Oppenheimer Europe Fund

6803 South Tucson Way, Englewood, Colorado  80112

1.800.525.7048

Statement of Additional Information dated December 28, 2001

         This Statement of Additional Information is not a Prospectus. This document contains additional information
about the Fund and supplements information in the Prospectus dated December 28, 2001. It should be read together
with the Prospectus, which may be obtained by writing to the Fund's Transfer Agent, OppenheimerFunds Services, at
P.O. Box 5270, Denver, Colorado 80217, or by calling the Transfer Agent at the toll-free number shown above, or by
downloading it from the OppenheimerFunds Internet website at www.oppenheimerfunds.com.


Contents
                                                                                                          Page
About the Fund
Additional Information About the Fund's Investment Policies and Risks...................................  2
     The Fund's Investment Policies.....................................................................  2
     Other Investment Techniques and Strategies.........................................................  5
     Investment Restrictions............................................................................  18

How the Fund is Managed ................................................................................  20
     Organization and History...........................................................................  20
     Trustees and Officers..............................................................................  21
     The Manager........................................................................................  27
Brokerage Policies of the Fund..........................................................................  28
Distribution and Service Plans..........................................................................  30
Performance of the Fund.................................................................................  34
About Your Account
How To Buy Shares.......................................................................................  39
How To Sell Shares......................................................................................  48
How To Exchange Shares..................................................................................  53
Dividends, Capital Gains and Taxes......................................................................  56
Additional Information About the Fund...................................................................  57


Financial Information About the Fund

Independent Auditors' Report............................................................................  59
Statement of Assets & Liabilities.......................................................................  60


Appendix A: Corporate Industry Classifications..........................................................  A-1
Appendix B: Special Sales Charge Arrangements and Waivers...............................................  B-1









ABOUT THE FUND

Additional Information About the Fund's Investment Policies and Risks

         The investment objective, the principal investment policies and the main risks of the Fund are described in
the Prospectus. This Statement of Additional Information contains supplemental information about those policies and
risks and the types of securities that the Fund's investment Manager, OppenheimerFunds, Inc., can select for the
Fund. Additional information is also provided about the strategies that the Fund may use to try to achieve its
objective.

The Fund's Investment Policies. The composition of the Fund's portfolio and the techniques and strategies that the
Fund's Manager may use in selecting portfolio securities will vary over time. The Fund is not required to use all of
the investment techniques and strategies described below at all times in seeking its goal. It may use some of the
special investment techniques and strategies at some times or not at all.

         |X| Foreign Investing. "Foreign securities" include equity and debt securities of companies organized under
the laws of countries other than the United States and debt securities of foreign governments. They may be traded on
foreign securities exchanges or in foreign over-the-counter markets. Securities of foreign issuers that are listed
on a U.S. securities exchanges or traded in U.S. over-the-counter markets are not considered "foreign securities"
for the purpose of the Fund's investment allocations. That is because they are not subject to many of the special
considerations and risks, discussed below, that apply to foreign securities traded and held abroad.

         Because the Fund may purchase securities denominated in foreign currencies, a change in the value of such
foreign currency against the U.S. dollar will result in a change in the amount of income the Fund has available for
distribution. Because a portion of the Fund's investment income may be received in foreign currencies, the Fund will
be required to compute its income in U.S. dollars for distribution to shareholders, and therefore the Fund will
absorb the cost of currency fluctuations. After the Fund has distributed income, subsequent foreign currency losses
may result in the Fund's having distributed more income in a particular fiscal period than was available from
investment income, which could result in a return of capital to shareholders.


         Investing in foreign  securities offers potential  benefits not available from investing solely in securities
of  domestic  issuers.  They  include  the  opportunity  to invest in  foreign  issuers  that  appear to offer  growth
potential,  or in foreign  countries with economic policies or business cycles different from those of the U.S., or to
reduce  fluctuations  in portfolio  value by taking  advantage of foreign  stock  markets that do not move in a manner
parallel  to U.S.  markets.  The Fund will hold  foreign  currency  only in  connection  with the  purchase or sale of
foreign securities. Notwithstanding the foregoing, the Fund may invest up to 20% of its net assets in the euro for
investment purposes.


         |_| Risks of Foreign Investing. Investments in foreign securities may offer special opportunities for
investing but also present special additional risks and considerations not typically associated with investments in
domestic securities. Some of these additional risks are:
o        reduction of income by foreign taxes;
o        fluctuation in value of foreign investments due to changes in currency rates or currency control
         regulations (for example, currency blockage);
o        transaction charges for currency exchange;
o        lack of public information about foreign issuers;
o        lack of uniform accounting, auditing and financial reporting standards in foreign countries comparable to
         those applicable to domestic issuers;
o        less volume on foreign exchanges than on U.S. exchanges;
o        greater volatility and less liquidity on foreign markets than in the U.S.;
o        less governmental regulation of foreign issuers, stock exchanges and brokers than in the U.S.;
o        greater difficulties in commencing lawsuits;
o        higher brokerage commission rates than in the U.S.;
o        increased risks of delays in settlement of portfolio transactions or loss of certificates for portfolio
         securities;
o        possibilities in some countries of expropriation, confiscatory taxation, political, financial or social
         instability or adverse diplomatic developments; and
o        unfavorable differences between the U.S. economy and foreign economies.

         A number of current significant political demographic and economic developments may affect investments in
foreign securities and in securities of companies with operations overseas. Such developments include dramatic
political changes in government and economic policies in several Eastern European countries, Germany and the
Republics comprising the former Soviet Union, as well as unification of the European Economic Community. The course
of any of one or more of these events and the effect on trade barriers, competition and markets for consumer goods
and services is uncertain. With roughly two-thirds of all outstanding equity securities now traded outside of the
United States the Fund's global scope enables it to attempt to take advantage of other world markets and companies
and to seek to protect itself against any single economy.


         |_| European Stocks and Other Equity Securities. The Fund does not limit its investments in European equity
securities to issuers having a market capitalization of a specified size or range, and therefore may invest in
securities of small-, mid- and large-capitalization issuers. At times, the Fund may focus its equity investments in
securities of one or more capitalization ranges, based upon the Manager's judgment of where are the best market
opportunities to seek the Fund's objective. At times, the market may favor or disfavor securities of issuers of a
particular capitalization range, and securities of small-capitalization issuers may be subject to greater price
volatility in general than securities of larger companies. Therefore, if the Fund is focusing on or has substantial
investments in smaller-capitalization companies at times of market volatility, the Fund's share prices may fluctuate
more than that of funds focusing on larger-capitalization issuers.


         In determining the European equity investments to be made for the Fund, the Manager seeks to apply a
strategic investment policy that provides for the selection of securities that meet certain quantitative standards
determined by the Manager. The quantitative model considers all European issuers and generates a proposed buy/sell
list of equity securities without regard to specific geographic location, company or industry. The Fund will
consider European stocks of closed-end management investment companies, the assets of which are invested primarily
in European stocks, to be securities of European companies.


         |_| Special Risks of "Emerging Markets."  Investments in securities traded in "emerging markets" (which are
trading markets that are relatively new in countries with developing economies) involve more risks than other
foreign securities. Emerging markets may have extended settlement periods for securities transactions so that the
Fund might not receive the repayment of principal or income on its investments on a timely basis, which could affect
its net asset values. There may be a lack of liquidity for emerging market securities. Interest rates and foreign
currency exchange rates may be more volatile. Government limitations on foreign investments may be more likely to be
imposed than in more developed countries. Emerging markets may respond in a more volatile manner to economic changes
than those of more developed countries.


         |_| Eastern European Markets. The Fund may invest in the securities of issuers domiciled in Eastern
European countries. Investment in the securities of issuers in Eastern European markets involves certain additional
risks not involved in investment in securities of issuers in more developed capital markets, such as (i) low or
non-existent trading volume, resulting in a lack of liquidity and increased volatility in prices for such
securities, as compared to securities of comparable issuers in more developed capital markets, (ii) uncertain
national policies and social, political and economic instability (including the possibility that such countries
could revert to a centralist planned government), increasing the potential for expropriation of assets, confiscatory
taxation, high rates of inflation or unfavorable diplomatic developments, (iii) possible fluctuations in exchange
rates, differing legal systems and the existence of possible imposition of exchange controls, custodial restrictions
or other foreign or U.S. Governmental laws or restrictions on investment in issuers or industries deemed sensitive
to national interests, and (iv) the lack of developed legal structures governing private and foreign investments and
private property.

         |X| Rights and Warrants. The Fund may invest up to 10% of its total assets in warrants or rights, although
the Fund does not currently intend to invest more than 5% of its total assets in warrants or rights. Warrants
basically are options to purchase equity securities at specific prices valid for a specific period of time. Their
prices do not necessarily move parallel to the prices of the underlying securities. Rights are similar to warrants,
but normally have a short duration and are distributed directly by the issuer to its shareholders. Rights and
warrants have no voting rights, receive no dividends and have no rights with respect to the assets of the issuer.

         |X| Investments in Bonds, Other Debt Securities and Convertible Securities. The Fund is permitted to invest
in bonds, debentures and other debt securities. However, as the Fund currently emphasizes investments in equity
securities, such as stocks, the Fund does not anticipate that under normal market conditions it will invest more
than 5% of its total assets in debt securities in the coming year. For temporary defensive purposes, in times of
adverse market or economic conditions, the Fund may invest up to 100% of its assets in debt securities. The Fund's
debt investments would include investment-grade bonds. These are bonds rated at least "Baa" by Moody's Investors
Service, Inc., at least "BBB" by Standard & Poor's Corporation or Fitch, Inc., or have comparable ratings by another
nationally recognized statistical rating organization. In making investments in debt securities, the Manager may
rely to some extent on the ratings of ratings organizations or it may use its own research to evaluate a security's
credit-worthiness. If the securities are unrated, to be considered part of the Fund's holdings of investment-grade
securities, they must be judged by the Manager to be of comparable quality to bonds rated as investment grade by a
rating organization.

         |X| U.S. Government Securities. Obligations of U.S. Government agencies or instrumentalities (including
mortgage-backed securities) may or may not be guaranteed or supported by the "full faith and credit" of the United
States. Some are backed by the right of the issuer to borrow from the U.S. Treasury; others, by discretionary
authority of the U.S. Government to purchase the agencies' obligations; while others are supported only by the
credit of the instrumentality. All U.S. Treasury obligations are backed by the full faith and credit of the United
States. If the securities are not backed by the full faith and credit of the United States, the owner of the
securities must look principally to the agency issuing the obligation for repayment and may not be able to assert a
claim against the United States in the event that the agency or instrumentality does not meet its commitment. The
Fund will invest in U.S. Government securities of such agencies and instrumentalities only when the Manager is
satisfied that the credit risk with respect to such instrumentality is minimal.

         |X| Convertible Securities. While some convertible securities are a form of debt security, in many cases
their conversion feature (allowing conversion into equity securities) causes them to be regarded by the Manager more
as "equity equivalents."  As a result, the rating assigned to the security has less impact by the Manager investment
decision than in the case of non-convertible debt fixed income securities. To determine whether convertible
securities should be regarded as "equity equivalents," the Manager examines the following factors:

(1)      whether, at the option of the investor, the convertible security can be exchanged for a fixed number of
                  shares of common stock of the issuer,
(2)      whether the issuer of the convertible securities has restated its earnings per share of common stock on a
                  fully diluted basis (considering the effect of conversion of the convertible securities), and
(3)      the extent to which the convertible security may be a defensive "equity substitute," providing the ability
                  to participate in any appreciation in the price of the issuer's common stock.

         The value of a convertible security is a function of its "investment value" and its "conversion value." If
the investment value exceeds the conversion value, the security will behave more like a debt security and the
security's price will likely increase when interest rates fall and decrease when interest rates rise. If the
conversion value exceeds the investment value, the security will behave more like an equity security. In that case,
it will likely sell at a premium over its conversion value and its price will tend to fluctuate directly with the
price of the underlying security.

         |_| Portfolio Turnover. "Portfolio turnover" describes the rate at which the fund traded its portfolio
securities during its last fiscal year. For example, if a fund sold all of its securities during the year, its
portfolio turnover rate would have been 100%. The Fund's portfolio turnover rate will fluctuate from year to year.
The Fund may have a portfolio turnover rate of more than 100% annually. Increased portfolio turnover creates higher
brokerage and transaction costs for the Fund, which may reduce its overall performance. Additionally, the
realization of capital gains from selling portfolio securities may result in distributions of taxable long-term
capital gains to shareholders, since the Fund will normally distribute all of its capital gains realized each year,
to avoid excise taxes under the Internal Revenue Code.

Other Investment Techniques and Strategies. In seeking its objective, the Fund may from time to time use the types
of investment strategies and investments described below. It is not required to use all of these strategies at all
times, and at times may not use them.

         |X| Investing in Small, Unseasoned Companies. The Fund may invest in securities of small, unseasoned
companies. These are companies that have been in operation for less than three years, including the operations of
any predecessors. Securities of these companies may be subject to volatility in their prices. They may have a
limited trading market, which may adversely affect the Fund's ability to dispose of them and can reduce the price
the Fund might be able to obtain for them. Other investors that own a security issued by a small, unseasoned issuer
for which there is limited liquidity might trade the security when the Fund is attempting to dispose of its holdings
of that security. In that case the Fund might receive a lower price for its holdings than might otherwise be
obtained. The Fund currently intends to invest no more than 5% of its net assets in securities of small, unseasoned
issuers.

         |X| "When-Issued" and "Delayed-Delivery" Transactions. The Fund may invest in securities on a "when-issued"
basis and may purchase or sell securities on a "delayed-delivery" basis. When-issued and delayed-delivery are terms
that refer to securities whose terms and indenture are available and for which a market exists, but which are not
available for immediate delivery.


         When such transactions are negotiated, the price (which is generally expressed in yield terms) is fixed at
the time the commitment is made. Delivery and payment for the securities take place at a later date.  The securities
are subject to change in value from market fluctuations during the period until settlement. The value at delivery
may be less than the purchase price. For example, changes in interest rates in a direction other than that expected
by the Manager before settlement will affect the value of such securities and may cause a loss to the Fund. During
the period between purchase and settlement, no payment is made by the Fund to the issuer and no interest accrues to
the Fund from the investment. No income begins to accrue to the Fund on a when-issued security until the Fund
receives the security at settlement of the trade.


         The Fund will engage in when-issued transactions to secure what the Manager considers to be an advantageous
price and yield at the time of entering into the obligation. When the Fund enters into a when-issued or
delayed-delivery transaction, it relies on the other party to complete the transaction. Their failure to do so may
cause the Fund to lose the opportunity to obtain the security at a price and yield the Manager considers to be
advantageous.

         When the Fund engages in when-issued and delayed-delivery transactions, it does so for the purpose of
acquiring or selling securities consistent with its investment objective and policies for its portfolio or for
delivery pursuant to options contracts it has entered into, and not for the purpose of investment leverage. Although
the Fund will enter into delayed-delivery or when-issued purchase transactions to acquire securities, it may dispose
of a commitment prior to settlement. If the Fund chooses to dispose of the right to acquire a when-issued security
prior to its acquisition or to dispose of its right to delivery or receive against a forward commitment, it may
incur a gain or loss.


         At the time the Fund makes the commitment to purchase or sell a security on a when-issued or
delayed-delivery basis, it records the transaction on its books and reflects the value of the security purchased in
determining the Fund's net asset values. In a sale transaction, it records the proceeds to be received. The Fund
will identify on its books liquid assets at least equal in value to the value of the Fund's purchase commitments
until the Fund pays for the investment.


         When-issued and delayed-delivery transactions can be used by the Fund as a defensive technique to hedge
against anticipated changes in interest rates and prices. For instance, in periods of rising interest rates and
falling prices, the Fund might sell securities in its portfolio on a forward commitment basis to attempt to limit
its exposure to anticipated falling prices. In periods of falling interest rates and rising prices, the Fund might
sell portfolio securities and purchase the same or similar securities on a when-issued or delayed-delivery basis to
obtain the benefit of currently higher cash yields.

         Portfolio Turnover. The Fund does not expect to engage frequently in short-term trading to try to achieve
its objective. Portfolio turnover affects brokerage costs the Fund pays. If the Fund realizes capital gains when it
sells its portfolio investments, it must generally pay those gains out to shareholders, increasing their taxable
distributions.

         |X| Borrowing. The Fund has the ability to borrow one-third the value of its total assets from banks. The
Fund may borrow as a temporary measure for extraordinary or emergency purposes. The Fund may also borrow on an
unsecured basis to invest the borrowed funds in portfolio securities. This is a speculative investment technique
known as "leverage" and the Fund currently does not contemplate using it. The Fund may borrow only from banks. Under
current regulatory requirements, borrowings can be made only to the extent that the value of the Fund's assets, less
its liabilities other than borrowings, is equal to at least 300% of all borrowings (including the proposed
borrowing). If the value of the Fund's assets fails to meet this 300% asset coverage requirement, the Fund will
reduce its bank debt within three days to meet the requirement. To do so, the Fund might have to sell a portion of
its investments at a disadvantageous time.


         The Fund will pay interest on these loans, and that interest expense will raise the overall expenses of the
Fund and reduce its returns. If it does borrow, its expenses will be greater than comparable funds that do not
borrow. Additionally, the Fund's net asset values per share might fluctuate more than that of funds that do not
borrow.


         |X| Repurchase Agreements. The Fund can acquire securities subject to repurchase agreements. It may do so
for liquidity purposes to meet anticipated redemptions of Fund shares, or pending the investment of the proceeds
from sales of Fund shares, or pending the settlement of portfolio securities transactions.

         In a repurchase transaction, the Fund buys a security from, and simultaneously resells it to, an approved
vendor for delivery on an agreed upon future date. The resale price exceeds the purchase price by an amount that
reflects an agreed-upon interest rate effective for the period during which the repurchase agreement is in effect.
Approved vendors include U.S. commercial banks, U.S. branches of foreign banks, or broker-dealers that have been
designated as primary dealers in government securities. They must meet credit requirements set by the Fund's Board
of Trustees from time to time.

         The majority of these transactions run from day to day, and delivery pursuant to the resale typically occur
within one to five days of the purchase. Repurchase agreements having a maturity beyond seven days are subject to
the Fund's limits on holding illiquid investments. The Fund will not enter into a repurchase agreement that causes
more than 10% of its net assets to be subject to repurchase agreements having a maturity beyond seven days. There is
no limit on the amount of the Fund's net assets that may be subject to repurchase agreements having maturities of
seven days or less.


         Repurchase agreements, considered "loans" under the Investment Company Act of 1940 (the "Investment Company
Act"), are collateralized by the underlying security. The Fund's repurchase agreements require that at all times
while the repurchase agreement is in effect, the value of the collateral must equal or exceed the repurchase price
to fully collateralize the repayment obligation. However, if the vendor fails to pay the resale price on the
delivery date, the Fund may incur costs in disposing of the collateral and may experience losses if there is any
delay in its ability to do so. The Manager will monitor the vendor's creditworthiness to confirm that the vendor is
financially sound and will continuously monitor the collateral's value.


         |X| Illiquid and Restricted Securities. The Fund has limitations that apply to purchases of restricted
securities, as stated in the Prospectus. Those percentage restrictions do not limit purchases of restricted
securities that are eligible for sale to qualified institutional purchasers under Rule 144A of the Securities Act of
1933, if those securities have been determined to be liquid by the Manager under Board approved guidelines. Those
guidelines take into account the trading activity for such securities and the availability of reliable pricing
information, among other factors. If there is a lack of trading interest in a particular Rule 144A security, the
Fund's holdings of that security may be considered to be illiquid. Illiquid securities include repurchase agreements
maturing in more than seven days and participation interests that do not have puts exercisable within seven days.

         |X| Loans of Portfolio Securities. The Fund can lend its portfolio securities to certain types of eligible
borrowers approved by the Board of Trustees. It may do so to try to provide income or to raise cash for liquidity
purposes. These loans are limited to not more than 25% of the value of the Fund's total assets. There are some risks
in connection with securities lending. The Fund might experience a delay in receiving additional collateral to
secure a loan, or a delay in recovery of the loaned securities. The Fund presently does not intend to engage in
loans of securities in the coming year.

         The Fund must receive collateral for a loan. Under current applicable regulatory requirements (which are
subject to change), on each business day the loan collateral must be at least equal to the value of the loaned
securities. It must consist of cash, bank letters of credit, securities of the U.S. Government or its agencies or
instrumentalities, or other cash equivalents in which the Fund is permitted to invest. To be acceptable as
collateral, letters of credit must obligate a bank to pay amounts demanded by the Fund if the demand meets the terms
of the letter. The terms of the letter of credit and the issuing bank both must be satisfactory to the Fund.

         When it lends securities, the Fund receives amounts equal to the dividends or interest on loaned
securities. It also receives one or more of (a) negotiated loan fees, (b) interest on securities used as collateral,
and (c) interest on any short-term debt securities purchased with such loan collateral. Either type of interest may
be shared with the borrower. The Fund may also pay reasonable finder's, custodian and administrative fees in
connection with these loans. The terms of the Fund's loans must meet applicable tests under the Internal Revenue
Code and must permit the Fund to reacquire loaned securities on five days' notice or in time to vote on any
important matter.

         |X| Hedging. Although the Fund does not anticipate the extensive use of hedging instruments, the Fund can
use hedging instruments. To attempt to protect against declines in the market value of the Fund's portfolio, to
permit the Fund to retain unrealized gains in the value of portfolio securities which have appreciated, or to
facilitate selling securities for investment reasons, the Fund could:
         |_| sell futures contracts,

         |_| buy puts on such futures or on securities, or
         |_| write covered calls on securities or futures. Covered calls may also be used for liquidity purposes,
         but the Manager does not expect to engage extensively in that practice.


         The Fund can use hedging to establish a position in the securities market as a temporary substitute for
purchasing particular securities. In that case the Fund would normally seek to purchase the securities and then
terminate that hedging position. The Fund might also use this type of hedge to attempt to protect against the
possibility that its portfolio securities would not be fully included in a rise in value of the market. To do so the
Fund could:
         |_| buy futures, or

         |_| buy calls on such futures or on securities.


         The Fund is not obligated to use hedging instruments, even though it is permitted to use them in the
Manager's discretion, as described below. The Fund's strategy of hedging with futures and options on futures will be
incidental to the Fund's activities in the underlying cash market. The particular hedging instruments the Fund can
use are described below. The Fund may employ new hedging instruments and strategies when they are developed, if
those investment methods are consistent with the Fund's investment objective and are permissible under applicable
regulations governing the Fund.


         |_| Futures. The Fund can buy and sell futures contracts that relate to (1) broadly-based stock indices
(these are referred to as "stock index futures") (2) bond indices (these are referred to as "bond index futures"),
(3) debt securities (these are referred to as "interest rate futures"), and (4) foreign currencies (these are
referred to as "forward contracts").

         A broadly-based stock index is used as the basis for trading stock index futures. They may in some cases be
based on stocks of issuers in a particular industry or group of industries. A stock index assigns relative values to
the common stocks included in the index and its value fluctuates in response to the changes in value of the
underlying stocks. A stock index cannot be purchased or sold directly. Bond index futures are similar contracts
based on the future value of the basket of securities that comprise the index. These contracts obligate the seller
to deliver, and the purchaser to take, cash to settle the futures transaction. There is no delivery made of the
underlying securities to settle the futures obligation. Either party may also settle the transaction by entering
into an offsetting contract.

         An interest rate future obligates the seller to deliver (and the purchaser to take) cash or a specified
type of debt security to settle the futures transaction. Either party could also enter into an offsetting contract
to close out the position.


         No money is paid or received by the Fund on the purchase or sale of a future. Upon entering into a futures
transaction, the Fund will be required to deposit an initial margin payment with the futures commission merchant
(the "futures broker"). Initial margin payments will be deposited with the Fund's custodian bank in an account
registered in the futures broker's name. However, the futures broker can gain access to that account only under
specified conditions. As the future is marked-to-market (that is, its value on the Fund's books is changed) to
reflect changes in its market value, subsequent margin payments, called variation margin, will be paid to or by the
futures broker daily.

         At any time prior to expiration of the future, the Fund may elect to close out its position by taking an
opposite position, at which time a final determination of variation margin is made and any additional cash must be
paid by or released to the Fund. Any loss or gain on the future is then realized by the Fund for tax purposes. All
futures transactions (except forward contracts) are effected through a clearinghouse associated with the exchange on
which the contracts are traded.


         |_| Put and Call Options. The Fund can buy and sell certain kinds of put options ("puts") and call options
("calls"). The Fund can buy and sell exchange-traded and over-the-counter put and call options, including index
options, securities options, currency options, commodities options, and options on other types of futures described
above.


                  |_| Writing Covered Call Options. The Fund can write (that is, sell) covered calls. If the Fund
sells a call option, it must be covered. That means the Fund must own the security subject to the call while the
call is outstanding, or, for certain types of calls, the call may be covered by segregating liquid assets to enable
the Fund to satisfy its obligations if the call is exercised. Up to 25% of the Fund's total assets may be subject to
calls the Fund writes.

         When the Fund writes a call on a security, it receives cash (a premium). The Fund agrees to sell the
underlying security to a purchaser of a corresponding call on the same security during the call period at a fixed
exercise price regardless of market price changes during the call period. The call period is usually not more than
nine months. The exercise price may differ from the market price of the underlying security. The Fund has the risk
of loss that the price of the underlying security may decline during the call period. That risk may be offset to
some extent by the premium the Fund receives. If the value of the investment does not rise above the call price, it
is likely that the call will lapse without being exercised. In that case the Fund would keep the cash premium and
the investment.

         When the Fund writes a call on an index, it receives cash (a premium). If the buyer of the call exercises
it, the Fund will pay an amount of cash equal to the difference between the closing price of the call and the
exercise price, multiplied by a specified multiple that determines the total value of the call for each point of
difference. If the value of the underlying investment does not rise above the call price, it is likely that the call
will lapse without being exercised. In that case, the Fund would keep the cash premium.

         The Fund's custodian bank, or a securities depository acting for the custodian bank, will act as the Fund's
escrow agent, through the facilities of the Options Clearing Corporation ("OCC"), as to the investments on which the
Fund has written calls traded on exchanges or as to other acceptable escrow securities. In that way, no margin will
be required for such transactions. OCC will release the securities on the expiration of the option or when the Fund
enters into a closing transaction.

         When the Fund writes an over-the-counter ("OTC") option, it will enter into an arrangement with a primary
U.S. Government securities dealer which will establish a formula price at which the Fund will have the absolute
right to repurchase that OTC option. The formula price will generally be based on a multiple of the premium received
for the option, plus the amount by which the option is exercisable below the market price of the underlying security
(that is, the option is "in the money"). When the Fund writes an OTC option, it will treat as illiquid (for purposes
of its restriction on holding illiquid securities) the mark-to-market value of any OTC option it holds, unless the
option is subject to a buy-back agreement by the executing broker.

         To terminate its obligation on a call it has written, the Fund may purchase a corresponding call in a
"closing purchase transaction."  The Fund will then realize a profit or loss, depending upon whether the net of the
amount of the option transaction costs and the premium received on the call the Fund wrote is more or less than the
price of the call the Fund purchases to close out the transaction. The Fund may realize a profit if the call expires
unexercised, because the Fund will retain the underlying security and the premium it received when it wrote the
call. Any such profits are considered short-term capital gains for federal income tax purposes, as are the premiums
on lapsed calls. When distributed by the Fund they are taxable as ordinary income. If the Fund cannot effect a
closing purchase transaction due to the lack of a market, it will have to hold the callable securities until the
call expires or is exercised.

         The Fund may also write calls on a futures contract without owning the futures contract or securities
deliverable under the contract. To do so, at the time the call is written, the Fund must cover the call by
segregating an equivalent dollar amount of liquid assets. The Fund will segregate additional liquid assets if the
value of the segregated assets drops below 100% of the current value of the future. Because of this segregation
requirement, in no circumstances would the Fund's receipt of an exercise notice as to that future require the Fund
to deliver a futures contract. It would simply put the Fund in a short futures position, which is permitted by the
Fund's hedging policies.

                  |_| Writing Put Options. The Fund can sell put options. A put option on securities gives the
purchaser the right to sell, and the writer the obligation to buy, the underlying investment at the exercise price
during the option period. The Fund will not write puts if, as a result, more than 50% of the Fund's net assets would
be required to be segregated to cover such put options.

         If the Fund writes a put, the put must be covered by liquid assets identified on the Fund's books. The
premium the Fund receives from writing a put represents a profit, as long as the price of the underlying investment
remains equal to or above the exercise price of the put. However, the Fund also assumes the obligation during the
option period to buy the underlying investment from the buyer of the put at the exercise price, even if the value of
the investment falls below the exercise price. If a put the Fund has written expires unexercised, the Fund realizes
a gain in the amount of the premium less the transaction costs incurred. If the put is exercised, the Fund must
fulfill its obligation to purchase the underlying investment at the exercise price. That price will usually exceed
the market value of the investment at that time. In that case, the Fund may incur a loss if it sells the underlying
investment. That loss will be equal to the sum of the sale price of the underlying investment and the premium
received minus the sum of the exercise price and any transaction costs the Fund incurred.

         When writing a put option on a security, to secure its obligation to pay for the underlying security the
Fund will deposit in escrow liquid assets with a value equal to or greater than the exercise price of the underlying
securities. The Fund therefore forgoes the opportunity of investing the segregated assets or writing calls against
those assets.

         As long as the Fund's obligation as the put writer continues, it may be assigned an exercise notice by the
broker-dealer through which the put was sold. That notice will require the Fund to take delivery of the underlying
security and pay the exercise price. The Fund has no control over when it may be required to purchase the underlying
security, since it may be assigned an exercise notice at any time prior to the termination of its obligation as the
writer of the put. That obligation terminates upon expiration of the put. It may also terminate if, before it
receives an exercise notice, the Fund effects a closing purchase transaction by purchasing a put of the same series
as it sold. Once the Fund has been assigned an exercise notice, it cannot effect a closing purchase transaction.

         The Fund may decide to effect a closing purchase transaction to realize a profit on an outstanding put
option it has written or to prevent the underlying security from being put. Effecting a closing purchase transaction
will also permit the Fund to write another put option on the security, or to sell the security and use the proceeds
from the sale for other investments. The Fund will realize a profit or loss from a closing purchase transaction
depending on whether the cost of the transaction is less or more than the premium received from writing the put
option. Any profits from writing puts are considered short-term capital gains for federal tax purposes, and when
distributed by the Fund, are taxable as ordinary income.

                  |_| Purchasing Calls and Puts. The Fund can purchase calls to protect against the possibility that
the Fund's portfolio will not participate in an anticipated rise in the securities market. When the Fund buys a call
(other than in a closing purchase transaction), it pays a premium. The Fund then has the right to buy the underlying
investment from a seller of a corresponding call on the same investment during the call period at a fixed exercise
price. The Fund benefits only if it sells the call at a profit or if, during the call period, the market price of
the underlying investment is above the sum of the call price plus the transaction costs and the premium paid for the
call and the Fund exercises the call. If the Fund does not exercise the call or sell it (whether or not at a
profit), the call will become worthless at its expiration date. In that case the Fund will have paid the premium but
lost the right to purchase the underlying investment.

         The Fund can buy puts whether or not it holds the underlying investment in its portfolio. When the Fund
purchases a put, it pays a premium and, except as to puts on indices, has the right to sell the underlying
investment to a seller of a put on a corresponding investment during the put period at a fixed exercise price.
Buying a put on securities or futures the Fund owns enables the Fund to attempt to protect itself during the put
period against a decline in the value of the underlying investment below the exercise price by selling the
underlying investment at the exercise price to a seller of a corresponding put. If the market price of the
underlying investment is equal to or above the exercise price and, as a result, the put is not exercised or resold,
the put will become worthless at its expiration date. In that case the Fund will have paid the premium but lost the
right to sell the underlying investment. However, the Fund may sell the put prior to its expiration. That sale may
or may not be at a profit.

         When the Fund purchases a call or put on an index or future, it pays a premium, but settlement is in cash
rather than by delivery of the underlying investment to the Fund. Gain or loss depends on changes in the index in
question (and thus on price movements in the securities market generally) rather than on price movements in
individual securities or futures contracts.

         The Fund may buy a call or put only if, after the purchase, the value of all call and put options held by
the Fund will not exceed 5% of the Fund's total assets.

                  |_| Buying and Selling Options on Foreign Currencies. The Fund can buy and sell calls and puts on
foreign currencies. They include puts and calls that trade on a securities or commodities exchange or in the
over-the-counter markets or are quoted by major recognized dealers in such options. The Fund could use these calls
and puts to try to protect against declines in the dollar value of foreign securities and increases in the dollar
cost of foreign securities the Fund wants to acquire.

         If the Manager anticipates a rise in the dollar value of a foreign currency in which securities to be
acquired are denominated, the increased cost of those securities may be partially offset by purchasing calls or
writing puts on that foreign currency. If the Manager anticipates a decline in the dollar value of a foreign
currency, the decline in the dollar value of portfolio securities denominated in that currency might be partially
offset by writing calls or purchasing puts on that foreign currency. However, the currency rates could fluctuate in
a direction adverse to the Fund's position. The Fund will then have incurred option premium payments and transaction
costs without a corresponding benefit.

         A call the Fund writes on a foreign currency is "covered" if the Fund owns the underlying foreign currency
covered by the call or has an absolute and immediate right to acquire that foreign currency without additional cash
consideration (or it can do so for additional cash consideration held in a segregated account by its custodian bank)
upon conversion or exchange of other foreign currency held in its portfolio.

         The Fund could write a call on a foreign currency to provide a hedge against a decline in the U.S. dollar
value of a security which the Fund owns or has the right to acquire and which is denominated in the currency
underlying the option. That decline might be one that occurs due to an expected adverse change in the exchange rate.
This is known as a "cross-hedging" strategy. In those circumstances, the Fund covers the option by maintaining cash,
U.S. Government securities or other liquid, high grade debt securities in an amount equal to the exercise price of
the option, in a segregated account with the Fund's custodian bank.

         |_| Risks of Hedging with Options and Futures. The use of hedging instruments requires special skills and
knowledge of investment techniques that are different than what is required for normal portfolio management. If the
Manager uses a hedging instrument at the wrong time or judges market conditions incorrectly, hedging strategies may
reduce the Fund's return. The Fund could also experience losses if the prices of its futures and options positions
were not correlated with its other investments.

         The Fund's option activities could affect its portfolio turnover rate and brokerage commissions. The
exercise of calls written by the Fund might cause the Fund to sell related portfolio securities, thus increasing its
turnover rate. The exercise by the Fund of puts on securities will cause the sale of underlying investments,
increasing portfolio turnover. Although the decision whether to exercise a put it holds is within the Fund's
control, holding a put might cause the Fund to sell the related investments for reasons that would not exist in the
absence of the put.


         The Fund could pay a brokerage commission each time it buys a call or put, sells a call or put, or buys or
sells an underlying investment in connection with the exercise of a call or put. Those commissions could be higher
on a relative basis than the commissions for direct purchases or sales of the underlying investments. Premiums paid
for options are small in relation to the market value of the underlying investments. Consequently, put and call
options offer large amounts of leverage. The leverage offered by trading in options could result in the Fund's net
asset values being more sensitive to changes in the value of the underlying investment.


         If a covered call written by the Fund is exercised on an investment that has increased in value, the Fund
will be required to sell the investment at the call price. It will not be able to realize any profit if the
investment has increased in value above the call price.

         An option position may be closed out only on a market that provides secondary trading for options of the
same series, and there is no assurance that a liquid secondary market will exist for any particular option. The Fund
might experience losses if it could not close out a position because of an illiquid market for the future or option.

         There is a risk in using short hedging by selling futures or purchasing puts on broadly-based indices or
futures to attempt to protect against declines in the value of the Fund's portfolio securities. The risk is that the
prices of the futures or the applicable index will correlate imperfectly with the behavior of the cash prices of the
Fund's securities. For example, it is possible that while the Fund has used hedging instruments in a short hedge,
the market may advance and the value of the securities held in the Fund's portfolio might decline. If that occurred,
the Fund would lose money on the hedging instruments and also experience a decline in the value of its portfolio
securities. However, while this could occur for a very brief period or to a very small degree, over time the value
of a diversified portfolio of securities will tend to move in the same direction as the indices upon which the
hedging instruments are based.

         The risk of imperfect correlation increases as the composition of the Fund's portfolio diverges from the
securities included in the applicable index. To compensate for the imperfect correlation of movements in the price
of the portfolio securities being hedged and movements in the price of the hedging instruments, the Fund might use
hedging instruments in a greater dollar amount than the dollar amount of portfolio securities being hedged. It might
do so if the historical volatility of the prices of the portfolio securities being hedged is more than the
historical volatility of the applicable index.

         The ordinary spreads between prices in the cash and futures markets are subject to distortions, due to
differences in the nature of those markets. First, all participants in the futures market are subject to margin
deposit and maintenance requirements. Rather than meeting additional margin deposit requirements, investors may
close futures contracts through offsetting transactions which could distort the normal relationship between the cash
and futures markets. Second, the liquidity of the futures market depends on participants entering into offsetting
transactions rather than making or taking delivery. To the extent participants decide to make or take delivery,
liquidity in the futures market could be reduced, thus producing distortion. Third, from the point of view of
speculators, the deposit requirements in the futures market are less onerous than margin requirements in the
securities markets. Therefore, increased participation by speculators in the futures market may cause temporary
price distortions.

         The Fund can use hedging instruments to establish a position in the securities markets as a temporary
substitute for the purchase of individual securities (long hedging) by buying futures and/or calls on such futures,
broadly-based indices or on securities. It is possible that when the Fund does so the market might decline. If the
Fund then concludes not to invest in securities because of concerns that the market might decline further or for
other reasons, the Fund will realize a loss on the hedging instruments that is not offset by a reduction in the
price of the securities purchased.

         |_| Forward Contracts. Forward contracts are foreign currency exchange contracts. They are used to buy or
sell foreign currency for future delivery at a fixed price. The Fund uses them to "lock in" the U.S. dollar price of
a security denominated in a foreign currency that the Fund has bought or sold, or to protect against possible losses
from changes in the relative values of the U.S. dollar and a foreign currency. The Fund limits its exposure in
foreign currency exchange contracts in a particular foreign currency to the amount of its assets denominated in that
currency or a closely-correlated currency. The Fund may also use "cross-hedging" where the Fund hedges against
changes in currencies other than the currency in which a security it holds is denominated.

         Under a forward contract, one party agrees to purchase, and another party agrees to sell, a specific
currency at a future date. That date may be any fixed number of days from the date of the contract agreed upon by
the parties. The transaction price is set at the time the contract is entered into. These contracts are traded in
the inter-bank market conducted directly among currency traders (usually large commercial banks) and their customers.

         The Fund may use forward contracts to protect against uncertainty in the level of future exchange rates.
The use of forward contracts does not eliminate the risk of fluctuations in the prices of the underlying securities
the Fund owns or intends to acquire, but it does fix a rate of exchange in advance. Although forward contracts may
reduce the risk of loss from a decline in the value of the hedged currency, at the same time they limit any
potential gain if the value of the hedged currency increases.

         When the Fund enters into a contract for the purchase or sale of a security denominated in a foreign
currency, or when it anticipates receiving dividend payments in a foreign currency, the Fund might desire to
"lock-in" the U.S. dollar price of the security or the U.S. dollar equivalent of the dividend payments. To do so, the
Fund could enter into a forward contract for the purchase or sale of the amount of foreign currency involved in the
underlying transaction, in a fixed amount of U.S. dollars per unit of the foreign currency. This is called a
"transaction hedge." The transaction hedge will protect the Fund against a loss from an adverse change in the
currency exchange rates during the period between the date on which the security is purchased or sold or on which
the payment is declared, and the date on which the payments are made or received.

         The Fund could also use forward contracts to lock in the U.S. dollar value of portfolio positions. This is
called a "position hedge."  When the Fund believes that foreign currency might suffer a substantial decline against
the U.S. dollar, it could enter into a forward contract to sell an amount of that foreign currency approximating the
value of some or all of the Fund's portfolio securities denominated in that foreign currency. When the Fund believes
that the U.S. dollar might suffer a substantial decline against a foreign currency, it could enter into a forward
contract to buy that foreign currency for a fixed dollar amount. Alternatively, the Fund could enter into a forward
contract to sell a different foreign currency for a fixed U.S. dollar amount if the Fund believes that the U.S.
dollar value of the foreign currency to be sold pursuant to its forward contract will fall whenever there is a
decline in the U.S. dollar value of the currency in which portfolio securities of the Fund are denominated. That is
referred to as a "cross hedge."

         The Fund will cover its short positions in these cases by identifying to its custodian bank assets having a
value equal to the aggregate amount of the Fund's commitment under forward contracts. The Fund will not enter into
forward contracts or maintain a net exposure to such contracts if the consummation of the contracts would obligate
the Fund to deliver an amount of foreign currency in excess of the value of the Fund's portfolio securities or other
assets denominated in that currency or another currency that is the subject of the hedge.


         However, to avoid excess transactions and transaction costs, the Fund may maintain a net exposure to
forward contracts in excess of the value of the Fund's portfolio securities or other assets denominated in foreign
currencies if the excess amount is "covered" by liquid securities denominated in any currency. The cover must be at
least equal at all times to the amount of that excess. As one alternative, the Fund may purchase a call option
permitting the Fund to purchase the amount of foreign currency being hedged by a forward sale contract at a price no
higher than the forward contract price. As another alternative, the Fund may purchase a put option permitting the
Fund to sell the amount of foreign currency subject to a forward purchase contract at a price as high or higher than
the forward contact price.

         The precise matching of the amounts under forward contracts and the value of the securities involved
generally will not be possible because the future value of securities denominated in foreign currencies will change
as a consequence of market movements between the date the forward contract is entered into and the date it is sold.
In some cases the Manager might decide to sell the security and deliver foreign currency to settle the original
purchase obligation. If the market value of the security is less than the amount of foreign currency the Fund is
obligated to deliver, the Fund might have to purchase additional foreign currency on the "spot" (that is, cash)
market to settle the security trade. If the market value of the security instead exceeds the amount of foreign
currency the Fund is obligated to deliver to settle the trade, the Fund might have to sell on the spot market some
of the foreign currency received upon the sale of the security. There will be additional transaction costs on the
spot market in those cases.

         The projection of short-term currency market movements is extremely difficult, and the successful execution
of a short-term hedging strategy is highly uncertain. Forward contracts involve the risk that anticipated currency
movements will not be accurately predicted, causing the Fund to sustain losses on these contracts and to pay
additional transactions costs. The use of forward contracts in this manner might reduce the Fund's performance if
there are unanticipated changes in currency prices to a greater degree than if the Fund had not entered into such
contracts.

         At or before the maturity of a forward contract requiring the Fund to sell a currency, the Fund might sell
a portfolio security and use the sale proceeds to make delivery of the currency. In the alternative the Fund might
retain the security and offset its contractual obligation to deliver the currency by purchasing a second contract.
Under that contract the Fund will obtain, on the same maturity date, the same amount of the currency that it is
obligated to deliver. Similarly, the Fund might close out a forward contract requiring it to purchase a specified
currency by entering into a second contract entitling it to sell the same amount of the same currency on the
maturity date of the first contract. The Fund would realize a gain or loss as a result of entering into such an
offsetting forward contract under either circumstance. The gain or loss will depend on the extent to which the
exchange rate or rates between the currencies involved moved between the execution dates of the first contract and
offsetting contract.

         The costs to the Fund of engaging in forward contracts varies with factors such as the currencies involved,
the length of the contract period and the market conditions then prevailing. Because forward contracts are usually
entered into on a principal basis, no brokerage fees or commissions are involved. Because these contracts are not
traded on an exchange, the Fund must evaluate the credit and performance risk of the counterparty under each forward
contract.

         Although the Fund values its assets daily in terms of U.S. dollars, it does not intend to convert its
holdings of foreign currencies into U.S. dollars on a daily basis. The Fund may convert foreign currency from time
to time, and will incur costs in doing so. Foreign exchange dealers do not charge a fee for conversion, but they do
seek to realize a profit based on the difference between the prices at which they buy and sell various currencies.
Thus, a dealer might offer to sell a foreign currency to the Fund at one rate, while offering a lesser rate of
exchange if the Fund desires to resell that currency to the dealer.

         |_| Regulatory Aspects of Hedging Instruments. When using futures and options on futures, the Fund is
required to operate within certain guidelines and restrictions with respect to the use of futures as established by
the Commodities Futures Trading Commission (the "CFTC"). In particular, the Fund is exempted from registration with
the CFTC as a "commodity pool operator" if the Fund complies with the requirements of Rule 4.5 adopted by the CFTC.
The Rule does not limit the percentage of the Fund's assets that may be used for futures margin and related options
premiums for a bona fide hedging position. However, under the Rule, the Fund must limit its aggregate initial
futures margin and related options premiums to not more than 5% of the Fund's net assets for hedging strategies that
are not considered bona fide hedging strategies under the Rule. Under the Rule, the Fund must also use short futures
and options on futures solely for bona fide hedging purposes within the meaning and intent of the applicable
provisions of the Commodity Exchange Act.

         Transactions in options by the Fund are subject to limitations established by the option exchanges. The
exchanges limit the maximum number of options that may be written or held by a single investor or group of investors
acting in concert. Those limits apply regardless of whether the options were written or purchased on the same or
different exchanges or are held in one or more accounts or through one or more different exchanges or through one or
more brokers. Thus, the number of options that the Fund may write or hold may be affected by options written or held
by other entities, including other investment companies having the same advisor as the Fund (or an advisor that is
an affiliate of the Fund's advisor). The exchanges also impose position limits on futures transactions. An exchange
may order the liquidation of positions found to be in violation of those limits and may impose certain other
sanctions.

         Under the Investment Company Act, when the Fund purchases a future, it must maintain cash or readily
marketable short-term debt instruments in an amount equal to the market value of the securities underlying the
future, less the margin deposit applicable to it. The account must be a segregated account or accounts held by the
Fund's custodian bank.

         |_| Tax Aspects of Certain Hedging Instruments. Certain foreign currency exchange contracts in which the
Fund may invest are treated as "Section 1256 contracts" under the Internal Revenue Code. In general, gains or losses
relating to Section 1256 contracts are characterized as 60% long-term and 40% short-term capital gains or losses
under the Code. However, foreign currency gains or losses arising from Section 1256 contracts that are forward
contracts generally are treated as ordinary income or loss. In addition, Section 1256 contracts held by the Fund at
the end of each taxable year are "marked-to-market," and unrealized gains or losses are treated as though they were
realized. These contracts also may be marked-to-market for purposes of determining the excise tax applicable to
investment company distributions and for other purposes under rules prescribed pursuant to the Internal Revenue
Code. An election can be made by the Fund to exempt those transactions from this marked-to-market treatment.

         Certain forward contracts the Fund enters into may result in "straddles" for Federal income tax purposes.
The straddle rules may affect the character and timing of gains (or losses) recognized by the Fund on straddle
positions. Generally, a loss sustained on the disposition of a position making up a straddle is allowed only to the
extent that the loss exceeds any unrecognized gain in the offsetting positions making up the straddle. Disallowed
loss is generally allowed at the point where there is no unrecognized gain in the offsetting positions making up the
straddle, or the offsetting position is disposed of.

         Under the Internal Revenue Code, the following gains or losses are treated as ordinary income or loss:

(1)      gains or losses attributable to fluctuations in exchange rates that occur between the time the Fund accrues
              interest or other receivables or accrues expenses or other liabilities denominated in a foreign
              currency and the time the Fund actually collects such receivables or pays such liabilities, and
(2)      gains or losses attributable to fluctuations in the value of a foreign currency between the date of
              acquisition of a debt security denominated in a foreign currency or foreign currency forward contracts
              and the date of disposition.

         Currency gains and losses are offset against market gains and losses on each trade before determining a net
"Section 988" gain or loss under the Internal Revenue Code for that trade, which may increase or decrease the amount
of the Fund's investment income available for distribution to its shareholders.

         |_| Temporary Defensive Investments. These can include (i) obligations issued or guaranteed by the U.S.
Government, its agencies or instrumentalities; (ii) commercial paper rated in the highest category by an established
rating organization; (iii) certificates of deposit or bankers' acceptances of domestic banks with assets of $1
billion or more; (iv) any of the foregoing securities that mature in one year or less (generally known as "cash
equivalents"); (v) other short-term corporate debt obligations; and (vi) repurchase agreements.

Investment Restrictions

         |X| What Are "Fundamental Policies?" Fundamental policies are those policies that the Fund has adopted to
govern its investments that can be changed only by the vote of a "majority" of the Fund's outstanding voting
securities. Under the Investment Company Act, a "majority" vote is defined as the vote of the holders of the lesser
of:

         |_| 67% or more of the shares present or represented by proxy at a shareholder meeting, if the holders of
         more than 50% of the outstanding shares are present or represented by proxy, or
         |_| more than 50% of the outstanding shares.

         The Fund's investment objective is a fundamental policy. Other policies described in the Prospectus or this
Statement of Additional Information are "fundamental" only if they are identified as such. The Fund's Board of
Trustees can change non-fundamental policies without shareholder approval. However, significant changes to
investment policies will be described in supplements or updates to the Prospectus or this Statement of Additional
Information, as appropriate. The Fund's most significant investment policies are described in the Prospectus.

         |X| Does the Fund Have Additional Fundamental Policies?  The following investment restrictions are
fundamental policies of the Fund.

         |_| The Fund cannot buy securities issued or guaranteed by any one issuer if more than 5% of its total
assets would be invested in securities of that issuer or if it would then own more than 10% of that issuer's voting
securities. This limitation applies to 75% of the Fund's total assets. The limit does not apply to securities issued
by the U.S. Government or any of its agencies or instrumentalities.

         |_| The Fund cannot lend money except in connection with the acquisition of debt securities which the
Fund's investment policies and restrictions permit it to purchase. However, the Fund is not prohibited from engaging
in repurchase transactions nor from making loans of portfolio securities.

         |_| The Fund cannot concentrate investments. That means it cannot invest 25% or more of its total assets in
any single industry. However, there is no limitation on investments in U.S. Government securities.

         |_| The Fund cannot invest in real estate or in interests in real estate. However, the Fund can purchase
securities of issuers holding real estate or interests in real estate (including securities of real estate
investment trusts).

         |_| The Fund cannot underwrite securities of other companies. A permitted exception is in case it is deemed
to be an underwriter under the Securities Act of 1933 when reselling any securities held in its own portfolio.


         |_| The Fund cannot borrow money in excess of one-third of the value of its total assets. The Fund can
borrow only from banks. The Fund can borrow only if it maintains a 300% ratio of assets to borrowings at all times
in the manner set forth in the Investment Company Act.


         |_|  The Fund cannot issue "senior securities," but this does not prohibit certain investment activities
for which assets of the Fund are designated as segregated, or margin, collateral or escrow arrangements are
established, to cover the related obligations. Examples of those activities include borrowing money, reverse
repurchase agreements, delayed-delivery and when-issued arrangements for portfolio securities transactions, and
contracts to buy or sell derivatives, hedging instruments, options or futures.

         |_| The Fund cannot pledge, mortgage or otherwise encumber, transfer or assign any of its assets to secure
a debt. Collateral arrangements for premium and margin payments in connection with hedging instruments are not
deemed to be a pledge of assets.

         |X| Non-Fundamental Investment Restrictions. The following operating policies of the Fund are not
fundamental policies and, as such, may be changed by vote of a majority of the Fund's Board of Trustees without
shareholder approval. These additional restrictions provide that:

         |_| The Fund cannot purchase securities on margin. However, the Fund can make margin deposits when using
hedging instruments permitted by any of its other policies.

         |_| The Fund cannot invest in companies for the purpose of acquiring control or management those companies.

         |_| The Fund cannot invest or hold securities of any issuer if officers and trustees of the Fund or the
Manager individually beneficially own more than 1/2 of 1% of the securities of that issuer and together own more
than 5% of the securities of that issuer.

         As a matter of non-fundamental policy, the Fund also may invest all of its assets in the securities of a
single open-end management investment company for which the Manager or one of its subsidiaries or a successor is
advisor or sub-advisor, notwithstanding any other fundamental investment policy or limitation. The Fund is permitted
by this policy (but not required) to adopt a "master-feeder" structure in which the Fund and other "feeder" funds
would invest all of their assets in a single pooled "master fund" in an effort to take advantage of potential
efficiencies. The Fund has no present intention of adopting a "master-feeder" structure. The Fund would seek
approval of its Board of Trustees, and update its Prospectus and this Statement of Additional Information, prior to
adopting a "master-feeder" structure.

         Unless the Prospectus or this Statement of Additional Information states that a percentage restriction
applies on an ongoing basis, it applies only at the time the Fund makes an investment with the exception of the
borrowing policy. The Fund need not sell securities to meet the percentage limits if the value of the investment
increases in proportion to the size of the Fund.

         For purposes of the Fund's policy not to concentrate its investments as described above, the Fund has
adopted the industry classifications set forth in Appendix A to this Statement of Additional Information. This is
not a fundamental policy.

How the Fund is Managed

Organization and History. The Fund was organized in November 1998 as a Massachusetts business trust. The Fund is an
open-end, diversified management investment company with an unlimited number of authorized shares of beneficial
interest.

         The Fund is governed by a Board of Trustees, which is responsible for protecting the interests of
shareholders under Massachusetts law. The Trustees meet periodically throughout the year to oversee the Fund's
activities, review its performance, and review the actions of the Manager. Although the Fund will not normally hold
annual meetings of its shareholders, it may hold shareholder meetings from time to time on important matters, and
shareholders have the right to call a meeting to remove a Trustee or to take other action described in the Fund's
Declaration of Trust.


         |_| Classes of Shares. The Board of Trustees has the power, without shareholder approval, to divide
unissued shares of the Fund into two or more classes.  The Board has done so, and the Fund currently has five
classes of shares: Class A, Class B, Class C, Class N and Class Y.  All classes invest in the same investment
portfolio. Only retirement plans may purchase Class N shares. Only certain institutional investors may elect to
purchase Class Y shares. Each class of shares:


o        has its own dividends and distributions,
o        pays certain expenses which may be different for the different classes,
o        may have a different net asset value,
o        has one vote at shareholder meetings, with fractional shares voting proportionally on matters submitted to
              the vote of shareholders
o        may have separate voting rights on matters in which interests of one class are different from the interests
              of another class, and
o        vote as a class on matters that affect that class alone.

         |_| Meetings of Shareholders. As a Massachusetts business trust, the Fund is not required to hold, and does
not plan to hold, regular annual meeting of shareholders. The Fund will hold meetings when required to do so by the
Investment Company Act or other applicable law. It will also do so when a shareholder meeting is called by the
Trustees or upon the request of the shareholders.

         Shareholders have the right, upon the declaration in writing or vote of two-thirds of the outstanding
shares of the Fund, to remove a Trustee. The Trustees will call a meeting of shareholders to vote on the removal of
a Trustee upon the written request of the record holders of 10% of its outstanding shares. If the Trustees receive a
request from at least 10 shareholders stating that they wish to communicate with the other shareholders to request a
meeting to remove a Trustee, the Trustees will then either make the Fund's shareholder list available to the
applicants or mail their communication to all other shareholders at the applicant's expense. The shareholders making
the request must have been shareholders for at least six months and must hold shares of the Fund valued at $25,000
or more or constituting at least 1% of the Fund's outstanding shares, whichever is less. The Trustees may also take
other action as permitted by the Investment Company Act.

         |_| Shareholder and Trustee Liability. The Fund's Declaration of Trust contains an express disclaimer of
shareholder or Trustee liability for the Fund's obligations. It also provides for indemnification and reimbursement
of expenses out of the Fund's property for any shareholder held personally liable for its obligations. The
Declaration of Trust also states that upon request, the Fund shall assume the defense of any claim made against a
shareholder for any act or obligation of the Fund and shall satisfy any judgment on that claim. Massachusetts law
permits a shareholder of a business trust (such as the Fund) to be held personally liable as a "partner" under
certain circumstances. However, the risk that a Fund shareholder will incur financial loss from being held liable as
a "partner" of the Fund is limited to the relatively remote circumstances in which the Fund would be unable to meet
its obligations.
         The Fund's contractual arrangements state that any person doing business with the Fund (and each
shareholder of the Fund) agrees under its Declaration of Trust to look solely to the assets of the Fund for
satisfaction of any claim or demand that may arise out of any dealings with the Fund. Additionally, the Trustees
shall have no personal liability to any such person, to the extent permitted by law.

Trustees and Officers of the Fund. The Fund's Trustees and officers and their principal occupations and business
affiliations and occupations during the past five years are listed below. Trustees denoted with an asterisk (*)
below are deemed to be "interested persons" of the Fund under the Investment Company Act. All of the Trustees are
Trustees or Directors of the following New York-based Oppenheimer funds1:


Oppenheimer California Municipal Fund                     Oppenheimer International Growth Fund
Oppenheimer Capital Appreciation Fund                     Oppenheimer International Small Company Fund
Oppenheimer Capital Preservation Fund                     Oppenheimer Money Market Fund, Inc.
Oppenheimer Concentrated Growth Fund                      Oppenheimer Multiple Strategies Fund
Oppenheimer Developing Markets Fund                       Oppenheimer Multi-Sector Income Trust
Oppenheimer Discovery Fund                                Oppenheimer Multi-State Municipal Trust
Oppenheimer Emerging Growth Fund                          Oppenheimer Municipal Bond Fund
Oppenheimer Emerging Technologies Fund                    Oppenheimer New York Municipal Fund
Oppenheimer Enterprise Fund                               Oppenheimer Rochester National Municipal Fund, Inc.
Oppenheimer Europe Fund                                   Oppenheimer Series Fund, Inc.
Oppenheimer Global Fund                                   Oppenheimer Special Value Fund
Oppenheimer Global Growth & Income Fund               Oppenheimer Trinity Core Fund
Oppenheimer Gold & Special Minerals Fund              Oppenheimer Trinity Large Cap Growth Fund
Oppenheimer Growth Fund                                   Oppenheimer Trinity Value Fund
                                                          Oppenheimer U.S. Government Trust

         Messrs. Spiro, Murphy, Zack, Wixted, Bishop
and Farrar and Mses. Feld and Ives respectively hold
the same offices with the other New York-based
Oppenheimer funds as with the Fund. As of December 10,
2001, the Trustees and officers of the Fund as a group
owned of record or beneficially less than 1% of each
class of shares of the Fund. The foregoing statement
does not reflect ownership of shares of the Fund held
of record by an employee benefit plan for employees of
the Manager, other than the shares beneficially owned
under the plan by the officers of the Fund listed
above. Mr. Murphy is a trustee of that plan.

Leon Levy, Chairman of the Board of Trustees, Age: 76.
6803 South Tucson Way, Englewood, Colorado 80112
General Partner of Odyssey Partners, L.P. (investment
partnership) (since 1982) and Chairman of the Board of
Avatar Holdings, Inc. (real estate development) (since
1981).

Donald W. Spiro, Vice Chairman of the Board of
Trustees, Age: 76.
6803 South Tucson Way, Englewood, Colorado 80112
Chairman Emeritus of the Manager (since 1991). Formerly
he held the following positions: Chairman (November
1987 - January 1991) and a director (January 1969 -
August 1999) of the Manager; President and Director of
OppenheimerFunds Distributor, Inc., a subsidiary of the
Manager and the Fund's Distributor (July 1978 - January
1992).

John V. Murphy*, President, Chief Executive Officer and
Trustee, Age: 52.
498 Seventh Avenue, New York, New York 10018
Chairman  and  Chief  Executive   Officer  and  director
(since July 2001) and  President  (since August 2000) of
the   Manager;   President   and  a  trustee   of  other
Oppenheimer funds;  President and a director (since July
2001) of Oppenheimer  Acquisition  Corp.,  the Manager's
parent  holding  company;   President,  Chief  Executive
Officer and a director  (since July 2001) of OFI Private
Investments,  Inc., an investment  advisor subsidiary of
the Manager;  Chairman and a director  (since July 2001)
of  Shareholder   Services,   Inc.  and  of  Shareholder
Financial  Services,  Inc.,  transfer agent subsidiaries
of the  Manager;  President  and a director  (since July
2001)  of  Oppenheimer  Partnership  Holdings,  Inc.,  a
holding  company  subsidiary of the Manager;  a director
of  HarbourView  Asset  Management  Corporation  and  of
Oppenheimer  Real Asset  Management,  Inc.  (since  July
2001),  investment advisor  subsidiaries of the Manager;
President   and  a   director   (since   July  2001)  of
OppenheimerFunds  Legacy  Program,  a  charitable  trust
program established by the Manager; formerly trustee of
MML Series Investment Fund an open-end investment
company (from November 1999 to November 2001); Chief
Operating Officer (August 2000 - July 2001) of the
Manager; Executive Vice President of MassMutual
Financial Group (from 1995 to 1997); Executive Vice
President and Chief Operating Officer of David L.
Babson & Company (from 1995 to 1997), an investment
advisor; Chief Operating Officer of Concert Capital
Management, Inc. (from 1993 to 1996), an investment
advisor.


Robert G. Galli, Trustee, Age: 68.
6803 South Tucson Way, Englewood, Colorado 80112
A Trustee or Director of other Oppenheimer funds.
Formerly he held the following positions: Vice Chairman
(October 1995 - December 1997) and Executive Vice
President (December 1977 - October 1995) of the
Manager; Executive Vice President and a director (April
1986 - October 1993) of HarbourView Asset Management
Corporation.

Phillip A. Griffiths, Trustee, Age: 63.
6803 South Tucson Way, Englewood, Colorado 80112
The Director of the Institute for Advanced Study,
Princeton, N.J. (since 1991), director of GSI Lumonics
(since 2001) and a member of the National Academy of
Sciences (since 1979); formerly (in descending
chronological order) a director of Bankers Trust
Corporation, Provost and Professor of Mathematics at
Duke University, a director of Research Triangle
Institute, Raleigh, N.C., and a Professor of
Mathematics at Harvard University.

Benjamin Lipstein, Trustee, Age: 78.
6803 South Tucson Way, Englewood, Colorado 80112
Professor Emeritus of Marketing, Stern Graduate School
of Business Administration, New York University.

Elizabeth B. Moynihan, Trustee, Age: 72.
6803 South Tucson Way, Englewood, Colorado 80112
Author and architectural historian; a trustee of the
Freer Gallery of Art and Arthur M. Sockler Gallery
(Smithsonian Institute), Trustees Council of the
National Building Museum; a member of the Trustees
Council, Preservation League of New York State.

Kenneth A. Randall, Trustee, Age: 74.
6803 South Tucson Way, Englewood, Colorado 80112
A director of Dominion Resources, Inc. (electric
utility holding company) and Prime Retail, Inc. (real
estate investment trust); formerly a director of
Dominion Energy, Inc. (electric power and oil & gas
producer), President and Chief Executive Officer of The
Conference Board, Inc. (international economic and
business research) and a director of Lumbermens Mutual
Casualty Company, American Motorists Insurance Company
and American Manufacturers Mutual Insurance Company.

Edward V. Regan, Trustee, Age: 71.
6803 South Tucson Way, Englewood, Colorado 80112
President, Baruch College, CUNY; a director of RBAsset
(real estate manager); a director of OffitBank;
formerly Trustee, Financial Accounting Foundation (FASB
and GASB); Senior Fellow of Jerome Levy Economics
Institute, Bard College; Chairman of Municipal
Assistance Corporation for the City of New York; New
York State Comptroller and Trustee of New York State
and Local Retirement Fund.






Russell S. Reynolds, Jr., Trustee, Age: 70.
6803 South Tucson Way, Englewood, Colorado 80112
Chairman of The Directorship Search Group, Inc.
(corporate governance consulting and executive
recruiting) (since 1993); a director of Professional
Staff Limited (a U.K. temporary staffing company)
(since 1995); a life trustee of International House
(non-profit educational organization), and a trustee of
the Greenwich Historical Society (since 1996).

Clayton K. Yeutter, Trustee, Age: 71.
6803 South Tucson Way, Englewood, Colorado 80112
Of Counsel, Hogan & Hartson (a law firm) (since 1993).
Other directorships: Caterpillar, Inc. (since 1993);
Zurich Financial Services (since 1998); ConAgra, Inc.
(since 1993); FMC Corporation (since 1993); Texas
Instruments Incorporated (since 1993); and Weyerhaeuser
Co. (since 1999); formerly a director of Farmers Group
Inc. (1994-2000), Zurich Allied AG (1998-2000) and of
Allied Zurich Pl.c (1998-2000).

Robert G. Zack, Secretary, Age: 53.
498 Seventh Avenue, New York, New York  10018
Acting General Counsel (From November 1, 2001), Senior
Vice President (since May 1985), Associate General
Counsel (since May 1981) of OppenheimerFunds, Inc.;
Assistant Secretary of Shareholder Services, Inc.
(since May 1985), Shareholder Financial Services, Inc.
(since November 1989); OppenheimerFunds International
Ltd. and Oppenheimer Millennium Funds plc (since
October 1997); an officer of other Oppenheimer funds.

Shanquan Li, Vice President and Portfolio Manager, Age:
47.
498 Seventh Avenue, New York, New York 10018
Vice President of the Manager (since November 1998); an
officer and portfolio manager of other Oppenheimer
funds; formerly Assistant Vice President of the Manager
(January 1997 - November 1998); prior to joining the
Manager in November 1995, he was a Senior Quantitative
Analyst in the Investment Management Policy Group of
Brown Brothers Harriman & Co. (February 1991 - October
1995).

Brian W. Wixted, Treasurer, Age: 42.
6803 South Tucson Way, Englewood, Colorado 80112
Senior Vice President and Treasurer (since March 1999)
of the Manager ; Treasurer (since March 1999) of
HarbourView Asset Management Corporation, Shareholder
Services, Inc., Oppenheimer Real Asset Management
Corporation, Shareholder Financial Services, Inc. and
Oppenheimer Partnership Holdings, Inc., of OFI Private
Investments, Inc. (since March 2000) and of
OppenheimerFunds International Ltd. and Oppenheimer
Millennium Funds plc (since May 2000); Treasurer and
Chief Financial Officer (since May 2000) of Oppenheimer
Trust Company; Assistant Treasurer (since March 1999)
of Oppenheimer Acquisition Corp.; an officer of other
Oppenheimer funds; formerly Principal and Chief
Operating Officer, Bankers Trust Company - Mutual Fund
Services Division (March 1995 - March 1999); Vice
President and Chief Financial Officer of CS First
Boston Investment Management Corp. (September 1991 -
March 1995).





Denis R. Molleur, Assistant Secretary, Age: 44.
498 Seventh Avenue, New York, New York 10018
Vice President and Senior Counsel of the Manager (since
July 1999); an officer of other Oppenheimer funds;
formerly a Vice President and Associate Counsel of the
Manager (September 1991 - July 1999).

Katherine P. Feld, Assistant Secretary, Age: 43.
498 Seventh Avenue, New York, New York 10018
Vice President and Senior Counsel of the Manager (since
July 1999); Vice President of OppenheimerFunds
Distributor, Inc. (since June 1990); an officer of
other Oppenheimer funds; formerly a Vice President and
Associate Counsel of the Manager (June 1990 - July
1999).

Kathleen T. Ives, Assistant Secretary, Age: 36.
6803 South Tucson Way, Englewood, CO 80112
Vice President and Assistant Counsel of the Manager
(since June 1998); an officer of other Oppenheimer
funds; formerly an Assistant Vice President and
Assistant Counsel of the Manager (August 1997 - June
1998); and Assistant Counsel of the Manager (August
1994 - August 1997).

Robert J. Bishop, Assistant Treasurer, Age: 43.
6803 South Tucson Way, Englewood, Colorado 80112
Vice President of the Manager/Mutual Fund Accounting
(since May 1996); an officer of other Oppenheimer
funds; formerly an Assistant Vice President of the
Manager/Mutual Fund Accounting (April 1994 - May 1996)
and a Fund Controller of the Manager.

Scott T. Farrar, Assistant Treasurer, Age: 36.
6803 South Tucson Way, Englewood, Colorado 80112
Vice President of the Manager/Mutual Fund Accounting
(since May 1996); Assistant Treasurer of Oppenheimer
Millennium Funds plc (since October 1997); an officer
of other Oppenheimer Funds; formerly an Assistant Vice
President of the Manager/Mutual Fund Accounting (April
1994 - May 1996), and a Fund Controller of the Manager.

         Remuneration of Trustees. The officers of the
Fund and one Trustee of the Fund (Mr. Murphy) who are
affiliated with the Manager receive no salary or fee
from the Fund. The remaining Trustees of the Fund
received the compensation shown below.  The
compensation from the Fund was paid during its fiscal
year ended August 31, 2001.  The compensation from all
of the New York-based Oppenheimer funds (including the
Fund) was received as a director, trustee or member of
a committee of the boards of those funds during the
calendar year 2000.








                                       ----------------------- ------------------------- ---------------------------
                                               Total                                                                                                                       Retirement
                                            Compensation                                                                                                                    Benefits
                                              From all                                                                                                                  Accrued as Part
Trustee's Name                             New York-based                                                                                                                   Of Fund
and Position                                Oppenheimer                    Aggregate Compensation                                                                           Expenses
                                         Funds (30 Funds)2                       From Fund1
                                       ----------------------- ------------------------- ---------------------------
-------------------------------------- ----------------------- ------------------------- ---------------------------
Leon Levy, Chairman                             $670                     $562                     $171,950
-------------------------------------- ----------------------- ------------------------- ---------------------------
-------------------------------------- ----------------------- ------------------------- ---------------------------
Robert Galli3                                   $54                       $9                      $191,134
Study Committee Member
-------------------------------------- ----------------------- ------------------------- ---------------------------
-------------------------------------- ----------------------- ------------------------- ---------------------------
Phillip A Griffiths4                            $48                       $3                      $59,529
-------------------------------------- ----------------------- ------------------------- ---------------------------
-------------------------------------- ----------------------- ------------------------- ---------------------------
Benjamin Lipstein                               $535                     $442                     $148,639
Study Committee Chairman
Audit Committee Member
-------------------------------------- ----------------------- ------------------------- ---------------------------
-------------------------------------- ----------------------- ------------------------- ---------------------------
Elizabeth B. Moynihan                           $251                     $185                     $104,695
Study Committee Member
-------------------------------------- ----------------------- ------------------------- ---------------------------
-------------------------------------- ----------------------- ------------------------- ---------------------------
Kenneth A. Randall                              $369                     $309                     $96,034
Audit Committee Chairman
-------------------------------------- ----------------------- ------------------------- ---------------------------
-------------------------------------- ----------------------- ------------------------- ---------------------------
Edward V. Regan                                 $139                     $99                      $94,995
Proxy Committee Chairman
Audit Committee Member
-------------------------------------- ----------------------- ------------------------- ---------------------------
-------------------------------------- ----------------------- ------------------------- ---------------------------
Russell S. Reynolds, Jr.                        $170                     $110                     $71,069
Proxy Committee Member
-------------------------------------- ----------------------- ------------------------- ---------------------------
-------------------------------------- ----------------------- ------------------------- ---------------------------
Donald Spiro                                    $69                       $3                      $63,435
-------------------------------------- ----------------------- ------------------------- ---------------------------
-------------------------------------- ----------------------- ------------------------- ---------------------------
Clayton K. Yeutter5                             $117                     $81                      $71,069
Proxy Committee Member
-------------------------------------- ----------------------- ------------------------- ---------------------------
1. Aggregate  compensation  includes fees, deferred  compensation,  if any, and retirement plan benefits accrued for a
Trustee, if any. For the fiscal year ended 2001.
2. For the 2000 calendar year.
3. Total  compensation for the 2000 calendar year includes  $86,439  compensation for serving as a Trustee or Director
of 10 other Oppenheimer funds.
4. Includes $45 deferred under Deferred Compensation Plan described below.
5. Includes $9 deferred under Deferred Compensation Plan described below.

         |X| Retirement Plan for Trustees. The Fund has adopted a retirement plan that provides for payments to
retired Trustees. Payments are up to 80% of the average compensation paid during a Trustee's five years of service
in which the highest compensation was received. A Trustee must serve as trustee for any of the New York-based
Oppenheimer funds for at least 15 years to be eligible for the maximum payment. Each Trustee's retirement benefits
will depend on the amount of the Trustee's future compensation and length of service.

         |X| Deferred Compensation Plan for Trustees. The Board of Trustees has adopted a Deferred Compensation Plan
for disinterested trustees that enables them to elect to defer receipt of all or a portion of the annual fees they
are entitled to receive from the Fund. Under the plan, the compensation deferred by a Trustee is periodically
adjusted as though an equivalent amount had been invested in shares of one or more Oppenheimer funds selected by the
Trustee. The amount paid to the Trustee under the plan will be determined based upon the performance of the selected
funds.

         Deferral of Trustees' fees under the plan will not materially affect the Fund's assets, liabilities or net
income per share. The plan will not obligate the Fund to retain the services of any Trustee or to pay any particular
level of compensation to any Trustee. Pursuant to an Order issued by the Securities and Exchange Commission, the
Fund may invest in the funds selected by the Trustee under the plan without shareholder approval for the limited
purpose of determining the value of the Trustee's deferred fee account.

         |X| Major  Shareholders.  As of December 10, 2001,  the only persons who owned of record or who were known by
the Fund to own  beneficially  5% or more of the  Fund's  outstanding  Class A,  Class B, Class C, Class N and Class Y
shares were:

Charles  Schwab & Company Inc.  Special  Custody  Account for the exclusive  benefit of customers,  Attention:  Mutual
Funds, 101 Montgomery Street, San Francisco,  CA 94104-4122 which owned 55,818.886 Class A shares,  representing 5.62%
of the Class A shares then outstanding.

NFSC FEBO  #HKD-001716  Sylvia  Camillery,  241 East 86th Street,  New York, NY 10028 which owned  15,923.567  Class C
shares, representing 7.90% of the Class C shares then outstanding.

OppenheimerFunds,  Inc. c/o VP Financial Analysis 6803 South Tucson Way, Englewood,  CO 80112-3924 which owned 121.803
Class N shares, representing 100% of the Class N shares then outstanding.

Persumma  Financial  Services,  275 Grove  Street,  Auburndale  MA  02466-2272  which  owned  121.043  Class Y shares,
representing 54.76% of the Class Y shares then outstanding.

OppenheimerFunds,  Inc.,  c/o VP Financial  Analysis,  6803 South Tucson Way,  Englewood,  CO  80112-3924  which owned
100.00 Class Y shares, representing 45.24% of the Class Y shares then outstanding.

The Manager. The Manager is wholly-owned by Oppenheimer Acquisition Corp., a holding company controlled by
Massachusetts Mutual Life Insurance Company.

         |X| Code of Ethics. The Fund, the Manager and the Distributor have a Code of Ethics. It is designed to
detect and prevent improper personal trading by certain employees, including portfolio managers, that would compete
with or take advantage of the Fund's portfolio transactions. Covered persons include persons with knowledge of the
investments and investment intentions of the Fund and other funds advised by the Manager. The Code of Ethics does
permit personnel subject to the Code to invest in securities, including securities that may be purchased or held by
the Fund, subject to a number of restrictions and controls. Compliance with the Code of Ethics is carefully
monitored and enforced by the Manager.

         The Code of Ethics is an exhibit to the Fund's registration statement filed with the Securities and
Exchange Commission and can be reviewed and copied at the SEC's Public Reference Room in Washington, D.C. You can
obtain information about the hours of operation of the Public Reference Room by calling the SEC at 1.202.942.8090.
The Code of Ethics can also be viewed as part of the Fund's registration statement on the SEC's EDGAR database at
the SEC's Internet website at www.sec.gov. Copies may be obtained, after paying a duplicating fee, by electronic
request at the following E-mail address: publicinfo@sec.gov., or by writing to the SEC's Public Reference Section,
Washington, D.C. 20549-0102.

         |_| The Investment Advisory Agreement. The Manager provides investment advisory and management services to
the Fund under an investment advisory agreement between the Manager and the Fund. The Manager selects securities for
the Fund's portfolio and handles its day-to-day business. The agreement requires the Manager, at its expense, to
provide the Fund with adequate office space, facilities and equipment. It also requires the Manager to provide and
supervise the activities of all administrative and clerical personnel required to provide effective administration
for the Fund. Those responsibilities include the compilation and maintenance of records with respect to its
operations, the preparation and filing of specified reports, and composition of proxy materials and registration
statements for continuous public sale of shares of the Fund.

         The Fund pays expenses not expressly assumed by the Manager under the advisory agreement. The advisory
agreement lists examples of expenses paid by the Fund. The major categories relate to interest, taxes, brokerage
commissions, fees to certain Trustees, legal and audit expenses, custodian bank and transfer agent expenses, share
issuance costs, certain printing and registration costs and non-recurring expenses, including litigation costs. The
management fees paid by the Fund to the Manager are calculated at the rates described in the Prospectus, which are
applied to the assets of the Fund as a whole. The fees are allocated to each class of shares based upon the relative
proportion of the Fund's net assets represented by that class.

                        --------------------------- ------------------------------------------
                               Fiscal Year                   Management Fee Paid to
                                Ended 8/31                   OppenheimerFunds, Inc.
                        --------------------------- ------------------------------------------
                        --------------------------- ------------------------------------------
                                  1999(1)                            $15,927
                        --------------------------- ------------------------------------------
                        --------------------------- ------------------------------------------
                                   2000                             $104,783
                        --------------------------- ------------------------------------------
                        --------------------------- ------------------------------------------
                                   2001                             $133,645
                        --------------------------- ------------------------------------------
                        1.  For the  period  from  03/01/99  (commencement  of  operations)  to
                        08/31/99


         The investment advisory agreement states that in the absence of willful misfeasance, bad faith, gross
negligence in the performance of its duties or reckless disregard of its obligations and duties under the investment
advisory agreement, the Manager is not liable for any loss the Fund sustains for any investment, adoption of any
investment policy, or the purchase, sale or retention of any security.

         The agreement permits the Manager to act as investment advisor for any other person, firm or corporation
and to use the name "Oppenheimer" in connection with other investment companies for which it may act as investment
advisor or general distributor. If the Manager shall no longer act as investment advisor to the Fund, the Manager
may withdraw the right of the Fund to use the name "Oppenheimer" as part of its name and the name of the Fund.

Brokerage Policies of the Fund

Brokerage Provisions of the Investment Advisory Agreement. One of the duties of the Manager under the investment
advisory agreement is to arrange the portfolio transactions for the Fund. The advisory agreement contains provisions
relating to the employment of broker-dealers to effect the Fund's portfolio transactions. The Manager is authorized
by the advisory agreement to employ broker-dealers, including "affiliated" brokers, as that term is defined in the
Investment Company Act. The Manager may employ broker-dealers, that the Managers thinks, in its best judgment based
on all relevant factors, will implement the policy of the Fund to obtain, at reasonable expense, the "best
execution" of the Fund's portfolio transactions. "Best execution" means prompt and reliable execution at the most
favorable price obtainable. The Manager need not seek competitive commission bidding. However, it is expected to be
aware of the current rates of eligible brokers and to minimize the commissions paid to the extent consistent with
the interests and policies of the Fund as established by its Board of Trustees.

         Under the investment advisory agreement, the Manager may select brokers (other than affiliates) that
provide brokerage and/or research services for the Fund and/or the other accounts over which the Manager or its
affiliates have investment discretion. The commissions paid to such brokers may be higher than another qualified
broker would charge, if the Manager makes a good faith determination that the commission is fair and reasonable in
relation to the services provided. Subject to those considerations, as a factor in selecting brokers for the Fund's
portfolio transactions, the Manager may also consider sales of shares of the Fund and other investment companies for
which the Manager or an affiliate serves as investment advisor.

Brokerage Practices Followed by the Manager. The Manager allocates brokerage for the Fund subject to the provisions
of the investment advisory agreement and the procedures and rules described above. Generally, the Manager's
portfolio traders allocate brokerage based upon recommendations from the Manager's portfolio managers. In certain
instances, portfolio managers may directly place trades and allocate brokerage. In either case, the Manager's
executive officers supervise the allocation of brokerage.

         Transactions in securities other than those for which an exchange is the primary market are generally done
with principals or market makers. In transactions on foreign exchanges, the Fund may be required to pay fixed
brokerage commissions and therefore would not have the benefit of negotiated commissions available in U.S. markets.
Brokerage commissions are paid primarily for transactions in listed securities or for certain fixed-income agency
transactions in the secondary market. Otherwise brokerage commissions are paid only if it appears likely that a
better price or execution can be obtained by doing so. In an option transaction, the Fund ordinarily uses the same
broker for the purchase or sale of the option and any transaction in the securities to which the option relates.

         Other funds advised by the Manager have investment policies similar to those of the Fund. Those other funds
may purchase or sell the same securities as the Fund at the same time as the Fund, which could affect the supply and
price of the securities. If two or more funds advised by the Manager purchase the same security on the same day from
the same dealer, the transactions under those combined orders are averaged as to price and allocated in accordance
with the purchase or sale orders actually placed for each account.

         Most purchases of debt obligations are principal transactions at net prices. Instead of using a broker for
those transactions, the Fund normally deals directly with the selling or purchasing principal or market maker unless
the Manager determines that a better price or execution can be obtained by using the services of a broker. Purchases
of portfolio securities from underwriters include a commission or concession paid by the issuer to the underwriter.
Purchases from dealers include a spread between the bid and asked prices. The Fund seeks to obtain prompt execution
of these orders at the most favorable net price.

         The investment advisory agreement permits the Manager to allocate brokerage for research services. The
research services provided by a particular broker may be useful only to one or more of the advisory accounts of the
Manager and its affiliates. The investment research received for the commissions of those other accounts may be
useful both to the Fund and one or more of the Manager's other accounts. Investment research may be supplied to the
Manager by a third party at the instance of a broker through which trades are placed.

         Investment research services include information and analysis on particular companies and industries as
well as market or economic trends and portfolio strategy, market quotations for portfolio evaluations, information
systems, computer hardware and similar products and services. If a research service also assists the Manager in a
non-research capacity (such as bookkeeping or other administrative functions), then only the percentage or component
that provides assistance to the Manager in the investment decision-making process may be paid in commission dollars.
The Board of Trustees permits the Manager to use concessions on fixed-price offerings to obtain research, in the
same manner as is permitted for agency transactions.

         The Board of Trustees permits the Manager to use stated commissions on secondary fixed-income agency trades
to obtain research if the broker represents to the Manager that: (i) the trade is not from or for the broker's own
inventory, (ii) the trade was executed by the broker on an agency basis at the stated commission, and (iii) the
trade is not a riskless principal transaction. The Board of Trustees permits the Manager to use concessions on
fixed-price offerings to obtain research, in the same manner as is permitted for agency transactions.

         The research services provided by brokers broadens the scope and supplements the research activities of the
Manager. That research provides additional views and comparisons for consideration, and helps the Manager to obtain
market information for the valuation of securities that are either held in the Fund's portfolio or are being
considered for purchase. The Manager provides information to the Board about the commissions paid to brokers
furnishing such services, together with the Manager's representation that the amount of such commissions was
reasonably related to the value or benefit of such services.

   ----------------------------------------- ----------------------------------------------------------------------
           Fiscal Year Ended 8/31:                       Total Brokerage Commissions Paid by the Fund1
   ----------------------------------------- ----------------------------------------------------------------------
   ----------------------------------------- ----------------------------------------------------------------------
                     1999                                                  $24,1832
   ----------------------------------------- ----------------------------------------------------------------------
   ----------------------------------------- ----------------------------------------------------------------------
                     2000                                                  $144,7063
   ----------------------------------------- ----------------------------------------------------------------------
   ----------------------------------------- ----------------------------------------------------------------------
                     2001                                                  $198,5214
   ----------------------------------------- ----------------------------------------------------------------------
1.       Amounts do not include spreads or concessions on principal transactions on a net trade basis.
2.       In the fiscal year ended 8/31/99,  the amount of transactions  directed to brokers for research  services was
       $1,245,709 and the amount of the commissions paid to broker-dealers for those services was $3,018.
3.       In the fiscal year ended 8/31/00,  the amount of transactions  directed to brokers for research  services was
       $11,831,400 and the amount of the commissions paid to broker-dealers for those services was $26,401.
4.       In the fiscal year ended 8/31/01,  the amount of transactions  directed to brokers for research  services was
       $125,951 and the amount of the commissions paid to broker-dealers for those services was $379.


Distribution and Service Plans

The Distributor. Under its General Distributor's Agreement with the Fund, the Distributor acts as the Fund's
principal underwriter in the continuous public offering of shares of the Fund's Class A, Class B, Class C, Class N
and Class Y shares. The Distributor bears the expenses normally attributable to sales, including advertising and the
cost of printing and mailing prospectuses, other than those furnished to existing shareholders. The Distributor is
not obligated to sell a specific number of shares. Expenses normally attributable to sales are borne by the
Distributor. Class N shares were not publicly offered during the periods shown below.

The sales charges and concessions paid to, or retained by, the Distributor from the sale of shares during the Fund's
two most recent fiscal years, and the contingent deferred sales charges retained by the Distributor on the
redemption of shares for the most recent fiscal year are shown in the tables below.

--------------- ----------------------- -----------------------
Fiscal Year     Aggregate Front-End     Class A Front-End
                                        Sales Charges
Ended 8/31:     Sales Charges on        Retained by
                Class A Shares          Distributor
--------------- ----------------------- -----------------------
--------------- ----------------------- -----------------------
     2000              $81,976                 $24,750
--------------- ----------------------- -----------------------
--------------- ----------------------- -----------------------
     2001              $58,326                 $21,7471
--------------- ----------------------- -----------------------
1.       Includes amounts retained by a broker-dealer that is an affiliate or a parent of the Distributor.

--------------- ----------------------- ----------------------- ------------------------ -----------------------
Fiscal Year     Concessions on Class    Concessions on Class    Concessions on Class C   Concessions on Class
Ended 8/31:     A Shares Advanced by    B Shares Advanced by    Shares Advanced by       N Shares Advanced by
                Distributor1            Distributor1            Distributor1             Distributor1
--------------- ----------------------- ----------------------- ------------------------ -----------------------
--------------- ----------------------- ----------------------- ------------------------ -----------------------
     2000               $5,233                 $126,129                 $8,653                    N/A
--------------- ----------------------- ----------------------- ------------------------ -----------------------
--------------- ----------------------- ----------------------- ------------------------ -----------------------
     2001               $2,477                 $67,090                  $23,052                  None2
--------------- ----------------------- ----------------------- ------------------------ -----------------------
1.       The  Distributor  advances  concession  payments to dealers for certain sales of Class A shares and for sales
     of Class B, Class C and Class N shares from its own resources at the time of sale.
2.       The inception date of Class N shares was March 1, 2001.

--------------- ----------------------- ----------------------- ------------------------ -----------------------
Fiscal    Year  Class A Contingent      Class B Contingent      Class C Contingent       Class N Contingent
                Deferred Sales          Deferred Sales                                   Deferred Sales
Ended 8/31      Charges Retained by     Charges Retained by     Deferred Sales Charges   Charges Retained by
                Distributor             Distributor             Retained by Distributor  Distributor
--------------- ----------------------- ----------------------- ------------------------ -----------------------
--------------- ----------------------- ----------------------- ------------------------ -----------------------
     2001                None                  $18,231                  $1,873                    None
--------------- ----------------------- ----------------------- ------------------------ -----------------------

Distribution and Service Plans. The Fund has adopted a Service Plan for Class A shares and Distribution and Service
Plans for Class B, Class C and Class N shares under Rule 12b-1 of the Investment Company Act. Under those plans the
Fund reimburses the Distributor for all or a portion of its costs incurred in connection with the distribution
and/or servicing of the shares of the particular class.
         Each plan has been approved by a vote of the Board of Trustees, including a majority of the Independent
Trustees2

         Under the plans, the Manager and the Distributor may make payments to affiliates and in their sole
discretion, from time to time, may use their own resources (at no direct cost to the Fund) to make payments to
brokers, dealers or other financial institutions for distribution and administrative services they perform.  The
Manager may use its profits from the advisory fee it receives from the Fund. In their sole discretion, the
Distributor and the Manager may increase or decrease the amount of payments they make from their own resources to
plan recipients.

         Unless a plan is terminated as described below, the plan continues in effect from year to year but only if
the Fund's Board of Trustees and its Independent Trustees specifically vote annually to approve its continuance.
Approval must be by a vote cast in person at a meeting called for the purpose of voting on continuing the plan.

         The Board of Trustees and the Independent Trustees must approve all material amendments to a plan. An
amendment to materially increase the amount of payments to be made under a plan must be approved by shareholders of
the class affected by the amendment. Because Class B shares of the Fund automatically convert into Class A shares
after six years, the Fund must obtain the approval of both Class A and Class B shareholders for a proposed material
amendment to the Class A Plan that would materially increase payments under the plan. That approval must be by a
"majority" (as defined in the Investment Company Act) of the shares of each Class, voting separately by class.

         While the plans are in effect, the Treasurer of the Fund shall provide separate written reports on the
plans to the Board of Trustees at least quarterly for its review. The Reports shall detail the amount of all
payments made under a plan and the purpose for which the payments were made. The reports on the Class B plan and
Class C plan shall also include the Distributor's distribution costs for that quarter and such costs for previous
fiscal periods that have been carried forward. Those reports are subject to the review and approval of the
Independent Trustees.

         Each plan states that while it is in effect, the selection and nomination of those Trustees of the Fund's
parent corporation who are not "interested persons" of the corporation (or the Fund) is committed to the discretion
of the Independent Trustees. This does not prevent the involvement of others in the selection and nomination process
as long as the final decision as to selection or nomination is approved by a majority of the Independent Trustees.

         Under the plans for a class, no payment will be made to any recipient in any quarter in which the aggregate
net asset value of all Fund shares of that class held by the recipient for itself and its customers does not exceed
a minimum amount, if any, that may be set from time to time by a majority of the Independent Trustees. The Board of
Trustees has set no minimum amount of assets to qualify for payments  under the plans.

         |_| Class A Service Plan Fees. Under the Class A service plan, the Distributor currently uses the fees it
receives from the Fund to pay brokers, dealers and other financial institutions (they are referred to as
"recipients") for personal services and account maintenance services they provide for their customers who hold Class
A shares. The services include, among others, answering customer inquiries about the Fund, assisting in establishing
and maintaining accounts in the Fund, making the Fund's investment plans available and providing other services at
the request of the Fund or the Distributor. The Class A service plan permits reimbursements to the Distributor at a
rate of up to 0.25% of average annual net assets of Class A shares. The Board has set the rate at that level. While
the plan permits the Board to authorize payments to the Distributor to reimburse itself for services under the plan,
the Board has not yet done so. The Distributor makes payments to plan recipients quarterly at an annual rate not to
exceed 0.25% of the average annual net assets consisting of Class A shares held in the accounts of the recipients or
their customers.

         For the fiscal year ended August 31, 2001, payments under the Plan for Class A shares totaled $18,981, all
of which was paid by the Distributor to recipients. That included $2,450 paid to an affiliate of the Distributor.
Any unreimbursed expenses the Distributor incurs with respect to Class A shares in any fiscal year cannot be
recovered in subsequent years. The Distributor may not use payments received the Class A Plan to pay any of its
interest expenses, carrying charges, or other financial costs, or allocation of overhead.

         |_| Class B, Class C and Class N Service and Distribution Plan Fees. Under each plan, service fees and
distribution fees are computed on the average of the net asset value of shares in the respective class, determined
as of the close of each regular business day during the period. The Class B, Class C and Class N plans provide for
the Distributor to be compensated at a flat rate, whether the Distributor's distribution expenses are more or less
than the amounts paid by the Fund under the plan during the period for which the fee is paid. The types of services
that recipients provide are similar to the services provided under the Class A service plan, described above.

      The Class B, Class C and the Class N Plans permit the Distributor to retain both the asset-based sales charges
and the service fees or to pay recipients the service fee on a quarterly basis, without payment in advance. However,
the Distributor currently intends to pay the service fee to recipients in advance for the first year after the
shares are purchased. After the first year shares are outstanding, the Distributor makes service fee payments
quarterly on those shares. The advance payment is based on the net asset value of shares sold. Shares purchased by
exchange do not qualify for the advanced service fee payment. If Class B, Class C or Class N shares are redeemed
during the first year after their purchase, the recipient of the service fees on those shares will be obligated to
repay the Distributor a pro rata portion of the advance payment of the service fee made on those shares.

         The asset-based sales charge and service fees increase Class B and Class C expenses by 1.00% and the
asset-based sales charge and service fees increases Class N expenses by 0.50% of the net assets per year of the
respective class.

         The Distributor retains the asset-based sales charge on Class B shares and Class N shares. The Distributor
retains the asset-based sales charge on Class C shares during the first year the shares are outstanding. It pays the
asset-based sales charge as an ongoing concession to the recipient on Class C shares outstanding for a year or more.
If a dealer has a special agreement with the Distributor, the Distributor will pay the Class B, Class C and/or Class
N service fee and the asset-based sales charge to the dealer quarterly in lieu of paying the sales concessions and
service fee in advance at the time of purchase.

      The asset-based sales charges on Class B, Class C and Class N shares allow investors to buy shares without a
front-end sales charge while allowing the Distributor to compensate dealers that sell those shares. The Fund pays
the asset-based sales charges to the Distributor for its services rendered in distributing Class B, Class C and
Class N shares. The payments are made to the Distributor in recognition that the Distributor:

o        pays sales concessions to authorized brokers and dealers at the time of sale and pays service fees as
         described above,
o        may finance payment of sales concessions and/or the advance of the service fee payment to recipients under
         the plans, or may provide such financing from its own resources or from the resources of an affiliate,
o        employs personnel to support distribution of Class B, Class C and Class N shares, and
o        bears the costs of sales literature, advertising and prospectuses (other than those furnished to current
         shareholders) and state "blue sky" registration fees and certain other distribution expenses,
o        may not be able to adequately compensate dealers that sell Class B, Class C and Class N shares without
         receiving payment under the plans and therefore may not be able to offer such Classes for sale absent the
         plans,
o        receives payments under the plans consistent with the service fees and asset-based sales charges paid by
         other non-proprietary funds that charge 12b-1 fees,
o        may use the payments under the plan to include the Fund in various third-party distribution programs that
         may increase sales of Fund shares,
o        may experience increased difficulty selling the Fund's shares if payments under the plan are discontinued
         because most competitor funds have plans that pay dealers for rendering distribution services as much or
         more than the amounts currently being paid by the Fund, and
o        may not be able to continue providing, at the same or at a lesser cost, the same quality distribution sales
         efforts and services, or to obtain such services from brokers and dealers, if the plan payments were to be
         discontinued.

                  When Class B, Class C or Class N shares are sold without the designation of a broker-dealer, the
Distributor is automatically designated as the broker-dealer of record. In those cases, the Distributor retains the
service fee and asset-based sales charge paid on Class B, Class C and Class N shares.

         The Distributor's actual expenses in selling Class B, Class C and Class N shares may be more than the
payments it receives from the contingent deferred sales charges collected on redeemed shares and from the Fund under
the plans. If either the Class B, Class C or Class N plan is terminated by the Fund, the Board of Trustees may allow
the Fund to continue payments of the asset-based sales charge to the Distributor for distributing shares before the
plan was terminated.

  -----------------------------------------------------------------------------------------------------------------
                     Distribution Fees Paid to the Distributor in the Fiscal Year Ended 8/31/01
  -----------------------------------------------------------------------------------------------------------------
                                                                       Distributor's            Distributor's
                                                                         Aggregate              Unreimbursed
                                 Total              Amount              Unreimbursed            Expenses as %
                               Payments           Retained by             Expenses              of Net Assets
  Class                       Under Plan          Distributor            Under Plan               of Class
  ------------------------ ------------------ -------------------- ----------------------- ------------------------
  ------------------------ ------------------ -------------------- ----------------------- ------------------------
  Class B Plan                  $58,276            $49,6001               $143,578                  2.80%
  ------------------------ ------------------ -------------------- ----------------------- ------------------------
  ------------------------ ------------------ -------------------- ----------------------- ------------------------
  Class C Plan                  $18,213             $9,4792               $20,375                   1.43%
  ------------------------ ------------------ -------------------- ----------------------- ------------------------
  ------------------------ ------------------ -------------------- ----------------------- ------------------------
  Class N Plan                   None                None                   None                     0%
  ------------------------ ------------------ -------------------- ----------------------- ------------------------
1.        Includes $806 paid to an affiliate of the Distributor's parent company.
2.     Includes $19 paid to an affiliate of the Distributor's parent company.

      All payments under the Class B, Class C and Class N plans are subject to the limitations imposed by the
Conduct Rules of the National Association of Securities Dealers, Inc. on payments of asset-based sales charges and
service fees.

Performance of the Fund

Explanation of Performance Terminology. The Fund uses a variety of terms to illustrate its investment performance.
Those terms include "cumulative total return," "average annual total return," "average annual total return at net
asset value and "total return at net asset value." An explanation of how total returns are calculated is set forth
below. The charts below show the Fund's performance as of the Fund's most recent fiscal year end. You can obtain
current performance information by calling the Fund's Transfer Agent at 1.800.525.7048 or by visiting the
OppenheimerFunds Internet website at www.oppenheimerfunds.com.

         The Fund's illustrations of its performance data in advertisements must comply with rules of the Securities
and Exchange Commission. Those rules describe the types of performance data that may be used and how it is to be
calculated. In general, any advertisement by the Fund of its performance data must include the average annual total
returns for the advertised class of shares of the Fund. Those returns must be shown for the 1-, 5-, and 10-year
periods (or the life of the class, if less) ending as of the most recently ended calendar quarter prior to the
publication of the advertisement (or its submission for publication).

         Use of standardized performance calculations enables an investor to compare the Fund's performance to the
performance of other funds for the same periods. However, a number of factors should be considered before using the
Fund's performance information as a basis for comparison with other investments:

         |_| Total returns measure the performance of a hypothetical account in the Fund over various periods and do
not show the performance of each shareholder's account. Your account's performance will vary from the model
performance data if your dividends are received in cash, or you buy or sell shares during the period, or you bought
your shares at a different time and price than the shares used in the model.
         |_| An investment in the Fund is not insured by the FDIC or any other government agency.
         |_| The Fund's performance returns do not reflect the effect of taxes on dividends and capital gains
distributions.
         |_| The principal value of the Fund's shares and total returns are not guaranteed and normally will
fluctuate on a daily basis.
         |_| When an investor's shares are redeemed, they may be worth more or less than their original cost.
         |_| Total returns for any given past period represent historical performance information and are not, and
should not be considered, a prediction of future returns.


         The performance of each class of shares is shown separately, because the performance of each class of
shares will usually be different. That is because of the different kinds of expenses each class bears. The total
returns of each class of shares of the Fund are affected by market conditions, the quality of the Fund's
investments, the maturity of debt investments, the types of investments the Fund holds, and its operating expenses
that are allocated to the particular class.






--------------------------------------------------------------------------------------------------------------------
                              The Fund's Total Returns for the Periods Ended 8/31/01
--------------------------------------------------------------------------------------------------------------------
------------- ------------------------- ----------------------------------------------------------------------------

                     Cumulative
                   Total Returns
                    (10 years or                               Average Annual Total Returns
   Class           life of class)
     of
   Shares
------------- ------------------------- ----------------------------------------------------------------------------
------------- ------------------------- ------------------------- ------------------------- ------------------------
                                                                           5-Year                   10-Year
                                                 1-Year              (or life of class)       (or life of class)
------------- ------------------------- ------------------------- ------------------------- ------------------------
------------- ------------ ------------ ------------ ------------ ------------ ------------ ------------ -----------
                 After       Without       After       Without       After       Without       After      Without
                 Sales        Sales        Sales        Sales        Sales        Sales        Sales       Sales
                Charge       Charge       Charge       Charge       Charge       Charge       Charge       Charge
------------- ------------ ------------ ------------ ------------ ------------ ------------ ------------ -----------
------------- ------------ ------------ ------------ ------------ ------------ ------------ ------------ -----------
Class A        -31.94%1     -27.78%1      -42.60%      -39.10%     -14.26%1     -12.21%1        N/A         N/A
------------- ------------ ------------ ------------ ------------ ------------ ------------ ------------ -----------
------------- ------------ ------------ ------------ ------------ ------------ ------------ ------------ -----------
Class B        -31.26%2     -29.24%2      -42.57%      -39.55%     -13.93%2     -12.92%2        N/A         N/A
------------- ------------ ------------ ------------ ------------ ------------ ------------ ------------ -----------
------------- ------------ ------------ ------------ ------------ ------------ ------------ ------------ -----------
Class C        -29.04%3     -29.04%3      -40.25%      -39.64%     -12.82%3     -12.82%3        N/A         N/A
------------- ------------ ------------ ------------ ------------ ------------ ------------ ------------ -----------
------------- ------------ ------------ ------------ ------------ ------------ ------------ ------------ -----------
Class N        -17.40%4     -16.57%4        N/A          N/A          N/A          N/A          N/A         N/A
------------- ------------ ------------ ------------ ------------ ------------ ------------ ------------ -----------
------------- ------------ ------------ ------------ ------------ ------------ ------------ ------------ -----------
Class Y        -27.03%5        N/A        -38.69%        N/A       -11.84%5        N/A          N/A         N/A
------------- ------------ ------------ ------------ ------------ ------------ ------------ ------------ -----------
1. Inception of Class A:   3/1/99
2. Inception of Class B:   3/1/99
3. Inception of Class C:   3/1/99
4. Inception of Class N:   3/1/01
5. Inception of Class Y:   3/1/99

         |X| Total Return Information. There are different types of "total returns" to measure the Fund's
performance. Total return is the change in value of a hypothetical investment in the Fund over a given period,
assuming that all dividends and capital gains distributions are reinvested in additional shares and that the
investment is redeemed at the end of the period. Because of differences in expenses for each class of shares, the
total returns for each class are separately measured. The cumulative total return measures the change in value over
the entire period (for example, 10 years). An average annual total return shows the average rate of return for each
year in a period that would produce the cumulative total return over the entire period. However, average annual
total returns do not show actual year-by-year performance. The Fund uses standardized calculations for its total
returns as prescribed by the SEC. The methodology is discussed below.


                                                   [OBJECT OMITTED]



         In calculating total returns for Class A shares, the current maximum sales charge of 5.75% (as a percentage
of the offering price) is deducted from the initial investment ("P") (unless the return is shown without sales
charge, as described below). For Class B shares, payment of the applicable contingent deferred sales charge is
applied, depending on the period for which the return is shown: 5.0% in the first year, 4.0% in the second year,
3.0% in the third and fourth years, 2.0% in the fifth year, 1.0% in the sixth year and none thereafter. For Class C
shares, the 1.0% contingent deferred sales charge is deducted for returns for the one-year period. For Class N
shares, the 1.0% contingent deferred sales charge is deducted for returns for the one-year and life-of-class periods
as applicable. There is no sales charge for Class Y shares.






         |_| Average Annual Total Return. The "average annual total return" of each class is an average annual
compounded rate of return for each year in a specified number of years. It is the rate of return based on the change
in value of a hypothetical initial investment of $1,000 ("P" in the formula below) held for a number of years ("n"
in the formula) to achieve an Ending Redeemable Value ("ERV" in the formula) of that investment, according to the
following formula:

         |_| Cumulative Total Return. The "cumulative total return" calculation measures the change in value of a
hypothetical investment of $1,000 over an entire period of years. Its calculation uses some of the same factors as
average annual total return, but it does not average the rate of return on an annual basis. Cumulative total return
is determined as follows:

                                                   [OBJECT OMITTED]



         |_| Total Returns at Net Asset Value. From time to time the Fund may also quote a cumulative or an average
annual total return "at net asset value" (without deducting sales charges) for Class A, Class B, Class C or Class N
shares. There is no sales charge on Class Y shares. Each is based on the difference in net asset value per share at
the beginning and the end of the period for a hypothetical investment in that class of shares (without considering
front-end or contingent deferred sales charges) and takes into consideration the reinvestment of dividends and
capital gains distributions.

Other Performance Comparisons. The Fund compares its performance annually to that of an appropriate broadly-based
market index in its Annual Report to shareholders. You can obtain that information by contacting the Transfer Agent
at the addresses or telephone numbers shown on the cover of this Statement of Additional Information. The Fund may
also compare its performance to that of other investments, including other mutual funds, or use rankings of its
performance by independent ranking entities. Examples of these performance comparisons are set forth below.

         |_| Lipper Rankings. From time to time the Fund may publish the ranking of the performance of its classes
of shares by Lipper, Inc. Lipper is a widely-recognized independent mutual fund monitoring service. Lipper monitors
the performance of regulated investment companies, including the Fund, and ranks their performance for various
periods based on investment styles. The performance of the Fund is ranked by Lipper against all other European
region funds. The Lipper performance rankings are based on total returns that include the reinvestment of capital
gain distributions and income dividends but do not take sales charges or taxes into consideration. Lipper also
publishes "peer-group" indices of the performance of all mutual funds in a category that it monitors and averages of
the performance of the funds in particular categories.

         |_| Morningstar Rankings. From time to time the Fund may publish the ranking and/or star rating of the
performance of its classes of shares by Morningstar, Inc., an independent mutual fund monitoring service.
Morningstar rates and ranks mutual funds in broad investment categories: domestic stock funds, international stock
funds, taxable bond funds and municipal bond funds. The Fund is ranked among international stock funds.

         Morningstar proprietary star rankings reflect historical risk-adjusted total investment return.  For each
fund with at least a 3-year history, Morningstar calculates a Morningstar RatingTM metric each month by subtracting
the return on a 90-day U.S. Treasury Bill from the fund's load-adjusted return for the same period, and then
adjusting this excess return for risk.  The top 10% of funds in each broad asset class receive 5 stars, the next
22.5% receive 4 stars, the next 35% receive 3 stars, the next 22.5% receive two stars and the bottom 10% receive 1
star.  The Overall Morningstar Rating for a fund is derived from a weighted average of the performance figures
associated with its 3-, 5- and 10-year (if applicable) Morningstar Ratings metrics.

         The Fund may also compare its total return ranking to that of other funds in its Morningstar category, in
addition to its star ratings. Those total return rankings are percentages from one percent to one hundred percent
and are not risk adjusted. For example, if a fund is in the 94th percentile, that means that 94% of the funds in the
same category performed better than it did.

         |_| Performance Rankings and Comparisons by Other Entities and Publications. From time to time the Fund may
include in its advertisements and sales literature performance information about the Fund cited in newspapers and
other periodicals such as The New York Times, The Wall Street Journal, Barron's, or similar publications. That
information may include performance quotations from other sources, including Lipper and Morningstar. The performance
of the Fund's Class A, Class B or Class C shares may be compared in publications to the performance of various
market indices or other investments, and averages, performance rankings or other benchmarks prepared by recognized
mutual fund statistical services.

         Investors may also wish to compare the returns on the Fund's share classes to the return on fixed-income
investments available from banks and thrift institutions. Those include certificates of deposit, ordinary
interest-paying checking and savings accounts, and other forms of fixed or variable time deposits, and various other
instruments such as Treasury bills. However, the Fund's returns and share prices are not guaranteed or insured by
the FDIC or any other agency and will fluctuate daily, while bank depository obligations may be insured by the FDIC
and may provide fixed rates of return. Repayment of principal and payment of interest on Treasury securities is
backed by the full faith and credit of the U.S. Government.

         From time to time, the Fund may publish rankings or ratings of the Manager or Transfer Agent, and of the
investor services provided by them to shareholders of the Oppenheimer funds, other than performance rankings of the
Oppenheimer funds themselves. Those ratings or rankings of shareholder and investor services by third parties may
include comparisons of their services to those provided by other mutual fund families selected by the rating or
ranking services. They may be based upon the opinions of the rating or ranking service itself, using its research or
judgment, or based upon surveys of investors, brokers, shareholders or others.

         From time to time the Fund may include in its advertisements and sales literature the total return
performance of a hypothetical investment account that includes shares of the Fund and other Oppenheimer funds. The
combined account may be part of an illustration of an asset allocation model or similar presentation. The account
performance may combine total return performance of the Fund and the total return performance of other Oppenheimer
funds included in the account. Additionally, from time to time, the Fund's advertisements and sales literature may
include, for illustrative or comparative purposes, statistical data or other information about general or specific
market and economic conditions. That may include, for example,
o        information about the performance of certain securities or commodities markets or segments of those
             markets,
o        information about the performance of the economies of particular countries or regions,
o        the earnings of companies included in segments of particular industries, sectors, securities markets,
             countries or regions,
o        the availability of different types of securities or offerings of securities,
o        information relating to the gross national or gross domestic product of the United States or other
             countries or regions,
o        comparisons of various market sectors or indices to demonstrate performance, risk, or other characteristics
             of the Fund.

ABOUT YOUR ACCOUNT

How to Buy Shares

         Additional information is presented below about the methods that can be used to buy shares of the Fund.
Appendix B contains more information about the special sales charge arrangements offered by the Fund, and the
circumstances in which sales charges may be reduced or waived for certain classes of investors.

AccountLink. When shares are purchased through AccountLink, each purchase must be at least $25. Shares will be
purchased two regular business days following the regular business day you instruct the Distributor to initiate the
Automated Clearing House ("ACH") transfer to buy the shares. That instruction must be received prior to the close of
The New York Stock Exchange that day. Dividends will begin to accrue on shares purchased with the proceeds of ACH
transfers on the business day after the shares are purchased. The Exchange normally closes at 4:00 P.M., but may
close earlier on certain days. The proceeds of ACH transfers are normally received by the Fund three days after the
transfers are initiated. If the proceeds of the ACH transfer are not received on a timely basis, the Distributor
reserves the right to cancel the purchase order. The Distributor and the Fund are not responsible for any delays in
purchasing shares resulting from delays in ACH transmissions.

Reduced Sales Charges. As discussed in the Prospectus, a reduced sales charge rate may be obtained for Class A
shares under Right of Accumulation and Letters of Intent because of the economies of sales efforts and reduction in
expenses realized by the Distributor, dealers and brokers making such sales. No sales charge is imposed in certain
other circumstances described in Appendix B to this Statement of Additional Information because the Distributor or
dealer or broker incurs little or no selling expenses.

         |_| Right of Accumulation. To qualify for the lower sales charge rates that apply to larger purchases of
Class A shares, you and your spouse can add together:

o        Class A and Class B shares you purchase for your individual accounts (including IRAs and 403(b) plans), or
                  for your joint accounts, or for trust or custodial accounts on behalf of your children who are
                  minors, and
o        Current purchases of Class A and Class B shares of the Fund and other Oppenheimer funds to reduce the sales
                  charge rate that applies to current purchases of Class A shares, and
o        Class A and Class B shares of Oppenheimer funds you previously purchased subject to an initial or
                  contingent deferred sales charge to reduce the sales charge rate for current purchases of Class A
                  shares, provided that you still hold your investment in one of the Oppenheimer funds.

         A fiduciary can count all shares purchased for a trust, estate or other fiduciary account (including one or
more employee benefit plans of the same employer) that has multiple accounts. The Distributor will add the value, at
current offering price, of the shares you previously purchased and currently own to the value of current purchases
to determine the sales charge rate that applies. The reduced sales charge will apply only to current purchases. You
must request it when you buy shares.

         |X| The Oppenheimer Funds. The Oppenheimer funds are those mutual funds for which the Distributor acts as
the distributor or the sub-distributor and currently include the following:

Oppenheimer Bond Fund                                         Oppenheimer Municipal Bond Fund
Oppenheimer California Municipal Fund                         Oppenheimer New York Municipal Fund
Oppenheimer Capital Appreciation Fund                         Oppenheimer New Jersey Municipal Fund
Oppenheimer Capital Preservation Fund                         Oppenheimer Pennsylvania Municipal Fund
Oppenheimer Capital Income Fund                               Oppenheimer Quest Balanced Value Fund
Oppenheimer Champion Income Fund                              Oppenheimer Quest Capital Value Fund, Inc.
Oppenheimer Concentrated Growth Fund                          Oppenheimer Quest Global Value Fund, Inc.
Oppenheimer Convertible Securities Fund                       Oppenheimer Quest Opportunity Value Fund
Oppenheimer Developing Markets Fund                           Oppenheimer Quest Value Fund, Inc.
Oppenheimer Disciplined Allocation Fund                       Oppenheimer Real Asset Fund
Oppenheimer Discovery Fund                                    Oppenheimer Rochester National Municipals Fund
Oppenheimer Emerging Growth Fund                              Oppenheimer Senior Floating Rate Fund
Oppenheimer Emerging Technologies Fund                        Oppenheimer Small Cap Value Fund
Oppenheimer Enterprise Fund                                   Oppenheimer Special Value Fund
Oppenheimer Europe Fund                                       Oppenheimer Strategic Income Fund
Oppenheimer Global Fund                                       Oppenheimer Total Return Fund, Inc.
Oppenheimer Global Growth & Income Fund                   Oppenheimer Trinity Core Fund
Oppenheimer Gold & Special Minerals Fund                  Oppenheimer Trinity Large Cap Growth Fund
Oppenheimer Growth Fund                                       Oppenheimer Trinity Value Fund
Oppenheimer High Yield Fund                                   Oppenheimer U.S. Government Trust
Oppenheimer Intermediate Municipal Fund                       Oppenheimer Value Fund
Oppenheimer International Bond Fund                           Limited-Term New York Municipal Fund
Oppenheimer International Growth Fund                         Rochester Fund Municipals
Oppenheimer International Small Company Fund                  OSM1- Gartmore Millennium Growth Fund II
Oppenheimer Limited-Term Government Fund                      OSM1 - Jennison Growth Fund
Oppenheimer Main Street Growth & Income Fund              OSM1 - Mercury Advisors S&P 500 Index
Oppenheimer Main Street Opportunity Fund                      OSM1 - Mercury Advisors Focus Growth Fund
Oppenheimer Main Street Small Cap Fund                        OSM1 - QM Active Balanced Fund
Oppenheimer MidCap Fund                                       OSM1 - Salomon Brothers Capital Fund
Oppenheimer Multiple Strategies Fund
and the following money market funds:

Centennial America Fund, L. P.                                Centennial New York Tax Exempt Trust
Centennial California Tax Exempt Trust                        Centennial Tax Exempt Trust
Centennial Government Trust                                   Oppenheimer Cash Reserves
Centennial Money Market Trust                                 Oppenheimer Money Market Fund, Inc.

1 - "OSM" stands for Oppenheimer Select Managers

         There is an initial sales charge on the purchase of Class A shares of each of the Oppenheimer funds except
the money market funds. Under certain circumstances described in this Statement of Additional Information,
redemption proceeds of certain money market fund shares may be subject to a contingent deferred sales charge.

Letters of Intent. Under a Letter of Intent, if you purchase Class A shares or Class A and Class B shares of the
Fund and other Oppenheimer funds during a 13 month period, you can reduce the sales charge rate that applies to your
purchases of Class A shares. The total amount of your intended purchases of both Class A and Class B shares will
determine the reduced sales charge rate for the Class A shares purchased during that period. You can include
purchases made up to 90 days before the date of the Letter.

         A Letter of Intent is an investor's statement in writing to the Distributor of the intention to purchase
Class A shares or Class A and Class B shares of the Fund (and other Oppenheimer funds) during a 13 month period (the
"Letter of Intent period"). At the investor's request, this may include purchases made up to 90 days prior to the
date of the Letter. The Letter states the investor's intention to make the aggregate amount of purchases of shares
which, when added to the investor's holdings of shares of those funds, will equal or exceed the amount specified in
the Letter. Purchases made by reinvestment of dividends or distributions of capital gains and purchases made at net
asset value without sales charge do not count toward satisfying the amount of the Letter.

         A Letter enables an investor to count the Class A and Class B shares purchased under the Letter to obtain
the reduced sales charge rate on purchases of Class A shares of the Fund (and other Oppenheimer funds) that applies
under the Right of Accumulation to current purchases of Class A shares. Each purchase of Class A shares under the
Letter will be made at the offering price (including the sales charge) that applies to a single lump-sum purchase of
shares in the amount intended to be purchased under the Letter.

         In submitting a Letter, the investor makes no commitment to purchase shares. However, if the investor's
purchases of shares within the Letter of Intent period, when added to the value (at offering price) of the
investor's holdings of shares on the last day of that period, do not equal or exceed the intended purchase amount,
the investor agrees to pay the additional amount of sales charge applicable to such purchases. That amount is
described in "Terms of Escrow," below (those terms may be amended by the Distributor from time to time). The
investor agrees that shares equal in value to 5% of the intended purchase amount will be held in escrow by the
Transfer Agent subject to the Terms of Escrow. Also, the investor agrees to be bound by the terms of the Prospectus,
this Statement of Additional Information and the Application used for a Letter of Intent. If those terms are
amended, as they may be from time to time by the Fund, the investor agrees to be bound by the amended terms and that
those amendments will apply automatically to existing Letters of Intent.

         The Transfer Agent will not hold shares in escrow for purchases of shares of the Fund and other Oppenheimer
funds by OppenheimerFunds prototype 401(k) plans under a Letter of Intent. If the intended purchase amount under a
Letter of Intent entered into by an OppenheimerFunds prototype 401(k) plan is not purchased by the plan by the end
of the Letter of Intent period, there will be no adjustment of commissions paid to the broker-dealer or financial
institution of record for accounts held in the name of that plan.

         If the total eligible purchases made during the Letter of Intent period do not equal or exceed the intended
purchase amount, the commissions previously paid to the dealer of record for the account and the amount of sales
charge retained by the Distributor will be adjusted to the rates applicable to actual total purchases. If total
eligible purchases during the Letter of Intent period exceed the intended purchase amount and exceed the amount
needed to qualify for the next sales charge rate reduction set forth in the Prospectus, the sales charges paid will
be adjusted to the lower rate. That adjustment will be made only if and when the dealer returns to the Distributor
the excess of the amount of concessions allowed or paid to the dealer over the amount of concessions that apply to
the actual amount of purchases. The excess concessions returned to the Distributor will be used to purchase
additional shares for the investor's account at the net asset value per share in effect on the date of such
purchase, promptly after the Distributor's receipt thereof.

         In determining the total amount of purchases made under a Letter, shares redeemed by the investor prior to
the termination of the Letter of Intent period will be deducted. It is the responsibility of the dealer of record
and/or the investor to advise the Distributor about the Letter in placing any purchase orders for the investor
during the Letter of Intent period. All of such purchases must be made through the Distributor.

         |_| Terms of Escrow That Apply to Letters of Intent.

         1. Out of the initial purchase (or subsequent purchases if necessary) made pursuant to a Letter, shares of
the Fund equal in value up to 5% of the intended purchase amount specified in the Letter shall be held in escrow by
the Transfer Agent. For example, if the intended purchase amount is $50,000, the escrow shall be shares valued in
the amount of $2,500 (computed at the offering price adjusted for a $50,000 purchase). Any dividends and capital
gains distributions on the escrowed shares will be credited to the investor's account.

         2. If the total minimum investment specified under the Letter is completed within the 13 month Letter of
Intent period, the escrowed shares will be promptly released to the investor.

         3. If, at the end of the 13 month Letter of Intent period the total purchases pursuant to the Letter are
less than the intended purchase amount specified in the Letter, the investor must remit to the Distributor an amount
equal to the difference between the dollar amount of sales charges actually paid and the amount of sales charges
which would have been paid if the total amount purchased had been made at a single time. That sales charge
adjustment will apply to any shares redeemed prior to the completion of the Letter. If the difference in sales
charges is not paid within 20 days after a request from the Distributor or the dealer, the Distributor will, within
sixty days of the expiration of the Letter, redeem the number of escrowed shares necessary to realize such
difference in sales charges. Full and fractional shares remaining after such redemption will be released from
escrow. If a request is received to redeem escrowed shares prior to the payment of such additional sales charge, the
sales charge will be withheld from the redemption proceeds.

         4. By signing the Letter, the investor irrevocably constitutes and appoints the Transfer Agent as
attorney-in-fact to surrender for redemption any or all escrowed shares.

         5. The shares eligible for purchase under the Letter (or the holding of which may be counted toward
completion of a Letter) include:
(a)      Class A shares sold with a front-end sales charge or subject to a Class A contingent deferred sales charge,
(b)      Class B shares of other Oppenheimer funds acquired subject to a contingent deferred sales charge, and
(c)      Class A or Class B shares acquired by exchange of either (1) Class A shares of one of the other Oppenheimer
                  funds that were acquired subject to a Class A initial or contingent deferred sales charge or (2)
                  Class B shares of one of the other Oppenheimer funds that were acquired subject to a contingent
                  deferred sales charge.

         6. Shares held in escrow hereunder will automatically be exchanged for shares of another fund to which an
exchange is requested, as described in the section of the Prospectus entitled "How to Exchange Shares" and the
escrow will be transferred to that other fund.

Asset Builder Plans. To establish an Asset Builder Plan to buy shares directly from a bank account, you must enclose
a check (the minimum is $25) for the initial purchase with your application. Shares purchased by Asset Builder Plan
payments from bank accounts are subject to the redemption restrictions for recent purchases described in the
Prospectus. Asset Builder Plans are available only if your bank is an ACH member. Asset Builder Plans may not be
used to buy shares for OppenheimerFunds-sponsored qualified retirement accounts. Asset Builder Plans also enable
shareholders of Oppenheimer Cash Reserves to use their account in that fund to make monthly automatic purchases of
shares of up to four other Oppenheimer funds.

         If you make automatic payments from your bank account to purchase shares of the Fund, your bank account
will be debited automatically. Normally the debit will be made two business days prior to the investment dates you
selected on your Application. Neither the Distributor, the Transfer Agent nor the Fund shall be responsible for any
delays in purchasing shares that result from delays in ACH transmissions.

         Before you establish Asset Builder payments, you should obtain a prospectus of the selected fund(s) from
your financial advisor (or the Distributor) and request an application from the Distributor. Complete the
application and return it. You may change the amount of your Asset Builder payment or your can terminate these
automatic investments at any time by writing to the Transfer Agent. The Transfer Agent requires a reasonable period
(approximately 10 days) after receipt of your instructions to implement them. The Fund reserves the right to amend,
suspend, or discontinue offering Asset Builder plans at any time without prior notice.

Retirement Plans. Certain types of retirement plans are entitled to purchase shares of the Fund without sales charge
or at reduced sales charge rates, as described in Appendix B to this Statement of Additional Information. Certain
special sales charge arrangements described in that Appendix apply to retirement plans whose records are maintained
on a daily valuation basis by Merrill Lynch, Pierce Fenner & Smith, Inc. ("Merrill Lynch") or an independent record
keeper that has a contract or special arrangement with Merrill Lynch. If on the date the plan sponsor signed the
Merrill Lynch record keeping service agreement the plan has less than $3 million in assets (other than assets
invested in money market funds) invested in applicable investments, then the retirement plan may purchase only Class
B shares of the Oppenheimer funds. Any retirement plans in that category that currently invest in Class B shares of
the Fund will have their Class B shares converted to Class A shares of the Fund when the plan's applicable
investments reach $5 million.

Cancellation of Purchase Orders. Cancellation of purchase orders for the Fund's shares (for example, when a purchase
check is returned to the Fund unpaid) causes a loss to be incurred when the net asset value of the Fund's shares on
the cancellation date is less than on the purchase date. That loss is equal to the amount of the decline in the net
asset value per share multiplied by the number of shares in the purchase order. The investor is responsible for that
loss. If the investor fails to compensate the Fund for the loss, the Distributor will do so. The Fund may reimburse
the Distributor for that amount by redeeming shares from any account registered in that investor's name, or the Fund
or the Distributor may seek other redress.

Classes of Shares. Each class of shares of the Fund represents an interest in the same portfolio of investments of
the Fund. However, each class has different shareholder privileges and features. The net income attributable to
Class B, Class C or Class N shares and the dividends payable on Class B, Class C or Class N shares will be reduced
by incremental expenses borne solely by that class. Those expenses include the asset-based sales charges to which
Class B, Class C and Class N shares are subject.

         The availability of three classes of shares permits an investor to choose the method of purchasing shares
that is more appropriate for the investor. That may depend on the amount of the purchase, the length of time the
investor expects to hold shares, and other relevant circumstances. Class A shares normally are sold subject to an
initial sales charge. While Class B, Class C and Class N shares have no initial sales charge, the purpose of the
deferred sales charge and asset-based sales charge on Class B, Class C and Class N shares is the same as that of the
initial sales charge on Class A shares - to compensate the Distributor and brokers, dealers and financial
institutions that sell shares of the Fund. A salesperson who is entitled to receive compensation from his or her
firm for selling Fund shares may receive different levels of compensation for selling one class of shares rather
than another.

         The Distributor will not accept any order in the amount of $500,000 or more for Class B shares or $1
million or more for Class C shares on behalf of a single investor (not including dealer "street name" or omnibus
accounts). That is because generally it will be more advantageous for that investor to purchase Class A shares of
the Fund.

|X|      Class A Shares Subject to a Contingent Deferred Sales Charge. For purchases of Class A shares subject to a
     contingent deferred sales charge as described in the Prospectus, no sales concessions will be paid to the
     broker-dealer of record, as described in the Prospectus, on sales of Class A shares purchased with the
     redemption proceeds of shares of another mutual fund offered as an investment option in a retirement plan in
     which Oppenheimer funds are also offered as investment options under a special arrangement with the
     Distributor, if the purchase occurs more than 30 days after the Oppenheimer funds are added as an investment
     option under that plan. Additionally, that concession will not be paid on purchases of shares by a retirement
     plan made with the redemption proceeds of Class N shares of one or more Oppenheimer funds held by the plan for
     more than 18 months.

         |_| Class B Conversion. Under current interpretation of applicable federal tax law by the Internal Revenue
Service, the conversion of Class B shares to Class A shares after six years is not treated as a taxable event for
the shareholder. If those laws, or the IRS interpretation of those laws, should change, the automatic conversion
feature may be suspended. In that event, no further conversion of Class B shares would occur while that suspension
remained in effect. Although Class B shares could then be exchanged for Class A shares on the basis of relative net
asset value of the two classes, without the imposition of a sales charge or fee, such exchange could constitute a
taxable event for the shareholder, and absent such exchange, Class B shares might continue to be subject to the
asset-based sales charge for longer than six years.

         |X|  Availability of Class N Shares.  In addition to the description of the types of retirement plans which
may purchase Class N shares contained in the prospectus, Class N shares also are offered to the following:

o        to all rollover IRAs,
o        to all direct rollovers from OppenheimerFunds-sponsored Pinnacle and Ascender retirement plans,
o        to all trustee-to-trustee IRA transfers,
o        to all 90-24 type 403(b) transfers,
o        to Group Retirement Plans (as defined in Appendix B to this Statement of Additional Information) which have
                      entered into a special agreement with the Distributor for that purpose,
o        to Retirement Plans qualified under Sections 401(a) or 401(k) of the Internal Revenue Code, the
                      recordkeeper or the plan sponsor for which has entered into a special agreement with the
                      Distributor,
o        to Retirement Plans of a plan sponsor where the aggregate assets of all such plans invested in the
                      Oppenheimer funds is $500,000 or more,
o        to OppenheimerFunds-sponsored Ascender 401(k) plans that pay for the purchase with the redemption proceeds
                      of Class A shares of one or more Oppenheimer funds.
o        to certain customers of broker-dealers and financial advisors that are identified in a special agreement
                      between the broker-dealer or financial advisor and the Distributor for that purpose.

              The sales concession and the advance of the service fee, as described in the Prospectus, will not be
     paid to dealers of record on sales of Class N shares on:

o        purchases of Class N shares in amounts of $500,000 or more by a retirement plan that pays for the purchase
                      with the redemption proceeds of Class A shares of one or more Oppenheimer funds (other than
                      rollovers from an OppenheimerFunds-sponsored Pinnacle or Ascender 401(k) plan to any IRA
                      invested in the Oppenheimer funds),
o        purchases of Class N shares in amounts of $500,000 or more by a retirement plan that pays for the purchase
                      with the redemption proceeds of  Class C shares of one or more Oppenheimer funds held by the
                      plan for more than one year (other than rollovers from an OppenheimerFunds-sponsored Pinnacle
                      or Ascender 401(k) plan to any IRA invested in the Oppenheimer funds), and
o        on purchases of Class N shares by an OppenheimerFunds-sponsored Pinnacle or Ascender 401(k) plan made with
                      the redemption proceeds of Class A shares of one or more Oppenheimer funds.

         |_| Allocation of Expenses. The Fund pays expenses related to its daily operations, such as custodian bank
fees, Trustees' fees, transfer agency fees, legal fees and auditing costs. Those expenses are paid out of the Fund's
assets and are not paid directly by shareholders. However, those expenses reduce the net asset values of shares, and
therefore are indirectly borne by shareholders through their investment.

         The methodology for calculating the net asset value, dividends and distributions of the Fund's share
classes recognizes two types of expenses. General expenses that do not pertain specifically to any one class are
allocated pro rata to the shares of all classes. The allocation is based on the percentage of the Fund's total
assets that is represented by the assets of each class, and then equally to each outstanding share within a given
class. Such general expenses include management fees, legal, bookkeeping and audit fees, printing and mailing costs
of shareholder reports, Prospectuses, Statements of Additional Information and other materials for current
shareholders, fees to unaffiliated Trustees, custodian bank expenses, share issuance costs, organization and
start-up costs, interest, taxes and brokerage commissions, and non-recurring expenses, such as litigation costs.

         Other expenses that are directly attributable to a particular class are allocated equally to each
outstanding share within that class. Examples of such expenses include distribution and service plan (12b-1) fees,
transfer and shareholder servicing agent fees and expenses, share registration fees and shareholder meeting expenses
(to the extent that such expenses pertain only to a specific class).

Determination of Net Asset Values Per Share. The net asset values per share of each class of shares of the Fund are
determined as of the close of business of The New York Stock Exchange on each day that the Exchange is open. The
calculation is done by dividing the value of the Fund's net assets attributable to a class by the number of shares
of that class that are outstanding. The Exchange normally closes at 4:00 P.M., New York time, but may close earlier
on some other days (for example, in case of weather emergencies or on days falling before a holiday). The Exchange's
most recent annual announcement (which is subject to change) states that it will close on New Year's Day,
Presidents' Day, Martin Luther King, Jr. Day, Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving
Day and Christmas Day. It may also close on other days.

         Dealers other than Exchange members may conduct trading in certain securities on days on which the Exchange
is closed (including weekends and U.S. holidays) or after 4:00 P.M. on a regular business day. Because the Fund's
net asset values will not be calculated on those days, the Fund's net asset values per share may be significantly
affected on such days when shareholders may not purchase or redeem shares. Additionally, trading on European and
Asian stock exchanges and over-the-counter markets normally is completed before the close of The New York Stock
Exchange.

         Changes in the values of securities traded on foreign exchanges or markets as a result of events that occur
after the prices of those securities are determined, but before the close of The New York Stock Exchange, will not
be reflected in the Fund's calculation of its net asset values that day unless the Manager determines that the event
is likely to effect a material change in the value of the security. The Manager, or an internal valuation committee
established by the Manager, as applicable, may establish a valuation, under procedures established by the Board and
subject to the approval, ratification and confirmation by the Board at its next ensuing meeting.

         |_| Securities Valuation. The Fund's Board of Trustees has established procedures for the valuation of the
Fund's securities. In general those procedures are as follows:

         |_| Equity securities traded on a U.S. securities exchange or on NASDAQ are valued as follows:
(1)      if last sale information is regularly reported, they are valued at the last reported sale price on the
                  principal exchange on which they are traded or on NASDAQ, as applicable, on that day, or
(2)      if last sale information is not available on a valuation date, they are valued at the last reported sale
                  price preceding the valuation date if it is within the spread of the closing "bid" and "asked"
                  prices on the valuation date or, if not, at the closing "bid" price on the valuation date.

         |_| Equity securities traded on a foreign securities exchange generally are valued in one of the following
ways:
(1)      at the last sale price available to the pricing service approved by the Board of Trustees, or
(2)      at the last sale price obtained by the Manager from the report of the principal exchange on which the
                  security is traded at its last trading session on or immediately before the valuation date, or
(3)      at the mean between the "bid" and "asked" prices obtained from the principal exchange on which the security
                  is traded or, on the basis of reasonable inquiry, from two market makers in the security.

         |_| Long-term debt securities having a remaining maturity in excess of 60 days are valued based on the mean
between the "bid" and "asked" prices determined by a portfolio pricing service approved by the Fund's Board of
Trustees or obtained by the Manager from two active market makers in the security on the basis of reasonable
inquiry.

         |_| The following securities are valued at the mean between the "bid" and "asked" prices determined by a
pricing service approved by the Fund's Board of Trustees or obtained by the Manager from two active market makers in
the security on the basis of reasonable inquiry:
(1)      debt instruments that have a maturity of more than 397 days when issued,
(2)      debt instruments that had a maturity of 397 days or less when issued and have a remaining maturity of more
              than 60 days, and
(3)      non-money market debt instruments that had a maturity of 397 days or less when issued and which have a
              remaining maturity of 60 days or less.

         |_| The following securities are valued at cost, adjusted for amortization of premiums and accretion of
discounts:
(1)      money market debt securities held by a non-money market fund that had a maturity of less than 397 days when
              issued that have a remaining maturity of 60 days or less, and
(2)      debt instruments held by a money market fund that has a remaining maturity of 397 days or less.

         |_| Securities (including restricted securities) not having readily-available market quotations are valued
at fair value determined under the Board's procedures. If the Manager is unable to locate two market makers willing
to give quotes, a security may be priced at the mean between the "bid" and "asked" prices provided by a single
active market maker (which in certain cases may be the "bid" price if no "asked" price is available).

         In the case of U.S. Government securities, mortgage-backed securities, corporate bonds and foreign
government securities, when last sale information is not generally available, the Manager may use pricing services
approved by the Board of Trustees. The pricing service may use "matrix" comparisons to the prices for comparable
instruments on the basis of quality, yield and maturity. Other special factors may be involved (such as the
tax-exempt status of the interest paid by municipal securities). The Manager will monitor the accuracy of the pricing
services. That monitoring may include comparing prices used for portfolio valuation to actual sales prices of
selected securities.

         The closing prices in the London foreign exchange market on a particular business day that are provided to
the Manager by a bank, dealer or pricing service that the Manager has determined to be reliable are used to value
foreign currency, including forward contracts, and to convert to U.S. dollars securities that are denominated in
foreign currency.

         Puts, calls, and futures are valued at the last sale price on the principal exchange on which they are
traded or on NASDAQ, as applicable, as determined by a pricing service approved by the Board of Trustees or by the
Manager. If there were no sales that day, they shall be valued at the last sale price on the preceding trading day
if it is within the spread of the closing "bid" and "asked" prices on the principal exchange or on NASDAQ on the
valuation date. If not, the value shall be the closing bid price on the principal exchange or on NASDAQ on the
valuation date. If the put, call or future is not traded on an exchange or on NASDAQ, it shall be valued by the mean
between "bid" and "asked" prices obtained by the Manager from two active market makers. In certain cases that may be
at the "bid" price if no "asked" price is available.

         When the Fund writes an option, an amount equal to the premium received is included in the Fund's Statement
of Assets and Liabilities as an asset. An equivalent credit is included in the liability section. The credit is
adjusted ("marked-to-market") to reflect the current market value of the option. In determining the Fund's gain on
investments, if a call or put written by the Fund is exercised, the proceeds are increased by the premium received.
If a call or put written by the Fund expires, the Fund has a gain in the amount of the premium. If the Fund enters
into a closing purchase transaction, it will have a gain or loss, depending on whether the premium received was more
or less than the cost of the closing transaction. If the Fund exercises a put it holds, the amount the Fund receives
on its sale of the underlying investment is reduced by the amount of premium paid by the Fund.
How to Sell Shares

         The information below supplements the terms and conditions for redeeming shares set forth in the Prospectus.

Reinvestment Privilege. Within six months of a redemption, a shareholder may reinvest all or part of the redemption
proceeds of:
         |_| Class A shares purchased subject to an initial sales charge or Class A shares on which a contingent
deferred sales charge which was paid, or
         |_| Class B shares that were subject to the Class B contingent deferred sales charge when redeemed.

         The reinvestment may be made without sales charge only in Class A shares of the Fund or any of the other
Oppenheimer funds into which shares of the Fund are exchangeable as described in "How to Exchange Shares" below.
Reinvestment will be at the net asset value next computed after the Transfer Agent receives the reinvestment order.
The shareholder must ask the Transfer Agent for that privilege at the time of reinvestment. This privilege does not
apply to Class C, Class N or Class Y shares. The Fund may amend, suspend or cease offering this reinvestment
privilege at any time as to shares redeemed after the date of such amendment, suspension or cessation.

         Any capital gain that was realized when the shares were redeemed is taxable, and reinvestment will not
alter any capital gains tax payable on that gain. If there has been a capital loss on the redemption, some or all of
the loss may not be tax deductible, depending on the timing and amount of the reinvestment. Under the Internal
Revenue Code, if the redemption proceeds of Fund shares on which a sales charge was paid are reinvested in shares of
the Fund or another of the Oppenheimer funds within 90 days of payment of the sales charge, the shareholder's basis
in the shares of the Fund that were redeemed may not include the amount of the sales charge paid. That would reduce
the loss or increase the gain recognized from the redemption. However, in that case the sales charge would be added
to the basis of the shares acquired by the reinvestment of the redemption proceeds.

Payments "In Kind." The Prospectus states that payment for shares tendered for redemption is ordinarily made in
cash. However, under certain circumstances, the Board of Trustees of the Fund may determine that it would be
detrimental to the best interests of the remaining shareholders of the Fund to make payment of a redemption order
wholly or partly in cash. In that case, the Fund may pay the redemption proceeds in whole or in part by a
distribution "in kind" of liquid securities from the portfolio of the Fund, in lieu of cash.

         The Fund has elected to be governed by Rule 18f-1 under the Investment Company Act. Under that rule, the
Fund is obligated to redeem shares solely in cash up to the lesser of $250,000 or 1% of the net assets of the Fund
during any 90-day period for any one shareholder. If shares are redeemed in kind, the redeeming shareholder might
incur brokerage or other costs in selling the securities for cash. The Fund will value securities used to pay
redemptions in kind using the same method the Fund uses to value its portfolio securities described above under
"Determination of Net Asset Values Per Share." That valuation will be made as of the time the redemption price is
determined.

Involuntary Redemptions. The Fund's Board of Trustees has the right to cause the involuntary redemption of the
shares held in any account if the aggregate net asset value of those shares is less than $500 or such lesser amount
as the Board may fix. The Board will not cause the involuntary redemption of shares in an account if the aggregate
net asset value of such shares has fallen below the stated minimum solely as a result of market fluctuations. If the
Board exercises this right, it may also fix the requirements for any notice to be given to the shareholders in
question (not less than 30 days). The Board may alternatively set requirements for the shareholder to increase the
investment, or set other terms and conditions so that the shares would not be involuntarily redeemed.

Transfers of Shares. A transfer of shares to a different registration is not an event that triggers the payment of
sales charges. Therefore, shares are not subject to the payment of a contingent deferred sales charge of any class
at the time of transfer to the name of another person or entity. It does not matter whether the transfer occurs by
absolute assignment, gift or bequest, as long as it does not involve, directly or indirectly, a public sale of the
shares. When shares subject to a contingent deferred sales charge are transferred, the transferred shares will
remain subject to the contingent deferred sales charge. It will be calculated as if the transferee shareholder had
acquired the transferred shares in the same manner and at the same time as the transferring shareholder.

         If less than all shares held in an account are transferred, and some but not all shares in the account
would be subject to a contingent deferred sales charge if redeemed at the time of transfer, the priorities described
in the Prospectus under "How to Buy Shares" for the imposition of the Class B, Class C or Class N contingent
deferred sales charge will be followed in determining the order in which shares are transferred.

Selling Shares by Wire. The wire of redemption proceeds may be delayed if the Fund's custodian bank is not open for
business on a day when the Fund would normally authorize the wire to be made, which is usually the Fund's next
regular business day following the redemption. In those circumstances, the wire will not be transmitted until the
next bank business day on which the Fund is open for business. No dividends will be paid on the proceeds of redeemed
shares awaiting transfer by wire.

Distributions From Retirement Plans. Requests for distributions from OppenheimerFunds-sponsored IRAs, 403(b)(7)
custodial plans, 401(k) plans or pension or profit-sharing plans should be addressed to "Director, OppenheimerFunds
Retirement Plans," c/o the Transfer Agent at its address listed in "How To Sell Shares" in the Prospectus or on the
back cover of this Statement of Additional Information. The request must:

(1)      state the reason for the distribution;
(2)      state the owner's awareness of tax penalties if the distribution is premature; and
(3)      conform to the requirements of the plan and the Fund's other redemption requirements.

         Participants (other than self-employed persons) in OppenheimerFunds-sponsored pension or profit-sharing
plans with shares of the Fund held in the name of the plan or its fiduciary may not directly request redemption of
their accounts. The plan administrator or fiduciary must sign the request.

         Distributions from pension and profit sharing plans are subject to special requirements under the Internal
Revenue Code and certain documents (available from the Transfer Agent) must be completed and submitted to the
Transfer Agent before the distribution may be made. Distributions from retirement plans are subject to withholding
requirements under the Internal Revenue Code, and IRS Form W-4P (available from the Transfer Agent) must be
submitted to the Transfer Agent with the distribution request, or the distribution may be delayed. Unless the
shareholder has provided the Transfer Agent with a certified tax identification number, the Internal Revenue Code
requires that tax be withheld from any distribution even if the shareholder elects not to have tax withheld. The
Fund, the Manager, the Distributor, and the Transfer Agent assume no responsibility to determine whether a
distribution satisfies the conditions of applicable tax laws and will not be responsible for any tax penalties
assessed in connection with a distribution.

Special Arrangements for Repurchase of Shares from Dealers and Brokers. The Distributor is the Fund's agent to
repurchase its shares from authorized dealers or brokers on behalf of their customers. Shareholders should contact
their broker or dealer to arrange this type of redemption. The repurchase price per share will be the net asset
value next computed after the Distributor receives an order placed by the dealer or broker. However, if the
Distributor receives a repurchase order from a dealer or broker after the close of The New York Stock Exchange on a
regular business day, it will be processed at that day's net asset value if the order was received by the dealer or
broker from its customers prior to the time the Exchange closes. Normally, the Exchange closes at 4:00 P.M., but may
do so earlier on some days. Additionally, the order must have been transmitted to and received by the Distributor
prior to its close of business that day (normally 5:00 P.M.).

         Ordinarily, for accounts redeemed by a broker-dealer under this procedure, payment will be made within
three business days after the shares have been redeemed upon the Distributor's receipt of the required redemption
documents in proper form. The signature(s) of the registered owners on the redemption documents must be guaranteed
as described in the Prospectus.

Automatic Withdrawal and Exchange Plans. Investors owning shares of the Fund valued at $5,000 or more can authorize
the Transfer Agent to redeem shares (having a value of at least $50) automatically on a monthly, quarterly,
semi-annual or annual basis under an Automatic Withdrawal Plan. Shares will be redeemed three business days prior to
the date requested by the shareholder for receipt of the payment. Automatic withdrawals of up to $1,500 per month
may be requested by telephone if payments are to be made by check payable to all shareholders of record. Payments
must also be sent to the address of record for the account and the address must not have been changed within the
prior 30 days. Required minimum distributions from OppenheimerFunds-sponsored retirement plans may not be arranged
on this basis.

         Payments are normally made by check, but shareholders having AccountLink privileges (see "How To Buy
Shares") may arrange to have Automatic Withdrawal Plan payments transferred to the bank account designated on the
Account Application or by signature-guaranteed instructions sent to the Transfer Agent. Shares are normally redeemed
pursuant to an Automatic Withdrawal Plan three business days before the payment transmittal date you select in the
Account Application. If a contingent deferred sales charge applies to the redemption, the amount of the check or
payment will be reduced accordingly.


         The Fund cannot guarantee receipt of a payment on the date requested. The Fund reserves the right to amend,
suspend or discontinue offering these plans at any time without prior notice. Because of the sales charge assessed
on Class A share purchases, shareholders should not make regular additional Class A share purchases while
participating in an Automatic Withdrawal Plan. Class B, Class C and Class N shareholders should not establish
automatic withdrawal plans, because of the potential imposition of the contingent deferred sales charge on such
withdrawals (except where the Class B, Class C or Class N contingent deferred sales charge is waived as described in
Appendix B to this Statement of Additional Information)

         By requesting an Automatic Withdrawal or Exchange Plan, the shareholder agrees to the terms and conditions
that apply to such plans, as stated below. These provisions may be amended from time to time by the Fund and/or the
Distributor. When adopted, any amendments will automatically apply to existing Plans.

         |_| Automatic Exchange Plans. Shareholders can authorize the Transfer Agent to exchange a pre-determined
amount of shares of the Fund for shares (of the same class) of other Oppenheimer funds automatically on a monthly,
quarterly, semi-annual or annual basis under an Automatic Exchange Plan. The minimum amount that may be exchanged to
each other fund account is $25. Instructions should be provided on the OppenheimerFunds Application or
signature-guaranteed instructions. Exchanges made under these plans are subject to the restrictions that apply to
exchanges as set forth in "How to Exchange Shares" in the Prospectus and below in this Statement of Additional
Information.

         |_| Automatic Withdrawal Plans. Fund shares will be redeemed as necessary to meet withdrawal payments.
Shares acquired without a sales charge will be redeemed first. Shares acquired with reinvested dividends and capital
gains distributions will be redeemed next, followed by shares acquired with a sales charge, to the extent necessary
to make withdrawal payments. Depending upon the amount withdrawn, the investor's principal may be depleted. Payments
made under these plans should not be considered as a yield or income on your investment.

         The Transfer Agent will administer the investor's Automatic Withdrawal Plan as agent for the shareholder(s)
(the "Planholder") who executed the Plan authorization and application submitted to the Transfer Agent. Neither the
Fund nor the Transfer Agent shall incur any liability to the Planholder for any action taken or not taken by the
Transfer Agent in good faith to administer the Plan. Share certificates will not be issued for shares of the Fund
purchased for and held under the Plan, but the Transfer Agent will credit all such shares to the account of the
Planholder on the records of the Fund. Any share certificates held by a Planholder may be surrendered unendorsed to
the Transfer Agent with the Plan application so that the shares represented by the certificate may be held under the
Plan.

         For accounts subject to Automatic Withdrawal Plans, distributions of capital gains must be reinvested in
shares of the Fund, which will be done at net asset value without a sales charge. Dividends on shares held in the
account may be paid in cash or reinvested.

         Shares will be redeemed to make withdrawal payments at the net asset value per share determined on the
redemption date. Checks or AccountLink payments representing the proceeds of Plan withdrawals will normally be
transmitted three business days prior to the date selected for receipt of the payment, according to the choice
specified in writing by the Planholder. Receipt of payment on the date selected cannot be guaranteed.

         The amount and the interval of disbursement payments and the address to which checks are to be mailed or
AccountLink payments are to be sent may be changed at any time by the Planholder by writing to the Transfer Agent.
The Planholder should allow at least two weeks' time after mailing such notification for the requested change to be
put in effect. The Planholder may, at any time, instruct the Transfer Agent by written notice to redeem all or any
part of, the shares held under the Plan. That notice must be in proper form in accordance with the requirements of
the then-current Prospectus of the Fund. In that case, the Transfer Agent will redeem the number of shares requested
at the net asset value per share in effect and will mail a check for the proceeds to the Planholder.

         The Planholder may terminate a Plan at any time by writing to the Transfer Agent. The Fund may also give
directions to the Transfer Agent to terminate a Plan. The Transfer Agent will also terminate a Plan upon its receipt
of evidence satisfactory to it that the Planholder has died or is legally incapacitated. Upon termination of a Plan
by the Transfer Agent or the Fund, shares that have not been redeemed will be held in uncertificated form in the
name of the Planholder. The account will continue as a dividend-reinvestment, uncertificated account unless and
until proper instructions are received from the Planholder, his or her executor or guardian, or another authorized
person.

         To use shares held under the Plan as collateral for a debt, the Planholder may request issuance of a
portion of the shares in certificated form. Upon written request from the Planholder, the Transfer Agent will
determine the number of shares for which a certificate may be issued without causing the withdrawal checks to stop.
However, should such uncertificated shares become exhausted, Plan withdrawals will terminate.

         If the Transfer Agent ceases to act as transfer agent for the Fund, the Planholder will be deemed to have
appointed any successor transfer agent to act as agent in administering the Plan.

How to Exchange Shares

         As stated in the Prospectus, shares of a particular class of Oppenheimer funds having more than one class
of shares may be exchanged only for shares of the same class of other Oppenheimer funds.  Shares of Oppenheimer
funds that have a single class without a class designation are deemed "Class A" shares for this purpose. You can
obtain a current list showing which funds offer which classes by calling the Distributor at 1.800.525.7048.
o        All of the Oppenheimer funds currently offer Class A, B and C shares except Oppenheimer Money Market Fund,
     Inc., Centennial Money Market Trust, Centennial Tax Exempt Trust, Centennial Government Trust, Centennial New
     York Tax Exempt Trust, Centennial California Tax Exempt Trust, and Centennial America Fund, L.P., which only
     offer Class A shares.
o        Class B, Class C and Class N shares of Oppenheimer Cash Reserves are generally available only by exchange
     from the same class of shares of other Oppenheimer funds or through OppenheimerFunds-sponsored 401(k) plans.
o        Only certain Oppenheimer funds currently offer Class Y shares. Class Y shares of Oppenheimer Real Asset
     Fund may not be exchanged for shares of any other fund.
o        Only certain Oppenheimer funds currently offer Class N shares, which are only offered to retirement plans
     as described in the Prospectus. Class N shares can be exchanged only for Class N shares of other Oppenheimer
     funds.
o        Class M shares of Oppenheimer Convertible Securities Fund may be exchanged only for Class A shares of other
     Oppenheimer funds. They may not be acquired by exchange of shares of any class of any other Oppenheimer funds
     except Class A shares of Oppenheimer Money Market Fund or Oppenheimer Cash Reserves acquired by exchange of
     Class M shares.
o        Class X shares of Limited Term New York Municipal Fund can be exchanged only for Class B shares of other
     Oppenheimer funds and no exchanges may be made to Class X shares.
o        Shares of Oppenheimer Capital Preservation Fund may not be exchanged for shares of Oppenheimer Money Market
     Fund, Inc., Oppenheimer Cash Reserves or Oppenheimer Limited-Term Government Fund.  Only participants in
     certain retirement plans may purchase shares of Oppenheimer Capital Preservation Fund, and only those
     participants may exchange shares of other Oppenheimer funds for shares of Oppenheimer Capital Preservation Fund.
o        Class A, Class B, Class C and Class Y Shares of Oppenheimer Select Managers Mercury Advisors S&P Index Fund
     and Oppenheimer Select Managers QM Active Balanced Fund are only available to retirement plans and are
     available only by exchange from the same class of shares of other Oppenheimer funds held by retirement plans.

         Class A shares of Oppenheimer funds may be exchanged at net asset value for shares of any money market fund
offered by the Distributor.  Shares of any money market fund purchased without a sales charge may be exchanged for
shares of Oppenheimer funds offered with a sales charge upon payment of the sales charge. They may also be used to
purchase shares of Oppenheimer funds subject to an early withdrawal charge or contingent deferred sales charge.

         Shares of Oppenheimer Money Market Fund, Inc. purchased with the redemption proceeds of shares of other
mutual funds (other than funds managed by the Manager or its subsidiaries) redeemed within the 30 days prior to that
purchase may subsequently be exchanged for shares of other Oppenheimer funds without being subject to an initial
sales charge or contingent deferred sales charge. To qualify for that privilege, the investor or the investor's
dealer must notify the Distributor of eligibility for this privilege at the time the shares of Oppenheimer Money
Market Fund, Inc. are purchased.  If requested, they must supply proof of entitlement to this privilege.

         Shares of the Fund acquired by reinvestment of dividends or distributions from any of the other Oppenheimer
funds or from any unit investment trust for which reinvestment arrangements have been made with the Distributor may
be exchanged at net asset value for shares of any of the Oppenheimer funds.

         The Fund may amend, suspend or terminate the exchange privilege at any time.  Although the Fund may impose
these changes at any time, it will provide you with notice of those changes whenever it is required to do so by
applicable law.  It may be required to provide 60 days notice prior to materially amending or terminating the
exchange privilege.  That 60 day notice is not required in extraordinary circumstances.

         |_| How Exchanges Affect Contingent Deferred Sales Charges. No contingent deferred sales charge is imposed
on exchanges of shares of any class purchased subject to a contingent deferred sales charge. However, when Class A
shares acquired by exchange of Class A shares of other Oppenheimer funds purchased subject to a Class A contingent
deferred sales charge are redeemed within 18 months of the end of the calendar month of the initial purchase of the
exchanged Class A shares, the Class A contingent deferred sales charge is imposed on the redeemed shares. The Class
B contingent deferred sales charge is imposed on Class B shares acquired by exchange if they are redeemed within 6
years of the initial purchase of the exchanged Class B shares. The Class C contingent deferred sales charge is
imposed on Class C shares acquired by exchange if they are redeemed within 12 months of the initial purchase of the
exchanged Class C shares. With respect to Class N shares, a 1% contingent deferred sales charge will be imposed if
the retirement plan (not including IRAs and 403(b) plans) is terminated or Class N shares of all Oppenheimer funds
are terminated as an investment option of the plan and Class N shares are redeemed within 18 months after the plan's
first purchase of Class N shares of any Oppenheimer fund or with respect to an individual retirement plan or 403(b)
plan, Class N shares are redeemed within 18 months of the plan's first purchase of Class N shares of any Oppenheimer
fund.

         When Class A shares of Oppenheimer Cash Reserves and Oppenheimer Money Market Fund, Inc. acquired by
exchange of Class A shares of any Oppenheimer fund purchased subject to a Class A contingent deferred sales charge
are redeemed within the Class A holding period of the fund from which the shares were exchanged, the Class A
contingent deferred sales charge of the fund from which the shares were exchanged is imposed on the redeemed shares.

         When Class B or Class C shares are redeemed to effect an exchange, the priorities described in "How To Buy
Shares" in the Prospectus for the imposition of the Class B or the Class C contingent deferred sales charge will be
followed in determining the order in which the shares are exchanged. Before exchanging shares, shareholders should
take into account how the exchange may affect any contingent deferred sales charge that might be imposed in the
subsequent redemption of remaining shares.

         If Class B shares of an Oppenheimer fund are exchanged for Class B shares of Oppenheimer Limited-Term
Government Fund or Limited-Term New York Municipal Fund and those shares acquired by exchange are subsequently
redeemed, they will be subject to the contingent deferred sales charge of the Oppenheimer fund from which they were
exchanged. The contingent deferred sales charge rates of Class B shares of other Oppenheimer funds are typically
higher for the same holding period than for Class B shares of Oppenheimer Limited-Term Government Fund and
Limited-Term New York Municipal Fund. They will not be subject to the contingent deferred sales charge of
Oppenheimer Limited-Term Government Fund or Limited-Term New York Municipal Fund.

         Shareholders owning shares of more than one class must specify which class of shares they wish to exchange.

         |_| Limits on Multiple Exchange Orders. The Fund reserves the right to reject telephone or written exchange
requests submitted in bulk by anyone on behalf of more than one account. The Fund may accept requests for exchanges
of up to 50 accounts per day from representatives of authorized dealers that qualify for this privilege.

         |_| Telephone Exchange Requests. When exchanging shares by telephone, a shareholder must have an existing
account in the fund to which the exchange is to be made. Otherwise, the investors must obtain a Prospectus of that
fund before the exchange request may be submitted. If all telephone lines are busy (which might occur for example,
during periods of substantial market fluctuations), shareholders might not be able to request exchanges by telephone
and would have to submit written exchange requests.

         |_| Processing Exchange Requests. When you exchange some or all of your shares from one fund to another,
any special account feature such as an Asset Builder Plan or Automatic Withdrawal Plan will be switched to the new
fund account unless you tell the Transfer Agent not to do so. However, special redemption and exchange features such
as Automatic Exchange Plans and Automatic Withdrawal Plans cannot be switched to an account in Oppenheimer Senior
Floating Rate Fund. For full or partial exchanges of an account made by telephone, any special account features such
as Asset Builder Plans and Automatic Withdrawal Plans will be switched to the new account unless the Transfer Agent
is instructed otherwise.

         In connection with any exchange request, the number of shares exchanged may be less than the number
requested if the exchange or the number requested would include shares subject to a restriction cited in the
Prospectus or this Statement of Additional Information, or would include shares covered by a share certificate that
is not tendered with the request. In those cases, only the shares available for exchange without restriction will be
exchanged.

         The different Oppenheimer funds available for exchange have different investment objectives, policies and
risks. A shareholder should assure that the fund selected is appropriate for his or her investment and should be
aware of the tax consequences of an exchange. For federal income tax purposes, an exchange transaction is treated as
a redemption of shares of one fund and a purchase of shares of another. "Reinvestment Privilege," above, discusses
some of the tax consequences of reinvestment of redemption proceeds in such cases. The Fund, the Distributor, and
the Transfer Agent are unable to provide investment, tax or legal advice to a shareholder in connection with an
exchange request or any other investment transaction.

Dividends, Capital Gains and Taxes

         Dividends and Distributions. The Fund has no fixed dividend rate and there can be no assurance as to the
payment of any dividends or the realization of any capital gains. The dividends and distributions paid by a class of
shares will vary from time to time depending on market conditions, the composition of the Fund's portfolio, and
expenses borne by the Fund or borne separately by a class. Dividends are calculated in the same manner, at the same
time, and on the same day for each class of shares. However, dividends on Class B, Class C and Class N shares are
expected to be lower than dividends on Class A and Class Y shares. That is because of the effect of the asset-based
sales charge on Class B, Class C and Class N shares. Those dividends will also differ in amount as a consequence of
any difference in the net asset values of Class A, Class B, Class C, Class N and Class Y shares.

         Dividends, distributions and proceeds of the redemption of Fund shares represented by checks returned to
the Transfer Agent by the Postal Service as undeliverable will be invested in shares of Oppenheimer Money Market
Fund, Inc. Reinvestment will be made as promptly as possible after the return of such checks to the Transfer Agent,
to enable the investor to earn a return on otherwise idle funds. Unclaimed accounts may be subject to state
escheatment laws, and the Fund and the Transfer Agent will not be liable to shareholders or their representatives
for compliance with those laws in good faith.

Tax Status of the Fund's Dividends and Distributions. The Federal tax treatment of the Fund's dividends and capital
gains distributions is briefly highlighted in the Prospectus.

         Special provisions of the Internal Revenue Code govern the eligibility of the Fund's dividends for the
dividends-received deduction for corporate shareholders. Long-term capital gains distributions are not eligible for
the deduction. The amount of dividends paid by the Fund that may qualify for the deduction is limited to the
aggregate amount of qualifying dividends that the Fund derives from portfolio investments that the Fund has held for
a minimum period, usually 46 days. A corporate shareholder will not be eligible for the deduction on dividends paid
on Fund shares held for 45 days or less. To the extent the Fund's dividends are derived from gross income from
option premiums, interest income or short-term gains from the sale of securities or dividends from foreign
corporations, those dividends will not qualify for the deduction.

         Under the Internal Revenue Code, by December 31 each year, the Fund must distribute 98% of its taxable
investment income earned from January 1 through December 31 of that year and 98% of its capital gains realized in
the period from November 1 of the prior year through October 31 of the current year. If it does not, the Fund must
pay an excise tax on the amounts not distributed. It is presently anticipated that the Fund will meet those
requirements. However, the Board of Trustees and the Manager might determine in a particular year that it would be
in the best interests of shareholders for the Fund not to make such distributions at the required levels and to pay
the excise tax on the undistributed amounts. That would reduce the amount of income or capital gains available for
distribution to shareholders.

         The Fund intends to qualify as a "regulated investment company" under the Internal Revenue Code (although
it reserves the right not to qualify). That qualification enables the Fund to "pass through" its income and realized
capital gains to shareholders without having to pay tax on them. This avoids a double tax on that income and capital
gains, since shareholders normally will be taxed on the dividends and capital gains they receive from the Fund
(unless the Fund's shares are held in a retirement account or the shareholder is otherwise exempt from tax). If the
Fund qualifies as a "regulated investment company" under the Internal Revenue Code, it will not be liable for
federal income taxes on amounts paid by it as dividends and distributions. The Internal Revenue Code contains a
number of complex tests relating to qualification which the Fund might not meet in any particular year. If it did
not so qualify, the Fund would be treated for tax purposes as an ordinary corporation and receive no tax deduction
for payments made to shareholders.

         If prior distributions made by the Fund must be re-characterized as a non-taxable return of capital at the
end of the fiscal year as a result of the effect of the Fund's investment policies, they will be identified as such
in notices sent to shareholders.

Dividend Reinvestment in Another Fund. Shareholders of the Fund may elect to reinvest all dividends and/or capital
gains distributions in shares of the same class of any of the other Oppenheimer funds listed above. Reinvestment
will be made without sales charge at the net asset value per share in effect at the close of business on the payable
date of the dividend or distribution. To elect this option, the shareholder must notify the Transfer Agent in
writing and must have an existing account in the fund selected for reinvestment. Otherwise the shareholder first
must obtain a prospectus for that fund and an application from the Distributor to establish an account. Dividends
and/or distributions from shares of certain other Oppenheimer funds (other than Oppenheimer Cash Reserves) may be
invested in shares of this Fund on the same basis.

Additional Information About the Fund

The Distributor. The Fund's shares are sold through dealers, brokers and other financial institutions that have a
sales agreement with OppenheimerFunds Distributor, Inc., a subsidiary of the Manager that acts as the Fund's
Distributor. The Distributor also distributes shares of the other Oppenheimer funds and is sub-distributor for funds
managed by a subsidiary of the Manager.

The Transfer Agent. OppenheimerFunds Services, the Fund's Transfer Agent, is a division of the Manager.  It is
responsible for maintaining the Fund's shareholder registry and shareholder accounting records, and for paying
dividends and distributions to shareholders. It also handles shareholder servicing and administrative functions. It
serves as the Transfer Agent for an annual per account fee. It also acts as shareholder servicing agent for the
other Oppenheimer funds.  Shareholders should direct inquiries about their accounts to the Transfer Agent at the
address and toll-free numbers shown on the back cover.

The Custodian. The Bank of New York is the custodian bank of the Fund's assets. The custodian bank's
responsibilities include safeguarding and controlling the Fund's portfolio securities and handling the delivery of
such securities to and from the Fund. It will be the practice of the Fund to deal with the custodian bank in a
manner uninfluenced by any banking relationship the custodian may have with the Manager and its affiliates. The
Fund's cash balances with the custodian bank in excess of $100,000 are not protected by federal deposit insurance.
Those uninsured balances at times may be substantial.

Independent Auditors. KPMG LLP is the independent auditors of the Fund. They audit the Fund's financial statements
and perform other related audit services. They also act as auditors for certain other funds advised by the Manager
and its affiliates.


                           OPPENHEIMER EUROPE FUND


INDEPENDENT AUDITORS' REPORT

================================================================================
The Board of Trustees and Shareholders of Oppenheimer Europe Fund:

We have audited the accompanying statement of assets and liabilities of
Oppenheimer Europe Fund, including the statement of investments, as of August
31, 2001, and the related statement of operations for the year then ended, the
statements of changes in net assets for each of the two years in the period then
ended, and the financial highlights for each of the two years in the period then
ended and the period from March 1, 1999 (inception of offering) to August 31,
1999. 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 auditing standards generally
accepted in the United States of America. 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 August 31, 2001, 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 Europe Fund as of August 31, 2001, the results of its operations for
the year then ended, the changes in its net assets for each of the two years in
the period then ended, and the financial highlights for each of the two years in
the period then ended and the period from March 1, 1999 (inception of offering)
to August 31, 1999, in conformity with accounting principles generally accepted
in the United States of America.

/s/ KPMG LLP
KPMG LLP

Denver, Colorado
September 24, 2001


STATEMENT OF INVESTMENTS August 31, 2001

                                                                  Market Value
                                                      Shares        See Note 1
-------------------------------------------------------------------------------

Common Stocks--97.6%
Basic Materials--1.5%
Chemicals--1.5%
Aventis SA                                             2,600          $190,128
Bayer AG                                                 100             3,211
                                                                       -------
                                                                       193,339

Capital Goods--7.1%
Aerospace/Defense--1.1%
European Aeronautic Defense & Space Co.                8,500           145,317
Electrical Equipment--2.2%
ABB Ltd./1/                                           12,100           125,415
Siemens AG                                             3,300           168,052
                                                                       -------
                                                                       293,467

Industrial Services--2.4%
Bouygues SA                                            4,200           141,890
Hays plc                                              73,600           172,946
                                                                       -------
                                                                       314,836

Manufacturing--1.4%
Shire Pharmaceuticals Group plc/1/                    12,500           181,494
Communication Services--6.3%
Telecommunications-Long Distance--2.3%
British Telecommunications plc                        26,400           161,597
France Telecom SA                                      4,600           147,673
                                                                       -------
                                                                       309,270

Telephone Utilities--1.4%
Telefonica SA/1/                                      15,500           179,945
Telecommunications-Wireless--2.6%
Nokia Oyj                                              9,500           148,691
Telecom Italia Mobile SpA                             36,700           189,361
                                                                       -------
                                                                       338,052

Consumer Cyclicals--8.4%
Autos & Housing--3.6%
Bayerische Motoren Werke AG (BMW)                      9,200           295,430
CRH plc                                                  100             1,670
DaimlerChrysler AG                                     4,000           174,231
                                                                       -------
                                                                       471,331

                          11 OPPENHEIMER EUROPE FUND


STATEMENT OF INVESTMENTS Continued


                                                                  Market Value
                                                      Shares        See Note 1
-------------------------------------------------------------------------------

Consumer Services--1.3%
Cell Network AB/1/                                    20,060        $    3,647
Vivendi Universal SA                                   3,000           164,057
                                                                    ----------
                                                                       167,704

Media--1.2%
EMAP plc                                              15,600           162,468
Retail: General--1.0%
Pinault-Printemps-Redoute SA                           1,000           134,625
Retail: Specialty--1.3%
Karstadt Quelle AG                                     5,000           170,325

Consumer Staples--10.7%
Beverages--1.4%
Cadbury Schweppes plc                                 28,100           190,752
Broadcasting--1.2%
M6 Metropole Television                                6,300           157,380
Food--5.2%
Koninklijke Numico NV                                  6,262           206,773
Nestle SA                                              1,000           210,892
Sodexho Alliance SA                                    5,583           268,795
                                                                    ----------
                                                                       686,460

Food & Drug Retailers--1.5%
Carrefour SA                                           3,800           202,110
Household Goods--1.4%
L'Oreal SA                                             2,740           185,681

Energy--9.4%
Oil: International--9.4%
BP plc                                                25,200           213,650
ENI SpA                                               21,000           278,515
Premier Oil plc/1/                                   501,200           172,660
Royal Dutch Petroleum Co.                              4,100           232,517
Shell Transport & Trading Co. plc                     23,800           196,084
TotalFinaElf SA, B Shares                              1,000           147,797
                                                                    ----------
                                                                     1,241,223

Financial--25.0%
Banks--12.5%
ABN Amro Holding NV                                    7,400           136,191
Banco Bilbao Vizcaya Argentaria SA                    13,300           171,560
Banco Santander Central Hispano SA                    16,300           148,513
Barclays plc                                           5,500           166,735
Credit Lyonnais SA                                     4,700           184,399


                          12 OPPENHEIMER EUROPE FUND




                                                                  Market Value
                                                     Shares         See Note 1
------------------------------------------------------------------------------

Banks Continued
Credit Suisse Group/1/                                 3,200        $  136,025
Deutsche Bank AG                                       2,600           179,264
HSBC Holdings plc                                     15,600           181,475
Lloyds TSB Group plc                                  13,600           140,159
UBS AG                                                 4,200           204,829
                                                                     ---------
                                                                     1,649,150

Insurance--12.5%
Aegon NV                                               6,200           186,929
Allianz AG                                               700           196,042
Axa SA                                                 6,400           174,704
CGU plc                                               12,300           181,801
Muenchener Rueckversicherungs-Gesellschaft AG            800           229,353
Prudential plc                                        13,300           167,644
Skandia Forsakrings AB                                19,800           138,324
Swiss Re                                               2,000           198,910
Zurich Financial Services AG                             600           169,493
                                                                     ---------
                                                                     1,643,200

Healthcare--15.3%
Healthcare/Drugs--12.9%
Altana AG                                              5,000           245,268
AstraZeneca plc                                        5,500           265,420
Bioglan Pharma plc                                    23,400            73,495
Celltech Chiroscience plc1                             9,300           131,119
Elan Corp. plc, ADR1                                   3,300           171,435
GlaxoSmithKline plc                                   14,031           372,034
Novartis AG                                            5,700           207,804
Sanofi-Synthelabo SA                                     500            32,725
Serono SA, Cl. B                                         220           201,929
                                                                     ---------
                                                                     1,701,229

Healthcare/Supplies & Services--2.4%
Nycomed Amersham plc                                  17,300           152,444
Qiagen NV1                                             8,100           168,480
                                                                     ---------
                                                                       320,924

Technology--11.2%
Computer Services--0.8%
Debitel AG                                             2,500            44,784
Unilog SA                                                900            62,094
                                                                     ---------
                                                                       106,878


                          13 OPPENHEIMER EUROPE FUND


STATEMENT OF INVESTMENTS Continued



                                                                 Market Value
                                                      Shares       See Note 1
-----------------------------------------------------------------------------

Computer Software--4.1%
Business Objects SA/1/                                 8,950       $  221,141
Logica plc                                             6,800           68,847
Sage Group plc (The)                                  36,400          109,820
SAP AG                                                 1,000          135,424
                                                                   ----------
                                                                      535,232

Communications Equipment--1.1%
Vodafone Group plc                                    70,000          139,611
Electronics--5.2%
Koninklijke (Royal) Philips Electronics NV             9,700          261,525
Sagem SA                                               1,500           69,697
STMicroelectronics NV                                  6,000          182,588
Thomson Multimedia SA/1/                               6,000          170,107
                                                                   ----------
                                                                      683,917

Utilities--2.7%
Electric Utilities--2.7%
Electrabel SA                                            700          157,825
Veba AG                                                3,600          196,378
                                                                      354,203
                                                                   ----------
Total Common Stocks (Cost $13,734,704)                             12,860,123

Preferred Stocks--1.3%
Fresenius Medical Care AG, Preferred (Cost $161,473)   3,200          177,785

                                                       Units
Rights, Warrants and Certificates--0.0%
Banca Bipielle Network SpA Wts./1/ (Cost $0)           1,200                --
Total Investments, at Value (Cost $13,896,177)          98.9%       13,037,908
Other Assets Net of Liabilities                          1.1           144,283
                                                       -----------------------
Net Assets                                             100.0%      $13,182,191
                                                       =======================

                          14 OPPENHEIMER EUROPE FUND


Footnotes to Statement of Investments

1. Non-income-producing security
Distribution of investments representing geographic diversification, as a
percentage of total investments at value, is as follows:



Geographic Diversification                      Market Value            Percent
-------------------------------------------------------------------------------

Great Britain                                    $ 3,602,255              27.7%
France                                             2,982,907              22.9
Germany                                            2,215,547              17.0
Switzerland                                        1,455,296              11.2
The Netherlands                                    1,192,415               9.1
Spain                                                500,019               3.8
Italy                                                467,877               3.6
Ireland                                              173,105               1.3
Belgium                                              157,825               1.2
Finland                                              148,691               1.1
Sweden                                               141,971               1.1
                                                 ------------------------------
Total                                            $13,037,908             100.0%
                                                 ==============================


See accompanying Notes to Financial Statements.


                          15 OPPENHEIMER EUROPE FUND


STATEMENT OF ASSETS AND LIABILITIES August 31, 2001


------------------------------------------------------------------------------------------

Assets
Investments, at value (cost $13,896,177) - see accompanying statement         $ 13,037,908
Unrealized appreciation on foreign currency contracts                                1,197
Receivables and other assets:
Investments sold                                                                   498,659
Interest and dividends                                                              44,742
Shares of beneficial interest sold                                                  18,380
Other                                                                                3,130
                                                                               -----------
Total assets                                                                    13,604,016

Liabilities
Bank overdraft                                                                     302,996
Payables and other liabilities:
Investments purchased                                                               66,890
Shares of beneficial interest redeemed                                              17,982
Shareholder reports                                                                  7,530
Distribution and service plan fees                                                   5,773
Transfer and shareholder servicing agent fees                                        2,582
Trustees' compensation                                                               1,941
Other                                                                               16,131
                                                                               -----------
Total liabilities                                                                  421,825

Net Assets                                                                    $ 13,182,191
                                                                              ============

Composition of Net Assets
Paid-in capital                                                               $ 21,091,138
Undistributed (overdistributed) net investment loss                                 (1,805)
Accumulated net realized gain (loss) on investments and foreign                 (7,049,496)
currency transactions
Net unrealized appreciation (depreciation) on investments and
translation of assets and liabilities denominated in foreign
currencies                                                                        (857,646)
                                                                              ------------
Net Assets                                                                    $ 13,182,191
                                                                              ============

                          16 OPPENHEIMER EUROPE FUND


STATEMENT OF ASSETS AND LIABILITIES Continued



-------------------------------------------------------------------------------------------------
Net Asset Value Per Share

Class A Shares:
Net asset value and redemption price per share (based on net assets of
$6,629,790 and 964,393 shares of beneficial interest outstanding)                        $   6.87
Maximum offering price per share (net asset value plus sales charge
of 5.75% of offering price)                                                              $   7.29

Class B Shares:
Net asset value, redemption price (excludes applicable contingent deferred sales
charge) and offering price per share (based on net assets of $5,128,926
and 760,449 shares of beneficial interest outstanding)                                   $   6.74

Class C Shares:
Net asset value, redemption price (excludes applicable contingent deferred
sales charge) and offering price per share (based on net assets of $1,421,876
and 210,274 shares of beneficial interest outstanding)                                   $   6.76

Class N Shares:
Net asset value, redemption price (excludes applicable contingent deferred
sales charge) and offering price per share (based on net assets of $836
and 122 shares of beneficial interest outstanding)                                       $   6.85

Class Y Shares:
Net asset value, redemption price and offering price per share (based on
net assets of $763 and 110 shares of beneficial interest outstanding)                    $   6.94


See accompanying Notes to Financial Statements.

                          17 OPPENHEIMER EUROPE FUND


STATEMENT OF OPERATIONS For the Year Ended August 31, 2001


-------------------------------------------------------------------------------------

Investment Income
Dividends (net of foreign withholding taxes of $28,689)                  $   257,333
Interest                                                                      48,962
                                                                         -----------
Total income                                                                 306,295

Expenses
Management fees                                                              133,645
Distribution and service plan fees:
Class A                                                                       18,981
Class B                                                                       58,276
Class C                                                                       18,213
Transfer and shareholder servicing agent fees:
Class A                                                                       29,009
Class B                                                                       19,595
Class C                                                                        6,368
Class N                                                                            2
Class Y                                                                            1
Shareholder reports                                                           32,769
Legal, auditing and other professional fees                                   31,802
Custodian fees and expenses                                                   10,906
Trustees' compensation                                                         2,422
Other                                                                         11,509
                                                                         -----------
Total expenses                                                               373,498
Less reduction to custodian expenses                                            (818)
                                                                         -----------
Net expenses                                                                 372,680

Net Investment Loss                                                          (66,385)

Realized and Unrealized Gain (Loss)
Net realized gain (loss) on:
Investments                                                               (5,406,046)
Foreign currency transactions                                             (1,269,935)
                                                                         -----------
Net realized gain (loss)                                                  (6,675,981)

Net change in unrealized appreciation (depreciation) on:
Investments                                                               (2,566,014)
Translation of assets and liabilities denominated in foreign
currencies                                                                 1,315,171
                                                                         -----------
Net change                                                                (1,250,843)
                                                                         -----------
Net realized and unrealized gain (loss)                                   (7,926,824)

Net Decrease in Net Assets Resulting from Operations                     $(7,993,209)
                                                                         ===========

See accompanying Notes to Financial Statements.


                          18 OPPENHEIMER EUROPE FUND


STATEMENTS OF CHANGES IN NET ASSETS



Year Ended August 31,                                                                  2001                 2000
-----------------------------------------------------------------------------------------------------------------

Operations
Net investment income (loss)                                                    $   (66,385)         $  (133,073)
Net realized gain (loss)                                                         (6,675,981)            (145,308)
Net change in unrealized appreciation (depreciation)                             (1,250,843)             284,737
                                                                                ---------------------------------
Net increase (decrease) in net assets resulting from                             (7,993,209)               6,356
operations

Dividends and/or Distributions to Shareholders
Dividends from net investment income:
Class A                                                                                  --               (8,674)
Class B                                                                                  --                   --
Class C                                                                                  --                   --
Class N                                                                                  --                   --
Class Y                                                                                  --                   (2)
Distributions from net realized gain:
Class A                                                                                  --             (211,896)
Class B                                                                                  --              (79,596)
Class C                                                                                  --               (6,956)
Class N                                                                                  --                   --
Class Y                                                                                  --                  (46)
Distributions in excess of net realized gain:
Class A                                                                                  --              (53,404)
Class B                                                                                  --              (20,063)
Class C                                                                                  --               (1,753)
Class N                                                                                  --                   --
Class Y                                                                                  --                   (8)

Beneficial Interest Transactions

Net increase (decrease) in net assets resulting from
beneficial interest transactions:
Class A                                                                            (827,962)           7,717,305
Class B                                                                           1,458,939            5,971,636
Class C                                                                             634,311            1,263,514
Class N                                                                               1,000                   --
Class Y                                                                                  64                   --

Net Assets
Total increase (decrease)                                                        (6,726,857)          14,576,413
Beginning of period                                                              19,909,048            5,332,635
                                                                                ---------------------------------
End of period [including undistributed (overdistributed) net investment
loss of $(1,805) and $(2), respectively]                                        $13,182,191          $19,909,048
                                                                                =================================


See accompanying Notes to Financial Statements.


                          19 OPPENHEIMER EUROPE FUND


FINANCIAL HIGHLIGHTS



Class A Year Ended August 31,                               2001           2000         19991
----------------------------------------------------------------------------------------------

Per Share Operating Data
Net asset value, beginning of period                     $ 11.28        $ 10.78        $10.00
Income (loss) from investment operations:
Net investment income (loss)                                  --           (.06)          .02
Net realized and unrealized gain (loss)                    (4.41)          1.12           .76
                                                         -------------------------------------
Total income (loss) from investment operations             (4.41)          1.06           .78
Dividends and/or distributions to shareholders:
Dividends from net investment income                          --           (.02)           --
Distributions from net realized gain                          --           (.43)           --
Distributions in excess of net realized gain                  --           (.11)           --
                                                         -------------------------------------
Total dividends and/or distributions to                       --           (.56)           --
shareholders
Net asset value, end of period                           $  6.87        $ 11.28        $10.78
                                                         =====================================

Total Return, at Net Asset Value/2/                       (39.10)%         9.99%         7.80%

Ratios/Supplemental Data
Net assets, end of period (in thousands)                 $ 6,630        $11,809        $4,347
Average net assets (in thousands)                        $ 9,051        $ 8,366        $3,473
Ratios to average net assets:/3/
Net investment income (loss)                               (0.06)%        (0.73)%        0.54%
Expenses                                                    1.87%          1.94%         1.61%
Expenses, net of reduction to custodian expenses             N/A           1.92%          N/A
Portfolio turnover rate                                      285%           210%           83%


1. For the period from March 1, 1999 (inception of offering) to August 31, 1999.
2. Assumes a $1,000 hypothetical initial investment on the business day before
the first day of the fiscal period (or inception of offering), 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 of less than one full year.
3. Annualized for periods of less than one full year.

See accompanying Notes to Financial Statements.


                          20 OPPENHEIMER EUROPE FUND





Class B Year Ended August 31,                               2001          2000         19991
---------------------------------------------------------------------------------------------

Per Share Operating Data

Net asset value, beginning of period                     $ 11.15        $10.73        $10.00
Income (loss) from investment operations:
Net investment loss                                         (.06)         (.08)         (.03)
Net realized and unrealized gain (loss)                    (4.35)         1.04           .76
                                                         ------------------------------------
Total income (loss) from investment operations             (4.41)          .96           .73
Dividends and/or distributions to shareholders:
Dividends from net investment income                          --            --            --
Distributions from net realized gain                          --          (.43)           --
Distributions in excess of net realized gain                  --          (.11)           --
                                                         ------------------------------------
Total dividends and/or distributions to                       --          (.54)           --
shareholders
Net asset value, end of period                           $  6.74        $11.15        $10.73
                                                         ====================================

Total Return, at Net Asset Value/2/                       (39.55)%        9.09%         7.30%

Ratios/Supplemental Data
Net assets, end of period (in thousands)                 $ 5,129        $6,685        $  851
Average net assets (in thousands)                        $ 5,829        $3,954        $  401
Ratios to average net assets:/3/
Net investment loss                                        (0.85)%       (1.56)%       (0.87)%
Expenses                                                    2.68%         2.77%         2.60%
Expenses, net of reduction to custodian expenses             N/A          2.75%          N/A
Portfolio turnover rate                                      285%          210%           83%


1. For the period from March 1, 1999 (inception of offering) to August 31, 1999.
2. Assumes a $1,000 hypothetical initial investment on the business day before
the first day of the fiscal period (or inception of offering), 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 of less than one full year.
3. Annualized for periods of less than one full year.

See accompanying Notes to Financial Statements.



                          21 OPPENHEIMER EUROPE FUND


FINANCIAL HIGHLIGHTS Continued




Class C Year Ended August 31,                               2001          2000          1999/1/
===============================================================================================

Per Share Operating Data

Net asset value, beginning of period                      $11.20        $10.76        $10.00
Income (loss) from investment operations:
Net investment loss                                         (.04)         (.08)         (.02)
Net realized and unrealized gain (loss)                    (4.40)         1.06           .78
                                                          -------------------------------------
Total income (loss) from investment operations             (4.44)          .98           .76
Dividends and/or distributions to shareholders:
Dividends from net investment income                          --            --            --
Distributions from net realized gain                          --          (.43)           --
Distributions in excess of net realized gain                  --          (.11)           --
                                                          -------------------------------------
Total dividends and/or distributions to
  shareholders                                                --          (.54)           --
Net asset value, end of period                             $6.76        $11.20        $10.76
                                                          =====================================

===============================================================================================
Total Return, at Net Asset Value/2/                       (39.64)%        9.26%         7.60%
===============================================================================================

Ratios/Supplemental Data

Net assets, end of period (in thousands)                  $1,422        $1,413          $133
Average net assets (in thousands)                         $1,823        $  811          $ 52
Ratios to average net assets:/3/
Net investment loss                                        (0.61)%       (1.56)%       (0.82)%
Expenses                                                    2.69%         2.77%         2.57%
Expenses, net of reduction to custodian expenses             N/A          2.75%          N/A
Portfolio turnover rate                                      285%          210%           83%


1. For the period from March 1, 1999 (inception of offering) to August 31, 1999.
2. Assumes a $1,000 hypothetical initial investment on the business day before
the first day of the fiscal period (or inception of offering), 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 of less than one full year.
3. Annualized for periods of less than one full year.

See accompanying Notes to Financial Statements.

                          22 OPPENHEIMER EUROPE FUND


Class N Period Ended August 31,                                     2001/1/
===============================================================================
Per Share Operating Data
Net asset value, beginning of period                                    $ 8.21
Income (loss) from investment operations:
Net investment income                                                      .01
Net realized and unrealized gain (loss)                                  (1.37)
                                                                        -------
Total income (loss) from investment operations                           (1.36)
Dividends and/or distributions to shareholders:
Dividends from net investment income                                        --
Distributions from net realized gain                                        --
Distributions in excess of net realized gain                                --
                                                                        -------
Total dividends and/or distributions to shareholders                        --
Net asset value, end of period                                          $ 6.85
                                                                        =======

===============================================================================
Total Return, at Net Asset Value/2/                                     (16.57)%

===============================================================================
Ratios/Supplemental Data
Net assets, end of period (in thousands)                                    $1
Average net assets (in thousands)                                           $1
Ratios to average net assets:/3/
Net investment income                                                     0.20%
Expenses                                                                  1.74%
Expenses, net of reduction to custodian expenses                           N/A
Portfolio turnover rate                                                    285%

1. For the period from March 1, 2001 (inception of offering) to August 31, 2001.
2. Assumes a $1,000 hypothetical initial investment on the business day before
the first day of the fiscal period (or inception of offering), 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 of less than one full year.
3. Annualized for periods of less than one full year.

See accompanying Notes to Financial Statements.

                          23 OPPENHEIMER EUROPE FUND


FINANCIAL HIGHLIGHTS Continued




Class Y Year Ended August 31,                                 2001          2000            1999/1/
===================================================================================================

Per Share Operating Data

Net asset value, beginning of period                        $ 11.32        $ 10.78        $ 10.00
Income (loss) from investment operations:
Net investment income (loss)                                    .03           (.05)           .04
Net realized and unrealized gain (loss)                       (4.41)          1.15            .74
                                                            ---------------------------------------
Total income (loss) from investment operations                (4.38)          1.10            .78
Dividends and/or distributions to shareholders:
Dividends from net investment income                             --           (.02)            --
Distributions from net realized gain                             --           (.43)            --
Distributions in excess of net realized gain                     --           (.11)            --
                                                            ---------------------------------------
Total dividends and/or distributions to                          --           (.56)            --
shareholders
Net asset value, end of period                              $  6.94        $ 11.32        $ 10.78
                                                            =======================================

===================================================================================================
Total Return, at Net Asset Value/2/                          (38.69)%        10.41%          7.80%

===================================================================================================
Ratios/Supplemental Data
Net assets, end of period (in thousands)                         $1             $1             $1
Average net assets (in thousands)                                $1             $1             $1
Ratios to average net assets:/3/
Net investment income (loss)                                   0.37%         (0.30)%         0.65%
Expenses                                                       1.44%          1.51%          1.52%
Expenses, net of reduction to custodian expenses                N/A           1.49%           N/A
Portfolio turnover rate                                         285%           210%           83%

1. For the period from March 1, 1999 (inception of offering) to August 31, 1999.
2. Assumes a $1,000 hypothetical initial investment on the business day before
the first day of the fiscal period (or inception of offering), 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 of less than one full year.
3. Annualized for periods of less than one full year.

See accompanying Notes to Financial Statements.

                          24 OPPENHEIMER EUROPE FUND


NOTES TO FINANCIAL STATEMENTS

================================================================================
1. Significant Accounting Policies

Oppenheimer Europe Fund (the Fund) is registered under the Investment Company
Act of 1940, as amended, as an open-end management investment company. The
Fund's investment objective is to seek capital appreciation. The Fund's
investment advisor is OppenheimerFunds, Inc. (the Manager).
     The Fund offers Class A, Class B, Class C, Class N and Class Y shares.
Class A shares are sold at their offering price, which is normally net asset
value plus a front-end sales charge. Class B, Class C and Class N shares are
sold without a front-end sales charge but may be subject to a contingent
deferred sales charge (CDSC). Class N shares are sold only through retirement
plans. Retirement plans that offer Class N shares may impose charges on those
accounts. Class Y shares are sold to certain institutional investors without
either a front-end sales charge or a CDSC. All classes of shares have identical
rights to earnings, assets and voting privileges, except that each class has its
own expenses directly attributable to that class and exclusive voting rights
with respect to matters affecting that class. Classes 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 six
years after the date of purchase. The following is a summary of significant
accounting policies consistently followed by the Fund.
--------------------------------------------------------------------------------
Securities Valuation. Securities listed or traded on National Stock Exchanges or
other domestic or foreign exchanges are valued based on the last sale price of
the security traded on that exchange prior to the time when the Fund's assets
are valued. In the absence of a sale, the security is valued at the last sale
price on the prior trading day, if it is within the spread of the closing bid
and asked prices, and if not, at the closing bid price. Securities (including
restricted securities) for which quotations are not readily available are valued
primarily using dealer-supplied valuations, a portfolio pricing service
authorized by the Board of Trustees, or at their fair value. Fair value is
determined in good faith under consistently applied procedures under the
supervision of the Board of Trustees. Short-term "money market type" debt
securities with remaining maturities of sixty days or less are valued at
amortized cost (which approximates market value).
--------------------------------------------------------------------------------
Foreign Currency Translation. The accounting records of the Fund are maintained
in U.S. dollars. Prices of securities denominated in foreign currencies are
translated into U.S. dollars at the closing rates of exchange. Amounts related
to the purchase and sale of foreign securities and investment income are
translated at the rates of exchange prevailing on the respective dates of such
transactions.
     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.

                          25 OPPENHEIMER EUROPE FUND


NOTES TO FINANCIAL STATEMENTS Continued

================================================================================
1. Significant Accounting Policies Continued
Repurchase Agreements. The Fund requires its custodian bank to take possession,
to have legally segregated in the Federal Reserve Book Entry System or to have
segregated within the custodian's vault, all securities held as collateral for
repurchase agreements. The market value of the underlying securities is required
to be at least 102% of the resale price at the time of purchase. If the seller
of the agreement defaults and the value of the collateral declines, or if the
seller enters an insolvency proceeding, realization of the value of the
collateral by the Fund may be delayed or limited.
--------------------------------------------------------------------------------
Allocation of Income, Expenses, Gains and Losses. Income, expenses (other than
those attributable to a specific class), gains and losses are allocated daily to
each class of shares based upon the relative proportion of net assets
represented by such class. Operating expenses directly attributable to a
specific class are charged against the operations of that class.
--------------------------------------------------------------------------------
Federal Taxes.The Fund intends to continue to comply with provisions of the
Internal Revenue Code applicable to regulated investment companies and to
distribute all of its taxable income, including any net realized gain on
investments not offset by loss carryovers, to shareholders. Therefore, no
federal income or excise tax provision is required.

As of August 31, 2001, the Fund had available for federal income tax purposes
an unused capital loss carryover as follows:

Expiring
--------------------------
2009              $385,788

As of August 31, 2001, the Fund had approximately $6,654,000 of post-October
losses available to offset future capital gains, if any. Such losses, if
unutilized, will expire in 2010.
--------------------------------------------------------------------------------
Trustees' Compensation. The Fund has adopted an unfunded retirement plan for
the Fund's independent Board of Trustees. Benefits are based on years of
service and fees paid to each trustee during the years of service. During the
year ended August 31, 2001, the Fund's projected benefit obligations were
increased by $1,803, resulting in an accumulated liability of $1,803 as of
August 31, 2001.
  The Board of Trustees has adopted a deferred compensation plan for independent
trustees that enables trustees to elect to defer receipt of all or a portion of
annual compensation they are entitled to receive from the Fund. Under the plan,
the compensation deferred is periodically adjusted as though an equivalent
amount had been invested for the Board of Trustees in shares of one or more
Oppenheimer funds selected by the trustee. The amount paid to the Board of
Trustees under the plan will be determined based upon the performance of the
selected funds. 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.

                          26 OPPENHEIMER EUROPE FUND


--------------------------------------------------------------------------------
Dividends and Distributions to Shareholders. Dividends and distributions to
shareholders, which are determined in accordance with income tax regulations,
are recorded on the ex-dividend date.
--------------------------------------------------------------------------------
Classification of Dividends and Distributions to Shareholders. Net investment
income (loss) and net realized gain (loss) may differ for financial statement
and tax purposes primarily because of the recognition of certain foreign
currency gains (losses) as ordinary income (loss) for 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 realized gain was
recorded by the Fund.
    The Fund adjusts the classification of distributions to shareholders to
reflect the differences between financial statement amounts and distributions
determined in accordance with income tax regulations. Accordingly, during the
year ended August 31, 2001, amounts have been reclassified to reflect a
decrease in paid-in capital of $78,952, a decrease in undistributed net
investment loss of $64,582, and a decrease in accumulated net realized loss on
investments of $14,370. Net assets of the Fund were unaffected by the
reclassifications.
--------------------------------------------------------------------------------
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, which includes accretion of discount and amortization
of premium, is accrued as earned.
--------------------------------------------------------------------------------
Security Transactions. Security transactions are accounted for as of trade
date. Gains and losses on securities sold are determined on the basis of
identified cost.
--------------------------------------------------------------------------------
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 income and
expenses during the reporting period. Actual results could differ from those
estimates.

                          27 OPPENHEIMER EUROPE FUND


NOTES TO FINANCIAL STATEMENTS Continued

================================================================================
2. Shares of Beneficial Interest
The Fund has authorized an unlimited number of no par value shares of beneficial
interest for each class. Transactions in shares of beneficial interest were as
follows:


                                       Year Ended August 31, 2001/1/           Year Ended August 31, 2000
                                       Shares              Amount              Shares              Amount

-----------------------------------------------------------------------------------------------------------
Class A
Sold                                8,206,271         $67,025,636           1,305,642         $15,150,672
Dividends and/or
distributions reinvested                   --                  --              13,787             150,971
Redeemed                           (8,289,125)        (67,853,598)           (675,447)         (7,584,338)
                                   ------------------------------------------------------------------------
Net increase (decrease)               (82,854)        $  (827,962)            643,982         $ 7,717,305
                                   ========================================================================

-----------------------------------------------------------------------------------------------------------
Class B
Sold                                  404,139         $ 3,390,595             609,291         $ 7,023,625
Dividends and/or
distributions reinvested                   --                  --               8,944              97,403
Redeemed                             (243,241)         (1,931,656)            (98,063)         (1,149,392)
                                   ------------------------------------------------------------------------
Net increase (decrease)               160,898         $ 1,458,939             520,172         $ 5,971,636
                                   ========================================================================

-----------------------------------------------------------------------------------------------------------
Class C
Sold                                2,827,363         $23,336,549             589,533         $ 6,506,073
Dividends and/or
distributions reinvested                   --                  --                 792               8,654
Redeemed                           (2,743,323)        (22,702,238)           (476,470)         (5,251,213)
                                   ------------------------------------------------------------------------
Net increase (decrease)                84,040         $   634,311             113,855         $ 1,263,514
                                   ========================================================================

-----------------------------------------------------------------------------------------------------------
Class N
Sold                                      122         $     1,000                  --         $        --
Dividends and/or
distributions reinvested                   --                  --                  --                  --
Redeemed                                   --                  --                  --                  --
                                   ------------------------------------------------------------------------
Net increase (decrease)                   122         $     1,000                  --         $        --
                                   ========================================================================

-----------------------------------------------------------------------------------------------------------
Class Y
Sold                                       10         $        64                  --         $        --
Dividends and/or
distributions reinvested                   --                  --                  --                  --
Redeemed                                   --                  --                  --                  --
                                   ------------------------------------------------------------------------
Net increase (decrease)                    10         $        64                  --         $        --
                                   ========================================================================

1. For the year ended August 31, 2001, for Class A, B, C and Y shares and for
the period from March 1, 2001 (inception of offering) to August 31, 2001, for
Class N shares.

                          28 OPPENHEIMER EUROPE FUND


================================================================================
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 August 31, 2001, were
$46,201,741 and $45,375,319, respectively.

As of August 31, 2001, unrealized appreciation (depreciation) based on cost of
securities for federal income tax purposes of $13,896,177 was:

Gross unrealized appreciation                 $    302,464
Gross unrealized depreciation                   (1,160,733)
                                              ------------
Net unrealized appreciation (depreciation)    $   (858,269)
                                              ============

================================================================================
4. Fees and Other Transactions with Affiliates
Management Fees. Management fees paid to the Manager were in accordance with the
investment advisory agreement with the Fund which provides for a fee of 0.80% of
the first $250 million of average annual net assets of the Fund, 0.77% of the
next $250 million, 0.75% of the next $500 million, 0.69% of the next $1 billion
and 0.67% of average annual net assets over $2 billion. The Fund's management
fee for the year ended August 31, 2001, was an annualized rate of 0.80%.
--------------------------------------------------------------------------------
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 an agreed-upon per account fee.
--------------------------------------------------------------------------------
Distribution and Service Plan Fees. Under its General Distributor's Agreement
with the Manager, the Distributor acts as the Fund's principal underwriter in
the continuous public offering of the different classes of shares of the Fund.

The compensation paid to (or retained by) the Distributor from the sale of
shares or on the redemption of shares is shown in the table below for the
period indicated.


                            Aggregate         Class A   Commissions      Commissions      Commissions
Commissions
                            Front-End       Front-End    on Class A       on Class B       on Class C       on
Class N
                        Sales Charges   Sales Charges        Shares           Shares           Shares
Shares
                           on Class A     Retained by   Advanced by      Advanced by      Advanced by
Advanced by
Year Ended                     Shares     Distributor   Distributor/1/   Distributor/1/   Distributor/1/
Distributor/1/
-------------------------------------------------------------------------------------------------------------------------

August 31, 2001               $58,326         $21,747        $2,477          $67,090
$23,052              $--


1. The Distributor advances commission payments to dealers for certain sales of
Class A shares and for sales of Class B, Class C and Class N shares from its own
resources at the time of sale.

                                    Class A                   Class B                   Class C
Class N
                        Contingent Deferred       Contingent Deferred      Contingent  Deferred       Contingent
Deferred
                              Sales Charges             Sales Charges             Sales Charges             Sales
Charges
Year Ended          Retained by Distributor   Retained by Distributor   Retained by Distributor   Retained by
Distributor
-------------------------------------------------------------------------------------------------------------------------

August 31, 2001                         $--                   $18,231
$1,873                       $--


The Fund has adopted a Service Plan for Class A shares and Distribution and
Service Plans for Class B, Class C and Class N shares under Rule 12b-1 of the
Investment Company Act. Under those plans the Fund pays the Distributor for all
or a portion of its costs incurred in connection with the distribution and/or
servicing of the shares of the particular class.

                          29 OPPENHEIMER EUROPE FUND


NOTES TO FINANCIAL STATEMENTS Continued

================================================================================
4. Fees and Other Transactions with Affiliates Continued
Class A Service Plan Fees. Under the Class A service plan, the Distributor
currently uses the fees it receives from the Fund to pay brokers, dealers and
other financial institutions. The Class A service plan permits reimbursements to
the Distributor at a rate of up to 0.25% of average annual net assets of Class A
shares purchased. The Distributor makes payments to plan recipients quarterly at
an annual rate not to exceed 0.25% of the average annual net assets consisting
of Class A shares of the Fund. For the year ended August 31, 2001, payments
under the Class A plan totaled $18,981, all of which were paid by the
Distributor to recipients, and included $2,450 paid to an affiliate of the
Manager. Any unreimbursed expenses the Distributor incurs with respect to Class
A shares in any fiscal year cannot be recovered in subsequent years.
--------------------------------------------------------------------------------
Class B, Class C and Class N Distribution and Service Plan Fees. Under each
plan, service fees and distribution fees are computed on the average of the net
asset value of shares in the respective class, determined as of the close of
each regular business day during the period. The Class B, Class C and Class N
plans provide for the Distributor to be compensated at a flat rate, whether the
Distributor's distribution expenses are more or less than the amounts paid by
the Fund under the plan during the period for which the fee is paid.

The Distributor retains the asset-based sales charge on Class B shares.
The Distributor retains the asset-based sales charge on Class C shares during
the first year the shares are outstanding. The Distributor retains the
asset-based sales charge on Class N shares. The asset-based sales charges on
Class B, Class C and Class N shares allow investors to buy shares without a
front-end sales charge while allowing the Distributor to compensate dealers that
sell those shares.

The Distributor's actual expenses in selling Class B, Class C and Class N shares
may be more than the payments it receives from the contingent deferred sales
charges collected on redeemed shares and asset-based sales charges from the Fund
under the plans. If any plan is terminated by the Fund, the Board of Trustees
may allow the Fund to continue payments of the asset-based sales charge to the
Distributor for distributing shares before the plan was terminated. The plans
allow for the carryforward of distribution expenses to be recovered from
asset-based sales charges in subsequent fiscal periods.

Distribution fees paid to the Distributor for the year ended August 31, 2001,
were as follows:


                                                                         Distributor's
                                                         Distributor's       Aggregate
                                                             Aggregate    Unreimbursed
                                                          Unreimbursed   Expenses as %
                      Total Payments   Amount Retained        Expenses   of Net Assets
                          Under Plan    by Distributor      Under Plan        of Class
---------------------------------------------------------------------------------------

Class B Plan                 $58,276           $49,600        $143,578            2.80%
Class C Plan                  18,213             9,479          20,375            1.43
Class N Plan                      --                --              --              --


                          30 OPPENHEIMER EUROPE FUND


================================================================================
5. Foreign Currency Contracts
A foreign currency contract is a commitment to purchase or sell a foreign
currency at a future date, at a negotiated rate. The Fund may enter into foreign
currency contracts for operational purposes and to seek to protect against
adverse exchange rate fluctuations. Risks to the Fund include the potential
inability of the counterparty to meet the terms of the contract.

     The net U.S. dollar value of foreign currency underlying all contractual
commitments held by the Fund and the resulting unrealized appreciation or
depreciation are determined using foreign currency exchange rates as provided
by a reliable bank, dealer or pricing service. Unrealized appreciation and
depreciation on foreign currency contracts are reported in the Statement of
Assets and Liabilities as a receivable or payable and in the Statement of
Operations with the change in unrealized appreciation or depreciation.

     The Fund may realize a gain or loss upon the closing or settlement of the
foreign currency transactions. Such realized gains and losses are reported
with all other foreign currency gains and losses in the Statement of Operations.

As of August 31, 2001, the Fund had outstanding foreign currency contracts as
follows:


                                                         Contract   Valuation as of     Unrealized
Contract Description             Expiration Dates   Amount (000s)   August 31, 2001   Appreciation
--------------------------------------------------------------------------------------------------

Contracts to Sell
British Pound Sterling (GBP)               9/3/01          GBP101          $146,396         $   45
Euro (EUR)                                 9/4/01          EUR143           129,498          1,152
                                                                                         ---------
Total Unrealized Appreciation                                                               $1,197
                                                                                         =========

==================================================================================================


6. Bank Borrowings
The Fund may borrow from a bank for temporary or emergency purposes including,
without limitation, funding of shareholder redemptions provided asset coverage
for borrowings exceeds 300%. The Fund has entered into an agreement which
enables it to participate with other Oppenheimer funds in an unsecured line of
credit with a bank, which permits borrowings up to $400 million, collectively.
Interest is charged to each fund, based on its borrowings, at a rate equal to
the Federal Funds Rate plus 0.45%. Borrowings are payable 30 days after such
loan is executed. The Fund also pays a commitment fee equal to its pro rata
share of the average unutilized amount of the credit facility at a rate of 0.08%
per annum.

     The Fund had no borrowings outstanding during the period ended or at
August 31, 2001.







                                                      Appendix A

                                               Industry Classifications


Aerospace/Defense                                            Food and Drug Retailers
Air Transportation                                           Gas Utilities
Asset-Backed                                                 Health Care/Drugs
Auto Parts and Equipment                                     Health Care/Supplies & Services
Automotive                                                   Homebuilders/Real Estate
Bank Holding Companies                                       Hotel/Gaming
Banks                                                        Industrial Services
Beverages                                                    Information Technology
Broadcasting                                                 Insurance
Broker-Dealers                                               Leasing & Factoring
Building Materials                                           Leisure
Cable Television                                             Manufacturing
Chemicals                                                    Metals/Mining
Commercial Finance                                           Nondurable Household Goods
Communication Equipment                                      Office Equipment
Computer Hardware                                            Oil - Domestic
Computer Software                                            Oil - International
Conglomerates                                                Paper
Consumer Finance                                             Photography
Consumer Services                                            Publishing
Containers                                                   Railroads & Truckers
Convenience Stores                                           Restaurants
Department Stores                                            Savings & Loans
Diversified Financial                                        Shipping
Diversified Media                                            Special Purpose Financial
Drug Wholesalers                                             Specialty Printing
Durable Household Goods                                      Specialty Retailing
Education                                                    Steel
Electric Utilities                                           Telecommunications - Long Distance
Electrical Equipment                                         Telephone - Utility
Electronics                                                  Textile, Apparel & Home Furnishings
Energy Services                                              Tobacco
Entertainment/Film                                           Trucks and Parts
Environmental                                                Wireless Services
Food








                                                         B-11
                                                      Appendix B

OppenheimerFunds Special Sales Charge Arrangements and Waivers
--------------------------------------------------------------

In certain cases, the initial sales charge that applies to purchases of Class A shares1 of the Oppenheimer funds or
the contingent deferred sales charge that may apply to Class A, Class B , Class C or Class N shares may be waived.2
That is because of the economies of sales efforts realized by OppenheimerFunds Distributor, Inc., (referred to in
this document as the "Distributor"), or by dealers or other financial institutions that offer those shares to
certain classes of investors.

Not all waivers apply to all funds. For example, waivers relating to Retirement Plans do not apply to Oppenheimer
municipal funds, because shares of those funds are not available for purchase by or on behalf of retirement plans.
Other waivers apply only to shareholders of certain funds.

For the purposes of some of the waivers described below and in the Prospectus and Statement of Additional
Information of the applicable Oppenheimer funds, the term "Retirement Plan" refers to the following types of plans:
              1)  plans qualified under Sections 401(a) or 401(k) of the Internal Revenue Code,
              2)  non-qualified deferred compensation plans,
              3)  employee benefit plans3
              4)  Group Retirement Plans4
              5)  403(b)(7) custodial plan accounts
              6)  Individual Retirement Accounts ("IRAs"), including traditional IRAs, Roth IRAs, SEP-IRAs, SARSEPs
                  or SIMPLE plans

The interpretation of these provisions as to the applicability of a special arrangement or waiver in a particular
case is in the sole discretion of the Distributor or the transfer agent (referred to in this document as the
"Transfer Agent") of the particular Oppenheimer fund. These waivers and special arrangements may be amended or
terminated at any time by a particular fund, the Distributor, and/or OppenheimerFunds, Inc. (referred to in this
document as the "Manager").

Waivers that apply at the time shares are redeemed must be requested by the shareholder and/or dealer in the
redemption request.
I.





                     Applicability of Class A Contingent Deferred Sales Charges in Certain Cases
----------------------------------------------------------------------------------------------------------------------

Purchases of Class A Shares of Oppenheimer Funds That Are Not Subject to Initial Sales Charge but May Be Subject to
the Class A Contingent Deferred Sales Charge (unless a waiver applies).

         There is no initial sales charge on purchases of Class A shares of any of the Oppenheimer funds in the
cases listed below. However, these purchases may be subject to the Class A contingent deferred sales charge if
redeemed within 18 months (24 months in the case of Oppenheimer Rochester National Municipals and Rochester Fund
Municipals) of the beginning of the calendar month of their purchase, as described in the Prospectus (unless a
waiver described elsewhere in this Appendix applies to the redemption). Additionally, on shares purchased under
these waivers that are subject to the Class A contingent deferred sales charge, the Distributor will pay the
applicable concession described in the Prospectus under "Class A Contingent Deferred Sales Charge."5 This waiver
provision applies to:
|_|      Purchases of Class A shares aggregating $1 million or more.
|_|      Purchases of Class A shares by a Retirement Plan that was permitted to purchase such shares at net asset
              value but subject to a contingent deferred sales charge prior to March 1, 2001. That included plans
              (other than IRA or 403(b)(7) Custodial Plans) that: 1) bought shares costing $500,000 or more, 2) had
              at the time of purchase 100 or more eligible employees or total plan assets of $500,000 or more, or 3)
              certified to the Distributor that it projects to have annual plan purchases of $200,000 or more.
|_|      Purchases by an OppenheimerFunds-sponsored Rollover IRA, if the purchases are made:
              1)  through a broker, dealer, bank or registered investment advisor that has made special arrangements
                  with the Distributor for those purchases, or
              2)  by a direct rollover of a distribution from a qualified Retirement Plan if the administrator of
                  that Plan has made special arrangements with the Distributor for those purchases.
|_|      Purchases of Class A shares by Retirement Plans that have any of the following record-keeping arrangements:
              1)  The record keeping is performed by Merrill Lynch Pierce Fenner & Smith, Inc. ("Merrill Lynch") on
                  a daily valuation basis for the Retirement Plan. On the date the plan sponsor signs the
                  record-keeping service agreement with Merrill Lynch, the Plan must have $3 million or more of its
                  assets invested in (a) mutual funds, other than those advised or managed by Merrill Lynch
                  Investment Management, L.P. ("MLIM"), that are made available under a Service Agreement between
                  Merrill Lynch and the mutual fund's principal underwriter or distributor, and  (b)  funds advised
                  or managed by MLIM (the funds described in (a) and (b) are referred to as "Applicable
                  Investments").
              2)  The record keeping for the Retirement Plan is performed on a daily valuation basis by a record
                  keeper whose services are provided under a contract or arrangement between the Retirement Plan and
                  Merrill Lynch. On the date the plan sponsor signs the record keeping service agreement with
                  Merrill Lynch, the Plan must have $3 million or more of its assets (excluding assets invested in
                  money market funds) invested in Applicable Investments.
              3)  The record keeping for a Retirement Plan is handled under a service agreement with Merrill Lynch
                  and on the date the plan sponsor signs that agreement, the Plan has 500 or more eligible employees
                  (as determined by the Merrill Lynch plan conversion manager).
|_|      Purchases by a Retirement Plan whose record keeper had a cost-allocation agreement with the Transfer Agent
              on or before March 1, 2001.
II.





                                Waivers of Class A Sales Charges of Oppenheimer Funds
----------------------------------------------------------------------------------------------------------------------

A.   Waivers of Initial and Contingent Deferred Sales Charges for Certain Purchasers.

Class A shares purchased by the following investors are not subject to any Class A sales charges (and no concessions
are paid by the Distributor on such purchases):
|_|      The Manager or its affiliates.
|_|      Present or former officers, directors, trustees and employees (and their "immediate families") of the Fund,
              the Manager and its affiliates, and retirement plans established by them for their employees. The term
              "immediate family" refers to one's spouse, children, grandchildren, grandparents, parents,
              parents-in-law, brothers and sisters, sons- and daughters-in-law, a sibling's spouse, a spouse's
              siblings, aunts, uncles, nieces and nephews; relatives by virtue of a remarriage (step-children,
              step-parents, etc.) are included.
|_|      Registered management investment companies, or separate accounts of insurance companies having an agreement
              with the Manager or the Distributor for that purpose.
|_|      Dealers or brokers that have a sales agreement with the Distributor, if they purchase shares for their own
              accounts or for retirement plans for their employees.
|_|      Employees and registered representatives (and their spouses) of dealers or brokers described above or
              financial institutions that have entered into sales arrangements with such dealers or brokers (and
              which are identified as such to the Distributor) or with the Distributor. The purchaser must certify
              to the Distributor at the time of purchase that the purchase is for the purchaser's own account (or
              for the benefit of such employee's spouse or minor children).
|_|      Dealers, brokers, banks or registered investment advisors that have entered into an agreement with the
              Distributor providing specifically for the use of shares of the Fund in particular investment products
              made available to their clients. Those clients may be charged a transaction fee by their dealer,
              broker, bank or advisor for the purchase or sale of Fund shares.
|_|      Investment advisors and financial planners who have entered into an agreement for this purpose with the
              Distributor and who charge an advisory, consulting or other fee for their services and buy shares for
              their own accounts or the accounts of their clients.
|_|      "Rabbi trusts" that buy shares for their own accounts, if the purchases are made through a broker or agent
              or other financial intermediary that has made special arrangements with the Distributor for those
              purchases.
|_|      Clients of investment advisors or financial planners (that have entered into an agreement for this purpose
              with the Distributor) who buy shares for their own accounts may also purchase shares without sales
              charge but only if their accounts are linked to a master account of their investment advisor or
              financial planner on the books and records of the broker, agent or financial intermediary with which
              the Distributor has made such special arrangements . Each of these investors may be charged a fee by
              the broker, agent or financial intermediary for purchasing shares.
|_|      Directors, trustees, officers or full-time employees of OpCap Advisors or its affiliates, their relatives
              or any trust, pension, profit sharing or other benefit plan which beneficially owns shares for those
              persons.
|_|      Accounts for which Oppenheimer Capital (or its successor) is the investment advisor (the Distributor must
              be advised of this arrangement) and persons who are directors or trustees of the company or trust
              which is the beneficial owner of such accounts.
|_|      A unit investment trust that has entered into an appropriate agreement with the Distributor.
|_|      Dealers, brokers, banks, or registered investment advisors that have entered into an agreement with the
              Distributor to sell shares to defined contribution employee retirement plans for which the dealer,
              broker or investment advisor provides administration services.
|-|




         Retirement Plans and deferred compensation plans and trusts used to fund those plans (including, for
              example, plans qualified or created under sections 401(a), 401(k), 403(b) or 457 of the Internal
              Revenue Code), in each case if those purchases are made through a broker, agent or other financial
              intermediary that has made special arrangements with the Distributor for those purchases.
|_|      A TRAC-2000 401(k) plan (sponsored by the former Quest for Value Advisors) whose Class B or Class C shares
              of a Former Quest for Value Fund were exchanged for Class A shares of that Fund due to the termination
              of the Class B and Class C TRAC-2000 program on November 24, 1995.
|_|      A qualified Retirement Plan that had agreed with the former Quest for Value Advisors to purchase shares of
              any of the Former Quest for Value Funds at net asset value, with such shares to be held through
              DCXchange, a sub-transfer agency mutual fund clearinghouse, if that arrangement was consummated and
              share purchases commenced by December 31, 1996.

B.   Waivers of Initial and Contingent Deferred Sales Charges in Certain Transactions.

Class A shares issued or purchased in the following transactions are not subject to sales charges (and no
concessions are paid by the Distributor on such purchases):
|_|      Shares issued in plans of reorganization, such as mergers, asset acquisitions and exchange offers, to which
              the Fund is a party.
|_|      Shares purchased by the reinvestment of dividends or other distributions reinvested from the Fund or other
              Oppenheimer funds (other than Oppenheimer Cash Reserves) or unit investment trusts for which
              reinvestment arrangements have been made with the Distributor.
|_|      Shares purchased through a broker-dealer that has entered into a special agreement with the Distributor to
              allow the broker's customers to purchase and pay for shares of Oppenheimer funds using the proceeds of
              shares redeemed in the prior 30 days from a mutual fund (other than a fund managed by the Manager or
              any of its subsidiaries) on which an initial sales charge or contingent deferred sales charge was
              paid. This waiver also applies to shares purchased by exchange of shares of Oppenheimer Money Market
              Fund, Inc. that were purchased and paid for in this manner. This waiver must be requested when the
              purchase order is placed for shares of the Fund, and the Distributor may require evidence of
              qualification for this waiver.
|_|      Shares purchased with the proceeds of maturing principal units of any Qualified Unit Investment Liquid
              Trust Series.
|_|      Shares purchased by the reinvestment of loan repayments by a participant in a Retirement Plan for which the
              Manager or an affiliate acts as sponsor.

C.   Waivers of the Class A Contingent Deferred Sales Charge for Certain Redemptions.

The Class A contingent deferred sales charge is also waived if shares that would otherwise be subject to the
contingent deferred sales charge are redeemed in the following cases:
|_|      To make Automatic Withdrawal Plan payments that are limited annually to no more than 12% of the account
              value adjusted annually.
|_|      Involuntary redemptions of shares by operation of law or involuntary redemptions of small accounts (please
              refer to "Shareholder Account Rules and Policies," in the applicable fund Prospectus).
|_|      For distributions from Retirement Plans, deferred compensation plans or other employee benefit plans for
              any of the following purposes:
              1)  Following the death or disability (as defined in the Internal Revenue Code) of the participant or
                  beneficiary. The death or disability must occur after the participant's account was established.
              2)  To return excess contributions.
              3)  To return contributions made due to a mistake of fact.
              4)  Hardship withdrawals, as defined in the plan.6
              5)  Under a Qualified Domestic Relations Order, as defined in the Internal Revenue Code, or, in the
                  case of an IRA, a divorce or separation agreement described in Section 71(b) of the Internal
                  Revenue Code.
              6)  To meet the minimum distribution requirements of the Internal Revenue Code.
              7)  To make "substantially equal periodic payments" as described in Section 72(t) of the Internal
                  Revenue Code.
              8)  For loans to participants or beneficiaries.
              9)  Separation from service.7
              10) Participant-directed redemptions to purchase shares of a mutual fund (other than a fund managed by
                  the Manager or a subsidiary of the Manager) if the plan has made special arrangements with the
                  Distributor.
              11) Plan termination or "in-service distributions," if the redemption proceeds are rolled over
                  directly to an OppenheimerFunds-sponsored IRA.
|_|      For distributions from 401(k) plans sponsored by broker-dealers that have entered into a special agreement
              with the Distributor allowing this waiver.
|_|      For distributions from retirement plans that have $10 million or more in plan assets and that have entered
              into a special agreement with the Distributor.
|_|      For distributions from retirement plans which are part of a retirement plan product or platform offered by
              certain banks, broker-dealers, financial advisors, insurance companies or record keepers which have
              entered into a special agreement with the Distributor.
III.                      Waivers of Class B, Class C and Class N Sales Charges of Oppenheimer Funds
----------------------------------------------------------------------------------------------------------------------

The Class B, Class C and Class N contingent deferred sales charges will not be applied to shares purchased in
certain types of transactions or redeemed in certain circumstances described below.

A.   Waivers for Redemptions in Certain Cases.

The Class B, Class C and Class N contingent deferred sales charges will be waived for redemptions of shares in the
following cases:
|_|      Shares redeemed involuntarily, as described in "Shareholder Account Rules and Policies," in the applicable
              Prospectus.
|_|      Redemptions from accounts other than Retirement Plans following the death or disability of the last
              surviving shareholder, including a trustee of a grantor trust or revocable living trust for which the
              trustee is also the sole beneficiary. The death or disability must have occurred after the account was
              established, and for disability you must provide evidence of a determination of disability by the
              Social Security Administration.
|_|      Distributions from accounts for which the broker-dealer of record has entered into a special agreement with
              the Distributor allowing this waiver.
|_|      Redemptions of Class B shares held by Retirement Plans whose records are maintained on a daily valuation
              basis by Merrill Lynch or an independent record keeper under a contract with Merrill Lynch.
|_|      Redemptions of Class C shares of Oppenheimer U.S. Government Trust from accounts of clients of financial
              institutions that have entered into a special arrangement with the Distributor for this purpose.
|_|      Redemptions requested in writing by a Retirement Plan sponsor of Class C shares of an Oppenheimer fund in
              amounts of $500,000 or more and made more than 12 months after the Retirement Plan's first purchase of
              Class C shares, if the redemption proceeds are invested in Class N shares of one or more Oppenheimer
              funds.
|_|      Distributions8 from Retirement Plans or other employee benefit plans for any of the following purposes:
              1)  Following the death or disability (as defined in the Internal Revenue Code) of the participant or
                  beneficiary. The death or disability must occur after the participant's account was established in
                  an Oppenheimer fund.
              2)  To return excess contributions made to a participant's account.
              3)  To return contributions made due to a mistake of fact.
              4)  To make hardship withdrawals, as defined in the plan.9
              5)  To make distributions required under a Qualified Domestic Relations Order or, in the case of an
                  IRA, a divorce or separation agreement described in Section 71(b) of the Internal Revenue Code.
              6)  To meet the minimum distribution requirements of the Internal Revenue Code.
              7)  To make "substantially equal periodic payments" as described in Section 72(t) of the Internal
                  Revenue Code.
              8)  For loans to participants or beneficiaries.10
              9)  On account of the participant's separation from service.11
              10) Participant-directed redemptions to purchase shares of a mutual fund (other than a fund managed by
                  the Manager or a subsidiary of the Manager) offered as an investment option in a Retirement Plan
                  if the plan has made special arrangements with the Distributor.
              11) Distributions made on account of a plan termination or "in-service" distributions, if the
                  redemption proceeds are rolled over directly to an OppenheimerFunds-sponsored IRA.
              12) For distributions from a participant's account under an Automatic Withdrawal Plan after the
                  participant reaches age 59 1/2, as long as the aggregate value of the distributions does not exceed
                  10% of the account's value, adjusted annually.
              13) Redemptions of Class B shares under an Automatic Withdrawal Plan for an account other than a
                  Retirement Plan, if the aggregate value of the redeemed shares does not exceed 10% of the
                  account's value, adjusted annually.
              14) For distributions from 401(k) plans sponsored by broker-dealers that have entered into a special
                  arrangement with the Distributor allowing this waiver.
|_|      Redemptions of Class B shares or Class C shares under an Automatic Withdrawal Plan from an account other
              than a Retirement Plan if the aggregate value of the redeemed shares does not exceed 10% of the
              account's value annually.

B.   Waivers for Shares Sold or Issued in Certain Transactions.

The contingent deferred sales charge is also waived on Class B, Class C or Class N shares sold or issued in the
following cases:
|_|      Shares sold to the Manager or its affiliates.
|_|      Shares sold to registered management investment companies or separate accounts of insurance companies
              having an agreement with the Manager or the Distributor for that purpose.
|_|      Shares issued in plans of reorganization to which the Fund is a party.
|_|      Shares sold to present or former officers, directors, trustees or employees (and their "immediate families"
              as defined above in Section I.A.) of the Fund, the Manager and its affiliates and retirement plans
              established by them for their employees.
IV.





   Special Sales Charge Arrangements for Shareholders of Certain Oppenheimer Funds Who Were Shareholders of Former
                                                     Quest for Value Funds
----------------------------------------------------------------------------------------------------------------------

The initial and contingent deferred sales charge rates and waivers for Class A, Class B and Class C shares described
in the Prospectus or Statement of Additional Information of the Oppenheimer funds are modified as described below
for certain persons who were shareholders of the former Quest for Value Funds.  To be eligible, those persons must
have been shareholders on November 24, 1995, when OppenheimerFunds, Inc. became the investment advisor to those
former Quest for Value Funds.  Those funds include:
     Oppenheimer Quest Value Fund, Inc.              Oppenheimer Small Cap Value Fund
     Oppenheimer Quest Balanced Value Fund           Oppenheimer Quest Global Value Fund, Inc.
     Oppenheimer Quest Opportunity Value Fund

         These arrangements also apply to shareholders of the following funds when they merged (were reorganized)
into various Oppenheimer funds on November 24, 1995:

     Quest for Value U.S. Government Income Fund              Quest for Value New York Tax-Exempt Fund
     Quest for Value Investment Quality Income Fund           Quest for Value National Tax-Exempt Fund
     Quest for Value Global Income Fund                       Quest for Value California Tax-Exempt Fund

         All of the funds listed above are referred to in this Appendix as the "Former Quest for Value Funds."  The
waivers of initial and contingent deferred sales charges described in this Appendix apply to shares of an
Oppenheimer fund that are either:
|_|      acquired by such shareholder pursuant to an exchange of shares of an Oppenheimer fund that was one of the
              Former Quest for Value Funds, or
|_|      purchased by such shareholder by exchange of shares of another Oppenheimer fund that were acquired pursuant
              to the merger of any of the Former Quest for Value Funds into that other Oppenheimer fund on November
              24, 1995.

A.   Reductions or Waivers of Class A Sales Charges.

|X|      Reduced Class A Initial Sales Charge Rates for Certain Former Quest for Value Funds Shareholders.

Purchases by Groups and Associations.  The following table sets forth the initial sales charge rates for Class A
shares purchased by members of "Associations" formed for any purpose other than the purchase of securities. The
rates in the table apply if that Association purchased shares of any of the Former Quest for Value Funds or received
a proposal to purchase such shares from OCC Distributors prior to November 24, 1995.

-------------------------------- ---------------------------- --------------------------------- ---------------------
Number of Eligible Employees     Initial Sales Charge as a    Initial Sales Charge as a % of    Concession as % of
or Members                       % of Offering Price          Net Amount Invested               Offering Price
-------------------------------- ---------------------------- --------------------------------- ---------------------
-------------------------------- ---------------------------- --------------------------------- ---------------------
9 or Fewer                                  2.50%                          2.56%                       2.00%
-------------------------------- ---------------------------- --------------------------------- ---------------------
-------------------------------- ---------------------------- --------------------------------- ---------------------
At least  10 but not more  than             2.00%                          2.04%                       1.60%
49
-------------------------------- ---------------------------- --------------------------------- ---------------------

----------------------------------------------------------------------------------------------------------------------
         For purchases by Associations having 50 or more eligible employees or members, there is no initial sales
charge on purchases of Class A shares, but those shares are subject to the Class A contingent deferred sales charge
described in the applicable fund's Prospectus.






         Purchases made under this arrangement qualify for the lower of either the sales charge rate in the table
based on the number of members of an Association, or the sales charge rate that applies under the Right of
Accumulation described in the applicable fund's Prospectus and Statement of Additional Information. Individuals who
qualify under this arrangement for reduced sales charge rates as members of Associations also may purchase shares
for their individual or custodial accounts at these reduced sales charge rates, upon request to the Distributor.

|X|      Waiver of Class A Sales Charges for Certain Shareholders.  Class A shares purchased by the following
investors are not subject to any Class A initial or contingent deferred sales charges:
o        Shareholders who were shareholders of the AMA Family of Funds on February 28, 1991 and who acquired shares
                  of any of the Former Quest for Value Funds by merger of a portfolio of the AMA Family of Funds.
o        Shareholders who acquired shares of any Former Quest for Value Fund by merger of any of the portfolios of
                  the Unified Funds.

|X|      Waiver of Class A Contingent Deferred Sales Charge in Certain Transactions.  The Class A contingent
deferred sales charge will not apply to redemptions of Class A shares purchased by the following investors who were
shareholders of any Former Quest for Value Fund:

         Investors who purchased Class A shares from a dealer that is or was not permitted to receive a sales load
or redemption fee imposed on a shareholder with whom that dealer has a fiduciary relationship, under the Employee
Retirement Income Security Act of 1974 and regulations adopted under that law.

B.   Class A, Class B and Class C Contingent Deferred Sales Charge Waivers.

|X|      Waivers for Redemptions of Shares Purchased Prior to March 6, 1995.  In the following cases, the contingent
deferred sales charge will be waived for redemptions of Class A, Class B or Class C shares of an Oppenheimer fund.
The shares must have been acquired by the merger of a Former Quest for Value Fund into the fund or by exchange from
an Oppenheimer fund that was a Former Quest for Value Fund or into which such fund merged. Those shares must have
been purchased prior to March 6, 1995 in connection with:
o        withdrawals under an automatic withdrawal plan holding only either Class B or Class C shares if the annual
                  withdrawal does not exceed 10% of the initial value of the account value, adjusted annually, and
o        liquidation of a shareholder's account if the aggregate net asset value of shares held in the account is
                  less than the required minimum value of such accounts.

|X|      Waivers for Redemptions of Shares Purchased on or After March 6, 1995 but Prior to November 24, 1995. In
the following cases, the contingent deferred sales charge will be waived for redemptions of Class A, Class B or
Class C shares of an Oppenheimer fund. The shares must have been acquired by the merger of a Former Quest for Value
Fund into the fund or by exchange from an Oppenheimer fund that was a Former Quest For Value Fund or into which such
Former Quest for Value Fund merged. Those shares must have been purchased on or after March 6, 1995, but prior to
November 24, 1995:
o        redemptions following the death or disability of the shareholder(s) (as evidenced by a determination of
                  total disability by the U.S. Social Security Administration);
o        withdrawals under an automatic withdrawal plan (but only for Class B or Class C shares) where the annual
                  withdrawals do not exceed 10% of the initial value of the account value; adjusted annually, and
o        liquidation of a shareholder's account if the aggregate net asset value of shares held in the account is
                  less than the required minimum account value.






         A shareholder's account will be credited with the amount of any contingent deferred sales charge paid on
the redemption of any Class A, Class B or Class C shares of the Oppenheimer fund described in this section if the
proceeds are invested in the same Class of shares in that fund or another Oppenheimer fund within 90 days after
redemption.
V.         Special Sales Charge Arrangements for Shareholders of Certain Oppenheimer Funds Who Were Shareholders of
                                       Connecticut Mutual Investment Accounts, Inc.
-----------------------------------------------------------------------------------------------------------------

The initial and contingent deferred sale charge rates and waivers for Class A and Class B shares described in the
respective Prospectus (or this Appendix) of the following Oppenheimer funds (each is referred to as a "Fund" in this
section):
     Oppenheimer U. S. Government Trust,
     Oppenheimer Bond Fund,
     Oppenheimer Value Fund and
     Oppenheimer Disciplined Allocation Fund
are modified as described below for those Fund shareholders who were shareholders of the following funds (referred
to as the "Former Connecticut Mutual Funds") on March 1, 1996, when OppenheimerFunds, Inc. became the investment
advisor to the Former Connecticut Mutual Funds:
     Connecticut Mutual Liquid Account      Connecticut Mutual Total Return Account
     Connecticut Mutual Government Securities Account            CMIA LifeSpan Capital Appreciation Account
     Connecticut Mutual Income Account      CMIA LifeSpan Balanced Account
     Connecticut Mutual Growth Account      CMIA Diversified Income Account

A.   Prior Class A CDSC and Class A Sales Charge Waivers.

|X|      Class A Contingent Deferred Sales Charge. Certain shareholders of a Fund and the other Former Connecticut
Mutual Funds are entitled to continue to make additional purchases of Class A shares at net asset value without a
Class A initial sales charge, but subject to the Class A contingent deferred sales charge that was in effect prior
to March 18, 1996 (the "prior Class A CDSC"). Under the prior Class A CDSC, if any of those shares are redeemed
within one year of purchase, they will be assessed a 1% contingent deferred sales charge on an amount equal to the
current market value or the original purchase price of the shares sold, whichever is smaller (in such redemptions,
any shares not subject to the prior Class A CDSC will be redeemed first).

         Those shareholders who are eligible for the prior Class A CDSC are:
              1)  persons whose purchases of Class A shares of a Fund and other Former Connecticut Mutual Funds were
                  $500,000 prior to March 18, 1996, as a result of direct purchases or purchases pursuant to the
                  Fund's policies on Combined Purchases or Rights of Accumulation, who still hold those shares in
                  that Fund or other Former Connecticut Mutual Funds, and
              2)  persons whose intended purchases under a Statement of Intention entered into prior to March 18,
                  1996, with the former general distributor of the Former Connecticut Mutual Funds to purchase
                  shares valued at $500,000 or more over a 13 month period entitled those persons to purchase shares
                  at net asset value without being subject to the Class A initial sales charge

         Any of the Class A shares of a Fund and the other Former Connecticut Mutual Funds that were purchased at
net asset value prior to March 18, 1996, remain subject to the prior Class A CDSC, or if any additional shares are
purchased by those shareholders at net asset value pursuant to this arrangement they will be subject to the prior
Class A CDSC.

|X|




         Class A Sales Charge Waivers. Additional Class A shares of a Fund may be purchased without a sales charge,
by a person who was in one (or more) of the categories below and acquired Class A shares prior to March 18, 1996,
and still holds Class A shares:
              1)  any purchaser, provided the total initial amount invested in the Fund or any one or more of the
                  Former Connecticut Mutual Funds totaled $500,000 or more, including investments made pursuant to
                  the Combined Purchases, Statement of Intention and Rights of Accumulation features available at
                  the time of the initial purchase and such investment is still held in one or more of the Former
                  Connecticut Mutual Funds or a Fund into which such Fund merged;
              2)  any participant in a qualified plan, provided that the total initial amount invested by the plan
                  in the Fund or any one or more of the Former Connecticut Mutual Funds totaled $500,000 or more;
              3)  Directors of the Fund or any one or more of the Former Connecticut Mutual Funds and members of
                  their immediate families;
              4)  employee benefit plans sponsored by Connecticut Mutual Financial Services, L.L.C. ("CMFS"), the
                  prior distributor of the Former Connecticut Mutual Funds, and its affiliated companies;
              5)  one or more members of a group of at least 1,000 persons (and persons who are retirees from such
                  group) engaged in a common business, profession, civic or charitable endeavor or other activity,
                  and the spouses and minor dependent children of such persons, pursuant to a marketing program
                  between CMFS and such group; and
              6)  an institution acting as a fiduciary on behalf of an individual or individuals, if such
                  institution was directly compensated by the individual(s) for recommending the purchase of the
                  shares of the Fund or any one or more of the Former Connecticut Mutual Funds, provided the
                  institution had an agreement with CMFS.

         Purchases of Class A shares made pursuant to (1) and (2) above may be subject to the Class A CDSC of the
Former Connecticut Mutual Funds described above.

         Additionally, Class A shares of a Fund may be purchased without a sales charge by any holder of a variable
annuity contract issued in New York State by Connecticut Mutual Life Insurance Company through the Panorama Separate
Account which is beyond the applicable surrender charge period and which was used to fund a qualified plan, if that
holder exchanges the variable annuity contract proceeds to buy Class A shares of the Fund.

B.   Class A and Class B Contingent Deferred Sales Charge Waivers.

In addition to the waivers set forth in the Prospectus and in this Appendix, above, the contingent deferred sales
charge will be waived for redemptions of Class A and Class B shares of a Fund and exchanges of Class A or Class B
shares of a Fund into Class A or Class B shares of a Former Connecticut Mutual Fund provided that the Class A or
Class B shares of the Fund to be redeemed or exchanged were (i) acquired prior to March 18, 1996 or (ii) were
acquired by exchange from an Oppenheimer fund that was a Former Connecticut Mutual Fund. Additionally, the shares of
such Former Connecticut Mutual Fund must have been purchased prior to March 18, 1996:
     1)  by the estate of a deceased shareholder;
     2)  upon the disability of a shareholder, as defined in Section 72(m)(7) of the Internal Revenue Code;
     3)  for retirement distributions (or loans) to participants or beneficiaries from retirement plans qualified
         under Sections 401(a) or 403(b)(7)of the Code, or from IRAs, deferred compensation plans created under
         Section 457 of the Code, or other employee benefit plans;
     4)  as tax-free returns of excess contributions to such retirement or employee benefit plans;
     5)  in whole or in part, in connection with shares sold to any state, county, or city, or any instrumentality,
         department, authority, or agency thereof, that is prohibited by applicable investment laws from paying a
         sales charge or concession in connection with the purchase of shares of any registered investment
         management company;
     6)  in connection with the redemption of shares of the Fund due to a combination with another investment
         company by virtue of a merger, acquisition or similar reorganization transaction;
     7)  in connection with the Fund's right to involuntarily redeem or liquidate the Fund;
     8)  in connection with automatic redemptions of Class A shares and Class B shares in certain retirement plan
         accounts pursuant to an Automatic Withdrawal Plan but limited to no more than 12% of the original value
         annually; or
     9)  as involuntary redemptions of shares by operation of law, or under procedures set forth in the Fund's
         Articles of Incorporation, or as adopted by the Board of Directors of the Fund.
VI.                   Special Reduced Sales Charge for Former Shareholders of Advance America Funds, Inc.
----------------------------------------------------------------------------------------------------------------------

Shareholders of Oppenheimer Municipal Bond Fund, Oppenheimer U.S. Government Trust, Oppenheimer Strategic Income
Fund and Oppenheimer Capital Income Fund who acquired (and still hold) shares of those funds as a result of the
reorganization of series of Advance America Funds, Inc. into those Oppenheimer funds on October 18, 1991, and who
held shares of Advance America Funds, Inc. on March 30, 1990, may purchase Class A shares of those four Oppenheimer
funds at a maximum sales charge rate of 4.50%.
VII.            Sales Charge Waivers on Purchases of Class M Shares of Oppenheimer Convertible Securities Fund
----------------------------------------------------------------------------------------------------------------------

Oppenheimer Convertible Securities Fund (referred to as the "Fund" in this section) may sell Class M shares at net
asset value without any initial sales charge to the classes of investors listed below who, prior to March 11, 1996,
owned shares of the Fund's then-existing Class A and were permitted to purchase those shares at net asset value
without sales charge:
|_|      the Manager and its affiliates,
|_|      present or former officers, directors, trustees and employees (and their "immediate families" as defined in
              the Fund's Statement of Additional Information) of the Fund, the Manager and its affiliates, and
              retirement plans established by them or the prior investment advisor of the Fund for their employees,
|_|      registered management investment companies or separate accounts of insurance companies that had an
              agreement with the Fund's prior investment advisor or distributor for that purpose,
|_|      dealers or brokers that have a sales agreement with the Distributor, if they purchase shares for their own
              accounts or for retirement plans for their employees,
|_|      employees and registered representatives (and their spouses) of dealers or brokers described in the
              preceding section or financial institutions that have entered into sales arrangements with those
              dealers or brokers (and whose identity is made known to the Distributor) or with the Distributor, but
              only if the purchaser certifies to the Distributor at the time of purchase that the purchaser meets
              these qualifications,
|_|      dealers, brokers, or registered investment advisors that had entered into an agreement with the Distributor
              or the prior distributor of the Fund specifically providing for the use of Class M shares of the Fund
              in specific investment products made available to their clients, and
|_|      dealers, brokers or registered investment advisors that had entered into an agreement with the Distributor
              or prior distributor of the Fund's shares to sell shares to defined contribution employee retirement
              plans for which the dealer, broker, or investment advisor provides administrative services.







Oppenheimer Europe Fund

Internet Website:
         WWW.OPPENHEIMERFUNDS.COM
         ------------------------

Investment Advisor
         OppenheimerFunds, Inc.
         498 Seventh Avenue
         New York, New York 10018

Distributor
         OppenheimerFunds Distributor, Inc.
         498 Seventh Avenue
         New York, New York 10018

Transfer Agent
         OppenheimerFunds Services
         P.O. Box 5270
         Denver, Colorado 80217
         1.800.525.7048

Custodian Bank
         The Bank of New York
         One Wall Street
         New York, New York 10015

Independent Auditors
         KPMG LLP
         707 Seventeenth Street
         Denver, Colorado 80202

Legal Counsel
         Mayer, Brown & Platt
         1675 Broadway
         New York, New York
         10019-5820


1234

PX0261.1201


--------

1. Mr. Griffiths is not a Director of Oppenheimer Money Market Fund, Inc.  Mr. Murphy is not a director of
Oppenheimer California Municipal Fund or Oppenheimer Money Market Fund Inc.
2 In accordance with rule 12b-1 of the Investment Company Act, the term "Independent Trustees" in this Statement of
Additional Information refers to those Trustees who are not "interested persons" of the Fund and who do not have any
direct or indirect financial interest in the operation of the distribution plan or any agreement under the plan.
1 Certain waivers also apply to Class M shares of Oppenheimer Convertible Securities Fund.
2 In the case of Oppenheimer Senior Floating Rate Fund, a continuously-offered closed-end fund, references to
contingent deferred sales charges mean the Fund's Early Withdrawal Charges and references to "redemptions" mean
"repurchases" of shares.
3 An "employee benefit plan" means any plan or arrangement, whether or not it is "qualified" under the Internal
Revenue Code, under which Class N shares of an Oppenheimer fund or funds are purchased by a fiduciary or other
administrator for the account of participants who are employees of a single employer or of affiliated employers.
These may include, for example, medical savings accounts, payroll deduction plans or similar plans. The fund
accounts must be registered in the name of the fiduciary or administrator purchasing the shares for the benefit of
participants in the plan.
4 The term "Group Retirement Plan" means any qualified or non-qualified retirement plan for employees of a
corporation or sole proprietorship, members and employees of a partnership or association or other organized group
of persons (the members of which may include other groups), if the group has made special arrangements with the
Distributor and all members of the group participating in (or who are eligible to participate in) the plan purchase
shares of an Oppenheimer fund or funds through a single investment dealer, broker or other financial institution
designated by the group. Such plans include 457 plans, SEP-IRAs, SARSEPs, SIMPLE plans and 403(b) plans other than
plans for public school employees. The term "Group Retirement Plan" also includes qualified retirement plans and
non-qualified deferred compensation plans and IRAs that purchase shares of an Oppenheimer fund or funds through a
single investment dealer, broker or other financial institution that has made special arrangements with the
Distributor.
5 However, that concession will not be paid on purchases of shares in amounts of $1 million or more (including any
right of accumulation) by a Retirement Plan that pays for the purchase with the redemption proceeds of Class C
shares of one or more Oppenheimer funds held by the Plan for more than one year.
6 This provision does not apply to IRAs.
7 This provision does not apply to 403(b)(7) custodial plans if the participant is less than age 55, nor to IRAs.
8 The distribution must be requested prior to Plan termination or the elimination of the Oppenheimer funds as an
investment option under the Plan.
9 This provision does not apply to IRAs.
10 This provision does not apply to loans from 403(b)(7) custodial plans.
11 This provision does not apply to 403(b)(7) custodial plans if the participant is less than age 55, nor to IRAs.