SA Empreendimentos e Participacoes1      15,641,200           29,875,541     
     

 

  

Internet & Catalog Retail—5.3%

  

   
Ctrip.com International Ltd., ADR1,2      7,900,702           845,454,121     

 

  
JD.com, Inc., ADR2      25,237,545           774,287,881     
     

 

 

  
        1,619,742,002     
     

 

  

Media—2.5%

  

   
Grupo Televisa SAB, Sponsored ADR      10,324,856           291,160,939     
     Shares       Value    

 

  

Media (Continued)

      

 

  
Zee Entertainment Enterprises Ltd.1      77,074,068          $ 475,759,531     
     

 

 

  
        766,920,470     
     

 

  

Textiles, Apparel & Luxury Goods—4.1%

  

   
Cie Financiere Richemont SA      1,966,632           146,843,662     

 

  

Kering

      1,683,361           290,086,238     

 

  
LVMH Moet Hennessy Louis Vuitton SE      2,212,409           370,704,390     

 

  
Prada SpA      126,303,810           443,721,772     
     

 

 

  
            1,251,356,062     
     

 

  

Consumer Staples—10.7%

  

   

 

  

Beverages—3.5%

      
Anadolu Efes Biracilik Ve Malt Sanayii AS      22,438,068           153,556,787     

 

  
Fomento Economico Mexicano SAB de CV      39,672,290           382,885,190     

 

  
Nigerian Breweries plc      200,536,868           121,035,651     

 

  
SABMiller plc      5,075,524           308,012,004     

 

  
Tsingtao Brewery Co. Ltd., Cl. H      20,744,000           93,088,064     
     

 

 

  
        1,058,577,696     
     

 

  

Food & Staples Retailing—5.5%

  

   
Almacenes Exito SA1      15,671,455           52,327,888     

 

  
Almacenes Exito SA, GDR1,3      11,250,373           39,308,803     

 

  
BIM Birlesik Magazalar AS      9,494,158           177,598,266     

 

  
Casino Guichard Perrachon SA      213,668           12,197,615     

 

  
CP ALL PCL      141,909,100           185,869,902     

 

  
Magnit PJSC1      5,845,481           1,062,201,771     

 

  
Sumber Alfaria Trijaya Tbk PT      1,399,700         58,667   

 

  
Wal-Mart de Mexico SAB de CV      60,721,653           161,379,882     
     

 

 

  
        1,690,942,794     
     

 

  

Food Products—1.7%

  

   
Tingyi Cayman Islands Holding Corp.      194,648,000           281,252,722     
 

 

 

1        OPPENHEIMER DEVELOPING MARKETS FUND

STATEMENT OF INVESTMENTS Unaudited / Continued

 

     Shares       Value    

 

  

Food Products (Continued)

  

 

  

Want Want China Holdings Ltd.

      282,336,000          $ 222,731,604     
     

 

 

  
        503,984,326     
     

 

  

Energy—2.9%

  

 

  

Energy Equipment & Services—0.6%

  

   
China Oilfield Services Ltd., Cl. H      53,624,000           53,553,317     

 

  

Tenaris SA, ADR

      5,317,141           138,883,723     
     

 

 

  
        192,437,040     
     

 

  

Oil, Gas & Consumable Fuels—2.3%

  

Novatek OAO, Sponsored GDR      7,336,884           685,113,716     
     

 

  

Financials—24.4%

  

 

  

Commercial Banks—7.1%

  

   
Bancolombia SA, Sponsored ADR      721,132           20,436,881     

 

  
Commercial International Bank Egypt SAE      28,529,090           158,493,932     

 

  
Grupo Aval Acciones y Valores SA, ADR      34,430,533           239,980,815     

 

  
Grupo Financiero Banorte SAB de CV, Cl. O      100,394,089           538,358,060     

 

  
Grupo Financiero Inbursa SAB de CV, Cl. O      145,629,981           280,573,739     

 

  
Guaranty Trust Bank plc      516,237,944           52,022,630     

 

  
ICICI Bank Ltd., Sponsored ADR      37,361,555           310,474,522     

 

  
Kotak Mahindra Bank Ltd.2      105,371           1,095,523     

 

  
Kotak Mahindra Bank Ltd.      9,445,368           97,894,065     

 

  
Sberbank of Russia PJSC, ADR      55,466,440           370,637,679     

 

  
Zenith Bank plc      1,278,261,810           100,547,040     
     

 

 

  
            2,170,514,886     
     

 

  

Diversified Financial Services—3.3%

  

   
BM&FBovespa SA-Bolsa de Valores Mercadorias e Futuros1      111,087,648           326,458,144     
     Shares       Value    

 

  

Diversified Financial Services (Continued)

  

 

  
Grupo de Inversiones Suramericana SA      17,689,539          $ 182,036,978     

 

  
Haci Omer Sabanci Holding AS      38,671,036           108,155,332     

 

  
Hong Kong Exchanges & Clearing Ltd.      14,298,652           372,454,906     
     

 

 

  
        989,105,360     
     

 

  

Insurance—6.7%

  

   

AIA Group Ltd.

      94,044,200           562,998,728     

 

  
China Life Insurance Co. Ltd., Cl. H      89,920,000           312,099,471     

 

  
China Pacific Insurance Group Co. Ltd., Cl. H      72,735,000           298,865,647     

 

  

Old Mutual plc

      140,736,241           436,978,367     

 

  
People’s Insurance Co. Group of China Ltd. (The), Cl. H      155,464,000           80,036,956     

 

  
PICC Property & Casualty Co. Ltd., Cl. H      89,874,000           194,254,199     

 

  

Sul America SA1

      27,427,333           152,767,905     
     

 

 

  
            2,038,001,273     
     

 

  

Real Estate Management & Development—3.3%

  

Global Logistic Properties Ltd.

      111,343,000           155,215,244     

 

  

Hang Lung Group Ltd.

      39,349,750           133,860,648     

 

  

Hang Lung Properties Ltd.

      128,458,881           303,264,388     

 

  

SM Prime Holdings, Inc.

      697,345,672           317,484,399     

 

  

SOHO China Ltd.

      193,815,000           80,877,158     
     

 

 

  
        990,701,837     

 

  

Thrifts & Mortgage Finance—4.0%

  

   
Housing Development Finance Corp. Ltd.      67,480,476           1,230,776,459     

 

  

Health Care—5.6%

  

   

 

  

Health Care Providers & Services—2.5%

  

   
Apollo Hospitals Enterprise Ltd.1      12,086,295           240,062,239     
 

 

 

2        OPPENHEIMER DEVELOPING MARKETS FUND

STATEMENT OF INVESTMENTS Unaudited / Continued

 

     Shares      Value  

 

  

Health Care Providers & Services (Continued)

  

 

  

Diagnosticos da America SA1

      27,003,700           $ 64,211,434     

 

  
Sinopharm Group Co. Ltd., Cl. H1      111,798,400           468,480,277     
     

 

 

  
        772,753,950     

 

  

Life Sciences Tools & Services—0.4%

  

   
WuXi PharmaTech Cayman, Inc., ADR2      2,327,133           106,349,978     

 

  

Pharmaceuticals—2.7%

  

   

Cipla Ltd.

      13,835,365           133,692,059     

 

  
Dr. Reddy’s Laboratories Ltd.      7,255,073           339,288,995     

 

  
Glenmark Pharmaceuticals Ltd.      6,412,001           94,300,130     

 

  

Lupin Ltd.

      3,230,639           86,917,878     

 

  
Sun Pharmaceutical Industries Ltd.      15,105,114           165,013,285     
     

 

 

  
        819,212,347     

 

  

Industrials—5.5%

  

   

 

  

Aerospace & Defense—1.4%

  

   
Embraer SA, Sponsored ADR1      13,662,162           427,489,049     

 

  

Industrial Conglomerates—2.1%

  

   
Jardine Strategic Holdings Ltd.      11,800,443           318,216,882     

 

  
SM Investments Corp.      18,506,926           330,784,661     
     

 

 

  
        649,001,543     

 

  

Transportation Infrastructure—2.0%

  

   
Airports of Thailand PCL      9,942,700           86,201,929     

 

  
DP World Ltd.      21,344,136           398,610,085     

 

  
Grupo Aeroportuario del Sureste SAB de CV, Cl. B      8,530,765           129,107,049     
     

 

 

  
        613,919,063     

 

  

Information Technology—18.7%

  

   

 

  

Internet Software & Services—12.7%

  

   
Alibaba Group Holding Ltd., Sponsored ADR2      13,045,100               1,096,832,008     

 

  
Baidu, Inc., Sponsored ADR2      4,733,964           1,031,862,133     
     Shares      Value  

 

  

Internet Software & Services (Continued)

  

 

  

MercadoLibre, Inc.1

      1,603,753          $ 197,646,520     

 

  

NAVER Corp.

      662,503           360,500,813     

 

  

Tencent Holdings Ltd.

      59,259,410           1,179,633,126     
     

 

 

  
        3,866,474,600     

 

  

IT Services—3.9%

  

   

Infosys Ltd.

      49,640,457           804,357,393     

 

  
Tata Consultancy Services Ltd.      10,977,181           390,691,198     
     

 

 

  
        1,195,048,591     

 

  

Semiconductors & Semiconductor Equipment— 2.1%

  

Taiwan Semiconductor Manufacturing Co. Ltd.      150,995,429           648,324,552     

 

  

Materials—2.5%

      

 

  

Chemicals—0.2%

      

Asian Paints Ltd.

      4,610,800           57,998,263     

 

  

Construction Materials—1.4%

  

   
Indocement Tunggal Prakarsa Tbk PT      102,713,200           138,456,318     

 

  
Semen Indonesia Persero Tbk PT      159,847,300           122,441,299     

 

  

UltraTech Cement Ltd.

      3,881,542           163,136,359     
     

 

 

  
        424,033,976     

 

  

Metals & Mining—0.9%

  

   

Alrosa PAO

      211,056,317           166,603,424     

 

  

Glencore plc2

      73,873,319           107,600,130     
     

 

 

  
        274,203,554     

 

  

Telecommunication Services—0.8%

  

   

 

  

Wireless Telecommunication Services—0.8%

  

America Movil SAB de CV, Cl. L, ADR      15,956,729           258,339,442     
     

 

 

  

Total Common Stocks

(Cost $25,119,808,353)

             27,998,441,510     

 

  

Preferred Stocks—2.5%

  

   

 

  
Banco Davivienda SA, Preference      12,909,328           84,157,357     

 

  
Cia Brasileira de Distribuicao, Preference      15,190,600           192,385,474     
 

 

 

3        OPPENHEIMER DEVELOPING MARKETS FUND

STATEMENT OF INVESTMENTS Unaudited / Continued

 

     Shares      Value  

 

  

Preferred Stocks (Continued)

  

 

  
Lojas Americanas SA, Preference1      98,405,500         $ 438,488,193     

 

  
Zee Entertainment Enterprises Ltd., 6% Cum. Non- Cv.1      1,895,913,054           25,599,306     
     

 

 

  

Total Preferred Stocks

(Cost $1,016,474,111)

             740,630,330     
     Units         

 

  

Rights, Warrants and Certificates—0.0%

  

 

  

Genting Bhd Wts., Strike Price 7.96MYR, Exp. 12/18/181,2

(Cost $22,944,872)

      36,522,500           7,537,477     
     Shares     Value  

 

  

Investment Companies—5.5%

  

 

  
OFI Global China Fund, LLC, China A Series 11,2      20,024,972         $ 245,906,656     

 

  
Oppenheimer Institutional Money Market Fund, Cl. E, 0.20%1,4      1,433,560,631          1,433,560,631     
    

 

 

  

Total Investment Companies

(Cost $1,633,847,802)

        1,679,467,287     

 

  
Total Investments, at Value (Cost $27,793,075,138)      99.9 %            30,426,076,604     

 

  

Net Other Assets

(Liabilities)

      0.1           39,564,260     
  

 

 

  

Net Assets

      100.0 %    $   30,465,640,864     
  

 

 

  
 

 

Footnotes to Statement of Investments

Strike price reported in U.S. Dollars, except for those denoted in the following currency:

            MYR Malaysian Ringgit

1. Is or was an affiliate, as defined in the Investment Company Act of 1940, as amended, at or during the reporting period, by virtue of the Fund owning at least 5% of the voting securities of the issuer or as a result of the Fund and the issuer having the same investment adviser. Transactions during the reporting period in which the issuer was an affiliate are as follows:

 

     Shares
August 31,
2015		       

Gross

Additions

       

Gross

Reductions

      Shares
November 30,
2015		  

 

  

Almacenes Exito SA

      15,671,455             —           —         15,671,455     

Almacenes Exito SA, GDR

      11,250,373             —           —         11,250,373     

Apollo Hospitals Enterprise Ltd.

      12,086,295             —           —         12,086,295     

BM&FBovespa SA-Bolsa de Valores Mercadorias e Futuros

      111,087,648             —           —         111,087,648     

Ctrip.com International Ltd., ADR

      7,900,702             —           —         7,900,702     

Cyrela Brazil Realty SA Empreendimentos e Participacoesa

      30,690,700             —           15,049,500         15,641,200     

Diagnosticos da America SA

      27,003,700             —           —         27,003,700     

Embraer SA, Sponsored ADR

      13,662,162             —           —         13,662,162     

Estacio Participacoes SA

      42,037,850             4,149,700           —         46,187,550     

Genting Bhd

      219,961,100             —           —         219,961,100     

Genting Bhd Wts.a

      36,522,500             —           —         36,522,500     

Homeinns Hotel Group, ADR

      6,717,713             —           —         6,717,713     

Kroton Educacional SA

      115,616,536             —           —         115,616,536     

Lojas Americanas SA, Preferencea

      98,405,500             —           —         98,405,500     

Magnit PJSC

      5,689,221             156,260           —         5,845,481     

MercadoLibre, Inc.a

      2,669,702             —           1,065,949         1,603,753     

New Oriental Education & Technology Group, Inc., Sponsored ADR

      14,908,372             —           734,810         14,173,562     

 

4        OPPENHEIMER DEVELOPING MARKETS FUND

STATEMENT OF INVESTMENTS Unaudited / Continued

Footnotes to Statement of Investments (Continued)

 

    

Shares
August 31,

2015

     

Gross

Additions

      Gross
Reductions		     

Shares
November 30,

2015

  

 

  

OFI Global China Fund, LLC, China A Series 1

      20,020,250           4,722           —           20,024,972     

Oppenheimer Institutional Money Market Fund, Cl. E

      1,432,448,652           1,105,967,824           1,104,855,845           1,433,560,631     

Qunar Cayman Islands Ltd., ADR

      4,232,159           —           4,232,159           —     

Sinopharm Group Co. Ltd., Cl. H

      111,316,000           482,400           —           111,798,400     

Sul America SA

      27,427,333           —           —           27,427,333     

Zee Entertainment Enterprises Ltd.

      77,074,068           —           —           77,074,068     

Zee Entertainment Enterprises Ltd., 6% Cum. Non-Cv.

      1,895,913,054           —           —           1,895,913,054     

 

     Value     Income         

Realized

Gain (Loss)

  

 

  

Almacenes Exito SA

    $ 52,327,888        $ 752,199         $ —     

Almacenes Exito SA, GDR

      39,308,803          573,285           —     

Apollo Hospitals Enterprise Ltd.

      240,062,239          —           —     

BM&FBovespa SA-Bolsa de Valores Mercadorias e Futuros

      326,458,144          4,491,974           —     

Ctrip.com International Ltd., ADR

      845,454,121          —           —     

Cyrela Brazil Realty SA Empreendimentos e Participacoesa

      —   b      —           (61,623,340)    

Diagnosticos da America SA

      64,211,434          —           —     

Embraer SA, Sponsored ADR

      427,489,049          5,319           —     

Estacio Participacoes SA

      160,086,598          —           —     

Genting Bhd

      370,360,947          —           —     

Genting Bhd Wts.a

      —   b      —           —     

Homeinns Hotel Group, ADR

      207,241,446          —           —     

Kroton Educacional SA

      276,415,859          1,393,840           —     

Lojas Americanas SA, Preferencea

      —   b      994,595           —     

Magnit PJSC

      1,062,201,771          7,004,405           —     

MercadoLibre, Inc.a

      —   b      250,292           15,088,100     

New Oriental Education & Technology Group, Inc., Sponsored ADR

      411,316,769          5,963,349           (3,818,770)    

OFI Global China Fund, LLC, China A Series 1

      245,906,656          —           —     

Oppenheimer Institutional Money Market Fund, Cl. E

      1,433,560,631          643,055           —     

Qunar Cayman Islands Ltd., ADR

      —          —           54,368,250     

Sinopharm Group Co. Ltd., Cl. H

      468,480,277          —           —     

Sul America SA

      152,767,905          256,887           —     

Zee Entertainment Enterprises Ltd.

      475,759,531          —           —     

Zee Entertainment Enterprises Ltd., 6% Cum. Non-Cv.

      25,599,306          —           —     
  

 

 

  

Total

    $   7,285,009,374        $   22,329,200         $ 4,014,240     
  

 

 

  

a. No longer an affiliate as of November 30, 2015.

b. The security is no longer an affiliate; therefore, the value has been excluded from this table.

2. Non-income producing security.

3. Represents securities sold under Rule 144A, which are exempt from registration under the Securities Act of 1933, as amended. These securities have been determined to be liquid under guidelines established by the Board of Trustees. These securities amount to $39,308,803 or 0.13% of the Fund’s net assets at period end.

4. Rate shown is the 7-day yield at period end.

 

5        OPPENHEIMER DEVELOPING MARKETS FUND

STATEMENT OF INVESTMENTS Unaudited / Continued

 

Distribution of investments representing geographic holdings, as a percentage of total investments at value, is as follows:

Geographic Holdings    Value      Percent               

 

  

China

    $ 7,786,198,040         25.6 %           

India

      4,617,057,205         15.2                

Russia

      2,284,556,590         7.5                

Brazil

      2,068,178,197         6.8                

Mexico

      2,041,804,303         6.7                

Hong Kong

      2,012,455,918         6.6                

United States

      1,963,105,740         6.5                

Philippines

      845,637,960         2.8                

United Kingdom

      744,990,371         2.5                

France

      672,988,243         2.2                

Taiwan

      648,324,552         2.1                

Colombia

      618,248,723         2.0                

Indonesia

      530,206,618         1.7                

Malaysia

      499,820,727         1.6                

Italy

      443,721,772         1.5                

Turkey

      439,310,384         1.4                

United Arab Emirates

      398,610,085         1.3                

South Korea

      360,500,813         1.2                

Nigeria

      273,605,321         0.9                

Thailand

      272,071,831         0.9                

Switzerland

      254,443,792         0.8                

Argentina

      197,646,520         0.7                

Egypt

      158,493,932         0.5                

Singapore

      155,215,244         0.5                

Luxembourg

      138,883,723         0.5                
  

 

 

  

Total

     $       30,426,076,604         100.0 %           
  

 

 

  

 

6        OPPENHEIMER DEVELOPING MARKETS FUND

NOTES TO STATEMENT OF INVESTMENTS November 30, 2015 Unaudited

 

 

1. Organization

Oppenheimer Developing Markets Fund (the “Fund”) is a diversified open-end management investment company registered under the Investment Company Act of 1940 (“1940 Act”), as amended. The Fund’s investment objective is to seek capital appreciation. The Fund’s investment adviser is OFI Global Asset Management, Inc. (“OFI Global” or the “Manager”), a wholly-owned subsidiary of OppenheimerFunds, Inc. (“OFI” or the “Sub-Adviser”). The Manager has entered into a sub-advisory agreement with OFI.

 

 

2. Significant Accounting Policies

Security Valuation. All investments in securities are recorded at their estimated fair value, as described in Note 3.

Reporting Period End Date. The last day of the Fund’s reporting period is the last day the New York Stock Exchange was open for trading during the period. The Fund’s financial statements have been presented through that date to maintain consistency with the Fund’s net asset value calculations used for shareholder transactions.

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 New York Stock Exchange (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.

 

 

3. 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, except in the case of a scheduled early closing of the Exchange, in which case the Fund will calculate net asset value of the shares as of the scheduled early closing time of the Exchange.

The Fund’s Board has adopted procedures for the valuation of the Fund’s securities and has delegated the day-to-day responsibility for valuation determinations under those procedures to the Manager. The Manager has established a Valuation Committee which is responsible for determining a “fair valuation” for any security for which market quotations are not “readily available.” The Valuation Committee’s fair valuation determinations are subject to review, approval and ratification by the Fund’s Board at its next regularly scheduled meeting covering the calendar quarter in which the fair valuation was determined.

Valuation Methods and Inputs

Securities are valued using unadjusted quoted market prices, when available, as supplied primarily by third party pricing services or dealers.

The following methodologies are used to determine the market value or the fair value of the types of securities described below:

 

7        OPPENHEIMER DEVELOPING MARKETS FUND

NOTES TO STATEMENT OF INVESTMENTS Unaudited / Continued

 

 

3. Securities Valuation (Continued)

 

Securities traded on a registered U.S. securities exchange (including exchange-traded derivatives other than futures and futures options) are valued based on the last sale price of the security reported on the principal exchange on which it is traded, prior to the time when the Fund’s assets are valued. In the absence of a sale, the security is valued at the mean between the bid and asked price on the principal exchange or, if not available from the principal exchange, obtained from two dealers. If bid and asked prices are not available from either the exchange or two dealers, the security is valued by using one of the following methodologies (listed in order of priority): (1) a bid from the principal exchange, (2) the mean between the bid and asked price as provided by a single dealer, or (3) a bid from a single dealer. A security of a foreign issuer traded on a foreign exchange, but not listed on a registered U.S. securities exchange, is valued based on the last sale price on the principal exchange on which the security is traded, as identified by the third party pricing service used by the Manager, prior to the time when the Fund’s assets are valued. If the last sale price is unavailable, the security is valued at the most recent official closing price on the principal exchange on which it is traded. If the last sales price or official closing price for a foreign security is not available, the security is valued at the mean between the bid and asked price per the exchange or, if not available from the exchange, obtained from two dealers. If bid and asked prices are not available from either the exchange or two dealers, the security is valued by using one of the following methodologies (listed in order of priority): (1) a bid from the exchange, (2) the mean between the bid and asked price as provided by a single dealer, or (3) a bid from a single dealer.

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 and government debt securities (of U.S. or foreign issuers) and municipal debt securities, event-linked bonds, loans, mortgage-backed securities, collateralized mortgage obligations, and asset-backed securities are valued at the mean between the “bid” and “asked” prices utilizing evaluated prices obtained from third party pricing services or broker-dealers who may use matrix pricing methods to determine the evaluated prices.

Short-term money market type debt securities with a remaining maturity 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. Short-term debt securities with a remaining maturity in excess of sixty days are valued at the mean between the “bid” and “asked” prices utilizing evaluated prices obtained from third party pricing services or broker-dealers.

A description of the standard inputs that may generally be considered by the third party pricing vendors in determining their evaluated prices is provided below.

Security Type    Standard inputs generally considered by third-party pricing vendors

 

Corporate debt, government debt, municipal, mortgage-backed and asset-backed securities    Reported trade data, broker-dealer price quotations, benchmark yields, issuer spreads on comparable securities, the credit quality, yield, maturity, and other appropriate factors.

 

Loans    Information obtained from market participants regarding reported trade data and broker-dealer price quotations.

 

8        OPPENHEIMER DEVELOPING MARKETS FUND

NOTES TO STATEMENT OF INVESTMENTS Unaudited / Continued

 

 

3. Securities Valuation (Continued)

 

 

Event-linked bonds    Information obtained from market participants regarding reported trade data and broker-dealer price quotations.

If a market value or price cannot be determined for a security using the methodologies described above, or if, in the “good faith” opinion of the Manager, the market value or price obtained does not constitute a “readily available market quotation,” or a significant event has occurred that would materially affect the value of the security, the security is fair valued either (i) by a standardized fair valuation methodology applicable to the security type or the significant event as previously approved by the Valuation Committee and the Fund’s Board or (ii) as determined in good faith by the Manager’s Valuation Committee. The Valuation Committee considers all relevant facts that are reasonably available, through either public information or information available to the Manager, when determining the fair value of a security. Fair value determinations by the Manager are subject to review, approval and ratification by the Fund’s Board at its next regularly scheduled meeting covering the calendar quarter in which the fair valuation was determined. Those fair valuation standardized methodologies include, but are not limited to, valuing securities at the last sale price or 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 further adjusted for any discounts related to security-specific resale restrictions. When possible, such methodologies use observable market inputs such as unadjusted 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 nor can it be assured that the Fund can obtain the fair value assigned to a security if it were to sell the security.

To assess the continuing appropriateness of security valuations, the Manager, or its third party service provider who is subject to oversight by the Manager, regularly compares prior day prices, prices on comparable securities, and sale prices to the current day prices and challenges those prices exceeding certain tolerance levels with the third party pricing service or broker source. For those securities valued by fair valuations, whether through a standardized fair valuation methodology or a fair valuation determination, the Valuation Committee reviews and affirms the reasonableness of the valuations based on such methodologies and fair valuation determinations on a regular basis after considering all relevant information that is reasonably available.

Classifications

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. 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-unadjusted quoted prices in active markets for identical assets or liabilities (including securities actively traded on a securities exchange)

 

9        OPPENHEIMER DEVELOPING MARKETS FUND

NOTES TO STATEMENT OF INVESTMENTS Unaudited / Continued

 

 

3. Securities Valuation (Continued)

 

2) Level 2-inputs other than unadjusted quoted prices that are observable for the asset or liability (such as unadjusted quoted prices for similar assets and market corroborated inputs such as interest rates, prepayment speeds, credit risks, etc.)

3) Level 3-significant unobservable inputs (including the Manager’s own judgments about assumptions that market participants would use in pricing the asset or liability).

The inputs used for valuing securities are not necessarily an indication of the risks associated with investing in those securities.

The table below categorizes amounts at period end based on valuation input level:

 

    

Level 1—
Unadjusted

Quoted Prices

     

Level 2—

Other Significant
Observable Inputs

      Level 3—
Significant
Unobservable
Inputs		      Value  

 

  

Assets Table

            

Investments, at Value:

            

Common Stocks

            

Consumer Discretionary

     $ 3,182,741,138       $ 3,152,396,077       $ —        $ 6,335,137,215    

Consumer Staples

      —          3,253,504,816         —          3,253,504,816     

Energy

      138,883,723         738,667,033         —          877,550,756     

Financials

      570,892,218         6,848,207,597         —          7,419,099,815     

Health Care

      106,349,978         1,591,966,297         —          1,698,316,275     

Industrials

      427,489,049         1,262,920,606         —          1,690,409,655     

Information Technology

      2,326,340,661         3,383,507,082         —          5,709,847,743     

Materials

      —          756,235,793         —          756,235,793     

Telecommunication Services

      258,339,442         —         —          258,339,442       

Preferred Stocks

      25,599,306         715,031,024         —          740,630,330     

Rights, Warrants and Certificates

      7,537,477         —         —          7,537,477     

Investment Companies

      1,433,560,631         245,906,656         —          1,679,467,287     
  

 

 

  

Total Assets

     $       8,477,733,623       $       21,948,342,981       $                     —        $     30,426,076,604     
  

 

 

  

Forward currency exchange contracts and futures contracts, if any, are reported at their unrealized appreciation/depreciation at measurement date, which represents the change in the contract’s value from trade date. All additional assets and liabilities included in the above table are reported at their market value at measurement date.

 

 

4. Investments and Risks

Risks of Foreign Investing. The Fund may invest in foreign securities which are subject to special risks. Securities traded in foreign markets may be less liquid and more volatile than those traded in U.S. markets. Foreign issuers are usually not subject to the same accounting and disclosure requirements that U.S. companies are subject to, which may make it difficult for the Fund to evaluate a foreign company’s operations or financial condition. A change in the value of a foreign currency against the U.S. dollar will result in a change in the U.S. dollar value of investments denominated in that foreign currency and in the value of any income or distributions the Fund may receive on those investments. The value of foreign investments may be affected by exchange control regulations, foreign taxes, higher transaction and other costs, delays in the settlement of transactions, changes in economic or monetary policy in the

 

10        OPPENHEIMER DEVELOPING MARKETS FUND

NOTES TO STATEMENT OF INVESTMENTS Unaudited / Continued

 

 

4. Investments and Risks (Continued)

 

United States or abroad, expropriation or nationalization of a company’s assets, or other political and economic factors. In addition, due to the inter-relationship of global economies and financial markets, changes in political and economic factors in one country or region could adversely affect conditions in another country or region. Investments in foreign securities may also expose the Fund to time-zone arbitrage risk. Foreign securities may trade on weekends or other days when the Fund does not price its shares. At times, the Fund may emphasize investments in a particular country or region and may be subject to greater risks from adverse events that occur in that country or region. Foreign securities and foreign currencies held in foreign banks and securities depositories may be subject to limited or no regulatory oversight.

Investments in Affiliated Funds. The Fund is permitted to invest in other mutual funds advised by the Manager (“Affiliated Funds”). Affiliated Funds are open-end management investment companies registered under the 1940 Act, as amended. The Manager is the investment adviser of, and the Sub-Adviser provides investment and related advisory services to, the Affiliated Funds. When applicable, the Fund’s investments in Affiliated Funds are included in the Statement of Investments. Shares of Affiliated Funds are valued at their net asset value per share. As a shareholder, the Fund is subject to its proportional share of the Affiliated Funds’ expenses, including their management fee. The Manager will waive fees and/or reimburse Fund expenses in an amount equal to the indirect management fees incurred through the Fund’s investment in the Affiliated Funds.

Each of the Affiliated Funds in which the Fund invests has its own investment risks, and those risks can affect the value of the Fund’s investments and therefore the value of the Fund’s shares. To the extent that the Fund invests more of its assets in one Affiliated Fund than in another, the Fund will have greater exposure to the risks of that Affiliated Fund.

Investment in Oppenheimer Institutional Money Market Fund. The Fund is permitted to invest daily available cash balances in a money market Affiliated Fund. The Fund may invest the available cash in Class E shares of Oppenheimer Institutional Money Market Fund (“IMMF”) to seek current income while preserving liquidity or for defensive purposes. IMMF is regulated as a money market fund under the Investment Company Act of 1940, as amended.

Investment in OFI Global China Fund, LLC. In seeking exposure to class A-shares of Chinese companies (“China A-Shares”), the Fund invests in OFI Global China Fund, LLC, a private investment vehicle organized under the laws of Delaware that intends to invest significantly in China A-Shares. The China A-Shares market is an active Chinese market that includes a large number of Chinese equities as well as smaller or emerging Chinese companies that may not list elsewhere. The Fund’s investment in the China Fund may vary based on the portfolio manager’s use of different types of investments that provide exposure to Chinese securities. Since the Fund may invest a portion of its assets in the China Fund, it may be considered to be investing indirectly in those investments through the China Fund. When applicable, the Fund’s investment in China Fund is included in the Statement of Investments.

 

11        OPPENHEIMER DEVELOPING MARKETS FUND

NOTES TO STATEMENT OF INVESTMENTS Unaudited / Continued

 

 

4. Investments and Risks (Continued)

 

Equity Security Risk. Stocks and other equity securities fluctuate in price. The value of the Fund’s portfolio may be affected by changes in the equity markets generally. Equity markets may experience significant short-term volatility and may fall sharply at times. Different markets may behave differently from each other and U.S. equity markets may move in the opposite direction from one or more foreign stock markets. Adverse events in any part of the equity or fixed-income markets may have unexpected negative effects on other market segments.

The prices of individual equity securities generally do not all move in the same direction at the same time and a variety of factors can affect the price of a particular company’s securities. These factors may include, but are not limited to, poor earnings reports, a loss of customers, litigation against the company, general unfavorable performance of the company’s sector or industry, or changes in government regulations affecting the company or its industry.

 

 

5. Market Risk Factors

The Fund’s investments in securities and/or financial derivatives may expose the fund to various market risk factors:

Commodity Risk. Commodity risk relates to the change in value of commodities or commodity indexes as they relate to increases or decreases in the commodities market.

Commodities are physical assets that have tangible properties. Examples of these types of assets are crude oil, heating oil, metals, livestock, and agricultural products.

Credit Risk. Credit risk relates to the ability of the issuer of debt to meet interest and principal payments, or both, as they come due. In general, lower-grade, higher-yield debt securities are subject to credit risk to a greater extent than lower-yield, higher-quality securities.

Equity Risk. Equity risk relates to the change in value of equity securities as they relate to increases or decreases in the general market.

Foreign Exchange Rate Risk. Foreign exchange rate risk relates to the change in the U.S. dollar value of a security held that is denominated in a foreign currency. The U.S. dollar value of a foreign currency denominated security will decrease as the dollar appreciates against the currency, while the U.S. dollar value will increase as the dollar depreciates against the currency.

Interest Rate Risk. Interest rate risk refers to the fluctuations in value of fixed-income securities resulting from the inverse relationship between price and yield. For example, an increase in general interest rates will tend to reduce the market value of already issued fixed-income investments, and a decline in general interest rates will tend to increase their value. In addition, debt securities with longer maturities, which tend to have higher yields, are subject to potentially greater fluctuations in value from changes in interest rates than obligations with shorter maturities.

Volatility Risk. Volatility risk refers to the magnitude of the movement, but not the direction of the movement, in a financial instrument’s price over a defined time period. Large increases or decreases in a financial instrument’s price over a relative time period

 

12        OPPENHEIMER DEVELOPING MARKETS FUND

NOTES TO STATEMENT OF INVESTMENTS Unaudited / Continued

 

 

5. Market Risk Factors (Continued)

 

typically indicate greater volatility risk, while small increases or decreases in its price typically indicate lower volatility risk.

 

 

6. Federal Taxes

The approximate aggregate cost of securities and other investments and the composition of unrealized appreciation and depreciation of securities and other investments for federal income tax purposes at period end are noted below. The primary difference between book and tax appreciation or depreciation of securities and other investments, if applicable, is attributable to the tax deferral of losses.

Total federal tax cost

    $     27,809,688,835   
  

 

 

  

Gross unrealized appreciation

    $ 8,092,994,006   

Gross unrealized depreciation

      (5,476,606,237 ) 
  

 

 

  

Net unrealized appreciation

    $ 2,616,387,769   
  

 

 

  

 

13        OPPENHEIMER DEVELOPING MARKETS FUND

Item 2. Controls and Procedures.

 

  (a) 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 11/30/2015, 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 the 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.

  (b) There have been no significant changes in the registrant’s internal controls over financial reporting that occurred during the registrant’s last fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

Item 3. Exhibits.

Exhibits 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 Developing Markets Fund

 

By:  

/s/ Arthur P. Steinmetz

  Arthur P. Steinmetz
  Principal Executive Officer
Date:   1/15/2016

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/ Arthur P. Steinmetz

  Arthur P. Steinmetz
  Principal Executive Officer
Date:   1/15/2016
By:  

/s/ Brian W. Wixted

  Brian W. Wixted
  Principal Financial Officer
Date:   1/15/2016