Oppenheimer Absolute Return FundSM

6803 South Tucson Way, Centennial, Colorado 80112-3924
1.800.CALL OPP (225.5677)

Statement of Additional Information dated September 26, 2008, revised May 8, 2009

This Statement of Additional Information is not a Prospectus. This document contains additional information about
the Fund and supplements information in the Prospectus dated September 26, 2008. It should be read together with
the Prospectus. You can obtain the Prospectus 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...........................................................    14
     Other Investment Restrictions........................................................................    36
     Disclosure of Portfolio Holdings.....................................................................    37
How the Fund is Managed ..................................................................................    41
     Organization and History.............................................................................    41
     Board of Trustees and Oversight Committees...........................................................    42
     Trustees and Officers of the Fund....................................................................    44
     The Manager..........................................................................................    54
     Brokerage Policies of the Fund.......................................................................    59
Service Plan..............................................................................................    61
Payments to Fund Intermediaries...........................................................................    64
Performance of the Fund...................................................................................    68

About Your Account
How To Buy Shares.........................................................................................    73
How To Sell Shares........................................................................................    81
How to Exchange Shares....................................................................................    85
Dividends, Capital Gains and Taxes........................................................................    87
Additional Information About the Fund.....................................................................    92

Financial Information About the Fund
Independent Registered Public Accounting Firm's Report....................................................    93
Financial Statements......................................................................................    94

Appendix A: Ratings Definitions...........................................................................   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 ("SAI") contains supplemental information about those
policies and risks and the types of securities that the Fund's investment manager, OppenheimerFunds, Inc., (the
"Manager"), 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 Manager may use in selecting portfolio securities will vary over time. The Fund is not required to use some
or all of the investment techniques and strategies described below  in seeking its goal. It may however, at times
use some or all of the special investment techniques and strategies when seeking its objective.

         The Fund seeks to meet its objective by using an investment process that primarily relies on
quantitative models to determine security selection, hedging and asset allocation.  While this process and the
inter-relationship of the factors used may change over time and its implementation may vary in particular cases,
currently the general security selection, hedging and asset allocation processes involve:
o        Bottom Up.  The Manager uses "bottom up" models to analyze a wide range of valuation and market factors
         to determine the relative value of the securities. The models assist the Manager in identifying the most
         attractive set of securities within each asset class or sector in which the Fund invests.
o        Hedging.  The Manager uses risk management models to estimate the Fund's level of risk exposures to
         major markets.  The Manager uses derivatives and other strategies, such as short sales, to hedge the
         Fund's exposure to these risks.
o        Top Down.  The Manager uses "top down" models to enable the Fund to tactically adjust the hedges to take
         advantage of investment opportunities at the asset and sector level.

|X|      Investments in Equity Securities. The Fund does not limit its investments in equity securities to
issuers having a market capitalization of a specified size or range, and therefore the Fund can invest in
securities of companies of any market capitalization. At times, the Fund may increase the relative emphasis of
its equity investments in securities of one or more capitalization ranges, based upon the Manager's judgment of
where the best market opportunities are 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 smaller capitalization issuers may
be subject to greater price volatility in general than securities of larger companies. Therefore, if the Fund has
substantial investments in smaller capitalization companies at times of market volatility, the Fund's share price
may fluctuate more than that of funds focusing on larger capitalization issuers.

o        Preferred Stocks. Preferred stocks are equity securities but have certain attributes of debt securities.
Preferred stocks are equity securities because they do not constitute a liability of the issuer and therefore do
not offer the same degree of protection of capital as debt securities and may not offer the same degree of
assurance of continued income as debt securities. The rights of preferred stock on distribution of a
corporation's assets in the event of its liquidation are generally subordinate to the rights associated with a
corporation's debt securities. Preferred stock generally has a preference over common stock on the distribution
of a corporation's assets in the event of its liquidation.

Preferred stock, unlike common stock, has a stated dividend rate payable from the corporation's earnings.
Preferred stock dividends may be cumulative or non-cumulative, participating, or auction rate. "Cumulative"
dividend provisions require all or a portion of prior unpaid dividends to be paid before the issuer can pay
dividends on common shares.

         If interest rates rise, the fixed dividend on preferred stocks may be less attractive, causing the price
of preferred stocks to decline. Preferred stock may have mandatory sinking fund provisions, as well as provisions
for their call or redemption prior to maturity which can have a negative effect on their prices when interest
prior to maturity rates decline. Preferred stock may be "participating" stock, which means that it may be
entitled to a dividend exceeding the stated dividend in certain cases.

o        Rights and Warrants. The Fund can invest in rights and warrants. Warrants 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.

o        Convertible Securities. Convertible securities are debt securities that are convertible into an issuer's
common stock. Convertible securities rank senior to common stock in a corporation's capital structure and
therefore are subject to less risk than common stock in case of the issuer's bankruptcy or liquidation.

         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: 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. Convertible securities are subject to credit risks and interest rate risk as
discussed below under "Investments in Debt 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." In those cases, the credit rating assigned to the security has less impact on the Manager's
investment decision than in the case of non-convertible 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.

|X|      Investments in Debt Securities. The Fund can invest in a variety of domestic and foreign debt
securities, including mortgage-backed securities, investment-grade corporate debt securities and U.S. and foreign
government securities. The Fund can also invest in those debt securities and other high-quality short-term debt
securities including money market instruments for liquidity or defensive purposes. Foreign debt securities are
subject to the risks of foreign investing described below. In general, domestic and foreign debt securities are
also subject to two additional types of risks: credit risk and interest rate risk.

o        Credit Risk. Credit risk relates to the ability of the issuer to meet interest or principal payment
obligations as they become due. In making investments in debt securities, the Manager may rely to some extent on
the ratings of rating organizations or it may use its own research to evaluate a security's creditworthiness.
Investment-grade bonds are bonds rated at least "Baa" by Moody's Investors Service, Inc. ("Moody's"), at least
"BBB" by Standard & Poor's Rating Service ("S&P's") or Fitch Inc. ("Fitch"), or that have comparable ratings by
another nationally recognized statistical rating organization. If securities the Fund buys 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. The debt security ratings
definitions of the Moody's, S&P's and Fitch are included in Appendix A of this SAI.

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

         Fluctuations in the market value of fixed-income securities after the Fund buys them will not affect the
interest income payable on those securities (unless the security pays interest at a variable rate pegged to
interest rate changes). However, those price fluctuations will be reflected in the valuations of the securities,
and therefore the Fund's net asset values will be affected by those fluctuations.

o        Mortgage-Related Securities. Mortgage-related securities are a form of derivative investment
  collateralized by pools of commercial or residential mortgages. Pools of mortgage loans are assembled as
  securities for sale to investors by government agencies or entities or by private issuers. These securities
  include collateralized mortgage obligations ("CMOs"), mortgage pass-through securities, stripped mortgage
  pass-through securities, interests in real estate mortgage investment conduits ("REMICs") and other real
  estate-related securities.

         Mortgage-related securities that are issued or guaranteed by agencies or instrumentalities of the U.S.
government have relatively little credit risk (depending on the nature of the issuer) but are subject to interest
rate risks and prepayment risks, as described in the Prospectus.

         As with other debt securities, the prices of mortgage-related securities tend to move inversely to
changes in interest rates. The Fund can buy mortgage-related securities that have interest rates that move
inversely to changes in general interest rates, based on a multiple of a specific index. Although the value of a
mortgage-related security may decline when interest rates rise, the converse is not always the case.

         In periods of declining interest rates, mortgages are more likely to be prepaid. Therefore, a
mortgage-related security's maturity can be shortened by unscheduled prepayments on the underlying mortgages.
Therefore, it is not possible to predict accurately the security's yield. The principal that is returned earlier
than expected may have to be reinvested in other investments having a lower yield than the prepaid security.
Therefore, these securities may be less effective as a means of "locking in" attractive long-term interest rates,
and they may have less potential for appreciation during periods of declining interest rates, than conventional
bonds with comparable stated maturities.

         Prepayment risks can lead to substantial fluctuations in the value of a mortgage-related security. In
turn, this can affect the value of the Fund's shares. If a mortgage-related security has been purchased at a
premium, all or part of the premium the Fund paid may be lost if there is a decline in the market value of the
security, whether that results from interest rate changes or prepayments on the underlying mortgages. In the case
of stripped mortgage-related securities, if they experience greater rates of prepayment than were anticipated,
the Fund may fail to recoup its initial investment on the security.

         If interest rates rise rapidly, prepayments may occur at a slower rate than expected and the expected
maturity of long-term or medium-term securities could lengthen as a result. Generally, that would cause their
value and the prices of the Fund's share to fluctuate more widely in response to changes in interest rates.

         As with other debt securities, the values of mortgage-related securities may be affected by changes in
the market's perception of the creditworthiness of the entity issuing the securities or guaranteeing them. Their
values may also be affected by changes in government regulations and tax policies.

o        Collateralized Mortgage Obligations. CMOs are multi-class bonds that are backed by pools of mortgage
         loans or mortgage pass-through certificates. They may be collateralized by:
(1)      pass-through certificates issued or guaranteed by Ginnie Mae, Fannie Mae, or Freddie Mac,
(2)      unsecuritized mortgage loans insured by the Federal Housing Administration or guaranteed by the
         Department of Veterans' Affairs,
(3)      unsecuritized conventional mortgages,
(4)      other mortgage-related securities, or
(5)      any combination of these.

         Each class of CMO, referred to as a "tranche," is issued at a specific coupon rate and has a stated
maturity or final distribution date. Principal prepayments on the underlying mortgages may cause the CMO to be
retired much earlier than the stated maturity or final distribution date. The principal and interest on the
underlying mortgages may be allocated among the several classes of a series of a CMO in different ways. One or
more tranches may have coupon rates that reset periodically at a specified increase over an index. These are
floating rate CMOs, and typically have a cap on the coupon rate. Inverse floating rate CMOs have a coupon rate
that moves in the reverse direction to an applicable index. The coupon rate on these CMOs will increase as
general interest rates decrease. These are usually much more volatile than fixed rate CMOs or floating rate CMOs.

Below Investment-Grade Debt Securities.  Lower-rated bonds are bonds rated in the lower rating categories of
Moody's and S&P, including securities rated Ba or lower by Moody's and BB or lower by S&P.  Securities rated in
these categories are considered to be of poorer quality and predominantly speculative.  Bonds in these categories
may also be called "high yield bonds" or "junk bonds."  If they are unrated, and are determined by the Fund's
manager to be of comparable quality to debt securities rated below investment grade, they are considered part of
the Fund's portfolio of lower-grade securities.  A description of various corporate debt ratings appears in
Appendix A to this SAI.

         Lower-rated securities may be issued as a consequence of corporate restructurings, such as leveraged
buy-outs, mergers, acquisitions, debt recapitalizations or similar events. Also, lower-rated securities are often
issued by smaller, less creditworthy companies or by highly leveraged (indebted) firms, which are generally less
able than more financially stable firms to make scheduled payments of interest and principal. The risks posed by
securities issued under such circumstances may be substantial.

         In the past, the high yields from lower-rated securities have, at times, adequately compensated for the
higher default rates on such securities. However, there can be no assurance that diversification will protect the
Fund from widespread bond defaults brought about by a sustained economic downturn, or that yields will continue
to offset default rates on lower rated securities in the future. Issuers of these securities are often highly
leveraged, so that their ability to service their debt obligations during an economic downturn or during
sustained periods of rising interest rates may be impaired. In addition, such issuers may not have more
traditional methods of financing available to them and may be unable to repay debt at maturity by refinancing.
The risk of loss due to default by the issuer is significantly greater for the holders of lower rated securities
because such securities may be unsecured and may be subordinated to other creditors of the issuer. Further, an
economic recession may result in default levels with respect to such securities in excess of historic averages.

         The value of lower-rated securities will be influenced not only by changing interest rates, but also by
the bond market's perception of credit quality and the outlook for economic growth. When economic conditions
appear to be deteriorating, lower-rated securities may decline in market value due to investors' heightened
concern over credit quality, regardless of prevailing interest rates.

         Especially at such times, trading in the secondary market for lower-rated securities may become thin and
market liquidity may be significantly reduced. Even under normal conditions, the market for lower-rated
securities may be less liquid than the market for investment-grade corporate bonds. There are fewer securities
dealers in the high yield market and purchasers of lower-rated securities are concentrated among a smaller group
of securities dealers and institutional investors. In periods of reduced market liquidity, lower-rated securities
prices may become more volatile and the Fund's ability to dispose of particular issues when necessary to meet the
Fund's liquidity needs or in response to a specific economic event such as deterioration in the creditworthiness
of the issuer may be adversely affected.

         Lower-rated securities frequently have call or redemption features that would permit an issuer to
repurchase the security from the Fund. If a call were exercised by the issuer during a period of declining
interest rates, the Fund likely would have to replace such called security with a lower yielding security, thus
decreasing the net investment income to the Fund and any dividends to investors.

         Securities issued by foreign issuers rated below investment grade entail greater risks than higher rated
securities, including risk of untimely interest and principal payment, default, price volatility and may present
problems of liquidity, valuation and currency risk.  The Fund may also invest in Eurodollar securities, which are
fixed income securities of a U.S. issuer or a foreign issuer that are issued outside the United States. The Fund
does not intend to limit investments in lower rated securities.

o        Special Risks of Lower-Grade Debt Securities. "Lower-grade" debt securities are those rated below
"investment grade," which means they have a rating lower than "Baa" by Moody's or lower than "BBB" by S&P or
Fitch, or similar ratings by other rating organizations.

         Some of the special credit risks of lower-grade securities or "junk bonds" are discussed below. There is
a greater risk that the issuer may default on its obligation to pay interest or to repay principal than in the
case of investment-grade securities. The issuer's low creditworthiness may increase the potential for its
insolvency. An overall decline in values in the high yield bond market is also more likely during a period of a
general economic downturn. An economic downturn or an increase in interest rates could severely disrupt the
market for high yield bonds, adversely affecting the values of outstanding bonds as well as the ability of
issuers to pay interest or repay principal. In the case of foreign high yield bonds, these risks are in addition
to the special risk of foreign investing discussed in the Prospectus and in this SAI.

         To the extent they can be converted into stock, convertible securities may be less subject to some of
the risks of volatility than non-convertible high yield bonds, since stock may be more liquid and less affected
by some of these risk factors.

         The value of lower rated securities will be influenced not only by changing interest rates, but also by
the bond market's perception of credit quality and the outlook for economic growth. When economic conditions
appear to be deteriorating, lower rated securities may decline in market value due to investors' heightened
concern over credit quality, regardless of prevailing interest rates.

         Especially at such times, trading in the secondary market for lower rated securities may become thin and
market liquidity may be significantly reduced. Even under normal conditions, the market for lower rated
securities may be less liquid than the market for investment-grade corporate bonds. There are fewer securities
dealers in the yield market and purchasers of lower rated securities are concentrated among a smaller group of
securities dealers and institutional investors. In periods of reduced market liquidity, lower rated securities
prices may become more volatile and the Fund's ability to dispose of particular issues when necessary to meet the
Fund's liquidity needs or in response to a specific economic event such as deterioration in the creditworthiness
of the issuer may be adversely affected.

         Besides credit and liquidity concerns, prices for lower rated securities may be affected by legislative
and regulatory developments. For example, from time to time, Congress has considered legislation to restrict or
eliminate the corporate tax deduction for interest payments or to regulate corporate restructurings such as
takeovers or mergers. Such legislation may significantly depress the prices of outstanding lower rated
securities.

         Securities issued by foreign issuers rated below investment-grade entail greater risks than higher rated
securities, including risk of untimely interest and principal payment, default, price volatility and may present
problems of liquidity, valuation and currency risk.

         While securities rated "Baa" by Moody's or "BBB" by S&P's or Fitch are investment grade and are not
regarded as junk bonds, those securities may be subject to special risks, and have some speculative
characteristics. A description of the debt security ratings categories of the principal rating organizations is
included in Appendix A to this SAI.

|X|      U.S. Government Securities. These are securities issued or guaranteed by the U.S. Treasury or other U.S.
government agencies or federally-chartered entities referred to as "instrumentalities." The obligations of U.S.
government agencies or instrumentalities in which the Fund can invest may or may not be guaranteed or supported
by the "full faith and credit" of the United States. "Full faith and credit" means generally that the taxing
power of the U.S. government is pledged to the payment of interest and repayment of principal on a security. If a
security is not backed by the full faith and credit of the United States, the owner of the security must look
principally to the agency issuing the obligation for repayment. The owner might not be able to assert a claim
against the United States if the issuing agency or instrumentality does not meet its commitment. The Fund will
invest in securities of U.S. government agencies and instrumentalities only if the Manager is satisfied that the
credit risks with respect to the agency or instrumentality is minimal.

o        U.S. Treasury Obligations. These include Treasury bills (which have maturities of one year or less when
  issued), Treasury notes (which have maturities of from one to ten years when issued), and Treasury bonds (which
  have maturities of more than ten years when issued). Treasury securities are backed by the full faith and
  credit of the United States as to timely payments of interest and repayments of principal. They also can
  include U.S. Treasury securities that have been "stripped" by a Federal Reserve Bank, zero-coupon U.S. Treasury
  securities and Treasury Inflation-Protection Securities ("TIPS") described below.

o        Treasury Inflation-Protection Securities. The Fund can buy these U.S. Treasury securities, called
  "TIPS," that are designed to be an investment vehicle not vulnerable to inflation. The interest rate paid by
  TIPS is fixed. The principal value rises or falls semi-annually based on changes in the published Consumer
  Price Index. If inflation occurs, the principal and interest payments on TIPS are adjusted to protect investors
  from inflationary loss. If deflation occurs, the principal and interest payments will be adjusted downward,
  although the principal will not fall below its face amount at maturity.

o        Obligations Issued or Guaranteed by U.S. Government Agencies or Instrumentalities. These include direct
  obligations and mortgage-related securities that have different levels of credit support from the government.
  Some are supported by the full faith and credit of the U.S. government, such as Government National Mortgage
  Association ("Ginnie Mae") pass-through mortgage certificates. Some are supported by the right of the issuer to
  borrow from the U.S. Treasury under certain circumstances, such as Federal National Mortgage Association
  ("Fannie Mae") bonds, Federal Home Loan Mortgage Corporation ("Freddie Mac") obligations and certain other
  obligations.

o        U.S. Government Mortgage-Related Securities. The Fund can invest in a variety of mortgage-related
  securities that are issued by U.S. government agencies or instrumentalities, some of which are described below.

o        Ginnie Mae Certificates. Ginnie Mae is a wholly-owned corporate instrumentality of the United States
  within the U.S. Department of Housing and Urban Development. Ginnie Mae's principal programs involve its
  guarantees of privately-issued securities backed by pools of mortgages. Ginnie Mae certificates are debt
  securities representing an interest in one or a pool of mortgages that are insured by the Federal Housing
  Administration or the Farmers Home Administration or guaranteed by the Veterans Administration.

         The Ginnie Mae certificates in which the Fund can invest are of the "fully modified pass-through" type.
They provide that the registered holders of the certificates will receive timely monthly payments of the pro-rata
share of the scheduled principal payments on the underlying mortgages, whether or not those amounts are collected
by the issuers. Amounts paid include, on a pro-rata basis, any prepayment of principal of such mortgages and
interest (net of servicing and other charges) on the aggregate unpaid principal balance of Ginnie Mae, whether or
not the interest on the underlying mortgages has been collected by the issuers.

         The Ginnie Mae certificates purchased by the Fund are guaranteed as to timely payment of principal and
interest by Ginnie Mae. In giving that guaranty, Ginnie Mae expects that payments received by the issuers of
Ginnie Mae certificates on account of the mortgages backing the Ginnie Mae certificates will be sufficient to
make the required payments of principal of and interest on those Ginnie Mae certificates. However, if those
payments are insufficient, the guaranty agreements between the issuers of the certificates and Ginnie Mae require
the issuers to make advances sufficient for the payments. If the issuers fail to make those payments, Ginnie Mae
will do so.

         Under Federal law, the full faith and credit of the United States is pledged to the payment of all
amounts that may be required to be paid under any guaranty issued by Ginnie Mae as to such mortgage pools. An
opinion of an Assistant Attorney General of the United States, dated December 9, 1969, states that such
guaranties "constitute general obligations of the United States backed by its full faith and credit." Ginnie Mae
is empowered to borrow from the United States Treasury to the extent necessary to make any payments of principal
and interest required under those guaranties.

         Ginnie Mae certificates are backed by the aggregate indebtedness secured by the underlying FHA-insured,
FMHA-insured or VA-guaranteed mortgages. Except to the extent of payments received by the issuers on account of
such mortgages, Ginnie Mae certificates do not constitute a liability of those issuers, nor do they evidence any
recourse against those issuers. Recourse is solely against Ginnie Mae.  Holders of Ginnie Mae certificates (such
as the Fund) have no security interest in or lien on the underlying mortgages.

         Monthly payments of principal will be made, and additional prepayments of principal may be made, to the
Fund with respect to the mortgages underlying the Ginnie Mae certificates held by the Fund. All of the mortgages
in the pools relating to the Ginnie Mae certificates in the Fund are subject to prepayment without any
significant premium or penalty, at the option of the mortgagors. While the mortgages on 1-to-4-family dwellings
underlying certain Ginnie Mae certificates have a stated maturity of up to 30 years, it has been the experience
of the mortgage industry that the average life of comparable mortgages, as a result of prepayments, refinancing
and payments from foreclosures, is considerably less.

o        Freddie Mac Certificates. Freddie Mac, a corporate instrumentality of the United States, issues Freddie
 Mac certificates representing interests in mortgage loans.  Freddie Mac guarantees to each registered holder of
 a Freddie Mac certificate timely payment of the amounts representing a holder's proportionate share in:
(i)      interest payments less servicing and guarantee fees,
(ii)     principal prepayments, and
(iii)    the ultimate collection of amounts representing the holder's proportionate interest in principal
         payments on the mortgage loans in the pool represented by the Freddie Mac certificate,
         in each case whether or not such amounts are actually received.

         The obligations of Freddie Mac under its guarantees are obligations solely of Freddie Mac and are not
backed by the full faith and credit of the United States.

o        Fannie Mae Certificates. Fannie Mae, a federally-chartered and privately-owned corporation, issues
 Fannie Mae Certificates which are backed by a pool of mortgage loans. Fannie Mae guarantees to each registered
 holder of a Fannie Mae Certificate that the holder will receive amounts representing the holder's proportionate
 interest in scheduled principal and interest payments, and any principal prepayments, on the mortgage loans in
 the pool represented by such certificate, less servicing and guarantee fees, and the holder's proportionate
 interest in the full principal amount of any foreclosed or other liquidated mortgage loan. In each case the
 guarantee applies whether or not those amounts are actually received. The obligations of Fannie Mae under its
 guarantees are obligations solely of Fannie Mae and are not backed by the full faith and credit of the U.S. or
 any of its agencies or instrumentalities other than Fannie Mae.

|X|      Foreign Securities. The Fund can purchase equity and debt securities issued by foreign companies or
foreign governments or their agencies. "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 and
their agencies and instrumentalities. Those securities may be traded on foreign securities exchanges or in the
foreign over-the-counter markets.

         Securities of foreign issuers that are represented by American Depository Receipts or that are listed on
a U.S. securities exchange or traded in the U.S. over-the-counter markets are considered "foreign securities" for
the purpose of the Fund's investment allocations. That is because they are subject to many of the special
considerations and risks, discussed below, that apply to foreign securities traded and held abroad.

         Because the Fund can purchase securities denominated in foreign currencies, a change in the value of a
foreign currency against the U.S. dollar could 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.

o        Foreign Debt Obligations. The debt obligations of foreign governments and their agencies and
 instrumentalities may or may not be supported by the full faith and credit of the foreign government. The Fund
 can buy securities issued by certain "supra-national" entities, which include entities designated or supported
 by governments to promote economic reconstruction or development, international banking organizations and
 related government agencies. Examples are the International Bank for Reconstruction and Development (commonly
 called the "World Bank"), the Asian Development Bank and the Inter-American Development Bank.

         The governmental members of these supra-national entities are "stockholders" that typically make capital
contributions and may be committed to make additional capital contributions if the entity is unable to repay its
borrowings. A supra-national entity's lending activities may be limited to a percentage of its total capital,
reserves and net income. There can be no assurance that the constituent foreign governments will continue to be
able or willing to honor their capitalization commitments for those entities.

o        Emerging Markets.  The Fund intends to invest in securities in emerging market countries. As these
  markets change and other countries' markets develop, the Fund expects the countries in which it invests to
  change.  Emerging market countries generally include every nation in the world except the U.S., Canada, Japan,
  Australia, New Zealand and most nations located in Western Europe.

o        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;
o        unfavorable differences between the U.S. economy and foreign economies; and
o        foreign withholding taxes.

         In the past, U.S. government policies have discouraged certain investments abroad by U.S. investors,
through taxation or other restrictions, and it is possible that such restrictions could be re-imposed.

o        Special Risks of Emerging Markets. Emerging and developing markets abroad may also offer special
 opportunities for growth investing but have greater risks than more developed foreign markets, such as those in
 Europe, Canada, Australia, New Zealand and Japan. There may be even less liquidity in their securities markets,
 and settlements of purchases and sales of securities may be subject to additional delays. They are subject to
 greater risks of limitations on the repatriation of income and profits because of currency restrictions imposed
 by local governments. Those countries may also be subject to the risk of greater political and economic
 instability, which can greatly affect the volatility of prices of securities in those countries.

|X|      Passive Foreign Investment Companies.  Some securities of corporations domiciled outside the U.S. which
the Fund may purchase, may be considered passive foreign investment companies ("PFICs") under U.S. tax laws.
PFICs are those foreign corporations which generate primarily passive income. They tend to be growth companies or
"start-up" companies. For federal tax purposes, a corporation is deemed a PFIC if 75% or more of the foreign
corporation's gross income for the income year is passive income or if 50% or more of its assets are assets that
produce or are held to produce passive income. Passive income is further defined as any income to be considered
foreign personal holding company income within the subpart F provisions defined by Internal Revenue Code ("IRC")
Section 954.

         Investing in PFICs involves the risks associated with investing in foreign securities, as described
above. There are also the risks that the Fund may not realize that a foreign corporation it invests in is a PFIC
for federal tax purposes. Federal tax laws impose severe tax penalties for failure to properly report investment
income from PFICs. Following industry standards, the Fund makes every effort to ensure compliance with federal
tax reporting of these investments. PFICs are considered foreign securities for the purposes of the Fund's
minimum percentage requirements or limitations of investing in foreign securities.

         Subject to the limits under the Investment Company Act of 1940 (the "Investment Company Act"), the Fund
may also invest in foreign mutual funds which are also deemed PFICs (since nearly all of the income of a mutual
fund is generally passive income). Investing in these types of PFICs may allow exposure to various countries
because some foreign countries limit, or prohibit, all direct foreign investment in the securities of companies
domiciled therein.

         In addition to bearing their proportionate share of a fund's expenses (management fees and operating
expenses), shareholders will also indirectly bear similar expenses of such entities. Additional risks of
investing in other investment companies are described below under "Investment in Other Investment Companies."

|X|      Money Market Instruments. The following is a brief description of the types of money market securities
the Fund can invest in. Those money market securities are high-quality, short-term debt instruments that are
issued by the U.S. government, corporations, banks or other entities. They may have fixed, variable or floating
interest rates.

o        U.S. Government Securities. These include obligations issued or guaranteed by the U.S. government or any
of its agencies or instrumentalities, as described above.

o        Bank Obligations. The Fund can buy time deposits, certificates of deposit and bankers' acceptances. Time
deposits, other than overnight deposits, may be subject to withdrawal penalties, and if so, they are deemed to be
"illiquid" investments.

         The Fund can purchase bank obligations that are fully insured by the Federal Deposit Insurance
Corporation. The FDIC insures the deposits of member banks up to $100,000 per account. Insured bank obligations
may have a limited market and a particular investment of this type may be deemed "illiquid" unless the Board of
Trustees of the Fund determines that a readily-available market exists for that particular obligation, or unless
the obligation is payable at principal amount plus accrued interest on demand or within seven days after demand.

o        Commercial Paper. The Fund can invest in commercial paper if it is rated within the top two rating
 categories of S&P's and Moody's. If the paper is not rated, it may be purchased if issued by a company having a
 credit rating of at least "AA" by S&P's or "Aa" by Moody's.

         The Fund can buy commercial paper, including U.S. dollar-denominated securities of foreign branches of
U.S. banks, issued by other entities if the commercial paper is guaranteed as to principal and interest by a
bank, government or corporation whose certificates of deposit or commercial paper may otherwise be purchased by
the Fund.

o        Variable Amount Master Demand Notes. Master demand notes are corporate obligations that permit the
 investment of fluctuating amounts by the Fund at varying rates of interest under direct arrangements between the
 Fund, as lender, and the borrower. They permit daily changes in the amounts borrowed. The Fund has the right to
 increase the amount under the note at any time up to the full amount provided by the note agreement, or to
 decrease the amount. The borrower may prepay up to the full amount of the note without penalty. These notes may
 or may not be backed by bank letters of credit.

         Because these notes are direct lending arrangements between the lender and borrower, it is not expected
that there will be a trading market for them. There is no secondary market for these notes, although they are
redeemable (and thus are immediately repayable by the borrower) at principal amount, plus accrued interest, at
any time. Accordingly, the Fund's right to redeem such notes is dependent upon the ability of the borrower to pay
principal and interest on demand.

         The Fund has no limitations on the type of issuer from whom these notes will be purchased. However, in
connection with such purchases and on an ongoing basis, the Manager will consider the earning power, cash flow
and other liquidity ratios of the issuer, and its ability to pay principal and interest on demand, including a
situation in which all holders of such notes made demand simultaneously. Investments in master demand notes are
subject to the limitation on investments by the Fund in illiquid securities, described in the Prospectus. The
Fund does not intend that its investments in variable amount master demand notes will exceed 5% of its total
assets.

|X|      Portfolio Turnover. "Portfolio turnover" describes the rate at which a 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% annually. The Fund's portfolio turnover rate will fluctuate from
year to year, but the Fund expects to have a portfolio turnover rate in excess of 100% annually as a result of
the Fund's use of short selling and hedging strategies. 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 some or
all of 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|      Short Sales. The Fund may make short sales of securities, either as a hedge against potential declines
in value of a portfolio security or to realize appreciation when a security that the Fund does not own declines
in value. When the Fund makes a short sale, it borrows the security sold short and delivers it to the
broker-dealer through which it made the short sale. The Fund may have to pay a fee to borrow particular
securities and is often obligated to turn over any payments (including dividends and interest) received on such
borrowed securities to the lender of the securities.

            A Fund may also make short sales "against the box" without being subject to such limitations imposed
on other short sale transactions. In this type of short sale, at the time of the sale, the Fund owns or has the
immediate and unconditional right to acquire the identical security at no additional cost. This kind of short
sale, which is described as "against the box," will be entered into by a fund for the purpose of receiving a
portion of the interest earned by the executing broker from the proceeds of the sale. The proceeds of the sale
will be held by the broker until the settlement date when the fund delivers the identical security to close out
its short position. Although prior to delivery the Fund will have to pay an amount equal to any dividends paid on
the common stock sold short, the Fund will receive the dividends from the preferred stock or interest from the
debt securities convertible into the stock sold short, plus a portion of the interest earned from the proceeds of
the short sale. The Fund will deposit, in a segregated account with their custodian, identical security in
connection with short sales "against the box".

            No securities will be sold short if, after the effect is given to any such short sale, the total
market value of all securities sold short would exceed 25% of the Fund's net assets.

            Because making short sales in securities that it does not own exposes a Fund to the risks associated
with those securities, such short sales involve speculative exposure risk. As a result, if a Fund makes short
sales in securities that increase in value, it will likely under-perform similar mutual funds that do not make
short sales in securities they do not own. A Fund will incur a loss as a result of a short sale if the price of
the security increases between the date of the short sale and the date on which the Fund replaces the borrowed
security. A Fund will realize a gain if the security declines in price between those dates. The amount of gain
will be decreased and the amount of loss increased by the amount of premium, dividends, interest or expenses the
Fund may be required to pay in connection with a short sale.  There can be no assurance that a Fund will be able
to close out a short sale position at any particular time or at an acceptable price. Although a Fund's gain is
limited to the price at which it sold the security short, its potential loss is limited only by the maximum
attainable price of the security, less the price at which the security was sold and may, theoretically, be
unlimited.

Derivatives. The Fund is permitted to utilize various exchange-traded and over-the-counter derivative instruments
and derivative securities, for hedging and non-hedging purposes (i.e. speculative purposes) (such as to
tactically adjust existing hedges or to seek to enhance return). Permitted derivative products include, but are
not limited to, futures contracts ("futures"); forward contracts ("forwards"); options; swaps, caps, collars and
floors; weather derivatives; structured notes; and other derivative products yet to be developed, so long as
these new products are used in a manner consistent with the investment objective and policies of the Fund. These
derivative products may be based on a wide variety of underlying rates, indices, instruments, securities and
other products, such as interest rates, foreign currencies, foreign and domestic fixed income and equity
securities, groups or "baskets" of securities and securities indices (for each derivative product, the
"underlying").

            The Fund may use derivative products under a number of different circumstances to further their
investment objectives. For example, the Fund may purchase derivatives to gain exposure to a market or currency
quickly in response to changes in the Fund's investment strategy, upon the inflow of cash available for
investments or when the derivative provides greater liquidity than the underlying market. The Fund may also use
derivatives when it is restricted from directly owning the "underlying" or when derivatives provide a pricing
advantage or lower transaction costs. The Fund also may purchase combinations of derivatives in order to gain
exposure to an investment in lieu of actually purchasing such investment.  Derivatives may also be used by the
Fund for hedging or risk management purposes and in other circumstances when the Manager believes it advantageous
to do so consistent with the Fund's investment objectives and policies.

            The use of derivative products is a highly specialized activity which involves investment techniques
and risks different from those associated with ordinary portfolio securities transactions. If the Manager is
incorrect in forecasts of market values, interest rates, and currency exchange rates, the investment performance
of the Fund will be less favorable than it would have been if these investment techniques had not been used.

|X|      Hedging. The Fund intends to use derivative instruments to attempt to protect
against declines in the market value of the Fund's portfolio, to tactically adjust the hedges to take advantage
of investment opportunities at the asset and sector level, or to facilitate selling securities for investment
reasons.  The Fund could, for example, sell futures contracts, buy puts on such futures or on securities, or
write covered calls on securities or futures to attempt to protect against declines in the market value of the
Fund's portfolio or to facilitate selling securities for investment reasons.  Covered calls may also be used to
seek return.

            The Fund can use hedging to establish a position in the securities market as a temporary substitute
for purchasing particular securities.  This is known as anticipatory hedging.  In the case of anticipatory
hedging, the Fund would normally seek to purchase the securities and then terminate that hedging position.
Anticipatory hedging is a strategy in which the Fund uses a derivative to offset the risk that securities in
which the Fund intends to invest will increase in value before the Fund has an opportunity to purchase them. The
Fund may use derivatives for anticipatory hedging in order to gain exposure efficiently to its market segment in
the event the Fund receives cash inflows.  The Fund may also use derivatives in connection with the investment
strategy that seeks to profit from differences in price when the same (or a similar) security, currency or
commodity is traded in two or more markets.  To do so the Fund could buy futures, or buy calls on such futures or
on securities.

         The particular derivative instruments the Fund can use are described below. The Fund may employ new
derivative 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.  There can
be no assurance that the hedging strategies used by the Manager will be successful in avoiding losses, and hedged
positions may perform less favorably in generally rising markets than unhedged positions.  If the Manager used a
hedging strategy at the wrong time or judged market conditions incorrectly, the strategy could reduce the Fund's
return.  Also, in some cases, derivatives or other investments may be unavailable or the Manager may choose not
to use them under market conditions when their use, in hindsight, may be determined to have been beneficial to
the Fund.  No assurance can be given that the Manager will employ hedging strategies with respect to all or any
portion of the Fund's assets.

|X|        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) an individual stock ("single stock
futures"), (3) bond indices (these are referred to as "bond index futures"), (4) debt securities (these are
referred to as "interest rate futures"), (5) foreign currencies (these are referred to as "forward contracts"),
(6) commodities (these are referred to as "commodity futures") and commodities indices and (7) indices of implied
option volatility measures.

         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. Similarly, a single stock future obligates the seller to
deliver (and the purchaser to take) cash or a specified equity security to settle the futures transaction. Either
party could also enter into an offsetting contract to close out the position. Single stock futures trade on a
very limited number of exchanges, with contracts typically not fungible among the exchanges.

         The Fund can invest a portion of its assets in commodity futures contracts. Commodity futures may be
based upon commodities within six main commodity groups: (1) energy, which includes crude oil, natural gas,
gasoline and heating oil; (2) livestock, which includes cattle and hogs; (3) agriculture, which includes wheat,
corn, soybeans, cotton, coffee, sugar and cocoa; (4) industrial metals, which includes aluminum, copper, lead,
nickel, tin and zinc; (5) precious metals, which includes gold, platinum and silver; and (6) intangible assets,
which include carbon credits (emissions trading) and weather derivatives. The Fund may purchase and sell
commodity futures contracts, options on futures contracts and options and futures on commodity indices with
respect to these six main commodity groups and the individual commodities within each group, as well as other
types of commodities.

         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"). 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.

|X|        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 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 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 may 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.

|X|       Swaps. The Fund may enter into swap agreements, including interest rate,
equity and debt (of U.S. and foreign issuers), correlation, index, total return, credit and currency rate swaps
without limit.  The Fund also may invest in other types of securities that are or may become available that are
similar to the foregoing.  The Fund may enter into a swap agreement in order to, for example, attempt to obtain
or preserve a particular return or spread at a lower cost than obtaining a return or spread through the purchase
and/or sales of instruments in other markets; protect against currency fluctuations; attempt to manage duration
to protect against any increase in the price of securities the Fund anticipates purchasing at a later date;
reduce risk arising from ownership of a particular security or instrument, or gain exposure to certain markets in
the most economical way possible.

         Swap agreements are two-party contracts entered into primarily by institutional investors for a
specified period of time typically ranging from a few weeks to more than one year.  In a standard swap
transaction, two parties agree to exchange the returns (or differentials in rates of returns) earned or realized
on particular predetermined investment, instrument, basket of securities, index, or currency.  The gross returns
to be exchanged or swapped between the parties are generally calculated with respect to a notional amount, that
is, the return on or increase in value of a particular dollar amount invested at a particular interest rate, in a
particular foreign currency, or in a basket of securities representing a particular index or other investments or
instruments.  The obligations may extend beyond one year.

         The Fund can enter into swap transactions with certain counterparties pursuant to master netting
agreements. A master netting agreement provides that all swaps done between the Fund and that counterparty shall
be regarded as parts of an integral agreement. If amounts are payable on a particular date in the same currency
in respect of one or more swap transactions, the amount payable on that date in that currency shall be the net
amount. In addition, the master netting agreement may provide that if one party defaults generally or on one
swap, the counterparty can terminate all of the swaps with that party. Under these agreements, if a default
results in a loss to one party, the measure of that party's damages is calculated by reference to the average
cost of a replacement swap for each swap. It is measured by the mark-to-market value at the time of the
termination of each swap. The gains and losses on all swaps are then netted, and the result is the counterparty's
gain or loss on termination. The termination of all swaps and the netting of gains and losses on termination are
generally referred to as "aggregation."

o        Interest Rate Swap Transactions. The Fund can enter into interest rate swap
agreements. In an interest rate swap, the Fund and another party exchange their right to receive or their
obligation to pay interest on a security. For example, they might swap the right to receive floating rate
payments for fixed rate payments.

o        Index Swap Transactions. The Fund may enter into a swap on an index,
under which involve the exchange by the Fund with another party of the respective amounts payable with respect to
a notional principal amount related to one or more indices.

o        Total Return Swap Transactions.  The Fund may enter into total return
swap transactions, under which one party agrees to pay the other the total return of a defined underlying asset
which may include a specified security, basket of securities or securities indices, during the specified period,
in return for periodic payments based on a fixed or variable interest rate or the total return from other
underlying assets.  A total return swap gives the Fund the right to receive the appreciation in value of an
underlying asset in return for paying a fee to the counterparty. The fee paid by the Fund will typically be
determined by multiplying the face value of the swap agreement by an agreed-upon interest rate. If the underlying
asset declines in value over the term of the swap, the Fund would also be required to pay the dollar value of
that decline to the counterparty.  Total return swap agreements may be used to obtain exposure to a security or
market without owning or taking physical custody of such security or market.

o        Credit Default Swap Transactions.  The Fund also may enter into credit
default swaps to hedge an existing position or to obtain exposure to a security or market by purchasing or
selling credit protection.  A credit default swap is a bilateral contract that enables an investor to buy or sell
protection against a defined-issuer credit event.  The Fund may seek to enhance returns by selling protection or
attempt to mitigate credit risk by buying protection against a defined-issuer credit event.  The seller of credit
protection against a security or basket of securities receives an up-front or periodic payment to compensate
against potential default event(s).  The Fund may enter into credit default swaps, both (i) directly ("unfunded
swaps") and (ii) indirectly ("funded swaps") in the form of a swap embedded within a structured security to
protect against the risk that a debt security will default. The Fund pays a fee to enter into the trade and
receives a fixed payment during the life of the swap. If there is a credit event (for example, the security fails
to timely pay interest or principal), the Fund either delivers the defaulted bond (if the Fund has taken the
short position in the credit default swap, also known as "buying credit protection") or pays the par amount of
the defaulted bond (if the Fund had taken the long position in the credit default swap, also know as "selling
credit protection").

o        Variance and Volatility Swap Transactions.  The Fund may enter into
variance or volatility swap transactions to hedge the direction of volatility or the variance in a particular
currency, index or security, or for other speculative or non-speculative purposes.  In variance swaps
counterparties agree to buy or sell the measured variance of a specified underlying asset, and in or volatility
swaps counterparties agree to buy or sell volatility at a specific volatility level, over a fixed period.
Because the principal amount is not exchanged, it represents neither an asset nor a liability to either
counterparty and is referred to as a notional principal amount. The Fund records a daily increase or decrease to
unrealized gain (loss) based on changes in the amount due to or owed by the Fund at the expiration date of the
swap.

o        Swap Options and Swap Forwards.  The Fund also may enter into options on swap agreements ("swap
options") on the types of swaps listed above as well as swap forwards.  A swap option is a contract that gives a
counterparty the right (but not the obligation) to enter into a new swap agreement or to shorten, extend, cancel,
or otherwise modify an existing swap agreement at some designated future time on specified terms.  The Fund may
write (sell) and purchase put and call swap options.  A swap forward is an agreement to enter into a swap
agreement at some point in the future, usually three to six months forwarded.

o        Swaption Transactions. The Fund may enter into a swaption transaction, which is a contract that grants
the holder, in return for payment of the purchase price (the "premium") of the option, the right, but not the
obligation, to enter into an interest rate swap at a preset rate within a specified period of time, with the
writer of the contract.  The writer of the contract receives the premium and bears the risk of unfavorable
changes in the preset rate on the underlying interest rate swap.  Unrealized gains/losses on swaptions are
reflected in investment assets and investment liabilities in the Fund's statement of financial condition.

|X|       Risks of Swaps. The use of swap agreements by the Fund entails certain risks.
 The swaps  market is  generally  unregulated.  There is no central  exchange or market for swap  transactions  and
therefore they are less liquid  investments  than  exchange-traded  instruments.  If the Fund was to sell a swap it
owned to a third party, the Fund would still remain  primarily  liable of the obligations  under the swap contract.
Because swaps are two-party  contracts and because they may have terms of greater than seven days,  swap agreements
may be considered to be illiquid.  Because  swaps are two-party  contracts,  it may take some time to negotiate and
receive  completed  confirms from  counterparties.  Delaying the  completion of a confirm and settlement of a trade
may entail the risk of creating  uncertainty in a highly  volatile  market or if a market  disruption  occurs.  The
Fund's  successful use of swap  agreements is dependent  upon the Manager's  ability to predict  correctly  whether
certain types of investments are likely to produce greater returns than other investments.

         Swap agreements entail both interest rate risk and credit risk. There is a risk that based on movements
of interest rates in the future; the payments made by the Fund under a swap agreement will be greater than the
payments it received.   Interest rate and currency swaps could result in losses if interest rate or currency
changes are not correctly anticipated by the Manager.  Total return swaps could result in losses if the reference
index, security, or investments do not perform as anticipated by the Manager.  Total return swap agreements may
effectively add leverage to the Fund's portfolio because, in addition to its total net assets, the Fund would be
subject to investment exposure on the notional amount of the swap.  Variance and volatility swaps are subject to
credit risks (if the counterparty fails to meet its obligations), the risk that the Manager is incorrect in
forecasts of market values, interest rates, and currency exchange rates and as with all derivatives, the risks
associated with the currency, index or security underlying the swap.

         Credit risk arises from the possibility that the counterparty will default.  If the counterparty
defaults, the Fund's loss will consist of the net amount of contractual interest payments that the Fund has not
yet received.  Swap agreements also bear the risk that the Fund will not be able to meet its obligation to the
counterparty.  Swaps could result in losses if the Manager does not correctly evaluate the creditworthiness of
the issuer in which the swap is based.  The Manager will monitor the creditworthiness of counterparties to the
Fund's swap transactions on an ongoing basis.  The Fund will enter into swaps only with counterparties meeting
certain creditworthiness standards.  Certain restrictions imposed on the Fund by the Internal Revenue Code may
limit the Fund's ability to enter into swap agreements.

         Risks of credit default swaps include the cost of paying for credit protection if there are no credit
events, pricing transparency when assessing the cost of a credit default swap, counterparty risk, adverse pricing
when purchasing bonds to satisfy its delivery obligation, and the need to fund the delivery obligation (either
cash or the defaulted bonds), depending on whether the Fund is selling or buying credit protection,
respectively.  If the Fund is buying credit protection, and if there is a credit event (including bankruptcy,
failure to timely pay interest or principal, or a restructuring), the Fund will deliver the defaulted bonds and
the swap counterparty will pay the par amount of the bonds.  A credit default swap may become worthless if a bond
is ineligible for delivery because the issuer is restructured or acquired.  With the rise of credit derivatives
markets, the possibility of a "bond squeeze" has increased.  A protection buyer is susceptible to a bond squeeze
in the instance that they do not actually own the bond, and need to purchase the bond on the open market to
deliver to the protection seller.  While market participants have drafted measures to minimize the potential for
bond squeezes, there are at present no binding rules to prevent such market manipulation.  Thus, the protection
buyer could be potentially subject to such a bond squeeze.  If the swap is on a basket of securities, the
notional amount of the swap is reduced by the par amount of the defaulted bond, and the fixed payments are then
made on the reduced notional amount.

         Selling credit protection by purchasing a credit default swap note (i.e., funded swap) or credit default
swap (i.e., unfunded) would increase the Fund's exposure to specific issuers.  The goal would be to increase
liquidity in that market sector via the swap note and its associated increase in the number of trading
instruments, the number and type of market participants, and market capitalization.

          The Fund generally will incur a greater risk when it writes a swap option than when it purchases a swap
option.  When the Fund purchases a swap option it risks losing only the amount of the premium they have paid
should the Manger decide to let the option expire unexercised.  When the Fund writes a swap option it will become
obligated, upon exercise of the option, according to the terms of the underlying agreement.

|X|       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 the other types of futures described above.

o        Writing Covered Call Options. The Fund can write (that is, sell) covered calls. The Fund generally will
write call options on a covered basis. 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.

         From time to time, the Fund will write a call option that is not covered as indicated above but where
the Fund will maintain, with its custodian for the term of the option, segregated liquid assets in a segregated
account having a value equal to the fluctuating market value of the optioned securities or currencies. While such
an option would be "covered" with sufficient collateral to satisfy SEC prohibitions on issuing senior securities,
this type of strategy would expose the funds to the risks of writing uncovered options. When writing uncovered
call options, the Fund is subject to the risk of having to purchase the security or currency subject to the
option at a price higher than the exercise price of the option. As the price of a security or currency could
appreciate substantially, the Fund's loss could be significant.

         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, or securities depository acting for the custodian, 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. The 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.

o        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.

         If the Fund writes a put, the put must be covered by segregated liquid assets. 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 identify liquid assets on its books 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.

o        Purchasing Puts and Calls. 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 an investment the Fund does not own (such as an index or future) permits the Fund either
to resell the put or to buy the underlying investment and sell it at the exercise price. The resale price will
vary inversely to the price of the underlying investment. If the market price of the underlying investment is
above the exercise price and, as a result, the put is not exercised, the put will become worthless on its
expiration date.

         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.

|X|      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 identified on its books) 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
identifying on its books cash, U.S. government securities or other liquid, high grade debt securities in an
amount equal to the exercise price of the option.

|X|          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 value 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.

o        Regulatory Aspects of Hedging Instruments. The Commodities Futures Trading Commission (the "CFTC") has
eliminated limitations on futures trading by certain regulated entities including registered investment companies
and consequently registered investment companies may engage in unlimited futures transactions and options thereon
provided that the Fund claims an exclusion from regulation as a commodity pool operator. The Fund has claimed
such an exclusion from registration as a commodity pool operator under the Commodity Exchange Act ("CEA"). The
Fund may use futures and options for hedging and non-hedging purposes to the extent consistent with its
investment objective, internal risk management guidelines adopted by the Fund's investment adviser (as they may
be amended from time to time), and as otherwise set forth in the Fund's Prospectus or this SAI.

         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 adviser as the
Fund (or an adviser that is an affiliate of the Fund's adviser). 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 interpretations of the staff of the Securities and Exchange Commission ("SEC") regarding
applicable provisions of the Investment Company Act, when the Fund purchases a future, it must identify liquid
assets on its books in an amount equal to the purchase price of the future, less the margin deposit applicable to
it.

o        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.

|X|      Asset Coverage for Forward Contracts, Options, Futures, Options on
Futures, Swaps and Short Sales.  The Fund will comply with guidelines established by the SEC and other applicable
regulatory bodies with respect to coverage of options written by the Fund on securities and indexes, currency,
interest rate and security index futures contracts and options on these futures contracts, forward currency
contracts and short sales.  These guidelines may, in certain instances, require segregation by the Fund of cash
or liquid securities with its custodian or a designated sub-custodian to the extent the Fund's obligations with
respect to these strategies are not otherwise "covered" through ownership of the underlying security or financial
instrument or by other portfolio positions, or by other means consistent with applicable regulatory policies.
Segregation of a large percentage of the Fund's assets could impede the Manager's ability to manage the Fund's
portfolio.  Except under circumstances where a segregated account is not required under the Investment Company
Act or the rules adopted thereunder, the Fund will earmark cash or liquid assets or place them in a segregated
account in an amount necessary to cover the Fund's obligations under such derivative transactions.

         Most swap agreements entered into by the Fund would calculate the obligations of the parties to the
agreement on a "net basis" (i.e., the two payment streams are netted out with the Fund receiving or paying, as
the case may be, only the net amount of the two payments).  Consequently, the Fund's current obligations (or
rights) under a swap agreement will generally be equal only to the net amount to be paid or received under the
agreement based on the relative values of the positions held by each party to the agreement (the "net amount").
The Fund's current obligations under a swap agreement will be accrued daily (offset against any amounts owed to
the Fund) and any accrued but unpaid net amounts owed to a swap counterparty will be covered by the segregation
of liquid assets having an aggregate net asset value at least equal to the accrued unpaid net amounts owed.

         To the extent that the Fund enters into swaps on other than a net basis, the amount maintained in a
segregated account will be the full amount of the Fund's obligations, if any, with respect to such swaps, accrued
on a daily basis in an amount equal to or greater than the market value of the liabilities under the swap
agreement or the amount it would have cost the Fund initially to make an equivalent direct investment, plus or
minus any amount the Fund is obligated to pay or is to receive under the swap agreement.  Inasmuch as segregated
accounts are established for these hedging transactions, the investment adviser and the Fund believe such
obligations do not constitute senior securities and, accordingly, will not treat them as being subject to its
borrowing restrictions. If there is a default by the other party to such a transaction, the Fund will have
contractual remedies pursuant to the agreement related to the transaction. Since swaps are individually
negotiated, the Fund expects to achieve an acceptable degree of correlation between its rights to receive a
return on its portfolio securities and its rights and obligations to receive and pay a return pursuant to swaps.

            The Fund's obligation to replace the securities borrowed in connection with a short sale will be
secured by collateral deposited in a segregated account with the Fund's custodian on behalf of the broker that
consists of cash or U.S. government securities. In addition, the Fund will either (i) place in a segregated
account with its custodian an amount of cash or U.S. government securities equal to the difference, if any,
between (a) the market value of the securities sold at the time they were sold short and (b) any cash or U.S.
government securities deposited as collateral on behalf of the broker in connection with the short sale (not
including the proceeds of the short sale) or (ii) otherwise cover its short position.  Until it replaces the
borrowed securities, the Fund will maintain the segregated account daily at a level so that the amount deposited
in the account plus the amount deposited on behalf of the broker (not including the proceeds from the short sale)
(a) will equal the current market value of the securities sold short and (b) will not be less than the market
value of the securities at the time they were sold short.  No segregation is required, however, if the sale is
"covered" (i.e., the fund owns the security sold short or holds a convertible bond, call option or warrant it can
convert to the security sold short at a price no greater than the price the security was sold short - a
"short-against-the-box").

            Depending on arrangements made with the broker-dealer from which the Fund borrowed the security, a
Fund may not receive any payments (including interest) on its collateral deposited on behalf of such
broker-dealer.

         With respect to forward contracts, the Fund will cover its short positions in these cases by identifying
on its books liquid assets having a value equal to the aggregate amount of the Fund's commitment under forward
contracts. 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 as or higher than the forward contact price.

|X|      Investing in Small, Unseasoned Companies. The Fund can 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. These are more speculative securities and can increase the Fund's overall portfolio risks.

|X|      "When-Issued" and "Delayed-Delivery" Transactions. The Fund can invest in securities on a "when-issued"
basis and can purchase or sell securities on a "delayed-delivery" or "forward commitment" 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 can 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. Its 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 value. 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. The Fund will not enter into when-issued commitments if more
than 15% of the Fund's net assets would be committed under these transactions.

         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.

|X|      Repurchase Agreements. The Fund can acquire securities subject to repurchase agreements. It might 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, or for temporary
defensive purposes.

         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 Manager from time to time.

         The majority of these transactions run from day to day, and delivery pursuant to the resale typically
occurs 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. 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, 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.

         Pursuant to an exemptive order issued by the SEC, the Fund, along with other affiliated entities managed
by the Manager, may transfer uninvested cash balances into one or more joint repurchase accounts. These balances
are invested in one or more repurchase agreements, secured by U.S. government securities. Securities that are
pledged as collateral for repurchase agreements are held by a custodian bank until the agreements mature. Each
joint repurchase arrangement requires that the market value of the collateral be sufficient to cover payments of
interest and principal; however, in the event of default by the other party to the agreement, retention or sale
of the collateral may be subject to legal proceedings.

o        Reverse Repurchase Agreements. The Fund can use reverse repurchase agreements on debt obligations it
owns. Under a reverse repurchase agreement, the Fund sells an underlying debt obligation and simultaneously
agrees to repurchase the same security at an agreed-upon price at an agreed-upon date. The Fund will identify on
its books liquid assets in an amount sufficient to cover its obligations under reverse repurchase agreements,
including interest, until payment is made to the seller.

         These transactions involve the risk that the market value of the securities sold by the Fund under a
reverse repurchase agreement could decline below the price at which the Fund is obligated to repurchase them.
These agreements are considered borrowings by the Fund and will be subject to the asset coverage requirement
under the Fund's policy on borrowing discussed below.

|X|      Illiquid and Restricted Securities. To enable the Fund to sell its holdings of a restricted security not
registered under applicable securities law, the Fund may have to cause those securities to be registered. The
expenses of registering restricted securities may be negotiated by the Fund with the issuer at the time the Fund
buys the securities. When the Fund must arrange registration because the Fund wishes to sell the security, a
considerable period may elapse between the time the decision is made to sell the security and the time the
security is registered so that the Fund could sell it. The Fund would bear the risks of any downward price
fluctuation during that period.

         The Fund may also acquire restricted securities through private placements. Those securities have
contractual restrictions on their public resale. Those restrictions might limit the Fund's ability to dispose of
the securities and might lower the amount the Fund could realize upon the sale.

         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.

|X|      Real Estate Investment Trusts ("REITs").  The Fund may invest in REITs, which pool investors' funds for
investment, primarily in income producing real estate or real estate-related loans or interests. A REIT is not
taxed on income distributed to its shareholders or unitholders if it complies with regulatory requirements
relating to its organization, ownership, assets and income, and with a regulatory requirement that it distribute
to its shareholders or unitholders at least 90% of its taxable income for each taxable year. Generally, REITs can
be classified as Equity REITs, Mortgage REITs or Hybrid REITs. Equity REITs invest the majority of their assets
directly in real property and derive their income primarily from rents and capital gains from appreciation
realized through property sales. Equity REITs are further categorized according to the types of real estate
securities they own, e.g., apartment properties, retail shopping centers, office and industrial properties,
hotels, health-care facilities, manufactured housing and mixed-property types. Mortgage REITs invest the majority
of their assets in real estate mortgages and derive their income primarily from interest payments. Hybrid REITs
combine the characteristics of both Equity REITs and Mortgage REITs.

            A shareholder in the Fund, by investing in REITs indirectly through the Fund, will bear not only the
shareholder's proportionate share of the expenses of the Fund, but also, indirectly, the management expenses of
the underlying REITs. REITs may be affected by changes in the value of their underlying properties and by
defaults by borrowers or tenants. Mortgage REITs may be affected by the quality of the credit extended.
Furthermore, REITs are dependent on specialized management skills. Some REITs may have limited diversification
and may be subject to risks inherent in investments in a limited number of properties, in a narrow geographic
area, or in a single property type. REITs depend generally on their ability to generate cash flow to make
distributions to shareholders or unitholders, and may be subject to defaults by borrowers and to
self-liquidations. In addition, the performance of a REIT may be affected by its failure to qualify for tax-free
pass-through of income, or the REIT's failure to maintain exemption from registration under the Act.

            Investment in Other Investment Companies. The Fund can also invest in the securities of other
investment companies, which can include open-end funds, closed-end funds and unit investment trusts, subject to
the limits set forth in the Investment Company Act that apply to those types of investments, and the following
additional limitation: the Fund cannot invest in the securities of other registered investment companies or
registered unit investment trusts in reliance on sub-paragraph (F) or (G) of section 12(d)(1) of the Investment
Company Act. For example, the Fund can invest in exchange-traded funds, which are typically open-end funds or
unit investment trusts, listed on a stock exchange. The Fund might do so as a way of gaining exposure to the
segments of the equity or fixed-income markets represented by the exchange-traded funds' portfolio, at times when
the Fund may not be able to buy those portfolio securities directly.

            Investing in another investment company may involve the payment of substantial premiums above the
value of such investment company's portfolio securities and is subject to limitations under the Investment
Company Act.  The Fund does not intend to invest in other investment companies unless the Manager believes that
the potential benefits of the investment justify the payment of any premiums or sales charges.  As a shareholder
of an investment company, the Fund would be subject to its ratable share of that investment company's expenses,
including its advisory and administration expenses.  The Fund does not anticipate investing a substantial amount
of its net assets in shares of other investment companies.

|X|      Temporary Defensive and Interim Investments. When market, economic or political conditions are unstable,
or the Manager believes it is otherwise appropriate to reduce holdings in stocks, the Fund can invest in a
variety of debt securities for defensive purposes and the types of money market instruments described above. The
Fund can also purchase these securities for liquidity purposes to meet cash needs due to the redemption of Fund
shares, or to hold while waiting to reinvest cash received from the sale of other portfolio securities. The
Fund's temporary defensive investments can include the following short-term (maturing in one year or less)
dollar-denominated debt obligations:
o        obligations issued or guaranteed by the U. S. government or its instrumentalities or agencies,
o        commercial paper (short-term, unsecured, promissory notes of domestic or foreign companies) rated in the
         top two rating categories of a nationally-recognized rating organization,
o        short-term debt obligations of corporate issuers, rated investment grade (rated at least Baa by Moody's
         or at least BBB by S&P's, or a comparable rating by another rating organization), or unrated
         securities judged by the Manager to have a comparable quality to rated securities in those
         categories,
o        money market securities issued by the U.S. government, corporations, banks or other entities that may
         have fixed, variable or floating interest rates, and
o        repurchase agreements.

         Short-term debt securities would normally be selected for defensive or cash management purposes because
they can normally be disposed of quickly, are not generally subject to significant fluctuations in principal
value and their value will be less subject to interest rate risk than longer-term debt securities.

|X|      Event-Linked Bonds. The Fund may invest in "event-linked" bonds.  Event-linked bonds, which are
sometimes referred to as "catastrophe" bonds, are fixed income securities for which the return of principal and
payment of interest is contingent on the non-occurrence of a specific trigger event, such as a hurricane,
earthquake, or other occurrence that leads to physical or economic loss.  In some cases, the trigger event will
not be deemed to have occurred unless the event is of a certain magnitude (based on scientific readings) or
causes a certain measurable amount of loss to the issuer, a particular industry group or a reference index.  If
the trigger event occurs prior to maturity, the Fund may lose all or a portion of its principal and additional
interest. The Fund may also invest in similar bonds where the Fund may lose all or a portion of its principal and
additional interest if the mortality rate in a geographic area exceeds a stated threshold prior to maturity
whether or not a particular catastrophic event has occurred.

Event-linked bonds may be issued by government agencies, insurance companies, re-insurers, and financial
institutions, among other issuers, or special purpose vehicles associated with the foregoing.  Often event-linked
bonds provide for extensions of maturity in order to process and audit loss claims in those cases when a trigger
event has occurred or is likely to have occurred.  An extension of maturity may increase a bond's volatility.

Event-linked bonds may expose the Fund to certain other risks, including issuer default, adverse regulatory or
jurisdictional interpretations, liquidity risk and adverse tax consequences.  Lack of a liquid market may result
in higher transaction costs and the possibility that the Fund may be forced to liquidate positions when it would
not be advantageous to do so. Event-linked bonds are typically rated by one or more nationally recognized
statistical rating organization and the Fund will only invest in event-linked bonds that meet the credit quality
requirements for the Fund.

|X|      Borrowing for Leverage.  The Fund may not borrow money, except to the extent permitted under the
Investment Company Act, the rules or regulations thereunder or any exemption therefrom that is applicable to the
Fund, as such statute, rules or regulations may be amended or interpreted from time to time. Borrowing may entail
"leverage," and may be a speculative investment strategy. Any borrowing will be made only from banks and,
pursuant to the requirements of the Investment Company Act, will 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, when computed in that manner, should fail to meet the
300% asset coverage requirement, the Fund is required within three days to reduce its bank debt to the extent
necessary to meet that coverage requirement. To do so, the Fund may have to sell a portion of its investments at
a time when it would otherwise not want to sell the securities. Interest on money the Fund borrows is an expense
the Fund would not otherwise incur, so that during periods of substantial borrowings, its expenses may increase
more than the expenses of funds that do not borrow. The use of leverage also may make the Fund's share prices
more sensitive to interest rate changes.

|X|      Loans of Portfolio Securities.  The Fund may lend its portfolio securities pursuant to a Securities
Lending Agency Agreement (the "Securities Lending Agreement") with The Goldman Sachs Trust Company, doing
business as Goldman Sachs Agency Lending ("Goldman Sachs"), subject to the restrictions stated in the Prospectus.
The Fund will lend portfolio securities to attempt to increase its income. Goldman Sachs has agreed, in general,
to guarantee the obligations of borrowers to return loaned securities and to be responsible for certain expenses
relating to securities lending. Under the Securities Lending Agreement, the Fund's securities lending procedures
and applicable regulatory requirements (which are subject to change), the Fund must receive collateral from the
borrower consisting of cash, bank letters of credit or securities of the U.S. government (or its agencies or
instrumentalities). On each business day, the amount of collateral that the Fund has received must at least equal
the value of the loaned securities. If the Fund receives cash collateral from the borrower, the Fund may invest
that cash in certain high quality, short-term investments specified in its securities lending procedures. The
Fund will be responsible, for the risks associated with the investment of cash collateral, including the risk
that the Fund may lose money on the investment or may fail to earn sufficient income to meet its obligations to
the borrower.

         The terms of the Fund's portfolio loans must comply with all applicable regulations and with the
Fund's Securities Lending Procedures adopted by the Board. The terms of the loans must permit the Fund to
recall loaned securities on five business days' notice and the Fund will seek to recall loaned securities in
time to vote on any matters that the Manager determines would have a material effect on the Fund's investment.
The Securities Lending Agreement may be terminated by either Goldman Sachs or the Fund on 30 days' written
notice.

Other 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:
o        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
o        more than 50% of the outstanding shares.

         The Fund's investment objective is a fundamental policy. Other policies described in the Prospectus or
this SAI 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 SAI, as appropriate. The Fund's principal
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:

o        The Fund cannot buy securities or other instruments issued or guaranteed by any one issuer if more than
5% of its total assets would be invested in securities or other instruments 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 or guaranteed by the U.S. government or any of its agencies or
instrumentalities or securities of other investment companies.

o        The Fund cannot invest 25% or more of its total assets in any one industry. That limit does not apply to
securities issued or guaranteed by the U.S. government or its agencies and instrumentalities or securities issued
by investment companies.

o        The Fund may not borrow money, except to the extent permitted under the Investment Company Act, the
rules or regulations thereunder or any exemption therefrom that is applicable to the Fund, as such statute, rules
or regulations may be amended or interpreted from time to time.

o        The Fund cannot make loans, except to the extent permitted under the Investment Company Act, the rules
or regulations thereunder or any exemption therefrom that is applicable to the Fund, as such statute, rules or
regulations may be amended or interpreted from time to time.

o        The Fund cannot invest in real estate, physical commodities or commodity contracts, except to the extent
permitted under the Investment Company Act, the rules or regulations thereunder or any exemption therefrom, as
such statute, rules or regulations may be amended or interpreted from time to time.

o        The Fund may not underwrite securities issued by others, except to the extent that a Fund may be
considered an underwriter within the meaning of the Securities Act of 1933, as amended, when reselling securities
held in its own portfolio.

o        The Fund cannot issue senior securities, except to the extent permitted under the Investment Company
Act, the rules or regulations thereunder or any exemption therefrom, as such statute, rules or regulations may be
amended or interpreted from time to time.

         Currently, under the Investment Company Act, a mutual fund may borrow only from banks and the maximum
amount it may borrow is up to one-third of its total assets (including the amount borrowed less all liabilities
and indebtedness other than borrowing), except that a fund may borrow up to 5% of its total assets for temporary
purposes from any person. Under the Investment Company Act, there is a rebuttable presumption that a loan is
temporary if it is repaid within 60 days and not extended or renewed. Also, presently under the Investment
Company Act the Fund may lend its portfolio securities in an amount not to exceed 33 1/3 percent of the value of
its total assets. In addition, currently the Investment Company Act requires a mutual fund to have fundamental
investment policies governing investments in real estate and commodities. Presently, under the Investment Company
Act a registered mutual fund cannot make any commitment as an underwriter, if immediately thereafter the amount
of its outstanding underwriting commitments, plus the value of its investments in securities of issuers (other
than investment companies) of which it owns more than ten percent of the outstanding voting securities, exceeds
twenty-five percent of the value of its total assets.

|X|      Does the Fund Have Any Restrictions That Are Not Fundamental? The Fund has a number of other investment
restrictions that are not fundamental policies, which means that they can be changed by the Board of Trustees
without shareholder approval.

o        The Fund cannot invest in securities of other registered investment companies or registered unit
investment trusts in reliance on sub-paragraph (F) or (G) of section 12(d)(1) of the Investment Company Act.

         Unless the Prospectus or this SAI states that a percentage restriction applies on an ongoing basis, it
applies only at the time the Fund makes an investment (except in the case of borrowing and investments in
illiquid securities). 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.

      Disclosure of Portfolio Holdings.  The Fund has adopted policies and procedures concerning the dissemination of
      information about its portfolio holdings by employees, officers and/or directors of the Manager, Distributor and
      Transfer Agent. These policies are designed to assure that non-public information about portfolio securities is
      distributed only for a legitimate business purpose, and is done in a manner that (a) conforms to applicable laws
      and regulations and (b) is designed to prevent that information from being used in a way that could negatively
      affect the Fund's investment program or enable third parties to use that information in a manner that is harmful
      to the Fund.

o        Public Disclosure. The Fund's portfolio holdings are made publicly available no later than 60 days after the
                  close of each of the Fund's fiscal quarters in its semi-annual report to shareholders, its annual
                  report to shareholders, or its Statements of Investments on Form N-Q. The Fund may release the top
                  20 month-end holdings with a 15-day lag. The Fund may release a more restrictive list of holdings
                  (e.g., the top five or top 10 portfolio holdings) or may release no holdings if that is in the best
                  interests of the Fund and its shareholders. Other general information about the Fund's portfolio
                  investments, such as portfolio composition by asset class, industry, country, currency, credit
                  rating or maturity, may also be posted.

               Until publicly disclosed, the Fund's portfolio holdings are proprietary, confidential business
      information. While recognizing the importance of providing Fund shareholders with information about their Fund's
      investments and providing portfolio information to a variety of third parties to assist with the management,
      distribution and administrative process, the need for transparency must be balanced against the risk that third
      parties who gain access to the Fund's portfolio holdings information could attempt to use that information to
      trade ahead of or against the Fund, which could negatively affect the prices the Fund is able to obtain in
      portfolio transactions or the availability of the securities that portfolio managers are trading on the Fund's
      behalf.

      The Manager and its subsidiaries and affiliates, employees, officers, and directors, shall neither solicit nor
      accept any compensation or other consideration (including any agreement to maintain assets in the Fund or in
      other investment companies or accounts managed by the Manager or any affiliated person of the Manager) in
      connection with the disclosure of the Fund's non-public portfolio holdings. The receipt of investment advisory
      fees or other fees and compensation paid to the Manager and its subsidiaries pursuant to agreements approved by
      the Fund's Board shall not be deemed to be "compensation" or "consideration" for these purposes. It is a
      violation of the Code of Ethics for any covered person to release holdings in contravention of portfolio
      holdings disclosure policies and procedures adopted by the Fund.

      A list of the top 20 portfolio securities holdings (based on invested assets), listed by security or by issuer,
      as of the end of each month may be disclosed to third parties (subject to the procedures below) no sooner than
      15 days after month-end.

      Except under special limited circumstances discussed below, month-end lists of the Fund's complete portfolio
      holdings may be disclosed no sooner than 30-days after the relevant month-end, subject to the procedures below.
      If the Fund's complete portfolio holdings have not been disclosed publicly, they may be disclosed pursuant to
      special requests for legitimate business reasons, provided that:

o        The third-party recipient must first submit a request for release of Fund portfolio holdings, explaining the
         business reason for the request;
o        Senior officers in the Manager's Portfolio and Legal departments must approve the completed request for
         release of Fund portfolio holdings; and
o        The third-party recipient must sign the Manager's portfolio holdings non-disclosure agreement before
         receiving the data, agreeing to keep information that is not publicly available regarding the Fund's
         holdings confidential and agreeing not to trade directly or indirectly based on the information.

      The Fund's complete portfolio holdings positions may be released to the following categories of entities or
      individuals on an ongoing basis, provided that such entity or individual either (1) has signed an agreement to
      keep such information confidential and not trade on the basis of such information or (2) is subject to fiduciary
      obligations, as a member of the Fund's Board, or as an employee, officer and/or director of the Manager,
      Distributor, or Transfer Agent, or their respective legal counsel, not to disclose such information except in
      conformity with these policies and procedures and not to trade for his/her personal account on the basis of such
      information:

o        Employees of the Fund's Manager, Distributor and Transfer Agent who need to have access to such information
         (as determined by senior officers of such entity),
o        The Fund's independent registered public accounting firm,
o        Members of the Fund's Board and the Board's legal counsel,
o        The Fund's custodian bank,
o        A proxy voting service designated by the Fund and its Board,
o        Rating/ranking organizations (such as Lipper and Morningstar),
o        Portfolio pricing services retained by the Manager to provide portfolio security prices, and
o        Dealers, to obtain bids (price quotations if securities are not priced by the Fund's regular pricing
         services).

      Portfolio holdings information of the Fund may be provided, under limited circumstances, to brokers and/or
      dealers with whom the Fund trades and/or entities that provide investment coverage and/or analytical information
      regarding the Fund's portfolio, provided that there is a legitimate investment reason for providing the
      information to the broker, dealer or other entity. Month-end portfolio holdings information may, under this
      procedure, be provided to vendors providing research information and/or analytics to the Fund, with at least a
      15-day delay after the month end, but in certain cases may be provided to a broker or analytical vendor with a
      1-2 day lag to facilitate the provision of requested investment information to the Manager to facilitate a
      particular trade or the portfolio manager's investment process for the Fund. Any third party receiving such
      information must first sign the Manager's portfolio holdings non-disclosure agreement as a pre-condition to
      receiving this information.

      Portfolio holdings information (which may include information on individual securities positions or multiple
      securities) may be provided to the entities listed below (1) by portfolio traders employed by the Manager in
      connection with portfolio trading, and (2) by the members of the Manager's Security Valuation Group and
      Accounting Departments in connection with portfolio pricing or other portfolio evaluation purposes:

o        Brokers and dealers in connection with portfolio transactions (purchases and sales)
o        Brokers and dealers to obtain bids or bid and asked prices (if securities held by the Fund are not priced by
         the Fund's regular pricing services)
o        Dealers to obtain price quotations where the Fund is not identified as the owner.

      Portfolio holdings information (which may include information on the Fund's entire portfolio or individual
      securities therein) may be provided by senior officers of the Manager or attorneys on the legal staff of the
      Manager, Distributor, or Transfer Agent, in the following circumstances:

o        Response to legal process in litigation matters, such as responses to subpoenas or in class action matters
         where the Fund may be part of the plaintiff class (and seeks recovery for losses on a security) or a
         defendant,
o        Response to regulatory requests for information (the SEC, Financial Industry Regulatory Authority ("FINRA"),
         state securities regulators, and/or foreign securities authorities, including without limitation
         requests for information in inspections or for position reporting purposes),
o        To potential sub-advisers of portfolios (pursuant to confidentiality agreements),
o        To consultants for retirement plans for plan sponsors/discussions at due diligence meetings (pursuant to
         confidentiality agreements),
o        Investment bankers in connection with merger discussions (pursuant to confidentiality agreements).

      Portfolio managers and analysts may, subject to the Manager's policies on communications with the press and
      other media, discuss portfolio information in interviews with members of the media, or in due diligence or
      similar meetings with clients or prospective purchasers of Fund shares or their financial intermediary
      representatives.

      The Fund's shareholders may, under unusual circumstances (such as a lack of liquidity in the Fund's portfolio to
      meet redemptions), receive redemption proceeds of their Fund shares paid as pro rata shares of securities held
      in the Fund's portfolio. In such circumstances, disclosure of the Fund's portfolio holdings may be made to such
      shareholders.

      Any permitted release of otherwise non-public portfolio holdings information must be in accordance with the
      then-current policy on approved methods for communicating confidential information.

      The Chief Compliance Officer (the "CCO") of the Fund and the Manager, Distributor, and Transfer Agent shall
      oversee the compliance by the Manager, Distributor, Transfer Agent, and their personnel with these policies and
      procedures. At least annually, the CCO shall report to the Fund's Board on such compliance oversight and on the
      categories of entities and individuals to which disclosure of portfolio holdings of the Fund has been made
      during the preceding year pursuant to these policies. The CCO shall report to the Fund's Board any material
      violation of these policies and procedures and shall make recommendations to the Board as to any amendments that
      the CCO believes are necessary and desirable to carry out or improve these policies and procedures.

      The Manager and/or the Fund have entered into ongoing arrangements to make available information about the
      Fund's portfolio holdings. One or more of the Oppenheimer funds may currently disclose portfolio holdings
      information based on ongoing arrangements to the following parties:


ABG Sundial Collier                          Fixed Income Securities                        Nomura Securities
ABN AMRO                                     Fortis Securities                              Oppenheimer & Co.
                                             Fox-Pitt, Kelton                               Oscar Gruss & Sons, Inc.

Allen & Co                           Friedman, Billing, Ramsey                      OTR Global
American Technology Research                 Gabelli                                        Pacific Crest Securities
Auerbach Grayson                             Garp Research & Securities             Piper Jaffray Inc.
Avondale Partners                            Gartner                                        Portales Partners
Banc of America Securities                   George K Baum & Co.                    Ladenburg Thalmann & Co.
Barra                                        Goldman Sachs                                  Raymond James
BB&T                                 Howard Weil, Inc.                              RBC
Belle Haven                                  HSBC
Bloomberg                                    ISI Group                                      RiskMetrics/ISS
BMO Capital Markets                          ITG                                            Robert W. Baird & Co.
BNP Paribas                                  Janco Partners                                 Roosevelt & Cross, Inc.
Brean Murray Carret & Co.            Janney Montgomery Scott                        Russell
Broadpoint Securities Group, Inc.            Jefferies                                      Sandler O'Neil & Partners
Brown Brothers Harriman & Co.        JMP Securities                                 Sanford C. Bernstein
Buckingham Research Group                    JNK Securities                                 Scotia Capital Markets
Canaccord Adams                              Johnson Rice & Company                 Sidoti & Company
Caris & Co.                          JP Morgan Securities                           Simmons & Company
CIBC World Markets                           Kaufman Brothers                               Sanders Morris Harris
Citigroup Global Markets                     Keefe, Bruyette & Woods, Inc.          Societe Generale
CJS Securities, Inc.                         Keijser Securities                             Soleil Securities Group
Cleveland Research Company                   Kempen & Co. USA Inc.                  Standard & Poor's
Cogent                                       Kepler Equities/Julius Baer Sec                Stanford Group
Collins Stewart                              KeyBanc Capital Markets                        State Street Bank
Cowen & Company                      Lazard Freres & Co                     Stephens, Inc.
Craig-Hallum Capital Group LLC               Leerink Swann                                  Stifel Nicolaus
Credit Agricole Cheuvreux N.A. Inc.          Lehman Brothers                                Stone & Youngberg
Credit Suisse                                Loop Capital Markets                           Strategas Research
Data Communique                              Louise Yamada Tech Research                    Sungard
Daiwa Securities                             MainFirst Bank AG                              Suntrust Robinson Humphrey
Davy                                         Makinson Cowell US Ltd                         SWS Group
Deutsche Bank Securities                     McAdams Wright Ragen                           Think Panmure
Dougherty Markets                            Merrill Lynch                                  Thomas Weisel Partners
Dowling & Partners                   Miller Tabak & Co.                     Thomson Reuters
Empirical Research                           Mizuho Securities                              UBS
Enskilda Securities                          Moodys Research                                Virtusa Corporation
Exane BNP Paribas                            Morgan Stanley                                 Wachovia Securities
Factset                                      Natixis Bleichroeder, Inc.                     Wedbush Morgan Securities
Fidelity Capital Markets                     Ned Davis Research Group                       Weeden & Co.
                                             Needham & Company                      William Blair & Company


How the Fund is Managed

Organization and History. The Fund is an open-end, diversified management investment company with an unlimited
number of authorized shares of beneficial interest. The Fund was organized as a Massachusetts business trust on
June 5, 2006.

|X|      Classes of Shares. The Trustees are authorized, without shareholder approval, to create new series and
classes of shares, to reclassify unissued shares into additional series or classes and to divide or combine the
shares of a class into a greater or lesser number of shares without changing the proportionate beneficial
interest of a shareholder in the Fund. Shares do not have cumulative voting rights, preemptive rights or
subscription rights. Shares may be voted in person or by proxy at shareholder meetings.

         The Fund currently has one class of shares: Class A. Shares are freely transferable, and each share of
the class has one vote at shareholder meetings, with fractional shares voting proportionally, on matters
submitted to a vote of shareholders. Each share of the Fund represents an interest in the Fund proportionately
equal to the interest of each other share of the same class.

|X|      Meetings of Shareholders. As a Massachusetts business trust, the Fund is not required to hold, and does
  not plan to hold, regular annual meetings of shareholders, but may hold shareholder meetings from time to time
  on important matters or when required to do so by the Investment Company Act or other applicable law.
  Shareholders have the right, upon a vote or declaration in writing of two-thirds of the outstanding shares of
  the Fund, to remove a Trustee or to take other action described in the Fund's Declaration of Trust.

         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 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 applicants' 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. The Trustees may also take other action as permitted
by the Investment Company Act.

|X|      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.

Board of Trustees and Oversight Committees. 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. The Board
of Trustees has an Audit Committee, a Regulatory & Oversight Committee and a Governance Committee. The Audit
Committee and Regulatory & Oversight Committee are comprised solely of Trustees who are not "interested persons"
under the Investment Company Act (the "Independent Trustees").

         During the Fund's fiscal year ended May 31, 2008, the Audit Committee held 4 meetings, the Regulatory &
Oversight Committee held 5 meetings and the Governance Committee held 6 meetings.

         The members of the Audit Committee are David K. Downes (Chairman), Phillip A. Griffiths, Mary F. Miller,
Joseph M. Wikler and Peter I. Wold. The Audit Committee furnishes the Board with recommendations regarding the
selection of the Fund's independent registered public accounting firm (also referred to as the "independent
Auditors"). Other main functions of the Audit Committee outlined in the Audit Committee Charter, include, but are
not limited to: (i) reviewing the scope and results of financial statement audits and the audit fees charged;
(ii) reviewing reports from the Fund's independent Auditors regarding the Fund's internal accounting procedures
and controls; (iii) reviewing reports from the Manager's Internal Audit Department; (iv) maintaining a separate
line of communication between the Fund's independent Auditors and the Independent Trustees; (v) reviewing the
independence of the Fund's independent Auditors; and (vi) pre-approving the provision of any audit or non-audit
services by the Fund's independent Auditors, including tax services, that are not prohibited by the
Sarbanes-Oxley Act, to the Fund, the Manager and certain affiliates of the Manager.

         The members of the Regulatory & Oversight Committee are Matthew P. Fink (Chairman), David K. Downes,
Robert G. Galli, Phillip A. Griffiths, Joel W. Motley and Joseph M. Wikler. The Regulatory & Oversight Committee
evaluates and reports to the Board on the Fund's contractual arrangements, including the Investment Advisory and
Distribution Agreements, transfer agency and shareholder service agreements and custodian agreements as well as
the policies and procedures adopted by the Fund to comply with the Investment Company Act and other applicable
law, among other duties as set forth in the Regulatory & Oversight Committee's Charter.

         The members of the Governance Committee are Joel W. Motley (Chairman), Matthew P. Fink, Robert G. Galli,
Mary F. Miller, Russell S. Reynolds, Jr. and Peter I. Wold. The Governance Committee reviews the Fund's
governance guidelines, the adequacy of the Fund's Codes of Ethics, and develops qualification criteria for Board
members consistent with the Fund's governance guidelines, provides the Board with recommendations for voting
portfolio securities held by the Fund, and monitors the Fund's proxy voting, among other duties set forth in the
Governance Committee's Charter.

         The Governance Committee's functions also include the selection and nomination of Trustees, including
Independent Trustees for election. The Governance Committee may, but need not, consider the advice and
recommendation of the Manager and its affiliates in selecting nominees. The full Board elects new Trustees except
for those instances when a shareholder vote is required.

         To date, the Governance Committee has been able to identify from its own resources an ample number of
qualified candidates. Nonetheless, under the current policy of the Board, if the Board determines that a vacancy
exists or is likely to exist on the Board, the Governance Committee will consider candidates for Board membership
including those recommended by the Fund's shareholders. The Governance Committee will consider nominees
recommended by Independent Board members or recommended by any other Board members including Board members
affiliated with the Fund's Manager. The Governance Committee may, upon Board approval, retain an executive search
firm to assist in screening potential candidates. Upon Board approval, the Governance Committee may also use the
services of legal, financial, or other external counsel that it deems necessary or desirable in the screening
process. Shareholders wishing to submit a nominee for election to the Board may do so by mailing their submission
to the offices of OppenheimerFunds, Inc., Two World Financial Center, 225 Liberty Street, 11th Floor, New York,
New York 10281-1008, to the attention of the Board of Trustees of Oppenheimer Absolute Return Fund, c/o the
Secretary of the Fund.

         Submissions should, at a minimum, be accompanied by the following: (1) the name, address, and business,
educational, and/or other pertinent background of the person being recommended; (2) a statement concerning
whether the person is an "interested person" as defined in the Investment Company Act; (3) any other information
that the Fund would be required to include in a proxy statement concerning the person if he or she was nominated;
and (4) the name and address of the person submitting the recommendation and, if that person is a shareholder,
the period for which that person held Fund shares. Shareholders should note that a person who owns securities
issued by Massachusetts Mutual Life Insurance Company (the parent company of the Manager) would be deemed an
"interested person" under the Investment Company Act. In addition, certain other relationships with Massachusetts
Mutual Life Insurance Company or its subsidiaries, with registered broker-dealers, or with the Funds' outside
legal counsel may cause a person to be deemed an "interested person."

         The Governance Committee has not established specific qualifications that it believes must be met by a
trustee nominee. In evaluating trustee nominees, the Governance Committee considers, among other things, an
individual's background, skills, and experience; whether the individual is an "interested person" as defined in
the Investment Company Act; and whether the individual would be deemed an "audit committee financial expert"
within the meaning of applicable SEC rules. The Governance Committee also considers whether the individual's
background, skills, and experience will complement the background, skills, and experience of other Trustees and
will contribute to the Board. There are no differences in the manner in which the Governance Committee evaluates
nominees for trustees based on whether the nominee is recommended by a shareholder. Candidates are expected to
provide a mix of attributes, experience, perspective and skills necessary to effectively advance the interests of
shareholders.

         Trustees and Officers of the Fund. Except for Messrs. Murphy and Reynolds, each of the Trustees is an
Independent Trustee. All of the Trustees are also directors or trustees of the following Oppenheimer funds
(referred to as "Board I Funds"):


Oppenheimer Absolute Return Fund                               Oppenheimer Multi-State Municipal Trust
Oppenheimer AMT-Free Municipals                                Oppenheimer Portfolio Series
Oppenheimer AMT-Free New York Municipals                       Oppenheimer Real Estate Fund
Oppenheimer Balanced Fund                                      Oppenheimer Rochester Arizona Municipal Fund
Oppenheimer Baring China Fund                                  Oppenheimer Rochester Maryland Municipal Fund
Oppenheimer Baring Japan Fund                                  Oppenheimer Rochester Massachusetts Municipal Fund
Oppenheimer Baring SMA International Fund                      Oppenheimer Rochester Michigan Municipal Fund
Oppenheimer California Municipal Fund                          Oppenheimer Rochester Minnesota Municipal Fund
Oppenheimer Capital Appreciation Fund                          Oppenheimer Rochester North Carolina Municipal Fund
Oppenheimer Developing Markets Fund                            Oppenheimer Rochester Ohio Municipal Fund
Oppenheimer Discovery Fund                                     Oppenheimer Rochester Virginia Municipal Fund
Oppenheimer Dividend Growth Fund                               Oppenheimer Select Value Fund
Oppenheimer Emerging Growth Fund                               Oppenheimer Series Fund, Inc.
Oppenheimer Global Fund                                        Oppenheimer SMA Core Bond Fund
Oppenheimer Global Opportunities Fund                          Oppenheimer SMA International Bond Fund
Oppenheimer Global Value Fund                                  Oppenheimer Transition 2010 Fund
Oppenheimer Gold & Special Minerals Fund               Oppenheimer Transition 2015 Fund
Oppenheimer International Diversified Fund                     Oppenheimer Transition 2020 Fund
Oppenheimer International Growth Fund                          Oppenheimer Transition 2025 Fund
Oppenheimer International Small Company Fund                   Oppenheimer Transition 2030 Fund
Oppenheimer International Value Fund                           Oppenheimer Transition 2040 Fund
Oppenheimer Institutional Money Market Fund                    Oppenheimer Transition 2050 Fund
Oppenheimer Limited Term California Municipal Fund             OFI Tremont Core Strategies Hedge Fund
Oppenheimer Master International Value Fund, LLC               Oppenheimer U.S. Government Trust
Oppenheimer Money Market Fund, Inc.

         In addition to being a Board  member of each of the Board I Funds,  Messrs.  Downes,  Galli and Wruble are
directors or trustees of ten other portfolios in the Oppenheimer fund complex.

         Present or former  officers,  directors,  trustees and employees (and their  immediate  family members) of
the Fund,  the Manager and its  affiliates,  and  retirement  plans  established  by them for their  employees  are
permitted to purchase Class A shares of the Fund and the other  Oppenheimer  funds at net asset value without sales
charge.  The sales charge on Class A shares is waived for that group because of the reduced sales efforts  realized
by the  Distributor.  Present or former  officers,  directors,  trustees and employees (and their  eligible  family
members) of the Fund,  the Manager  and its  affiliates,  its parent  company  and the  subsidiaries  of its parent
company,  and retirement  plans  established  for the benefit of such  individuals,  are also permitted to purchase
Class Y shares of the Oppenheimer funds that offer Class Y shares.

         Messrs. Wong, Murphy, Petersen, Szilagyi, Vandehey, Wixted and Zack and Mss. Bloomberg and Ives, who are
officers of the Fund, hold the same offices with one or more of the other Board I Funds. As of September 5, 2008
the Trustees and officers of the Fund, as a group, owned of record or beneficially less than 1% of any class of
shares of the Fund. The foregoing statement does not reflect ownership of shares held of record by an employee
benefit plan for employees of the Manager, other than the shares beneficially owned under that plan by the
officers of the Fund listed above. In addition, none of the Independent Trustees (nor any of their immediate
family members) owns securities of either the Manager or the Distributor of the Board I Funds or of any entity
directly or indirectly controlling, controlled by or under common control with the Manager or the Distributor.

         Biographical Information. The Trustees and officers, their positions with the Fund, length of service in
such position(s) and principal occupations and business affiliations during at least the past five years are
listed in the charts below. The charts also include information about each Trustee's beneficial share ownership
in the Fund and in all of the registered investment companies that the Trustee oversees in the Oppenheimer family
of funds ("Supervised Funds"). The address of each Trustee in the chart below is 6803 S. Tucson Way, Centennial,
Colorado 80112-3924. Each Trustee serves for an indefinite term, or until his or her resignation, retirement,
death or removal.

-------------------------------------------------------------------------------------------------------------------------------------
                                                        Independent Trustees
-------------------------------------------------------------------------------------------------------------------------------------
---------------------------- ---------------------------------------------------------------- ----------------- ---------------------
Name, Position(s) Held       Principal Occupation(s) During the Past 5 Years; Other           Dollar Range of     Aggregate Dollar
                                                                                                   Shares
                                                                                                Beneficially      Range Of Shares
with the Fund, Length of     Trusteeships/Directorships Held; Number of Portfolios in the         Owned in       Beneficially Owned
Service, Age                 Fund Complex Currently Overseen                                      the Fund      in Supervised Funds
---------------------------- ---------------------------------------------------------------- ----------------- ---------------------
---------------------------- ---------------------------------------------------------------- ---------------------------------------
                                                                                                     As of December 31, 2007
---------------------------- ---------------------------------------------------------------- ---------------------------------------
---------------------------- ---------------------------------------------------------------- ----------------- ---------------------
Brian F. Wruble,             General Partner of Odyssey Partners, L.P. (hedge fund)                 None           Over $100,000
Chairman of the Board of     (September 1995-December 2007); Director of Special Value
Trustees since 2007,         Opportunities Fund, LLC (registered investment company)
Trustee since 2006,          (affiliate of the Manager's parent company) (since September
Age: 65                      2004); Chairman (since August 2007) and Trustee (since August
                             1991) of the Board of Trustees of The Jackson Laboratory
                             (non-profit); Treasurer and Trustee of the Institute for
                             Advanced Study (non-profit educational institute) (since May
                             1992); Member of Zurich Financial Investment Management
                             Advisory Council (insurance) (2004-2007); Special Limited
                             Partner of Odyssey Investment Partners, LLC (private equity
                             investment) (January 1999-September 2004). Oversees 64
                             portfolios in the OppenheimerFunds complex.
---------------------------- ---------------------------------------------------------------- ----------------- ---------------------
---------------------------- ---------------------------------------------------------------- ----------------- ---------------------
David K. Downes,             Independent  Chairman GSK Employee  Benefit  Trust (since April        None           Over $100,000
Trustee since 2007           2006);  Director of Correctnet (since January 2006); Trustee of
 Age: 68                     Employee   Trusts  (since  January  2006);   President,   Chief
                             Executive  Officer and Board Member of CRAFund  Advisors,  Inc.
                             (investment  management company) (since January 2004); Director
                             of Internet  Capital  Group  (information  technology  company)
                             (since  October  2003);  Independent  Chairman  of the Board of
                             Trustees  of Quaker  Investment  Trust  (registered  investment
                             company) (2004-2007);  President of The Community  Reinvestment
                             Act Qualified  Investment Fund (investment  management company)
                             (2004-2007);   Chief  Operating  Officer  and  Chief  Financial
                             Officer  of  Lincoln  National   Investment   Companies,   Inc.
                             (subsidiary of Lincoln National Corporation,  a publicly traded
                             company)  and  Delaware   Investments  U.S.,  Inc.  (investment
                             management   subsidiary   of  Lincoln   National   Corporation)
                             (1993-2003);  President, Chief Executive Officer and Trustee of
                             Delaware Investment Family of Funds (1993-2003);  President and
                             Board Member of Lincoln National Convertible  Securities Funds,
                             Inc. and the Lincoln  National Income Funds,  TDC  (1993-2003);
                             Chairman and Chief  Executive  Officer of Retirement  Financial
                             Services,   Inc.  (registered  transfer  agent  and  investment
                             adviser and  subsidiary  of Delaware  Investments  U.S.,  Inc.)
                             (1993-2003);  President and Chief Executive Officer of Delaware
                             Service  Company,   Inc.   (1995-2003);   Chief  Administrative
                             Officer,  Chief Financial  Officer,  Vice Chairman and Director
                             of  Equitable  Capital   Management   Corporation   (investment
                             subsidiary of Equitable  Life Assurance  Society)  (1985-1992);
                             Corporate  Controller  of  Merrill  Lynch & Company  (financial
                             services  holding  company)  (1977-1985);  held  the  following
                             positions  at  the  Colonial   Penn  Group,   Inc.   (insurance
                             company):  Corporate  Budget  Director  (1974-1977),  Assistant
                             Treasurer   (1972-1974)   and  Director  of   Corporate   Taxes
                             (1969-1972);  held the following  positions at Price Waterhouse
                             & Company (financial  services firm): Tax Manager  (1967-1969),
                             Tax  Senior  (1965-1967)  and  Staff  Accountant   (1963-1965);
                             United States Marine Corps (1957-1959).  Oversees 64 portfolios
                             in the OppenheimerFunds complex.
---------------------------- ---------------------------------------------------------------- ----------------- ---------------------
---------------------------- ---------------------------------------------------------------- ----------------- ---------------------
Matthew P. Fink,             Trustee of the Committee for Economic Development (policy              None           Over $100,000
Trustee since 2006           research foundation) (since 2005); Director of ICI Education
Age: 67                      Foundation (education foundation) (October 1991-August 2006);
                             President of the Investment Company Institute (trade
                             association) (October 1991-June 2004); Director of ICI Mutual
                             Insurance Company (insurance company) (October 1991-June
                             2004). Oversees 54 portfolios in the OppenheimerFunds complex.
---------------------------- ---------------------------------------------------------------- ----------------- ---------------------
---------------------------- ---------------------------------------------------------------- ----------------- ---------------------
Robert G. Galli,             A director or trustee of other Oppenheimer funds. Oversees 64          None           Over $100,000
Trustee since 2006           portfolios in the OppenheimerFunds complex.
Age: 75

---------------------------- ---------------------------------------------------------------- ----------------- ---------------------
---------------------------- ---------------------------------------------------------------- ----------------- ---------------------
Phillip A. Griffiths,        Fellow of the Carnegie Corporation (since 2007); Distinguished         None                None
Trustee since 2006           Presidential Fellow for International Affairs (since 2002) and
Age: 69                      Member (since 1979) of the National Academy of Sciences;
                             Council on Foreign Relations (since 2002); Director of GSI
                             Lumonics Inc. (precision technology products company) (since
                             2001); Senior Advisor of The Andrew W. Mellon Foundation
                             (since 2001); Chair of Science Initiative Group (since 1999);
                             Member of the American Philosophical Society (since 1996);
                             Trustee of Woodward Academy (since 1983); Foreign Associate of
                             Third World Academy of Sciences; Director of the Institute for
                             Advanced Study (1991-2004); Director of Bankers Trust New York
                             Corporation (1994-1999); Provost at Duke University
                             (1983-1991). Oversees 54 portfolios in the OppenheimerFunds
                             complex.
---------------------------- ---------------------------------------------------------------- ----------------- ---------------------
---------------------------- ---------------------------------------------------------------- ----------------- ---------------------
Mary F. Miller,              Trustee of International House (not-for-profit) (since June            None           Over $100,000
Trustee since 2006           2007); Trustee of the American Symphony Orchestra
Age: 65                      (not-for-profit) (since October 1998); and Senior Vice
                             President and General Auditor of American Express Company
                             (financial services company) (July 1998-February 2003).
                             Oversees 54 portfolios in the OppenheimerFunds complex.
---------------------------- ---------------------------------------------------------------- ----------------- ---------------------
---------------------------- ---------------------------------------------------------------- ----------------- ---------------------
Joel W. Motley,              Managing Director of Public Capital Advisors, LLC (privately           None           Over $100,000
Trustee since 2006           held financial advisor) (since January 2006); Managing
Age: 56                      Director of Carmona Motley, Inc. (privately-held financial
                             advisor) (since January 2002); Director of Columbia Equity
                             Financial Corp. (privately-held financial advisor)
                             (2002-2007); Managing Director of Carmona Motley Hoffman Inc.
                             (privately-held financial advisor) (January 1998-December
                             2001); Member of the Finance and Budget Committee of the
                             Council on Foreign Relations, Member of the Investment
                             Committee of the Episcopal Church of America, Member of the
                             Investment Committee and Board of Human Rights Watch and
                             Member of the Investment Committee of Historic Hudson Valley.
                             Oversees 54 portfolios in the OppenheimerFunds complex.
---------------------------- ---------------------------------------------------------------- ----------------- ---------------------
---------------------------- ---------------------------------------------------------------- ----------------- ---------------------
Mary Ann Tynan,              Vice Chair of Board of Trustees of Brigham and Woman's           None*             None*
Trustee since 2008           Hospital (non-profit hospital) (since 2000); Chair of Board of
Age: 63                      Directors of Faulkner Hospital (non-profit hospital) (since
                             1990); Member of Audit and Compliance Committee of Partners
                             Health Care System (non-profit) (since 2004); Board of
                             Trustees of Middlesex School (educational institution) (since
                             1994); Board of Directors of Idealswork, Inc. (financial
                             services provider) (since 2003); Member of Capital Campaign
                             Committee of Island Medical Center (medical facility)
                             (2006-2008); Partner, Senior Vice President and Director of
                             Regulatory Affairs of Wellington Management Company, LLP
                             (global investment manager) (1976-2002); Vice President and
                             Corporate Secretary, John Hancock Advisers, Inc. (mutual fund
                             investment adviser) (1970-1976). Oversees 54 portfolios in the
                             OppenheimerFunds complex.
---------------------------- ---------------------------------------------------------------- ----------------- ---------------------
---------------------------- ---------------------------------------------------------------- ----------------- ---------------------
Joseph M. Wikler,            Director  of  C-TASC  (bio-statistics  services  (since  2007);        None           Over $100,000
Trustee since 2006           Director of the following  medical device  companies:  Medintec
Age: 67                      (since  1992)  and  Cathco  (since  1996);  Director  of  Lakes
                             Environmental     Association     (environmental     protection
                             organization)  (since 1996); Member of the Investment Committee
                             of the Associated  Jewish  Charities of Baltimore (since 1994);
                             Director of Fortis/Hartford  mutual funds (1994-December 2001).
                             Oversees 54 portfolios in the OppenheimerFunds complex.
---------------------------- ---------------------------------------------------------------- ----------------- ---------------------
---------------------------- ---------------------------------------------------------------- ----------------- ---------------------
Peter I. Wold,               President   of  Wold  Oil   Properties,   Inc.   (oil  and  gas        None           Over $100,000
Trustee since 2006           exploration  and  production   company)   (since  1994);   Vice
Age: 60                      President  of American  Talc  Company,  Inc.  (talc  mining and
                             milling)  (since  1999);  Managing  Member of  Hole-in-the-Wall
                             Ranch  (cattle   ranching)   (since  1979);   Vice   President,
                             Secretary and Treasurer of Wold Trona  Company,  Inc. (soda ash
                             processing  and  production)   (1996  -  2006);   Director  and
                             Chairman of the Denver  Branch of the Federal  Reserve  Bank of
                             Kansas City (1993-1999); and Director of PacifiCorp.  (electric
                             utility)   (1995-1999).   Oversees   54   portfolios   in   the
                             OppenheimerFunds complex.
---------------------------- ---------------------------------------------------------------- ----------------- ---------------------
*Ms. Tynan joined the Board of Trustees of the Fund on October 1, 2008.


         The address of Mr. Reynolds is 6803 S. Tucson Way, Centennial, Colorado 80112-3924. Mr. Reynolds serves
for an indefinite term, or until his resignation, retirement, death or removal. Mr. Reynolds is an "Interested
Trustee" because of a potential consulting relationship between RSR Partners, which Mr. Reynolds may be deemed to
control, and the Manager.

--------------------------------------------------------------------------------------------------------------------------------------
                                                         Interested Trustee
--------------------------------------------------------------------------------------------------------------------------------------
------------------------------ -------------------------------------------------------------------- ----------------- ----------------
Name, Position(s) Held with    Principal Occupation(s) During the Past 5 Years; Other               Dollar Range of      Aggregate
                                                                                                                       Dollar Range
                                                                                                                         Of Shares
                                                                                                         Shares        Beneficially
                                                                                                      Beneficially     Owned in All
the Trust, Length of           Trusteeships/Directorships Held; Number of Portfolios in the Fund      Owned in the      Supervised
Service, Age                   Complex Currently Overseen                                                 Fund             Funds
------------------------------ -------------------------------------------------------------------- ----------------- ----------------
------------------------------ -------------------------------------------------------------------- ----------------------------------
                                                                                                         As of December 31, 2007
------------------------------ -------------------------------------------------------------------- ----------------------------------
------------------------------ -------------------------------------------------------------------- ----------------- ----------------
Russell S. Reynolds, Jr.,      Chairman of RSR Partners (formerly "The Directorship Search Group,         None         Over $100,000
Trustee since 2006             Inc.") (corporate governance consulting and executive recruiting)
Age: 76                        (since 1993); Retired CEO of Russell Reynolds Associates
                               (executive recruiting) (October 1969-March 1993); Life Trustee of
                               International House (non-profit educational organization); Former
                               Trustee of The Historical Society of the Town of Greenwich; Former
                               Director of Greenwich Hospital Association. Oversees 54 portfolios
                               in the OppenheimerFunds complex.
------------------------------ -------------------------------------------------------------------- ----------------- ----------------

         Mr. Murphy is an "Interested Trustee" because he is affiliated with the Manager by virtue of his
positions as an officer and director of the Manager, and as a shareholder of its parent company. The address of
Mr. Murphy is Two World Financial Center, 225 Liberty Street, 11th Floor, New York, New York 10281-1008. Mr.
Murphy serves as a Trustee for an indefinite term, or until his resignation, retirement, death or removal and as
an officer for an indefinite term, or until his resignation, retirement, death or removal.

------------------------------------------------------------------------------------------------------------------------------------
                                                  Interested Trustee and Officer
------------------------------------------------------------------------------------------------------------------------------------
--------------------------- ----------------------------------------------------------------- ---------------- ---------------------
Name, Position(s) Held      Principal Occupation(s) During the Past 5 Years; Other             Dollar Range      Aggregate Dollar
                                                                                                 of Shares
                                                                                               Beneficially      Range Of Shares
with Fund, Length of        Trusteeships/Directorships Held; Number of Portfolios in the         Owned in       Beneficially Owned
Service, Age                Fund Complex Currently Overseen                                      the Fund      in Supervised Funds
--------------------------- ----------------------------------------------------------------- ---------------- ---------------------
--------------------------- ----------------------------------------------------------------- --------------------------------------
                                                                                                     As of December 31, 2007
--------------------------- ----------------------------------------------------------------- --------------------------------------
--------------------------- ----------------------------------------------------------------- ----------------- --------------------
John V. Murphy,             Chairman, Chief Executive Officer and Director of the Manager           None           Over $100,000
Trustee since 2006 and      since June 2001; President of the Manager (September
President and Principal     2000-February 2007); President and a director or trustee of
Executive Officer since     other Oppenheimer funds; President and Director of Oppenheimer
2006                        Acquisition Corp. ("OAC") (the Manager's parent holding
Age: 59                     company) and of Oppenheimer Partnership Holdings, Inc. (holding
                            company subsidiary of the Manager) (since July 2001); Director
                            of OppenheimerFunds Distributor, Inc. (subsidiary of the
                            Manager) (November 2001-December 2006); Chairman and Director
                            of Shareholder Services, Inc. and of Shareholder Financial
                            Services, Inc. (transfer agent subsidiaries of the Manager)
                            (since July 2001); President and Director of OppenheimerFunds
                            Legacy Program (charitable trust program established by the
                            Manager) (since July 2001); Director of the following
                            investment advisory subsidiaries of the Manager: OFI
                            Institutional Asset Management, Inc., Centennial Asset
                            Management Corporation, Trinity Investment Management
                            Corporation and Tremont Capital Management, Inc. (since
                            November 2001), HarbourView Asset Management Corporation and
                            OFI Private Investments, Inc. (since July 2001); President
                            (since November 1, 2001) and Director (since July 2001) of
                            Oppenheimer Real Asset Management, Inc.; Executive Vice
                            President of Massachusetts Mutual Life Insurance Company (OAC's
                            parent company) (since February 1997); Director of DLB
                            Acquisition Corporation (holding company parent of Babson
                            Capital Management LLC) (since June 1995); Member of the
                            Investment Company Institute's Board of Governors (since
                            October, 2003); Chairman of the Investment Company's
                            Institute's Board of Governors (since October 2007). Oversees
                            103 portfolios in the OppenheimerFunds complex.
--------------------------- ----------------------------------------------------------------- ----------------- --------------------

         The addresses of the officers in the chart below are as follows: for Messrs. Wong, Zack and Ms.
Bloomberg, Two World Financial Center, 225 Liberty Street, New York, New York 10281-1008, for Messrs. Petersen,
Szilagyi, Vandehey and Wixted and Ms. Ives, 6803 S. Tucson Way, Centennial, Colorado 80112-3924. Each officer
serves for an indefinite term or until his or her resignation, retirement, death or removal.

-----------------------------------------------------------------------------------------------------------------------------
                                                 Other Officers of the Fund
-----------------------------------------------------------------------------------------------------------------------------
----------------------------------- -----------------------------------------------------------------------------------------
Name, Position(s) Held with Fund,   Principal Occupation(s) During Past 5 Years
Length of Service, Age
----------------------------------- -----------------------------------------------------------------------------------------
----------------------------------- -----------------------------------------------------------------------------------------
Caleb Wong,                         Vice President of the Manager since June 1999; Vice President of the Fund since June
Vice President and Portfolio        2006; employed in fixed-income quantitative research and risk management for the
Manager since 2006                  Manager (since July 1996).  A portfolio manager and officer of 2 portfolios in the
Age: 43                             OppenheimerFunds complex.

----------------------------------- -----------------------------------------------------------------------------------------
----------------------------------- -----------------------------------------------------------------------------------------
Mark S. Vandehey,                   Senior Vice President and Chief Compliance Manager of the Manager (since March 2004);
Vice President and Chief            Chief Compliance Officer of OppenheimerFunds Distributor, Inc., Centennial Asset
Compliance Officer since 2006       Management and Shareholder Services, Inc. (since March 2004); Vice President of
Age: 58                             OppenheimerFunds Distributor, Inc., Centennial Asset Management Corporation and
                                    Shareholder Services, Inc. (since June 1983). Former Vice President and Director of
                                    Internal Audit of the Manager (1997-February 2004). An officer of 103 portfolios in the
                                    OppenheimerFunds complex.
----------------------------------- -----------------------------------------------------------------------------------------
----------------------------------- -----------------------------------------------------------------------------------------
Brian W. Wixted,                    Senior Vice President and Treasurer of the Manager (since March 1999); Treasurer of the
Treasurer and Principal Financial   following: HarbourView Asset Management Corporation, Shareholder Financial Services,
& Accounting Officer since  Inc., Shareholder Services, Inc., Oppenheimer Real Asset Management, Inc. and
2006                                Oppenheimer Partnership Holdings, Inc. (since March 1999), OFI Private Investments,
Age: 48                             Inc. (since March 2000), OppenheimerFunds International Ltd. (since May 2000),
                                    OppenheimerFunds plc (since May 2000), OFI Institutional Asset Management, Inc. (since
                                    November 2000), and OppenheimerFunds Legacy Program (charitable trust program
                                    established by the Manager) (since June 2003); Treasurer and Chief Financial Officer of
                                    OFI Trust Company (trust company subsidiary of the Manager) (since May 2000); Assistant
                                    Treasurer of the following: OAC (since March 1999),Centennial Asset Management
                                    Corporation (March 1999-October 2003) and OppenheimerFunds Legacy Program (April
                                    2000-June 2003). An officer of 103 portfolios in the OppenheimerFunds complex.
----------------------------------- -----------------------------------------------------------------------------------------
----------------------------------- -----------------------------------------------------------------------------------------
Brian Petersen,                     Vice President of the Manager (since February 2007); Assistant Vice President of the
Assistant Treasurer since 2006      Manager (August 2002-February 2007); Manager/Financial Product Accounting of the
Age: 38                             Manager (November 1998-July 2002). An officer of 103 portfolios in the OppenheimerFunds
                                    complex.
----------------------------------- -----------------------------------------------------------------------------------------
----------------------------------- -----------------------------------------------------------------------------------------
Brian C. Szilagyi,                  Assistant Vice President of the Manager (since July 2004); Director of Financial
Assistant Treasurer since 2006      Reporting and Compliance of First Data Corporation (April 2003-July 2004); Manager of
Age: 38                             Compliance of Berger Financial Group LLC (May 2001-March 2003). An officer of 103
                                    portfolios in the OppenheimerFunds complex.
----------------------------------- -----------------------------------------------------------------------------------------
----------------------------------- -----------------------------------------------------------------------------------------
Robert G. Zack,                     Executive Vice President (since January 2004) and General Counsel (since March 2002) of
Secretary since 2006                the Manager; General Counsel and Director of the Distributor (since December 2001);
Age: 60                             General Counsel of Centennial Asset Management Corporation (since December 2001);
                                    Senior Vice President and General Counsel of HarbourView Asset Management Corporation
                                    (since December 2001); Secretary and General Counsel of OAC (since November 2001);
                                    Assistant Secretary (since September 1997) and Director (since November 2001) of
                                    OppenheimerFunds International Ltd. and OppenheimerFunds plc; Vice President and
                                    Director of Oppenheimer Partnership Holdings, Inc. (since December 2002); Director of
                                    Oppenheimer Real Asset Management, Inc. (since November 2001); Senior Vice President,
                                    General Counsel and Director of Shareholder Financial Services, Inc. and Shareholder
                                    Services, Inc. (since December 2001); Senior Vice President, General Counsel and
                                    Director of OFI Private Investments, Inc. and OFI Trust Company (since November 2001);
                                    Vice President of OppenheimerFunds Legacy Program (since June 2003); Senior Vice
                                    President and General Counsel of OFI Institutional Asset Management, Inc. (since
                                    November 2001); Director of OppenheimerFunds International Distributor Limited (since
                                    December 2003); Senior Vice President (May 1985-December 2003). An officer of 103
                                    portfolios in the OppenheimerFunds complex.
----------------------------------- -----------------------------------------------------------------------------------------
----------------------------------- -----------------------------------------------------------------------------------------
Kathleen T. Ives,                   Vice President (since June 1998), Deputy General Counsel (since May 2008) and Assistant
Assistant Secretary since 2006      Secretary (since October 2003) of the Manager; Vice President (since 1999) and
Age: 42                             Assistant Secretary (since October 2003) of the Distributor; Assistant Secretary of
                                    Centennial Asset Management Corporation (since October 2003); Vice President and
                                    Assistant Secretary of Shareholder Services, Inc. (since 1999); Assistant Secretary of
                                    OppenheimerFunds Legacy Program and Shareholder Financial Services, Inc. (since
                                    December 2001); Senior Counsel of the Manager (October 2003-May 2008). An officer of
                                    103 portfolios in the OppenheimerFunds complex.
----------------------------------- -----------------------------------------------------------------------------------------
----------------------------------- -----------------------------------------------------------------------------------------
Lisa I. Bloomberg,                  Vice President (since May 2004) and Deputy General Counsel (since May 2008); of the
Assistant Secretary since 2006      Manager; Associate Counsel of the Manager (May 2004-May 2008); First Vice President
Age: 40                             (April 2001-April 2004), Associate General Counsel (December 2000-April 2004) of UBS
                                    Financial Services Inc. (formerly, PaineWebber Incorporated). An officer of 103
                                    portfolios in the OppenheimerFunds complex.
----------------------------------- -----------------------------------------------------------------------------------------

           Remuneration of the Officers and Trustees. The officers and the interested Trustee of the Fund, who
   are affiliated with the Manager, receive no salary or fee from the Fund. The Independent Trustees' and Mr.
   Reynolds' compensation from the Fund, shown below, is for serving as a Trustee and member of a committee (if
   applicable), with respect to the Fund's fiscal year ended May 31, 2008. The total compensation from the Fund
   and fund complex represents compensation for serving as a Trustee and member of a committee (if applicable) of
   the Boards of the Fund and other funds in the OppenheimerFunds complex during the calendar year ended
   December 31, 2007.


--------------------------------- -------------------- --------------------- ---------------------- --------------------------
Name and Other Fund Position(s)        Aggregate                               Estimated Annual      Total Compensation From
                                                       Retirement Benefits
                                   Compensation From    Accrued as Part of       Benefits Upon
(as applicable)                       the Fund(1)         Fund Expenses          Retirement(2)      the Fund and Fund Complex
--------------------------------- -------------------- --------------------- ---------------------- --------------------------
--------------------------------- ------------------------------------------ ---------------------- --------------------------
                                       Fiscal year ended May 31, 2008                                Year ended December 31,
                                                                                                              2007
--------------------------------- ------------------------------------------ ---------------------- --------------------------
--------------------------------- -------------------- --------------------- ---------------------- --------------------------
Brian F. Wruble(3)                      $57 (4)                N/A                $65,868(5)              $335,190 (6)
Chairman of the Board
--------------------------------- -------------------- --------------------- ---------------------- --------------------------
--------------------------------- -------------------- --------------------- ---------------------- --------------------------
David K. Downes(7)
Audit Committee Chairman and
Regulatory & Oversight          $36                  N/A                  $26,112((8))             $180,587((9))
Committee Member
--------------------------------- -------------------- --------------------- ---------------------- --------------------------
--------------------------------- -------------------- --------------------- ---------------------- --------------------------
Matthew P. Fink                           $44                  N/A               $10,004((10))              $154,368
Regulatory & Oversight
Committee Chairman and
Governance Committee Member
--------------------------------- -------------------- --------------------- ---------------------- --------------------------
--------------------------------- -------------------- --------------------- ---------------------- --------------------------
Robert G. Galli                           $53                  N/A              $137,599((11))            $330,533 (12)
Regulatory & Oversight
Committee Chairman & Governance
Committee Member
--------------------------------- -------------------- --------------------- ---------------------- --------------------------
--------------------------------- -------------------- --------------------- ---------------------- --------------------------
Phillip A. Griffiths                    $53(13)                N/A               $51,621((14))              $198,211
Audit Committee Member and
Regulatory & Oversight
Committee Member
--------------------------------- -------------------- --------------------- ---------------------- --------------------------
--------------------------------- -------------------- --------------------- ---------------------- --------------------------
Mary F. Miller
Audit Committee Member and              $43(15)                N/A               $13,201((14))              $152,698
Governance Committee Member
--------------------------------- -------------------- --------------------- ---------------------- --------------------------
--------------------------------- -------------------- --------------------- ---------------------- --------------------------
Joel W. Motley                          $45(16)                N/A               $32,741((14))              $171,223
Governance Committee Chairman
and Regulatory & Oversight
Committee Member
--------------------------------- -------------------- --------------------- ---------------------- --------------------------
--------------------------------- -------------------- --------------------- ---------------------- --------------------------
Kenneth A. Randall(17)                    $4                   N/A               $96,401((18))              $117,520
--------------------------------- -------------------- --------------------- ---------------------- --------------------------
--------------------------------- -------------------- --------------------- ---------------------- --------------------------
Russell S. Reynolds, Jr.                  $43                  N/A               $77,288                 $153,530
Governance Committee Member
--------------------------------- -------------------- --------------------- ---------------------- --------------------------
--------------------------------- -------------------- --------------------- ---------------------- --------------------------
Joseph M. Wikler
Audit Committee Member and
Regulatory & Oversight         $43 (19)                N/A                $28,814((14))              $150,770
Committee Member
--------------------------------- -------------------- --------------------- ---------------------- --------------------------
--------------------------------- -------------------- --------------------- ---------------------- --------------------------
Peter I. Wold
Audit Committee Member and             $43 (20)                N/A                $28,814((14))              $150,770
Governance Committee Member
--------------------------------- -------------------- --------------------- ---------------------- --------------------------

1.   "Aggregate Compensation From the Fund" includes fees and amounts deferred under the "Compensation
     Deferral Plan" (described below), if any.
2.   "Estimated Annual Benefits Upon Retirement" is based on a single life payment election with the
     assumption that a Trustee would retire at the age of 75 and would then have been eligible to receive
     retirement plan benefits with respect to certain Board I Funds, and in the case of Messrs. Downes, Galli and
     Wruble, with respect to ten other Oppenheimer funds that are not Board I Funds (the "Non-Board I Funds").
     The Board I Funds' retirement plan was frozen effective December 31, 2006, and each plan participant who had
     not yet commenced receiving retirement benefits subsequently received previously accrued benefits based upon
     the distribution method elected by such participant, as described below. A similar plan with respect to the
     Non-Board I Funds is being frozen effective December 31, 2007.
3.   Mr. Wruble became Chairman of the Board I Funds on December 31, 2006.
4.   Includes $57 deferred by Mr. Wruble under the "Compensation Deferral Plan".
5.   In lieu of receiving an estimated annual benefit amount of $7,374 for his service as a director or
     trustee to the Board I funds, Mr. Wruble elected to have an actuarially equivalent lump sum amount
     contributed to his Compensation Deferral Plan account subsequent to the freezing of the Board I Funds'
     retirement plan. The amount set forth in the table above also includes $57,619 for estimated annual benefits
     for serving as a director or trustee of 10 other Oppenheimer funds that are not the Non-Board I Funds. In
     lieu of receiving that estimated annual benefit, Mr. Wruble has elected to have an actuarially equivalent
     lump sum distributed to the Compensation Deferral Plan subsequent to the freezing of the Non-Board I Funds'
     retirement plan.
6.   Includes $140,000 paid to Mr. Wruble for serving as a director or trustee of the Non-Board I Funds.
7.   Mr. Downes was appointed as Trustee of the Board I Funds on August 1, 2007, which was subsequent to the
     freezing of the Board I retirement plan.
8.   This amount represents the estimated benefits that would be payable to Mr. Downes for serving as a
     director or trustee of the Non-Board I Funds. In lieu of receiving this estimated annual benefit, Mr. Downes
     has elected to receive an actuarially equivalent lump sum payment subsequent to the freezing of the
     Non-Board I Funds' retirement plan.
9.   Includes $155,000 paid to Mr. Downes for serving as a director or trustee of the Non-Board I Funds.
10.  In lieu of receiving an estimated annual benefit for his service as a director or trustee to the Board I
     funds, Mr. Fink elected to receive an actuarially equivalent lump sum payment subsequent to the freezing of
     the Board I Funds' retirement plan.
11.  In lieu of receiving an estimated annual benefit amount of $62,085 for his service as a director or
     trustee to the Board I Funds, Mr. Galli elected to receive an actuarially equivalent lump sum payment
     subsequent to the freezing of the Board I Funds' retirement plan. The amount set forth in the table above
     also includes $75,514 for estimated annual benefits for serving as a director or trustee of the Non-Board I
     Funds. Mr. Galli has elected to receive this annual benefit in an annuity.
12.  Includes $140,000 paid to Mr. Galli for serving as a director or trustee of the Non-Board I Funds.
13.  Includes $44 deferred by Mr. Griffiths under the Compensation Deferral Plan.
14.  In lieu of receiving an estimated annual benefit for service as a director or trustee to the Board I
     funds, this Trustee elected to have an actuarially equivalent lump sum amount contributed to his or her
     Compensation Deferral Plan account subsequent to the freezing of the Board I Funds' retirement plan.
15.  Includes $20 deferred by Ms. Miller under the Compensation Deferral Plan.
16.  Includes $6 deferred by Mr. Motley under the Compensation Deferral Plan.
17.  Mr. Randall retired from the Boards of the Board I Funds effective June 30, 2007.
18.  At retirement, Mr. Randall elected to receive the alternative benefit payment based on a joint and
     survivor factor, which resulted in a lower annual payment than the amount indicated here.
19.  Includes $21 deferred by Mr. Wikler under the Compensation Deferral Plan.
20.  Includes $43 deferred by Mr. Wold under the Compensation Deferral Plan.


         |X|  Retirement  Plan for  Trustees.  The  Board I Funds  adopted a  retirement  plan  that  provides  for
payments  to retired  Independent  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 director
or trustee for any of the Board I Funds for at least seven years to be eligible for  retirement  plan  benefits and
must serve for at least 15 years to be  eligible  for the  maximum  benefit.  The Board has  frozen the  retirement
plan with respect to new accruals as of December 31, 2006 (the "Freeze  Date").  Each Trustee  continuing  to serve
on the Board of any of the Board I Funds  after the Freeze Date (each such  Trustee a  "Continuing  Board  Member")
may elect to have his accrued  benefit as of that date (i.e., an amount  equivalent to the actuarial  present value
of his benefit  under the  retirement  plan as of the Freeze Date) (i) paid at once or over time,  (ii) rolled into
the  Compensation  Deferral Plan described  below, or (iii) in the case of Continuing Board Members having at least
7 years of  service  as of the  Freeze  Date paid in the form of an annual  benefit  or joint and  survivor  annual
benefit.  The Board  determined to freeze the  retirement  plan after  considering  a recent trend among  corporate
boards of directors to forego retirement plan payments in favor of current compensation.

         |X|  Compensation Deferral Plan. The Board of Trustees has adopted a Compensation Deferral  Plan for
Independent Trustees that enables them to elect to defer receipt of all or a portion of the annual fees they are
entitled to receive from certain Board I Funds. 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 amount
of compensation deferred and the performance of the selected funds.

         Deferral of the Trustees' fees under the plan will not materially affect a Fund's assets, liabilities or
net income per share. The plan will not obligate a 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 SEC, a 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 compensation account.

|X| Control Persons. The Fund recently commenced operations. The Manager, OppenheimerFunds, Inc., is a
controlling shareholder of Class A of the Fund due to its initial investment of the "seed money" required for the
Fund to commence operations. As of September 5, 2008, the Manager beneficially owned 670,000 of the Class A
shares then outstanding, which represent 100% of the outstanding voting securities of the Fund. A withdrawal of
the Manager's investment could adversely affect the expense ratio for the Fund's shares and/or lead to an
increase in the Fund's portfolio turnover. The Manager is organized in the State of Colorado. The Manager is
wholly-owned by Oppenheimer Acquisition Corp., a holding company controlled by Massachusetts Mutual Life
Insurance Company, a global, diversified insurance and financial services organization.

           Major Shareholders. As of September 5, 2008, the only persons or entities who owned of record or were
   known by the Fund to own beneficially 5% or more of any class of the Fund's outstanding shares were:

         OppenheimerFunds, Inc., C/O Kristie Feinberg, Bldg 2, 6803 South Tucson Way, Centennial, CO
         80112-3924, which owned 670,000.000 Class A shares (100% of the Class A shares then
         outstanding).


The Manager. The Manager is wholly-owned by Oppenheimer Acquisition Corp., a holding company controlled by
Massachusetts Mutual Life Insurance Company, a global, diversified insurance and financial services organization.


|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 SEC 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 1.202.551.8090. 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.

|X|      Portfolio Proxy Voting. The Fund has adopted Portfolio Proxy Voting Policies and Procedures, which
include Proxy Voting Guidelines, under which the Fund votes proxies relating to securities held by the Fund
("portfolio proxies").  OppenheimerFunds, Inc. generally undertakes to vote portfolio proxies with a view to
enhancing the value of the company's stock held by the Funds.  The Fund has retained an independent, third party
proxy voting agent to vote portfolio proxies in accordance with the Fund's Proxy Voting Guidelines and to
maintain records of such portfolio proxy voting. The Portfolio Proxy Voting Policies and Procedures include
provisions to address conflicts of interest that may arise between the Fund and the Manager or the Manager's
affiliates or business relationships. Such a conflict of interest may arise, for example, where the Manager or an
affiliate of the Manager manages or administers the assets of a pension plan or other investment account of the
portfolio company soliciting the proxy or seeks to serve in that capacity. The Manager and its affiliates
generally seek to avoid such material conflicts of interest by maintaining separate investment decision making
processes to prevent the sharing of business objectives with respect to proposed or actual actions regarding
portfolio proxy voting decisions. Additionally, the Manager employs the following procedures, as long as OFI
determines that the course of action is consistent with the best interests of the Fund and its shareholders: (1)
if the proposal that gives rise to the conflict is specifically addressed in the Proxy Voting Guidelines, the
Manager will vote the portfolio proxy in accordance with the Proxy Voting Guidelines, provided that they do not
provide discretion to the Manager on how to vote on the matter; (2) if such proposal is not specifically
addressed in the Proxy Voting Guidelines or the Proxy Voting Guidelines provide discretion to the Manager  on how
to vote, the Manager will vote in accordance with the third-party proxy voting agent's general recommended
guidelines on the proposal provided that the Manager has reasonably determined that there is no conflict of
interest on the part of the proxy voting agent; and (3) if neither of the previous two procedures provides an
appropriate voting recommendation, the Manager may retain an independent fiduciary to advise the Manager on how
to vote the proposal or may abstain from voting. The Proxy Voting Guidelines' provisions with respect to certain
routine and non-routine proxy proposals are summarized below:

o        The Fund evaluates director nominees on a case-by-case basis, examining the following factors, among
         others: composition of the board and key board committees, experience and qualifications,
         attendance at board meetings, corporate governance provisions and takeover activity, long-term
         company performance and the nominee's investment in the company.
o        The Fund generally supports proposals requiring the position of chairman to be filled by an independent
         director unless there are compelling reasons to recommend against the proposal such as a
         counterbalancing governance structure.
o        The Fund generally supports proposals asking that a majority of directors be independent.  The Fund
         generally supports proposals asking that a board audit, compensation, and/or nominating committee
         be composed exclusively of independent directors.
o        The Fund generally supports shareholder proposals to reduce a super-majority vote requirement, and
         opposes management proposals to add a super-majority vote requirement.
o        The Fund generally supports proposals to allow shareholders the ability to call special meetings.
o        The Fund generally supports proposals to allow or make easier shareholder action by written consent.
o        The Fund generally votes against proposals to create a new class of stock with superior voting rights.
o        The Fund generally votes against proposals to classify a board.
o        The Fund generally supports proposals to eliminate cumulative voting.
o        The Fund generally opposes re-pricing of stock options without shareholder approval.
o        The Fund generally supports proposals to require majority voting for the election of directors.
o        The Fund generally supports proposals seeking additional disclosure of executive and director pay
         information.
o        The Fund generally supports proposals seeking disclosure regarding the company's, board's or committee's
         use of compensation consultants.
o        The Fund generally supports "pay-for-performance" proposals that align a significant portion of total
         compensation of senior executives to company performance.
o        The Fund generally supports having shareholder votes on poison pills.
o        The Fund generally supports proposals calling for companies to adopt a policy of not providing tax
         gross-up payments.
o        In the case of social, political and environmental responsibility issues, the Fund will generally
         abstain where there could be a detrimental impact on share value or where the perceived value if
         the proposal was adopted is unclear or unsubstantiated. The Fund generally supports proposals that
         would clearly have a discernible positive impact on short- or long-term share value, or that would
         have a presently indiscernible impact on short- or long-term share value but promotes general
         long-term interests of the company and its shareholders.

         The Fund is required to file Form N-PX, with its complete proxy voting record for the 12 months ended
June 30th, no later than August 31st of each year. The Fund's Form N-PX filing is available (i) without charge,
upon request, by calling the Fund toll-free at 1.800.525.7048 and (ii) on the SEC's website at www.sec.gov.

|X|      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 portfolio manager of the Fund is employed by
the Manager and is the person who is principally responsible for the day-to-day management of the Fund's
portfolio. Other members of the Manager's Equity and Fixed Income Portfolio Departments provide the portfolio
manager with counsel and support in managing the Fund's portfolio.

         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 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 the class of shares based upon
the relative proportion of the Fund's net assets represented by that class. The management fees paid by the Fund
to the Manager during its last two fiscal years was:

--------------------------------------- -----------------------------------------------------------------------------
      Fiscal Year ended May 31:                            Management Fees Paid to OppenheimerFunds, Inc.
--------------------------------------- -----------------------------------------------------------------------------
--------------------------------------- -----------------------------------------------------------------------------
                 2007                                                          $48,300
--------------------------------------- -----------------------------------------------------------------------------
--------------------------------------- -----------------------------------------------------------------------------
                 2008                                                         $205,538
--------------------------------------- -----------------------------------------------------------------------------

         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 in connection with
matters to which the agreement relates.

         The agreement permits the Manager to act as investment adviser 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 adviser or general distributor. If the Manager shall no longer act as investment adviser to the Fund,
the Manager may withdraw the right of the Fund to use the name "Oppenheimer" as part of its name.

Pending Litigation.  During 2009, a number of complaints have been filed in federal courts against the Manager,
the Distributor, and certain other mutual funds ("Defendant Funds") advised by the Manager and distributed by the
Distributor.  The complaints naming the Defendant Funds also name certain officers and trustees and former
trustees of the respective Defendant Fund.  The plaintiffs are seeking class action status on behalf of those who
purchased shares of the respective Defendant Fund during a particular time period.  The complaints against the
Defendant Funds raise claims under federal securities laws to the effect that, among other things, the disclosure
documents of the respective Defendant Fund contained misrepresentations and omissions, that such Defendant Fund's
investment policies were not followed, and that such Defendant Fund and the other defendants violated federal
securities laws and regulations.  The plaintiffs seek unspecified damages, equitable relief and an award of
attorneys' fees and litigation expenses.

         A complaint brought in state court against the Manager, the Distributor and another subsidiary of the
Manager (but not against the Fund), on behalf of the Oregon College Savings Plan Trust alleges a variety of
claims, including breach of contract, breach of fiduciary duty, negligence and violation of state securities
laws. Plaintiffs seek compensatory damages, equitable relief and an award of attorneys' fees and litigation
expenses.

         Other complaints have been filed in state and federal courts, by investors who made investments through
an affiliate of the Manager, against the Manager and certain of its affiliates, regarding the alleged investment
fraud perpetrated by Bernard Madoff and his firm ("Madoff").  Those lawsuits, in 2008 and 2009, allege a variety
of claims, including breach of fiduciary duty, fraud, negligent misrepresentation, unjust enrichment, and
violation of federal and state securities laws and regulations, among others.  They seek unspecified damages,
equitable relief and an award of attorneys' fees and litigation expenses.  None of the suits have named the
Distributor, any of the Oppenheimer mutual funds or any of their independent Trustees or Directors.  None of the
Oppenheimer funds invested in any funds or accounts managed by Madoff.

The Manager believes that the lawsuits described above are without legal merit and intends to defend them
vigorously.  The Defendant Funds' Boards of Trustees have also engaged counsel to defend the suits vigorously on
behalf of those Funds, their boards and the individual independent Trustees named in those suits.  While it is
premature to render any opinion as to the likelihood of an outcome in these lawsuits, or whether any costs that
the Defendant Funds may bear in defending the suits might not be reimbursed by insurance, the Manager believes
that these suits should not impair the ability of the Manager or the Distributor to perform their respective
duties to the Fund, and that the outcome of all of the suits together should not have any material effect on the
operations of any of the Oppenheimer Funds.

Portfolio Manager. The Fund's portfolio is managed by Caleb Wong (referred to as the "Portfolio Manager"). He is
the person responsible for the day-to-day management of the Fund's investments.

          Other Accounts Managed.  In addition to managing the Fund's investment portfolio, Mr. Wong also
          manages another investment portfolio on behalf of the Manager or its affiliates. The following table
          provides information regarding the other portfolio managed by the Portfolio Manager as of May 31, 2008.
          No portfolio or account has an advisory fee based on performance:


                                           Registered Investment    Other Pooled Investment
                                                 Companies                  Vehicles            Other Accounts**
     ---------------------------------------------------------------------------------------------------------------
     ---------------------------------------------------------------------------------------------------------------
                                                                               1                      None
     Accounts Managed                                3

     ---------------------------------------------------------------------------------------------------------------
     ---------------------------------------------------------------------------------------------------------------
                                                                                $106                     $0
     Total Assets Managed*                            $3,334

     ---------------------------------------------------------------------------------------------------------------
      *   In millions.
      **  Does not include personal accounts of portfolio managers and their families, which are subject to the
          Code of Ethics.

As indicated above, the Portfolio Manager also manages other funds. Potentially, at times, those responsibilities
could conflict with the interests of the Fund. That may occur whether the investment objectives and strategies of
the other fund are the same as, or different from, the Fund's investment objectives and strategies. For example
the Portfolio Manager may need to allocate investment opportunities between the Fund and another fund having
similar objectives or strategies, or he may need to execute transactions for another fund that could have a
negative impact on the value of securities held by the Fund. Not all funds and accounts advised by the Manager
have the same management fee. If the management fee structure of another fund is more advantageous to the Manager
than the fee structure of the Fund, the Manager could have an incentive to favor the other fund. However, the
Manager's compliance procedures and Code of Ethics recognize the Manager's fiduciary obligation to treat all of
its clients, including the Fund, fairly and equitably, and are designed to preclude the Portfolio Manager from
favoring one client over another. It is possible, of course, that those compliance procedures and the Code of
Ethics may not always be adequate to do so. At various times, the Fund's Portfolio Manager may manage other funds
or accounts with investment objectives and strategies similar to those of the Fund, or he may manage funds or
accounts with different investment objectives and strategies.

Compensation of the Portfolio Manager.  The Fund's Portfolio Manager is employed and compensated by the
Manager, not the Fund. Under the Manager's compensation program for its portfolio managers and portfolio
analysts, Fund performance is the most important element of compensation with half of annual cash compensation
based on relative investment performance results of the funds or accounts they manage, rather than on the
financial success of the Manager. This is intended to align the portfolio managers and analysts interests with
the success of the funds and accounts and their shareholders. The Manager's compensation structure is designed to
attract and retain highly qualified investment management professionals and to reward individual and team
contributions toward creating shareholder value. As of May 31, 2008, the Portfolio Manager's compensation
consisted of three elements: a base salary, an annual discretionary bonus and eligibility to participate in
long-term awards of options and stock appreciation rights in regard to the common stock of the Manager's holding
company parent. Senior portfolio managers may also be eligible to participate in the Manager's deferred
compensation plan.

The base pay component of each portfolio manager is reviewed regularly to ensure that it reflects the performance
of the individual, is commensurate with the requirements of the particular portfolio, reflects any specific
competence or specialty of the individual manager, and is competitive with other comparable positions. The annual
discretionary bonus is determined by senior management of the Manager and is based on a number of factors,
including a fund's pre-tax performance for periods of up to five years, measured against an appropriate Lipper
benchmark selected by management. The majority (80%) is based on three and five year data, with longer periods
weighted more heavily. Below median performance in all three periods results in an extremely low, and in some
cases no, performance based bonus. The Lipper benchmark used with respect to the Fund is the Global Flexible
Portfolio Fund. Other factors considered include management quality (such as style consistency, risk management,
sector coverage, team leadership and coaching) and organizational development. The Portfolio Manager's
compensation is not based on the total value of the Fund's portfolio assets, although the Fund's investment
performance may increase those assets. The compensation structure is also intended to be internally equitable and
serve to reduce potential conflicts of interest between the Fund and other funds managed by the Portfolio
Manager. The compensation structure of the other funds currently managed by the Portfolio Manager is the same as
the compensation structure of the Fund, described above.

Ownership of Fund Shares.  As of May 31, 2008, the Portfolio Manager did not beneficially own any shares 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, that the Manager 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 for the services provided. 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, in choosing brokers to execute portfolio transactions for the
Fund, the Manager may select brokers (other than affiliates) that provide both brokerage and research services to
the Fund. The commissions paid to those 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.

Brokerage Practices Followed by the Manager. The Manager allocates brokerage for the Fund subject to the
provisions of the investment advisory agreement and other applicable rules and procedures described below.

         The Manager's portfolio traders allocate brokerage based upon recommendations from the Manager's
portfolio managers, together with the portfolio traders' judgment as to the execution capability of the broker or
dealer. 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 that are available
in U.S. markets. Brokerage commissions are paid primarily for transactions in listed securities or for certain
fixed-income agency transactions executed 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 accounts advised by the Manager have investment policies similar to those of the Fund. Those other
accounts 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 accounts 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. When possible, the
Manager tries to combine concurrent orders to purchase or sell the same security by more than one of the accounts
managed by the Manager or its affiliates. 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.

         Rule 12b-1 under the Investment Company Act prohibits any fund from compensating a broker or dealer for
promoting or selling the fund's shares by (1) directing to that broker or dealer any of the fund's portfolio
transactions, or (2) directing any other remuneration to that broker or dealer, such as commissions, mark-ups,
mark downs or other fees from the fund's portfolio transactions, that were effected by another broker or dealer
(these latter arrangements are considered to be a type of "step-out" transaction). In other words, a fund and its
investment adviser cannot use the fund's brokerage for the purpose of rewarding broker-dealers for selling the
fund's shares.

         However, the Rule permits funds to effect brokerage transactions through firms that also sell fund
shares, provided that certain procedures are adopted to prevent a quid pro quo with respect to portfolio
brokerage allocations. As permitted by the Rule, the Manager has adopted procedures (and the Fund's Board of
Trustees has approved those procedures) that permit the Fund to direct portfolio securities transactions to
brokers or dealers that also promote or sell shares of the Fund, subject to the "best execution" considerations
discussed above. Those procedures are designed to prevent: (1) the Manager's personnel who effect the Fund's
portfolio transactions from taking into account a broker's or dealer's promotion or sales of the Fund shares when
allocating the Fund's portfolio transactions, and (2) the Fund, the Manager and the Distributor from entering
into agreements or understandings under which the Manager directs or is expected to direct the Fund's brokerage
directly, or through a "step-out" arrangement, to any broker or dealer in consideration of that broker's or
dealer's promotion or sale of the Fund's shares or the shares of any of the other Oppenheimer funds.

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

         "Research"  services are restricted to "advice,"  "analyses," and "reports" that reflect the expression of
reasoning or knowledge.  "Brokerage  services" are those  products and services that relate to the execution of the
trade from the point at which the Manager  communicates  with the  broker-dealer for the purpose of transmitting an
order for  execution,  through  the point at which funds or  securities  are  delivered  or credited to the advised
accounts.  If a research or brokerage service also assists the Manager in a  non-research/brokerage  capacity (such
as marketing,  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.

         Although the Manager currently does not do so, the Board of Trustees may permit 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 may also permit the Manager to use commissions on fixed-price offerings to obtain research,
in the same manner as is permitted for agency transactions.

         The research services provided by brokers broaden the scope and supplement 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.

         During the fiscal year ended May 31, 2007, the fund did not execute any transactions through or pay any
commissions to firms that provide research services.

------------------------------------------- ---------------------------------------------------------------
        Fiscal Year Ended May 31,                   Total Brokerage Commissions Paid by the Fund*
------------------------------------------- ---------------------------------------------------------------
------------------------------------------- ---------------------------------------------------------------
                   2008                                                $ 38,697
------------------------------------------- ---------------------------------------------------------------
   *   Amounts do not include spreads or commissions on principal transactions on a net trade basis.


Service Plan

The Distributor. Under its General Distributor's Agreement with the Trust, the Distributor acts as the Fund's
principal underwriter in the continuous public offering of the Fund's classes of 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.

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

------------------ ----------------------- -----------------------
Fiscal Year         Aggregate Front-End      Class A Front-End
                                               Sales Charges
Ended May 31:         Sales Charges on          Retained by
                       Class A Shares          Distributor(1)
------------------ ----------------------- -----------------------
------------------ ----------------------- -----------------------
      2007                  None                    None
------------------ ----------------------- -----------------------
------------------ ----------------------- -----------------------
      2008                  None                    None
------------------ ----------------------- -----------------------
1.       Includes amounts retained by a broker-dealer that is an affiliate or a parent of the Distributor.


------------------ -----------------------
Fiscal Year         Concessions on Class
Ended May 31:       A Shares Advanced by
                       Distributor(1)
------------------ -----------------------
------------------ -----------------------
      2007                  None
------------------ -----------------------
------------------ -----------------------
      2008                  None
------------------ -----------------------
1.   The Distributor advances concession payments to financial intermediaries for certain sales of Class A
     shares from its own resources at the time of sale.

------------------ -----------------------
Fiscal       Year    Class A Contingent
                       Deferred Sales
Ended May 31:       Charges Retained by
                        Distributor
------------------ -----------------------
------------------ -----------------------
      2007                  None
------------------ -----------------------
------------------ -----------------------
      2008                  None
------------------ -----------------------

Service Plan. The Fund has adopted a Service Plan for Class A shares under Rule 12b-1 of the Investment Company
Act. Under the plan 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. The plan has been approved by a vote of the Board of Trustees,
including a majority of the Independent Trustees(1), cast in person at a meeting called for the purpose of voting
on that plan.

         Under the Plan, the Manager and the Distributor may make payments to affiliates. In their sole
discretion, they may also from time to time make substantial payments from their own resources, which include the
profits the Manager derives from the advisory fees it receives from the Fund, to compensate brokers, dealers,
financial institutions and other intermediaries for providing distribution assistance and/or administrative
services or that otherwise promote sales of the Fund's shares. These payments, some of which may be referred to
as "revenue sharing," may relate to the Fund's inclusion on a financial intermediary's preferred list of funds
offered to its clients.

         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. A plan may be terminated at any time by the vote of a majority of the Independent Trustees
or by the vote of the holders of a "majority" (as defined in the Investment Company Act) of the outstanding
shares of that class.

         The Board of Trustees and the Independent Trustees must approve all material amendments to a plan. An
amendment to increase materially the amount of payments to be made under a plan must be approved by shareholders
of the class affected by the amendment.

         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. 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
who are not "interested persons" of 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 plan, no payment will be made to any recipient in any period in which the aggregate net asset
value of all Fund shares 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.

|X|      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 (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 Distributor makes payments to
recipients periodically at an annual rate not to exceed 0.25% of the average annual Class A share net assets held
in the accounts of the recipients or their customers.

         The Distributor does not receive or retain the service fee on Class A shares in accounts for which the
Distributor has been listed as the broker-dealer of record. 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,
except in the case of shares purchased prior to March 1, 2007 with respect to certain group retirement plans that
were established prior to March 1, 2001 ("grandfathered retirement plans"). Prior to March 1, 2007, the
Distributor paid the 0.25% service fee for grandfathered retirement plans in advance for the first year and
retained the first year's service fee paid by the Fund with respect to those shares. After the shares were held
for a year, the Distributor paid the ongoing service fees to recipients on a periodic basis. Such shares are
subject to a contingent deferred sales charge if they are redeemed within 18 months. If Class A shares purchased
in a grandfathered retirement plan prior to March 1, 2007 are redeemed within 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 those fees. For Class A shares purchased in grandfathered retirement plans on
or after March 1, 2007, the Distributor does not make any payment in advance and does not retain the service fee
for the first year. Such shares are not subject to the contingent deferred sales charge.

         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 under the Class A plan to
pay any of its interest expenses, carrying charges, or other financial costs, or allocation of overhead.

         All payments under the Class A plan are subject to the limitations imposed by the Conduct Rules of FINRA
on payments of asset-based sales charges and service fees.

Payments to Fund Intermediaries

         Financial intermediaries may receive various forms of compensation or reimbursement from the Fund in the
form of 12b-1 plan payments as described in the preceding section of this SAI. They may also receive payments or
concessions from the Distributor, derived from sales charges paid by the clients of the financial intermediary,
also as described in this SAI. Additionally, the Manager and/or the Distributor (including their affiliates) may
make payments to financial intermediaries in connection with their offering and selling shares of the Fund and
other Oppenheimer funds, providing marketing or promotional support, transaction processing and/or administrative
services. Among the financial intermediaries that may receive these payments are brokers and dealers who sell
and/or hold shares of the Fund, banks (including bank trust departments), registered investment advisers,
insurance companies, retirement plan and qualified tuition program administrators, third party administrators,
and other institutions that have selling, servicing or similar arrangements with the Manager or Distributor. The
payments to intermediaries vary by the types of product sold, the features of the Fund share class and the role
played by the intermediary.

         Possible types of payments to financial intermediaries include, without limitation, those discussed
below.

o        Payments made by the Fund, or by an investor buying or selling shares of the Fund may include:
o        initial front-end sales charges, all or a portion of which front-end sales charges are payable by the
         Distributor to financial intermediaries (see "About Your Account" in the Prospectus);
o        ongoing asset-based payments attributable to Class A shares, including fees payable under the Fund's
         distribution and/or service plans adopted under Rule 12b-1 under the Investment Company Act,
         which are paid from the Fund's assets and allocated to the class of shares to which the plan
         relates (see "About the Fund -- Distribution and Service Plans" above);
o        shareholder servicing payments for providing omnibus accounting, recordkeeping, networking, sub-transfer
         agency or other administrative or shareholder services, including retirement plan and 529
         plan administrative services fees, which are paid from the assets of a Fund as reimbursement
         to the Manager or Distributor for expenses they incur on behalf of the Fund.

o        Payments made by the Manager or Distributor out of their respective resources and assets, which may
         include profits the Manager derives from investment advisory fees paid by the Fund. These payments
         are made at the discretion of the Manager and/or the Distributor. These payments, often referred to
         as "revenue sharing" payments, may be in addition to the payments by the Fund listed above.

o        These types of payments may reflect compensation for marketing support, support provided in offering the
         Fund or other Oppenheimer funds through certain trading platforms and programs, transaction
         processing or other services;
o        The Manager and Distributor each may also pay other compensation to the extent the payment is not
         prohibited by law or by any self-regulatory agency, such as FINRA. Payments are made based on
         the guidelines established by the Manager and Distributor, subject to applicable law.

         These payments may provide an incentive to financial intermediaries to actively market or promote the
sale of shares of the Fund or other Oppenheimer funds, or to support the marketing or promotional efforts of the
Distributor in offering shares of the Fund or other Oppenheimer funds. In addition, some types of payments may
provide a financial intermediary with an incentive to recommend the Fund or a particular share class. Financial
intermediaries may earn profits on these payments, since the amount of the payment may exceed the cost of
providing the service. Certain of these payments are subject to limitations under applicable law. Financial
intermediaries may categorize and disclose these arrangements to their clients and to members of the public in a
manner different from the disclosures in the Fund's Prospectus and this SAI. You should ask your financial
intermediary for information about any payments it receives from the Fund, the Manager or the Distributor and any
services it provides, as well as the fees and commissions it charges.

         Although brokers or dealers that sell Fund shares may also act as a broker or dealer in connection with
the execution of the purchase or sale of portfolio securities by the Fund or other Oppenheimer funds, a financial
intermediary's sales of shares of the Fund or such other Oppenheimer funds is not a consideration for the Manager
when choosing brokers or dealers to effect portfolio transactions for the Fund or such other Oppenheimer funds.

         Revenue sharing payments can pay for distribution-related or asset retention items including, without
limitation,

o        transactional support, one-time charges for setting up access for the Fund or other Oppenheimer funds on
         particular trading systems, and paying the intermediary's networking fees;
o        program support, such as expenses related to including the Oppenheimer funds in retirement plans,
         college savings plans, fee-based advisory or wrap fee programs, fund "supermarkets", bank or trust
         company products or insurance companies' variable annuity or variable life insurance products;
o        placement on the dealer's list of offered funds and providing representatives of the Distributor with
         access to a financial intermediary's sales meetings, sales representatives and management
         representatives.

         Additionally, the Manager or Distributor may make payments for firm support, such as business planning
assistance, advertising, and educating a financial intermediary's sales personnel about the Oppenheimer funds and
shareholder financial planning needs.

         For the year ended December 31, 2007, the following financial intermediaries and/or their respective
affiliates offered shares of the Oppenheimer funds and received revenue sharing or similar distribution-related
payments from the Manager or the Distributor for marketing or program support:

1st Global Capital Company                                  Legend Equities Corporation
Advantage Capital Corporation                               Lincoln Benefit National Life
Aegon USA                                                   Lincoln Financial Advisors Corporation
Aetna Life Insurance & Annuity Company              Lincoln Investment Planning, Inc.
AG Edwards & Sons, Inc.                             Linsco Private Ledger Financial
AIG Financial Advisors                                      Massachusetts Mutual Life Insurance Company
AIG Life Variable Annuity                                   McDonald Investments, Inc.
Allianz Life Insurance Company                              Merrill Lynch Pierce Fenner & Smith, Inc.
Allmerica Financial Life Insurance & Annuity Company  Merrill Lynch Insurance Group
Allstate Life Insurance Company                             MetLife Investors Insurance Company
American Enterprise Life Insurance                          MetLife Securities, Inc.
American General Annuity Insurance                          Minnesota Life Insurance Company
American Portfolios Financial Services, Inc.                MML Investor Services, Inc.
Ameriprise Financial Services, Inc.                         Mony Life Insurance Company
Ameritas Life Insurance Company                             Morgan Stanley & Company, Inc.
Annuity Investors Life Insurance Company                    Multi-Financial Securities Corporation
Associated Securities Corporation                           Mutual Service Corporation
AXA Advisors LLC                                            NFP Securities, Inc.
AXA Equitable Life Insurance Company                        Nathan & Lewis Securities, Inc.
Banc One Securities Corporation                             National Planning Corporation
Cadaret Grant & Company, Inc.                       Nationwide Financial Services, Inc.
CCO Investment Services Corporation                         New England Securities Corporation
Charles Schwab & Company, Inc.                      New York Life Insurance & Annuity Company
Chase Investment Services Corporation                       Oppenheimer & Company
Citicorp Investment Services, Inc.                          PFS Investments, Inc.
Citigroup Global Markets Inc.                               Park Avenue Securities LLC
CitiStreet Advisors LLC                                     Phoenix Life Insurance Company
Citizen's Bank of Rhode Island                              Plan Member Securities
Columbus Life Insurance Company                             Prime Capital Services, Inc.
Commonwealth Financial Network                              Primevest Financial Services, Inc.
Compass Group Investment Advisors                           Protective Life Insurance Company
CUNA Brokerage Services, Inc.                               Prudential Investment Management Services LLC
CUSO Financial Services, LLP                                Raymond James & Associates, Inc.
E*TRADE Clearing LLC                                        Raymond James Financial Services, Inc.
Edward  Jones                                               RBC Dain Rauscher Inc.
Essex National Securities, Inc.                             Royal Alliance Associates, Inc.
Federal Kemper Life Assurance Company                       Securities America, Inc.
Financial Network                                           Security Benefit Life Insurance Company
Financial Services Corporation                              Security First-Metlife Investors Insurance Company
GE Financial Assurance                                      SII Investments, Inc.
GE Life & Annuity                                   Signator Investors, Inc.
Genworth Financial, Inc.                                    Sorrento Pacific Financial LLC
GlenBrook Life & Annuity Company                    Sun Life Assurance Company of Canada
Great West Life & Annuity Company                   Sun Life Insurance & Annuity Company of New York
GWFS Equities, Inc.                                         Sun Life Annuity Company Ltd.
Hartford Life Insurance Company                             SunTrust Bank
HD Vest Investment Services, Inc.                           SunTrust Securities, Inc.
Hewitt Associates LLC                                       Thrivent Financial Services, Inc.
IFMG Securities, Inc.                                       Towers Square Securities, Inc.
ING Financial Advisers LLC                                  Travelers Life & Annuity Company
ING Financial Partners, Inc.                                UBS Financial Services, Inc.
Invest Financial Corporation                                Union Central Life Insurance Company
Investment Centers of America, Inc.                         United Planners Financial Services of America
Jefferson Pilot Life Insurance Company                      Wachovia Securities, Inc.
Jefferson Pilot Securities Corporation                      Walnut Street Securities, Inc.
John Hancock Life Insurance Company                         Waterstone Financial Group
JP Morgan Securities, Inc.                                  Wells Fargo Investments
Kemper Investors Life Insurance Company                     Wescom Financial Services

         For the year ended December 31, 2007, the following firms, which in some cases are broker-dealers,
received payments from the Manager or the Distributor for administrative or other services provided (other than
revenue sharing arrangements), as described above:

1st Global Capital Co.                                        Lincoln Investment Planning, Inc.
AG Edwards                                                    Lincoln National Life Insurance Co.
ACS HR Solutions                                              Linsco Private Ledger Financial
ADP                                                           Massachusetts Mutual Life Insurance Company
AETNA Life Ins & Annuity Co.                          Matrix Settlement & Clearance Services
Alliance Benefit Group                                        McDonald Investments, Inc.
American Enterprise Investments                               Mercer HR Services
American Express Retirement Service                           Merrill Lynch
American United Life Insurance Co.                            Mesirow Financial, Inc.
Ameriprise Financial Services, Inc.                           MetLife
Ameritrade, Inc.                                              MFS Investment Management
AMG (Administrative Management Group)                         Mid Atlantic Capital Co.
AST (American Stock & Transfer)                       Milliman USA
AXA Advisors                                                  Morgan Keegan & Co, Inc.
Bear Stearns Securities Co.                                   Morgan Stanley Dean Witter
Benefit Administration Company, LLC                           Mutual of Omaha Life Insurance Co.
Benefit Administration, Inc.                                  Nathan & Lewis Securities, Inc.
Benefit Consultants Group                                     National City Bank
Benefit Plans Administration                                  National Deferred Comp
Benetech, Inc.                                                National Financial
Bisys                                                         National Investor Services Co.
Boston Financial Data Services                                Nationwide Life Insurance Company
Charles Schwab & Co, Inc.                             Newport Retirement Services, Inc.
Citigroup Global Markets Inc.                                 Northwest Plan Services, Inc.
CitiStreet                                                    NY Life Benefits
City National Bank                                            Oppenheimer & Co, Inc.
Clark Consulting                                              Peoples Securities, Inc.
CPI Qualified Plan Consultants, Inc.                          Pershing LLC
DA Davidson & Co.                                     PFPC
DailyAccess Corporation                                       Piper Jaffray & Co.
Davenport & Co, LLC                                   Plan Administrators, Inc.
David Lerner Associates, Inc.                                 Plan Member Securities
Digital Retirement Solutions, Inc.                            Primevest Financial Services, Inc.
DR, Inc.                                                      Principal Life Insurance Co.
Dyatech, LLC                                                  Prudential Investment Management Services LLC
E*Trade Clearing LLC                                          PSMI Group, Inc.
Edward D Jones & Co.                                  Quads Trust Company
Equitable Life / AXA                                          Raymond James & Associates, Inc.
ERISA Administrative Svcs, Inc.                               Reliance Trust Co.
ExpertPlan, Inc.                                              Reliastar Life Insurance Company
FASCore LLC                                                   Robert W Baird & Co.
Ferris Baker Watts, Inc.                                      RSM McGladrey
Fidelity                                                      Scott & Stringfellow, Inc.
First Clearing LLC                                            Scottrade, Inc.
First Southwest Co.                                           Southwest Securities, Inc.
First Trust - Datalynx                                        Standard Insurance Co
First Trust Corp                                              Stanley, Hunt, Dupree & Rhine
Franklin Templeton                                            Stanton Group, Inc.
Geller Group                                                  Sterne Agee & Leach, Inc.
Great West Life                                               Stifel Nicolaus & Co, Inc.
H&R Block Financial Advisors, Inc.                    Sun Trust Securities, Inc.
Hartford Life Insurance Co.                                   Symetra Financial Corp.
HD Vest Investment Services                                   T. Rowe Price
Hewitt Associates LLC                                         The 401k Company
HSBC Brokerage USA, Inc.                                      The Princeton Retirement Group Inc.
ICMA - RC Services                                            The Retirement Plan Company, LLC
Independent Plan Coordinators                                 TruSource Union Bank of CA
Ingham Group                                                  UBS Financial Services, Inc.
Interactive Retirement Systems                                Unified Fund Services (UFS)
Invesmart (Standard Retirement Services, Inc.)                US Clearing Co.
Janney Montgomery Scott, Inc.                                 USAA Investment Management Co.
JJB Hillard W L Lyons, Inc.                                   USI Consulting Group
John Hancock                                                  VALIC Retirement Services
JP Morgan                                                     Vanguard Group
July Business Services                                        Wachovia
Kaufman & Goble                                       Web401K.com
Legend Equities Co.                                           Wedbush Morgan Securities
Legg Mason Wood Walker                                        Wells Fargo Bank
Lehman Brothers, Inc.                                         Wilmington Trust
Liberty Funds Distributor, Inc./Columbia Management


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 1.800.225.5677
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 SEC.
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.

         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:
o        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.
o        The Fund's performance returns may not reflect the effect of taxes on dividends and capital gains
         distributions.
o        An investment in the Fund is not insured by the FDIC or any other government agency.
o        The principal value of the Fund's shares, and total returns are not guaranteed and normally will
         fluctuate on a daily basis.
o        When an investor's shares are redeemed, they may be worth more or less than their original cost.
o        Total returns for any given past period represent historical performance information and are not, and
         should not be considered, a prediction of future returns.

         |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. The cumulative total return measures the change in value over
the entire period (for example, ten 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.

         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" in the formula below) (unless the
return is shown without sales charge, as described below).

o        Average Annual Total Return. The "average annual total return" of the 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:

ERV l/n        - 1     = Average Annual Total Return
 P

o        Average Annual Total Return (After Taxes on Distributions). The "average annual total return (after
taxes on distributions)" of Class A shares is an average annual compounded rate of return for each year in a
specified number of years, adjusted to show the effect of federal taxes (calculated using the highest individual
marginal federal income tax rates in effect on any reinvestment date) on any distributions made by the Fund
during the specified period. 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 value ("ATVD" in the formula) of that investment, after taking into account the effect of taxes on Fund
distributions, but not on the redemption of Fund shares, according to the following formula:

ATVD l/n         - 1   = Average Annual Total Return (After Taxes on Distributions)
 P

o        Average Annual Total Return (After Taxes on Distributions and Redemptions). The "average annual total
return (after taxes on distributions and redemptions)" of Class A shares is an average annual compounded rate of
return for each year in a specified number of years, adjusted to show the effect of federal taxes (calculated
using the highest individual marginal federal income tax rates in effect on any reinvestment date) on any
distributions made by the Fund during the specified period and the effect of capital gains taxes or capital loss
tax benefits (each calculated using the highest federal individual capital gains tax rate in effect on the
redemption date) resulting from the redemption of the shares at the end of the period. 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 value ("ATVDR" in the formula) of that investment,
after taking into account the effect of taxes on Fund distributions and on the redemption of Fund shares,
according to the following formula:


ATVDR l/n         - 1    = Average Annual Total Return (After Taxes on Distributions and Redemptions)
 P

o        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:

    ERV - P        = Total Return
----------------
       P

o        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 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 the shares (without considering front-end or contingent deferred sales charges) and takes into
consideration the reinvestment of dividends and capital gains distributions.

--------------------------------------------------------------------------------------------------------------------
                            The Fund's Total Returns for the Period Ended May 31, 2008
--------------------------------------------------------------------------------------------------------------------
--------------- -------------------------------- -------------------------------------------------------------------
Class of           Cumulative Total Returns                         Average Annual Total Returns
                (10 Years or life-of-class, if
Shares                       less)
--------------- -------------------------------- -------------------------------------------------------------------
--------------- -------------------------------- --------------------------------- ---------------------------------
                                                              1-Year                           5-Years
                                                                                      (or life of class if less)
--------------- -------------------------------- --------------------------------- ---------------------------------
--------------- --------------- ---------------- ---------------- ---------------- ---------------- ----------------
                 After Sales     Without Sales     After Sales     Without Sales     After Sales     Without Sales
                    Charge          Charge           Charge           Charge           Charge           Charge
--------------- --------------- ---------------- ---------------- ---------------- ---------------- ----------------
--------------- --------------- ---------------- ---------------- ---------------- ---------------- ----------------
Class A*            -1.56%           4.44%           -3.08%            2.83%           -1.26%            3.57%
--------------- --------------- ---------------- ---------------- ---------------- ---------------- ----------------
* Inception of Class A:    03/05/07

--------------------------------------------------------------------------------------
               Total Returns for Class A* Shares (After Sales Charge)
                      For the Fiscal Period Ended May 31, 2008
--------------------------------------------------------------------------------------
------------------------------------------ ------------------- -----------------------
                                                 1-Year
                                                                      5-Years
                                           (or life of class    (or life of class if
                                                if less)               less)
------------------------------------------ ------------------- -----------------------
------------------------------------------ ------------------- -----------------------
After Taxes on Distributions                     -3.41%                -1.53%
------------------------------------------ ------------------- -----------------------
------------------------------------------ ------------------- -----------------------
After Taxes on Distributions and                 -2.01%                -1.23%
Redemption of Fund Shares
------------------------------------------ ------------------- -----------------------
               * Inception of Class A:      03/05/07

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 SAI. 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.

         |X|  Lipper Rankings. From time to time the Fund may publish the ranking of the performance of its
shares by Lipper, Inc. ("Lipper"). 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 in categories based on investment styles. 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.

|X|      Morningstar Ratings. From time to time the Fund may publish the star rating of the performance of its
shares by Morningstar, Inc., an independent mutual fund monitoring service. Morningstar rates mutual funds in
their specialized market sector. The Fund is rated among large value funds.

         Morningstar proprietary star ratings reflect historical risk-adjusted total investment return. For each
fund with at least a three-year history, Morningstar calculates a Morningstar Rating based on a Morningstar
Risk-Adjusted Return measure that accounts for variation in a fund's monthly performance (including the effects
of sales charges, loads, and redemption fees), placing more emphasis on downward variations and rewarding
consistent performance. The top 10% of funds in each category receive 5 stars, the next 22.5% receive 4 stars,
the next 35% receive 3 stars, the next 22.5% receive 2 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
three-, five-and ten-year (if applicable) Morningstar Rating metrics.

         |X|  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 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 shares 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 price 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,
         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 investors.

When you purchase shares of the Fund, your ownership interest in the shares of the Fund will be recorded as a
book entry on the records of the Fund.  The Fund will not issue or re-register physical share certificates.

AccountLink. When shares are purchased through AccountLink, each purchase must be at least $50 and shareholders
must invest at least $500 before an Asset Builder Plan (described below) can be established on a new account.
Accounts established prior to November 1, 2002 will remain at $25 for additional purchases. Shares will be
purchased on the regular business day the Distributor is instructed to initiate the Automated Clearing House
("ACH") transfer to buy the shares. Dividends will begin to accrue on shares purchased with the proceeds of ACH
transfers on the business day the Fund receives Federal Funds for the purchase through the ACH system before the
close of the New York Stock Exchange (the "NYSE"). The NYSE normally closes at 4:00 p.m., but may close earlier
on certain days. If Federal Funds are received on a business day after the close of the NYSE, the shares will be
purchased and dividends will begin to accrue on the next regular business day. 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 SAI because the Distributor or dealer or broker
incurs little or no selling expenses.

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

Oppenheimer AMT-Free Municipals                               Oppenheimer New Jersey Municipal Fund
Oppenheimer AMT-Free New York Municipals                      Oppenheimer Pennsylvania Municipal Fund
Oppenheimer Balanced Fund                                     Oppenheimer Portfolio Series:
Oppenheimer Baring China Fund                                     Active Allocation Fund
Oppenheimer Baring Japan Fund                                     Equity Investor Fund
Oppenheimer Baring SMA International Fund                         Conservative Investor Fund
Oppenheimer Core Bond Fund                                        Moderate Investor Fund
Oppenheimer California Municipal Fund

                                                              Oppenheimer Portfolio Series Fixed Income Active
                                                              Allocation Fund
Oppenheimer Capital Appreciation Fund                         Oppenheimer Principal Protected Main Street Fund
Oppenheimer Capital Income Fund                               Oppenheimer Principal Protected Main Street Fund II
Oppenheimer Champion Income Fund                              Oppenheimer Principal Protected Main Street Fund III
Oppenheimer Commodity Strategy Total Return Fund              Oppenheimer Quest Balanced Fund
Oppenheimer Convertible Securities Fund                       Oppenheimer Quest International Value Fund, Inc.
Oppenheimer Developing Markets Fund                           Oppenheimer Quest Opportunity Value Fund
Oppenheimer Discovery Fund                                    Oppenheimer Real Estate Fund
Oppenheimer Dividend Growth Fund                              Oppenheimer Rising Dividends Fund, Inc.
Oppenheimer Emerging Growth Fund                              Oppenheimer Rochester Arizona Municipal Fund
Oppenheimer Equity Fund, Inc.                                 Oppenheimer Rochester Maryland Municipal Fund
Oppenheimer Equity Income Fund, Inc.                          Oppenheimer Rochester Massachusetts Municipal Fund
Oppenheimer Global Fund                                       Oppenheimer Rochester Michigan Municipal Fund
Oppenheimer Global Opportunities Fund                         Oppenheimer Rochester Minnesota Municipal Fund
Oppenheimer Global Value Fund                                 Oppenheimer Rochester National Municipals
Oppenheimer Gold & Special Minerals Fund              Oppenheimer Rochester North Carolina Municipal Fund
Oppenheimer International Bond Fund                           Oppenheimer Rochester Ohio Municipal Fund
Oppenheimer International Diversified Fund                    Oppenheimer Rochester Virginia Municipal Fund
Oppenheimer International Growth Fund                         Oppenheimer Select Value Fund
Oppenheimer International Small Company Fund                  Oppenheimer Senior Floating Rate Fund
Oppenheimer International Value Fund                          Oppenheimer Small- & Mid- Cap Value Fund
Oppenheimer Limited Term California Municipal Fund            Oppenheimer SMA Core Bond Fund
Oppenheimer Limited-Term Government Fund                      Oppenheimer SMA International Bond Fund
Oppenheimer Limited Term Municipal Fund                       Oppenheimer Strategic Income Fund
Oppenheimer Main Street Fund                                  Oppenheimer U.S. Government Trust
Oppenheimer Main Street Opportunity Fund                      Oppenheimer Value Fund
Oppenheimer Main Street Small Cap Fund                        Limited-Term New York Municipal Fund
Oppenheimer MidCap Fund                                       Rochester Fund Municipals

LifeCycle Funds
         Oppenheimer Transition 2010 Fund
         Oppenheimer Transition 2015 Fund
         Oppenheimer Transition 2020 Fund
         Oppenheimer Transition 2025 Fund
         Oppenheimer Transition 2030 Fund
         Oppenheimer Transition 2040 Fund
         Oppenheimer Transition 2050 Fund

And the following money market funds:
Oppenheimer Cash Reserves                                     Centennial Government Trust
Oppenheimer Institutional Money Market Fund                   Centennial Money Market Trust
Oppenheimer Money Market Fund, Inc.                           Centennial New York Tax Exempt Trust
Centennial California Tax Exempt Trust                        Centennial Tax Exempt Trust


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

Letter of Intent. Under a Letter of Intent (a "Letter"), you may be able to reduce the sales charge rate that
applies to your purchases of Class A shares if you purchase Class A, Class B or Class C shares of the Fund or
other Oppenheimer funds or Class A, Class B, Class C, Class G and Class H units purchases in advisor sold Section
529 plans, for which the Manager or the Distributor serves as the Program Manager or Program Distributor. A
Letter is an investor's statement in writing to the Distributor of his or her intention to purchase a specified
value of those shares or units during a 13-month period (the "Letter period"), which begins on the date of the
investor's first share purchase following the establishment of the Letter. The sales charge on each purchase of
Class A shares during the Letter period will be at the rate that would apply to a single lump-sum purchase of
shares in the amount intended to be purchased. In submitting a Letter, the investor makes no commitment to
purchase shares. However, if the investor does not fulfill the terms of the Letter within the Letter period, he
or she agrees to pay the additional sales charges that would have been applicable to the purchases that were
made. The investor agrees that shares equal in value to 2% of the intended purchase amount will be held in escrow
by the Transfer Agent for that purpose, as described in "Terms of Escrow" below. It is the responsibility of the
dealer of record and/or the investor to advise the Distributor about the Letter when placing purchase orders
during the Letter period. The investor must also notify the Distributor or his or her financial intermediary of
any qualifying 529 plan holdings.

         To determine whether an investor has fulfilled the terms of a Letter, the Transfer Agent will count
purchases of "qualified" Class A, Class B and Class C shares and Class A, Class B, Class C, Class G and Class H
units during the Letter period. Purchases of Class N or Class Y shares, purchases made by reinvestment of
dividends or capital gains distributions from the Fund or other Oppenheimer funds, purchases of Class A shares
with redemption proceeds under the Reinvestment Privilege, and purchases of Class A shares of Oppenheimer Money
Market Fund, Inc. or Oppenheimer Cash Reserves on which a sales charge has not been paid do not count as
"qualified" shares for satisfying the terms of a Letter. An investor will also be considered to have fulfilled the
Letter if the value of the investor's total holdings of qualified shares on the last day of the Letter period,
calculated at the net asset value on that day, equals or exceeds the intended purchase amount.

     If the terms of the Letter are not fulfilled within the Letter period, the concessions previously paid to
the dealer of record for the account and the amount of sales charge retained by the Distributor will be adjusted
on the first business day following the expiration of the Letter period to reflect the sales charge rates that
are applicable to the actual total purchases.

     If total eligible purchases during the Letter period exceed the intended purchase amount and also exceed the
amount needed to qualify for the next sales charge rate reduction (stated in the Prospectus), the sales charges
paid may be adjusted to that lower rate. That adjustment will only be made if and when the dealer returns to the
Distributor the amount of the excess concessions allowed or paid to the dealer over the amount of concessions
that are applicable to the actual amount of purchases. The reduced sales charge adjustment will be made by adding
to the investors account the number of additional shares that would have been purchased if the lower sales charge
rate had been used. Those additional shares will be determined using the net asset value per share in effect on
the date of such adjustment.

     By establishing a Letter, the investor agrees to be bound by the terms of the Prospectus, this SAI and the
application used for a Letter, and if those terms are amended to be bound by the amended terms and that any
amendments by the Fund will apply automatically to existing Letters. Group retirement plans qualified under
section 401(a) of the Internal Revenue Code may not establish a Letter, however defined benefit plans and Single
K sole proprietor plans may do so.

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

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

         2.       If the Letter applies to more than one fund account, the investor can designate the fund from
which shares will be escrowed. If no fund is selected, the Transfer Agent will escrow shares in the fund account
that has the highest dollar balance on the date of the first purchase under the Letter. If there are not
sufficient shares to cover the escrow amount, the Transfer Agent will escrow shares in the fund account(s) with
the next highest balance(s). If there are not sufficient shares in the accounts to which the Letter applies, the
Transfer Agent may escrow shares in other accounts that are linked for Right of Accumulation purposes.
Additionally, if there are not sufficient shares available for escrow at the time of the first purchase under the
Letter, the Transfer Agent will escrow future purchases until the escrow amount is met.

         3.       If, during the Letter period, an investor exchanges shares of the Fund for shares of another
fund (as described in the Prospectus section titled "How to Exchange Shares"), the Fund shares held in escrow
will automatically be exchanged for shares of the other fund and the escrow obligations will also be transferred
to that fund.

         4.       If the total purchases under the Letter are less than the intended purchases specified, on the
first business day after the end of the Letter period, the Distributor will redeem escrowed shares equal in value
to the difference between the dollar amount of the sales charges actually paid and the amount of the sales
charges that would have been paid if the total purchases had been made at a single time. Any shares remaining
after such redemption will be released from escrow.

         5.       If the terms of the Letter are fulfilled, the escrowed shares will be promptly released to the
investor at the end of the Letter period.

         6.       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.


Asset Builder Plans. As explained in the Prospectus, you must initially establish your account with $500.
Subsequently, you can establish an Asset Builder Plan to automatically purchase additional shares directly from a
bank account for as little as $50. For those accounts established prior to November 1, 2002 and which have
previously established Asset Builder Plans, additional purchases will remain at $25. 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 employer-sponsored qualified retirement accounts.

         If you make 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 you 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 charges or at reduced sales charge rates, as described in Appendix B to this SAI. 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 had less than $1 million in assets invested in
applicable investments (other than assets invested in money market funds), then the retirement plan may purchase
only Class C shares of the Oppenheimer funds. If, on the date the plan sponsor signed the Merrill Lynch record
keeping service agreement, the plan had $1 million or more in assets but less than $5 million in assets invested
in applicable investments (other than assets invested in money market funds), then the retirement plan may
purchase only Class N shares of the Oppenheimer funds. If, on the date the plan sponsor signed the Merrill Lynch
record keeping service agreement, the plan had $5 million or more in assets invested in applicable investments
(other than assets invested in money market funds), then the retirement plan may purchase only Class A shares of
the Oppenheimer funds.

         OppenheimerFunds has entered into arrangements with certain record keepers whereby the Transfer Agent
compensates the record keeper for its record keeping and account servicing functions that it performs on behalf
of the participant accounts in a retirement plan. While such compensation may act to reduce the record keeping
fees charged by the retirement plan's record keeper, that compensation arrangement may be terminated at any time,
potentially affecting the record keeping fees charged by the retirement plan's record keeper.

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 values 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.

         Class A Shares Subject to a Contingent Deferred Sales Charge. Under a special arrangement with the
Distributor, for purchases of Class A shares at net asset value, whether or not subject to a contingent deferred
sales charge as described in the Prospectus, no sales concessions will be paid to the broker-dealer of record 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, 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 Class A share purchases by a retirement plan that are made with
the redemption proceeds of Class N shares of an Oppenheimer fund held by the plan for more than 18 months.

         |X|  Allocation of Expenses. The Fund pays expenses related to its daily operations, such as custodian
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.

         For calculating the net asset value, dividends and distributions, the Fund's 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 expenses, share issuance costs, organization and start-up costs, interest, taxes
and brokerage commissions, and non-recurring expenses, such as litigation cost distribution and service plan
(12b-1) fees, transfer and shareholder servicing agent fees and expenses, and shareholder meeting expenses.

Fund Account Fees. As stated in the Prospectus, a $12 annual "Minimum Balance Fee" is assessed on each Fund
account with a share balance valued under $500. The Minimum Balance Fee is automatically deducted from each such
Fund account in September.

         Listed below are certain cases in which the Fund has elected, in its discretion, not to assess the Fund
Account Fees.  These exceptions are subject to change:
o        A fund account whose shares were acquired after September 30th of the prior year;
o        Accounts of shareholders who elect to access their account documents electronically via eDoc Direct;
o        A fund account that has only certificated shares and, has a balance below $500 and is being escheated;
o        Accounts of shareholders that are held by broker-dealers under the NSCC Fund/SERV system in Networking
         level 1 and 3 accounts;
o        Accounts held under the Oppenheimer Legacy Program and/or holding certain Oppenheimer Variable Account
         Funds;
o        Omnibus accounts holding shares pursuant to the Pinnacle, Ascender, Custom Plus, Record(k)eeper Pro and
         Pension Alliance Retirement Plan programs; and
o        A fund account that falls below the $500 minimum solely due to market fluctuations within the 12-month
         period preceding the date the fee is deducted.
o        Accounts held in the Portfolio Builder Program which is offered through certain broker/dealers to
         qualifying shareholders.

         To access account documents electronically via eDocs Direct, please visit the Service Center on our
website at www.oppenheimerfunds.com and click the hyperlink "Sign Up for Electronic Document Delivery" under the
heading "I Want To," or call 1.888.470.0862 for instructions.

         The Fund reserves the authority to modify Fund Account Fees in its discretion.

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

         Dealers other than NYSE members may conduct trading in certain securities on days on which the NYSE is
closed (including weekends and 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 many foreign
stock exchanges and over-the-counter markets normally is completed before the close of the NYSE.

         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 NYSE, 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.

         |X|  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:
o        Equity securities traded on a U.S. securities exchange 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, 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.
o        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.
o        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.
o        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.
o        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 have a remaining maturity of 397 days or less.
o        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 New York 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, 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 on the valuation date. If not, the value
shall be the closing bid price on the principal exchange on the valuation date. If the put, call or future is not
traded on an exchange, 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.

Sending Redemption Proceeds by Federal Funds Wire. The Federal Funds 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 Federal Funds wire.

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

         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. 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. This reinvestment privilege does not apply to reinvestment purchases
made through automatic investment options.

         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 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.

Distributions From Retirement Plans. Requests for distributions from OppenheimerFunds-sponsored IRAs, SEP-IRAs,
SIMPLE IRAs, 403(b)(7) custodial plans, 401(k) plans or pension or profit-sharing plans should be addressed to
"Trustee, 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 SAI. 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 plan sponsors) 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 NYSE 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 NYSE closes. Normally, the NYSE closes at 4:00 p.m., but may do so earlier on
some days.

         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 Plans. Investors 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.

         By requesting an Automatic Withdrawal, the shareholder agrees to the terms and conditions that apply to
the plan, 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.

         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. 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.

         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. The prospectus of each of the Oppenheimer funds indicates which share class or classes that fund offers
and provides information about limitations on the purchase of particular share classes, as applicable for the
particular fund. You can also obtain a current list showing which funds offer which classes of shares by calling
the Distributor at the telephone number indicated on the front cover of this SAI.

         The Fund may amend, suspend or terminate the exchange privilege at any time. Although the Fund may
impose those changes at any time, it will provide you with notice of the 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, except in extraordinary circumstances.

         |X|  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, with the
following exceptions:

o        When Class A shares of any Oppenheimer fund acquired by exchange of Class A shares of any Oppenheimer
fund purchased subject to a Class A contingent deferred sales charge are redeemed within 18 months measured from
the beginning 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. Except, however, with respect to Class A
shares of Oppenheimer Rochester National Municipals and Rochester Fund Municipals acquired prior to October 22,
2007, in which case the Class A contingent deferred sales charge is imposed on the acquired shares if they are
redeemed within 24 months measured from the beginning of the calendar month of the initial purchase of the
exchanged Class A shares.

o        When Class A shares of Oppenheimer Rochester National Municipals and Rochester Fund Municipals acquired
prior to October 22, 2007 by exchange of Class A shares of any Oppenheimer fund purchased subject to a Class A
contingent deferred sales charge are redeemed within 24 months of the beginning 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.

o        If any Class A shares of another Oppenheimer fund that are exchanged for Class A shares of Oppenheimer
Senior Floating Rate Fund are subject to the Class A contingent deferred sales charge of the other Oppenheimer
fund at the time of exchange, the holding period for that Class A contingent deferred sales charge will carry
over to the Class A shares of Oppenheimer Senior Floating Rate Fund acquired in the exchange. The Class A shares
of Oppenheimer Senior Floating Rate Fund acquired in that exchange will be subject to the Class A Early
Withdrawal Charge of Oppenheimer Senior Floating Rate Fund if they are repurchased before the expiration of the
holding period.

o        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.

o        Except with respect to the Class B shares described in the next two paragraphs, the contingent deferred
sales charge is imposed on Class B shares acquired by exchange if they are redeemed within six years of the
initial purchase of the exchanged Class B shares.

o        With respect to Class B shares of Oppenheimer Limited Term California Municipal Fund, Oppenheimer
Limited-Term Government Fund, Oppenheimer Limited Term Municipal Fund, Limited Term New York Municipal Fund and
Oppenheimer Senior Floating Rate Fund, the Class B contingent deferred sales charge is imposed on the acquired
shares if they are redeemed within five years of the initial purchase of the exchanged Class B shares.

o        With respect to Class B shares of Oppenheimer Cash Reserves that were acquired through the exchange of
Class B shares initially purchased in the Oppenheimer Capital Preservation Fund, the Class B contingent deferred
sales charge is imposed on the acquired shares if they are redeemed within five years of that initial purchase.

o        With respect to Class C 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.

o        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.

o        When Class B, Class C or Class N 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, Class C or Class N 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.

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

         |X|  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. Shares to be exchanged are redeemed on the regular business day the
Transfer Agent receives an exchange request in proper form (the "Redemption Date"). Normally, shares of the fund
to be acquired are purchased on the Redemption Date, but such purchases may be delayed by either fund up to five
business days if it determines that it would be disadvantaged by an immediate transfer of the redemption
proceeds. The Fund reserves the right, in its discretion, to refuse any exchange request that may disadvantage
it. For example, if the receipt of multiple exchange requests might require the disposition of portfolio
securities at a time or at a price that might be disadvantageous to the Fund, the Fund may refuse the request.

         When you exchange some or all of your shares from one fund to another, any special account features that
are available in the new fund (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.

         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 SAI, 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 the 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 the class. Dividends are calculated in the same manner, at the
same time, and on the same day for the class of shares.

         If a dividend check or a check representing an automatic withdrawal payment is returned to the Transfer
Agent by the Postal Service as undeliverable, it will be reinvested in shares of the Fund. Returned checks for
the proceeds of other redemptions 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. 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, Distributions and Redemptions of Shares. The federal tax treatment of the
Fund's dividends and capital gains distributions is briefly highlighted in the Prospectus. The following is only a
summary of certain additional tax considerations generally affecting the Fund and its shareholders.

         The tax discussion in the Prospectus and this SAI is based on tax law in effect on the date of the
Prospectus and this SAI. Those laws and regulations may be changed by legislative, judicial, or administrative
action, sometimes with retroactive effect. State and local tax treatment of ordinary income dividends and capital
gain dividends from regulated investment companies may differ from the treatment under the Internal Revenue Code
described below. Potential purchasers of shares of the Fund are urged to consult their tax advisors with specific
reference to their own tax circumstances as well as the consequences of federal, state and local tax rules
affecting an investment in the Fund.

         Qualification as a Regulated Investment Company. The Fund has elected to be taxed as a regulated
investment company under Subchapter M of the Internal Revenue Code of 1986, as amended. As a regulated investment
company, the Fund is not subject to federal income tax on the portion of its net investment income (that is,
taxable interest, dividends, and other taxable ordinary income, net of expenses) and capital gain net income
(that is, the excess of net long-term capital gains over net short-term capital losses) that it distributes to
shareholders. 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
their Fund shares are held in a retirement account or the shareholder is otherwise exempt from tax).

         The Internal Revenue Code contains a number of complex tests relating to qualification that the Fund
might not meet in a particular year. If it did not qualify as a regulated investment company, the Fund would be
treated for tax purposes as an ordinary corporation and would receive no tax deduction for payments made to
shareholders.

         To qualify as a regulated investment company, the Fund must distribute at least 90% of its investment
company taxable income (in brief, net investment income and the excess of net short-term capital gain over net
long-term capital loss) for the taxable year. The Fund must also satisfy certain other requirements of the
Internal Revenue Code, some of which are described below. Distributions by the Fund made during the taxable year
or, under specified circumstances, within 12 months after the close of the taxable year, will be considered
distributions of income and gains for the taxable year and will therefore count toward satisfaction of the
above-mentioned requirement.

         To qualify as a regulated investment company, the Fund must derive at least 90% of its gross income from
dividends, interest, certain payments with respect to securities loans, gains from the sale or other disposition
of stock or securities or foreign currencies (to the extent such currency gains are directly related to the
regulated investment company's principal business of investing in stock or securities) and certain other income
including net income derived from an interest in a qualified publicly traded partnership.

         In addition to satisfying the requirements described above, the Fund must satisfy an asset
diversification test in order to qualify as a regulated investment company. Under that test, at the close of each
quarter of the Fund's taxable year, at least 50% of the value of the Fund's assets must consist of cash and cash
items (including receivables), U.S. Government securities, securities of other regulated investment companies,
and securities of other issuers. As to each of those issuers, the Fund must not have invested more than 5% of the
value of the Fund's total assets in securities of each such issuer and the Fund must not hold more than 10% of
the outstanding voting securities of each such issuer. No more than 25% of the value of its total assets may be
invested in the securities of any one issuer (other than U.S. Government securities and securities of other
regulated investment companies), or in two or more issuers which the Fund controls and which are engaged in the
same or similar trades or businesses or in the securities of one or more qualified publicly traded partnerships.
For purposes of this test, obligations issued or guaranteed by certain agencies or instrumentalities of the U.S.
Government are treated as U.S. Government securities.

         Excise Tax on Regulated Investment Companies. 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. To meet this requirement, in certain circumstances the
Fund might be required to liquidate portfolio investments to make sufficient distributions to avoid excise tax
liability. 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.

         Taxation of Fund Distributions. The Fund anticipates distributing substantially all of its investment
company taxable income for each taxable year. Those distributions will be taxable to shareholders as ordinary
income and treated as dividends for federal income tax purposes.

         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.

         The Fund may either retain or distribute to shareholders its net capital gain for each taxable year. The
Fund currently intends to distribute any such amounts. If net long term capital gains are distributed and
designated as a capital gain distribution, it will be taxable to shareholders as a long-term capital gain and
will be properly identified in reports sent to shareholders in January of each year. Such treatment will apply no
matter how long the shareholder has held his or her shares or whether that gain was recognized by the Fund before
the shareholder acquired his or her shares.

         If the Fund elects to retain its net capital gain, the Fund will be subject to tax on it at the 35%
corporate tax rate. If the Fund elects to retain its net capital gain, the Fund will provide to shareholders of
record on the last day of its taxable year information regarding their pro rata share of the gain and tax paid.
As a result, each shareholder will be required to report his or her pro rata share of such gain on their tax
return as long-term capital gain, will receive a refundable tax credit for his/her pro rata share of tax paid by
the Fund on the gain, and will increase the tax basis for his/her shares by an amount equal to the deemed
distribution less the tax credit.

         Investment income that may be received by the Fund from sources within foreign countries may be subject
to foreign taxes withheld at the source. The United States has entered into tax treaties with many foreign
countries which entitle the Fund to a reduced rate of, or exemption from, taxes on such income. The Fund may be
subject to U.S. Federal income tax, and an interest charge, on certain distributions or gains from the sale of
shares of a foreign company considered to be a PFIC, even if those amounts are paid out as dividends to
shareholders. To avoid imposition of the interest charge, the Fund may elect to "mark to market" all PFIC shares
that it holds at the end of each taxable year. In that case, any increase or decrease in the value of those
shares would be recognized as ordinary income or as ordinary loss (but only to the extent of previously
recognized "mark-to-market" gains).

         Distributions by the Fund that do not constitute ordinary income dividends or capital gain distributions
will be treated as a return of capital to the extent of the shareholder's tax basis in their shares. Any excess
will be treated as gain from the sale of those shares, as discussed below. Shareholders will be advised annually
as to the U.S. federal income tax consequences of distributions made (or deemed made) during the year. 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.

         Distributions by the Fund will be treated in the manner described above regardless of whether the
distributions are paid in cash or reinvested in additional shares of the Fund (or of another fund). Shareholders
receiving a distribution in the form of additional shares will be treated as receiving a distribution in an
amount equal to the fair market value of the shares received, determined as of the reinvestment date.

         The Fund will be required in certain cases to withhold 28% of ordinary income dividends, capital gains
distributions and the proceeds of the redemption of shares, paid to any shareholder (1) who has failed to provide
a correct taxpayer identification number or to properly certify that number when required, (2) who is subject to
backup withholding for failure to report the receipt of interest or dividend income properly, or (3) who has
failed to certify to the Fund that the shareholder is not subject to backup withholding or is an "exempt
recipient" (such as a corporation). Any tax withheld by the Fund is remitted by the Fund to the U.S. Treasury and
all income and any tax withheld is identified in reports mailed to shareholders in January of each year with a
copy sent to the IRS.

         Tax Effects of Redemptions of Shares. If a shareholder redeems all or a portion of his/her shares, the
shareholder will recognize a gain or loss on the redeemed shares in an amount equal to the difference between the
proceeds of the redeemed shares and the shareholder's adjusted tax basis in the shares. All or a portion of any
loss recognized in that manner may be disallowed if the shareholder purchases other shares of the Fund within 30
days before or after the redemption.

         In general, any gain or loss arising from the redemption of shares of the Fund will be considered
capital gain or loss, if the shares were held as a capital asset. It will be long-term capital gain or loss if
the shares were held for more than one year. However, any capital loss arising from the redemption of shares held
for six months or less will be treated as a long-term capital loss to the extent of the amount of capital gain
dividends received on those shares. Special holding period rules under the Internal Revenue Code apply in this
case to determine the holding period of shares and there are limits on the deductibility of capital losses in any
year.

         Foreign Shareholders. Under U.S. tax law, taxation of a shareholder who is a foreign person (to include,
but not limited to, a nonresident alien individual, a foreign trust, a foreign estate, a foreign corporation, or
a foreign partnership) primarily depends on whether the foreign person's income from the Fund is effectively
connected with the conduct of a U.S. trade or business. Typically, ordinary income dividends paid from a mutual
fund are not considered "effectively connected" income.

         Ordinary income dividends that are paid by the Fund (and are deemed not "effectively connected income")
to foreign persons will be subject to a U.S. tax withheld by the Fund at a rate of 30%, provided the Fund obtains
a properly completed and signed Certificate of Foreign Status. The tax rate may be reduced if the foreign
person's country of residence has a tax treaty with the U.S. allowing for a reduced tax rate on ordinary income
dividends paid by the Fund. Any tax withheld by the Fund is remitted by the Fund to the U.S. Treasury and all
income and any tax withheld is identified in reports mailed to shareholders in March of each year with a copy
sent to the IRS.

         If the ordinary income dividends from the Fund are effectively connected with the conduct of a U.S.
trade or business, then the foreign person may claim an exemption from the U.S. tax described above provided the
Fund obtains a properly completed and signed Certificate of Foreign Status. If the foreign person fails to
provide a certification of his/her foreign status, the Fund will be required to withhold U.S. tax at a rate of
28% on ordinary income dividends, capital gains distributions and the proceeds of the redemption of shares, paid
to any foreign person. Any tax withheld by the Fund is remitted by the Fund to the U.S. Treasury and all income
and any tax withheld is identified in reports mailed to shareholders in January of each year with a copy sent to
the IRS.

         The tax consequences to foreign persons entitled to claim the benefits of an applicable tax treaty may
be different from those described herein. Foreign shareholders are urged to consult their own tax advisors or the
U.S. Internal Revenue Service with respect to the particular tax consequences to them of an investment in the
Fund, including the applicability of the U.S. withholding taxes described above.

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 into which you may
exchange shares. 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 or his or her financial intermediary 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 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. JPMorgan Chase Bank is the custodian of the Fund's assets. The custodian's responsibilities
include safeguarding and controlling the Fund's portfolio securities and handling the delivery of such securities
to and from the Fund. It is the practice of the Fund to deal with the custodian 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 in excess of $100,000 are not protected by federal deposit insurance. Those uninsured balances at
times may be substantial.

Independent Registered Public Accounting Firm. KPMG llp serves as the independent registered public accounting
firm for the Fund. KPMG llp audits the Fund's financial statements and performs other related audit and tax
services. KPMG llp also acts as the independent registered public accounting firm for the Manager and certain
other funds advised by the Manager and its affiliates. Audit and non-audit services provided by KPMG LLP to the
Fund must be pre-approved by the Audit Committee.





REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
BOARD OF TRUSTEES AND SHAREHOLDERS OF OPPENHEIMER ABSOLUTE RETURN FUND:

We have audited the accompanying statement of assets and liabilities of
Oppenheimer Absolute Return Fund, including the statement of investments, as of
May 31, 2008, the related statement of operations for the year then ended, and
the statements of changes in net assets and financial highlights for the year
then ended and the period from March 5, 2007 (commencement of operations) to May
31, 2007. These financial statements and financial highlights are the
responsibility of the Fund's management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits.

      We conducted our audits in accordance with the standards of the Public
Company Accounting Oversight Board (United States). Those standards require that
we plan and perform the audit to obtain reasonable assurance about whether the
financial statements and financial highlights are free of material misstatement.
An audit includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. Our procedures included
confirmation of securities owned as of May 31, 2008, 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 Absolute Return Fund as of May 31, 2008, the results of its
operations for the year then ended, and the changes in its net assets and
financial highlights for the year then ended and the period from March 5, 2007
(commencement of operations) to May 31, 2007, in conformity with U.S. generally
accepted accounting principles.


/s/ KPMG LLP
KPMG LLP

Denver, Colorado
July 16, 2008

                     F27 | OPPENHEIMER ABSOLUTE RETURN FUND





STATEMENT OF INVESTMENTS May 31, 2008
--------------------------------------------------------------------------------



                                                       SHARES           VALUE
-------------------------------------------------------------------------------

-------------------------------------------------------------------------------
COMMON STOCKS--34.1%
-------------------------------------------------------------------------------

CONSUMER DISCRETIONARY--3.7%
-------------------------------------------------------------------------------
AUTOMOBILES--0.2%
Hyundai Motor Co.                                         612       $  49,908
-------------------------------------------------------------------------------
DIVERSIFIED CONSUMER SERVICES--0.3%
A.B.C. Learning Centres Ltd.                           39,300          58,425
-------------------------------------------------------------------------------
HOTELS, RESTAURANTS & LEISURE--0.3%
PartyGaming plc 1                                      10,796          61,270
-------------------------------------------------------------------------------
HOUSEHOLD DURABLES--0.5%
LG Electronics, Inc.                                      330          45,813
-------------------------------------------------------------------------------
Snap-On, Inc.                                             873          54,056
                                                                    -----------
                                                                       99,869

-------------------------------------------------------------------------------
INTERNET & CATALOG RETAIL--0.2%
Rakuten, Inc.                                              83          42,752
-------------------------------------------------------------------------------
LEISURE EQUIPMENT & PRODUCTS--0.3%
Hasbro, Inc.                                            1,442          52,258
-------------------------------------------------------------------------------
MEDIA--1.2%
Gannett Co., Inc.                                       1,767          50,907
-------------------------------------------------------------------------------
PagesJaunes Groupe SA                                   2,569          46,282
-------------------------------------------------------------------------------
ProSieben Sat.1 Media AG                                3,299          46,910
-------------------------------------------------------------------------------
SES, FDR                                                2,100          55,540
-------------------------------------------------------------------------------
Yellow Pages Income Fund                                4,764          48,187
                                                                    -----------
                                                                      247,826

-------------------------------------------------------------------------------
SPECIALTY RETAIL--0.2%
DSG International plc                                  39,930          46,074
-------------------------------------------------------------------------------
TEXTILES, APPAREL & LUXURY GOODS--0.5%
LG Fashion Corp.                                        1,770          51,035
-------------------------------------------------------------------------------
Onward Holdings Co. Ltd.                                5,000          57,959
                                                                    -----------
                                                                      108,994

-------------------------------------------------------------------------------
CONSUMER STAPLES--2.3%
-------------------------------------------------------------------------------
FOOD & STAPLES RETAILING--0.2%
Wal-Mart Stores, Inc.                                     896          51,735
-------------------------------------------------------------------------------
FOOD PRODUCTS--0.5%
Archer-Daniels-Midland Co.                              1,172          46,528
-------------------------------------------------------------------------------
Nippon Meat Packers, Inc.                               4,000          52,779
                                                                    -----------
                                                                       99,307


                      F1 | OPPENHEIMER ABSOLUTE RETURN FUND



STATEMENT OF INVESTMENTS Continued
--------------------------------------------------------------------------------



                                                       SHARES           VALUE
-------------------------------------------------------------------------------

PERSONAL PRODUCTS--0.5%
Natura Cosmeticos SA                                    4,433       $  51,103
-------------------------------------------------------------------------------
Shiseido Co. Ltd.                                       2,000          49,042
                                                                    -----------
                                                                      100,145

-------------------------------------------------------------------------------
TOBACCO--1.1%
Altria Group, Inc.                                      2,521          56,117
-------------------------------------------------------------------------------
British American Tobacco plc                            1,370          51,237
-------------------------------------------------------------------------------
Reynolds American, Inc.                                   957          52,558
-------------------------------------------------------------------------------
Souza Cruz SA                                           1,893          58,635
                                                                    -----------
                                                                      218,547

-------------------------------------------------------------------------------
ENERGY--8.2%
-------------------------------------------------------------------------------
ENERGY EQUIPMENT & SERVICES--1.6%
ENSCO International, Inc.                                 798          57,320
-------------------------------------------------------------------------------
Halliburton Co.                                         1,139          55,333
-------------------------------------------------------------------------------
Nabors Industries Ltd. 1                                1,333          56,039
-------------------------------------------------------------------------------
Noble Corp.                                               887          56,005
-------------------------------------------------------------------------------
Rowan Cos., Inc.                                        1,320          58,278
-------------------------------------------------------------------------------
Transocean, Inc.                                          339          50,914
                                                                    -----------
                                                                      333,889

-------------------------------------------------------------------------------
OIL, GAS & CONSUMABLE FUELS--6.6%
Anadarko Petroleum Corp.                                  768          57,577
-------------------------------------------------------------------------------
Apache Corp.                                              400          53,624
-------------------------------------------------------------------------------
ARC Energy Trust                                        1,945          57,003
-------------------------------------------------------------------------------
Athabasca Oil Sands Trust                               1,100          55,399
-------------------------------------------------------------------------------
BG Group plc                                            2,122          53,216
-------------------------------------------------------------------------------
BP plc                                                  4,240          51,066
-------------------------------------------------------------------------------
Chesapeake Energy Corp.                                   978          53,565
-------------------------------------------------------------------------------
Chevron Corp.                                             540          53,541
-------------------------------------------------------------------------------
ConocoPhillips                                            593          55,208
-------------------------------------------------------------------------------
CONSOL Energy, Inc.                                       611          59,609
-------------------------------------------------------------------------------
Devon Energy Corp.                                        459          53,216
-------------------------------------------------------------------------------
Enerplus Resources Fund, Series G                       1,145          53,528
-------------------------------------------------------------------------------
EOG Resources, Inc.                                       403          51,838
-------------------------------------------------------------------------------
Harvest Energy Trust                                    2,319          57,111
-------------------------------------------------------------------------------
Hess Corp.                                                484          59,440
-------------------------------------------------------------------------------
Murphy Oil Corp.                                          617          57,165
-------------------------------------------------------------------------------
Noble Energy, Inc.                                        594          57,885
-------------------------------------------------------------------------------
Occidental Petroleum Corp.                                615          56,537


                      F2 | OPPENHEIMER ABSOLUTE RETURN FUND





                                                       SHARES           VALUE
-------------------------------------------------------------------------------

OIL, GAS & CONSUMABLE FUELS Continued
Origin Energy Ltd.                                      3,900     $    58,151
-------------------------------------------------------------------------------
Provident Energy Trust                                  4,757          54,675
-------------------------------------------------------------------------------
Range Resources Corp.                                     762          50,109
-------------------------------------------------------------------------------
Royal Dutch Shell plc, Cl. A                            1,280          54,514
-------------------------------------------------------------------------------
S-Oil Corp.                                               763          54,741
-------------------------------------------------------------------------------
Total SA                                                  610          53,230
-------------------------------------------------------------------------------
XTO Energy, Inc.                                          828          52,677
                                                                  ------------
                                                                    1,374,625

-------------------------------------------------------------------------------
FINANCIALS--5.6%
-------------------------------------------------------------------------------
CAPITAL MARKETS--0.5%
American Capital Strategies Ltd.                        1,609          51,488
-------------------------------------------------------------------------------
Deutsche Bank AG                                          429          46,045
                                                                  -------------
                                                                       97,533

-------------------------------------------------------------------------------
COMMERCIAL BANKS--1.8%
BB&T Corp.                                              1,411          44,404
-------------------------------------------------------------------------------
BNP Paribas SA                                            480          49,715
-------------------------------------------------------------------------------
Comerica, Inc.                                          1,359          50,528
-------------------------------------------------------------------------------
Credit Agricole SA                                      1,525          40,356
-------------------------------------------------------------------------------
Hypo Real Estate Holding AG                             1,392          45,716
-------------------------------------------------------------------------------
Lloyds TSB Group plc                                    6,060          46,096
-------------------------------------------------------------------------------
Natixis                                                 3,066          46,650
-------------------------------------------------------------------------------
U.S. Bancorp                                            1,488          49,387
                                                                  ------------
                                                                      372,852

-------------------------------------------------------------------------------
CONSUMER FINANCE--0.2%
Capital One Financial Corp.                               932          44,848
-------------------------------------------------------------------------------
INSURANCE--2.2%
ACE Ltd.                                                  837          50,279
-------------------------------------------------------------------------------
Allstate Corp.                                            992          50,532
-------------------------------------------------------------------------------
Assurant, Inc.                                            788          53,608
-------------------------------------------------------------------------------
Chubb Corp.                                               954          51,287
-------------------------------------------------------------------------------
Cincinnati Financial Corp.                              1,401          49,063
-------------------------------------------------------------------------------
Muenchener Rueckversicherungs-Gesellschaft AG             267          50,095
-------------------------------------------------------------------------------
NIPPONKOA Insurance Co. Ltd.                            6,000          56,289
-------------------------------------------------------------------------------
Safeco Corp.                                              772          51,724
-------------------------------------------------------------------------------
Travelers Cos., Inc. (The)                                989          49,262
                                                                  ------------
                                                                      462,139


                      F3 | OPPENHEIMER ABSOLUTE RETURN FUND



STATEMENT OF INVESTMENTS Continued
--------------------------------------------------------------------------------



                                                       SHARES           VALUE
-------------------------------------------------------------------------------

REAL ESTATE INVESTMENT TRUSTS--0.9%
Commonwealth Property Office Fund                      38,900       $  48,335
-------------------------------------------------------------------------------
GPT Group                                              16,300          44,869
-------------------------------------------------------------------------------
ING Industrial Fund                                    26,100          50,187
-------------------------------------------------------------------------------
Macquarie Office Trust                                 53,000          49,110
                                                                    -----------
                                                                      192,501

-------------------------------------------------------------------------------
HEALTH CARE--0.5%
-------------------------------------------------------------------------------
PHARMACEUTICALS--0.5%
Biovail Corp.                                           4,500          52,355
-------------------------------------------------------------------------------
Hanmi Pharm Co. Ltd.                                      305          42,343
                                                                    -----------
                                                                       94,698

-------------------------------------------------------------------------------
INDUSTRIALS--2.5%
-------------------------------------------------------------------------------
AIRLINES--0.5%
All Nippon Airways Co. Ltd.                            13,000          49,943
-------------------------------------------------------------------------------
Deutsche Lufthansa AG                                   1,948          50,308
                                                                    -----------
                                                                      100,251

-------------------------------------------------------------------------------
CONSTRUCTION & ENGINEERING--0.3%
AMEC plc                                                3,280          54,221
-------------------------------------------------------------------------------
MACHINERY--0.5%
Glory Ltd. 2                                            2,300          53,998
-------------------------------------------------------------------------------
Mitsui Engineering & Shipbuilding Co. Ltd.             16,000          58,129
                                                                    -----------
                                                                      112,127

-------------------------------------------------------------------------------
ROAD & RAIL--0.5%
CSX Corp.                                                 803          55,455
-------------------------------------------------------------------------------
Ryder Systems, Inc.                                       719          52,796
                                                                    -----------
                                                                      108,251

-------------------------------------------------------------------------------
TRANSPORTATION INFRASTRUCTURE--0.7%
Macquarie Airports                                     17,500          48,507
-------------------------------------------------------------------------------
Macquarie Infrastructure Group                         19,400          55,628
-------------------------------------------------------------------------------
Societe des Autoroutes Paris-Rhin-Rhone                   431          47,969
                                                                    -----------
                                                                      152,104

-------------------------------------------------------------------------------
INFORMATION TECHNOLOGY--2.0%
-------------------------------------------------------------------------------
COMMUNICATIONS EQUIPMENT--0.3%
Research In Motion Ltd. 1                                 423          58,499
-------------------------------------------------------------------------------
COMPUTERS & PERIPHERALS--0.2%
Mitsumi Electric Co. Ltd.                               1,600          46,443


                      F4 | OPPENHEIMER ABSOLUTE RETURN FUND





                                                       SHARES           VALUE
-------------------------------------------------------------------------------

ELECTRONIC EQUIPMENT & INSTRUMENTS--0.4%
Electrocomponents plc                                  14,000       $  47,770
-------------------------------------------------------------------------------
OKI Electric Industry Co. 1                            24,000          42,117
                                                                    -----------
                                                                       89,887

-------------------------------------------------------------------------------
OFFICE ELECTRONICS--0.3%
Konica Minolta Holdings, Inc.                           3,000          55,976
-------------------------------------------------------------------------------
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT--0.3%
Samsung Electronics Co.                                    73          52,515
-------------------------------------------------------------------------------
SOFTWARE--0.5%
FUJI SOFT, Inc.                                         2,700          52,248
-------------------------------------------------------------------------------
Nintendo Co. Ltd.                                         100          55,259
                                                                    -----------
                                                                      107,507

-------------------------------------------------------------------------------
MATERIALS--4.0%
-------------------------------------------------------------------------------
CHEMICALS--1.1%
BASF AG                                                   362          54,274
-------------------------------------------------------------------------------
Fertilizantes Fosfatados SA                             1,000          73,698
-------------------------------------------------------------------------------
K+S AG                                                    124          58,335
-------------------------------------------------------------------------------
Potash Corp. of Saskatchewan, Inc.                        270          53,622
                                                                    -----------
                                                                      239,929

-------------------------------------------------------------------------------
CONTAINERS & PACKAGING--0.3%
Toyo Seikan Kaisha Ltd.                                 2,700          53,145
-------------------------------------------------------------------------------
METALS & MINING--2.6%
Billiton plc                                            1,460          55,355
-------------------------------------------------------------------------------
Companhia Siderurgica Nacional SA                       1,169          57,483
-------------------------------------------------------------------------------
Fording Canadian Coal Trust                               800          63,406
-------------------------------------------------------------------------------
Freeport-McMoRan Copper & Gold, Inc., Cl. B               467          54,037
-------------------------------------------------------------------------------
Nisshin Steel Co. Ltd.                                 14,000          54,183
-------------------------------------------------------------------------------
Nucor Corp.                                               693          51,836
-------------------------------------------------------------------------------
Rio Tinto plc                                             443          53,135
-------------------------------------------------------------------------------
United States Steel Corp.                                 328          56,649
-------------------------------------------------------------------------------
Xstrata plc                                               660          52,152
-------------------------------------------------------------------------------
Zinifex Ltd.                                            5,400          49,507
                                                                    -----------
                                                                      547,743

-------------------------------------------------------------------------------
TELECOMMUNICATION SERVICES--2.4%
-------------------------------------------------------------------------------
DIVERSIFIED TELECOMMUNICATION SERVICES--2.1%
Brasil Telcom Participacoes SA                          3,000          49,524
-------------------------------------------------------------------------------
Deutsche Telekom AG                                     2,868          47,965


                      F5 | OPPENHEIMER ABSOLUTE RETURN FUND

STATEMENT OF INVESTMENTS Continued
--------------------------------------------------------------------------------



                                                         SHARES          VALUE
--------------------------------------------------------------------------------

DIVERSIFIED TELECOMMUNICATION SERVICES Continued
Embarq Corp.                                              1,169   $     55,317
--------------------------------------------------------------------------------
France Telecom SA                                         1,638         50,108
--------------------------------------------------------------------------------
KT Corp.                                                  1,110         49,732
--------------------------------------------------------------------------------
Qwest Communications International, Inc.                  9,519         46,167
--------------------------------------------------------------------------------
Telstra Corp. Ltd. 1                                     18,542         84,182
--------------------------------------------------------------------------------
Windstream Corp.                                          4,173         55,668
                                                                  --------------
                                                                       438,663

--------------------------------------------------------------------------------
WIRELESS TELECOMMUNICATION SERVICES--0.3%
Vodafone Group plc                                       16,279         52,321
--------------------------------------------------------------------------------
UTILITIES--2.9%
--------------------------------------------------------------------------------
ELECTRIC UTILITIES--0.8%
British Energy Group plc                                  3,433         49,915
--------------------------------------------------------------------------------
Companhia Energetica de Minas Gerais                      2,350         55,481
--------------------------------------------------------------------------------
E.ON AG                                                     253         53,746
                                                                  --------------
                                                                       159,142

--------------------------------------------------------------------------------
ENERGY TRADERS--0.2%
Tractebel Energia SA                                      3,591         52,148
--------------------------------------------------------------------------------
GAS UTILITIES--0.3%
Gaz de France                                               779         53,070
--------------------------------------------------------------------------------
MULTI-UTILITIES--1.3%
Dominion Resources, Inc.                                  1,130         52,319
--------------------------------------------------------------------------------
DTE Energy Co.                                            1,245         55,079
--------------------------------------------------------------------------------
Suez SA                                                     734         54,698
--------------------------------------------------------------------------------
Teco Energy, Inc.                                         3,095         63,045
--------------------------------------------------------------------------------
United Utilities plc                                      3,630         53,822
                                                                  --------------
                                                                       278,963

--------------------------------------------------------------------------------
WATER UTILITIES--0.3%
Companhia de Saneamento Basico do Estado de Sao Paulo     2,471         69,884
                                                                  --------------
Total Common Stocks (Cost $ 6,589,130)                               7,092,984

--------------------------------------------------------------------------------
PREFERRED STOCKS--1.5%
--------------------------------------------------------------------------------

Brasil Telecom SA, Preference                             4,300         52,531
--------------------------------------------------------------------------------
Hyundai Motor Co., Preference                             1,430         50,256
--------------------------------------------------------------------------------
LG Electronics, Inc., Preference                            720         47,112
--------------------------------------------------------------------------------
RWE AG, Preference, Non-Vtg.                                552         58,464
--------------------------------------------------------------------------------
Samsung Electronics, Preference                             100         51,065
--------------------------------------------------------------------------------
Telemar Norte Leste SA, A Shares, Preference              1,000         58,408
                                                                  --------------
Total Preferred Stocks (Cost $ 307,448)                                317,836


                      F6 | OPPENHEIMER ABSOLUTE RETURN FUND





                                                                               PRINCIPAL
                                                                                  AMOUNT        VALUE
-------------------------------------------------------------------------------------------------------

-------------------------------------------------------------------------------------------------------
STRUCTURED SECURITIES--12.1%
-------------------------------------------------------------------------------------------------------

Akibare Ltd. Catastrophe Linked Nts., Cl. A, 5.608%,5/22/12 3,4                $ 250,000   $  252,238
-------------------------------------------------------------------------------------------------------
Cascadia Ltd. Catastrophe Linked Nts.,6.115%, 6/13/08 4,5                        250,000      249,875
-------------------------------------------------------------------------------------------------------
Champlain Ltd. Catastrophe Linked Nts., Series A, 15.478%,1/7/09 3,4             250,000      253,481
-------------------------------------------------------------------------------------------------------
Eurus Ltd. Catastrophe Linked   9.163%, 4/8/09 3,4                               250,000      253,750
-------------------------------------------------------------------------------------------------------
Fusion 2007 Ltd.Catastrophe Linked Nts., 8.719%,5/19/09 3,4                      250,000      249,788
-------------------------------------------------------------------------------------------------------
GlobeCat Ltd.Catastrophe Linked Nts., 4.788%, 12/30/08 4                         250,000      250,088
-------------------------------------------------------------------------------------------------------
Redwood Capital X Ltd.Catastrophe Linked Nts., Series C,7.46%, 1/9/09 4,5        250,000      250,688
-------------------------------------------------------------------------------------------------------
Successor II Ltd.Catastrophe Linked Nts., Series CIII,19.758%, 4/6/10 4,5        250,000      249,175
-------------------------------------------------------------------------------------------------------
Successor Japan Quake Ltd.Catastrophe Linked Nts., Cl. A-I, 7.258%
6/6/08 3,4                                                                       250,000      250,013
-------------------------------------------------------------------------------------------------------
VASCO Re 2006 Ltd.Catastrophe Linked Nts., 11.514%,6/5/09 3,4                    250,000      250,675
                                                                                           ------------
Total Structured Securities (Cost $ 2,504,641)                                              2,509,771

-------------------------------------------------------------------------------------------------------
SHORT-TERM NOTES--2.4%
-------------------------------------------------------------------------------------------------------

Federal National Mortgage Assn.,2.28%, 12/22/08 (Cost $ 493,572)                 500,000      493,572




                                                                                SHARES
-------------------------------------------------------------------------------------------------------

-------------------------------------------------------------------------------------------------------
INVESTMENT COMPANY--50.3%
-------------------------------------------------------------------------------------------------------

Oppenheimer Institutional Money Market Fund, Cl. E,2.70% 6,7
(Cost $10,460,287)                                                          10,460,287     10,460,287

-------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS, AT VALUE (COST $20,355,078)                                   100.4%    20,874,450
-------------------------------------------------------------------------------------------------------
LIABILITIES IN EXCESS OF OTHER ASSETS                                             (0.4)       (83,047)
                                                                           ----------------------------
NET ASSETS                                                                       100.0%  $ 20,791,403
                                                                           ============================


FOOTNOTES TO STATEMENT OF INVESTMENTS

1. Non-income producing security.

2. A sufficient amount of securities has been designated to cover outstanding
foreign currency exchange contracts. See Note 5 of accompanying Notes.

3. Represents securities sold under Rule 144A, which are exempt from
registration under the Securities Act of 1933, as amended. These securities have
been determined to be liquid under guidelines established by the Board of
Trustees. These securities amount to $1,509,945 or 7.26% of the Fund's net
assets as of May 31, 2008.

4. Represents the current interest rate for a variable or increasing rate
security.

5. Illiquid security. The aggregate value of illiquid securities as of May 31,
2008 was $749,738, which represents 3.61% of the Fund's net assets. See Note 9
of accompanying Notes.

6. Is or was an affiliate, as defined in the Investment Company Act of 1940, at
or during the period ended May 31, 2008, by virtue of the Fund owning at least
5% of the voting securities of the issuer or as a result of the Fund and the
issuer having the same investment adviser. Transactions during the period in
which the issuer was an affiliate are as follows:



                                                      SHARES        GROSS        GROSS         SHARES
                                                MAY 31, 2007    ADDITIONS   REDUCTIONS   MAY 31, 2008
-------------------------------------------------------------------------------------------------------

Oppenheimer Institutional
Money Market Fund, Cl. E                             136,660   36,894,532   26,570,905     10,460,287


                      F7 | OPPENHEIMER ABSOLUTE RETURN FUND



STATEMENT OF INVESTMENTS Continued
--------------------------------------------------------------------------------

FOOTNOTES TO STATEMENT OF INVESTMENTS Continued

6. Continued



                                                                                                           DIVIDEND
                                                                                                  VALUE      INCOME
---------------------------------------------------------------------------------------------------------------------

Oppenheimer Institutional
Money Market Fund, Cl. E                                                                   $ 10,460,287   $ 171,098


7. Rate shown is the 7-day yield as of May 31, 2008.

--------------------------------------------------------------------------------
FOREIGN CURRENCY EXCHANGE CONTRACTS AS OF MAY 31, 2008 ARE AS FOLLOWS:
--------------------------------------------------------------------------------



                                           CONTRACT
                                             AMOUNT            EXPIRATION                  UNREALIZED     UNREALIZED
CONTRACT DESCRIPTION            BUY/SELL     (000S)                 DATES        VALUE   APPRECIATION   DEPRECIATION
----------------------------------------------------------------------------------------------------------------------

Argentine Peso (ARP)                 Buy        800 ARP            6/6/08   $  257,694       $  6,693       $     --
Australian Dollar (AUD)              Buy         50 AUD            8/5/08       47,355          2,365             --
Australian Dollar (AUD)             Sell         35 AUD           6/10/08       33,410             --            545
Brazilian Real (BRR)                 Buy        900 BRR     6/3/08-7/2/08      550,818         16,281             --
Brazilian Real (BRR)                Sell        570 BRR     6/3/08-7/2/08      349,616             --          8,998
British Pound Sterling (GBP)         Buy         48 GBP            8/5/08       93,603            542             --
British Pound Sterling (GBP)        Sell        285 GBP   6/10/08-8/29/08      561,367             --          3,122
Canadian Dollar (CAD)               Sell        160 CAD    6/10/08-8/5/08      160,988             --          2,119
Chinese Renminbi (Yuan) (CNY)       Sell      1,800 CNY           6/30/08      259,872            135             --
Euro (EUR)                          Sell        760 EUR   6/10/08-8/29/08    1,180,107          2,246          8,587
Hong Kong Dollar (HKD)              Sell      2,000 HKD           6/30/08      256,488             87             --
Japanese Yen (JPY)                  Sell     88,000 JPY   6/10/08-8/29/08      837,259          5,964             --
New Taiwan Dollar (TWD)             Sell      8,000 TWD           6/30/08      263,726             --          1,276
New Turkish Lira (TRY)               Buy        325 TRY           6/30/08      263,606          6,313             --
New Zealand Dollar (NZD)             Buy        325 NZD            7/7/08      252,984             --            159
Singapore Dollar (SGD)              Sell        350 SGD           6/30/08      257,381            541             --
South African Rand (ZAR)             Buy      2,100 ZAR           6/30/08      273,780          5,042             --
South Korean Won (KRW)              Sell    290,000 KRW            8/5/08      280,668          6,177             --
Swiss Franc (CHF)                   Sell         30 CHF           6/10/08       28,786             --            417
                                                                                             -------------------------
Total unrealized appreciation and depreciation                                               $ 52,386       $ 25,223
                                                                                             =========================


--------------------------------------------------------------------------------
FUTURES CONTRACTS AS OF MAY 31, 2008 ARE AS FOLLOWS:
--------------------------------------------------------------------------------



                                                                                                          UNREALIZED
                                                                NUMBER OF   EXPIRATION                  APPRECIATION
CONTRACT DESCRIPTION                                 BUY/SELL   CONTRACTS         DATE         VALUE   DEPRECIATION)
----------------------------------------------------------------------------------------------------------------------

DAX Index                                                 Buy           1      6/20/08   $   276,397      $    9,895
Euro-Bundesobligation, 10 yr.                             Buy           3       6/6/08       522,356         (25,132)
FTSE 100 Index                                            Buy           3      6/20/08       358,999           6,736
Japan (Government of) Bonds, 10 yr.                      Sell           3      6/10/08       382,669           4,026
NASDAQ 100 Index                                          Buy           9      6/20/08       366,345          34,486
Nikkei 225 Index                                          Buy           3      6/12/08       408,082          16,690
Standard & Poor's 500 E-Mini Index                       Sell          64      6/20/08     4,481,920        (380,845)
U.S. Long Bonds                                          Sell           5      9/19/08       567,500           2,632
U.S. Treasury Nts., 2 yr.                                Sell           2      9/30/08       421,250            (127)
U.S. Treasury Nts., 10 yr.                                Buy           2      9/19/08       224,813          (1,831)
U.S. Treasury Nts., 10 yr.                               Sell           4      9/19/08       449,625             234
United Kingdom Long Gilt                                  Buy           2      9/26/08       419,199          (2,175)
                                                                                                          ------------
                                                                                                          $ (335,411)
                                                                                                          ============


                      F8 | OPPENHEIMER ABSOLUTE RETURN FUND



--------------------------------------------------------------------------------
INTEREST RATE SWAP CONTRACTS AS OF MAY 31, 2008 ARE AS FOLLOWS:
--------------------------------------------------------------------------------



SWAP                                       NOTIONAL           PAID BY      RECEIVED BY   TERMINATION
COUNTERPARTY                                 AMOUNT          THE FUND         THE FUND          DATE       VALUE
----------------------------------------------------------------------------------------------------------------

                                                          Three-Month
Deutsche Bank AG                            810,000 NZD   NZD-BRR-FRA           7.5700%       4/3/18   $    (93)
----------------------------------------------------------------------------------------------------------------
JPMorgan Chase Bank NA:
                                                            One-Month
                                                            MXN-TIIE-
                                          6,700,000 MXN       Banxico           8.3685       4/23/18    (11,809)
                                                                        Six-Month CZK-
                                         10,000,000 CZK        4.4000%          PRIBOR        4/4/18     10,950
----------------------------------------------------------------------------------------------------------------
                                                                        Six-Month SGD-
Merrill Lynch                               880,000 SGD        3.2534     SOR-Telerate        4/3/18     32,921
                                                                                                       ---------
                                                                                                       $ 31,969
                                                                                                       =========


Notional amount is reported in U.S. Dollars (USD), except for those denoted in
the following currencies:



CZK         Czech Koruna
MXN         Mexican Nuevo Peso
NZD         New Zealand Dollar
SGD         Singapore Dollar

Abbreviations are as follows:

BBR          Bank Bill Rate
FRA          Forward Rate Agreement
MXN TIIE     Mexican Peso-Interbank Equilibrium Interest Rate
PRIBOR       Prague Interbank Offering Rate
SGD-SOR      Singapore Swap Offer Rate


--------------------------------------------------------------------------------
TOTAL RETURN SWAP CONTRACTS AS OF MAY 31, 2008 ARE AS FOLLOWS:
--------------------------------------------------------------------------------



SWAP              NOTIONAL                       PAID BY                   RECEIVED BY   TERMINATION
COUNTERPARTY        AMOUNT                      THE FUND                      THE FUND          DATE       VALUE
----------------------------------------------------------------------------------------------------------------

Citibank NA:
                                     One-Month USD LIBOR
                               BBR minus 50 basis points
                                    and if negative, the
                             absolute value of the Total        If positive, the Total
                                Return of the MSCI Daily      Return of the MSCI Daily
               $   411,824      Net Australian USD Index      Net Australian USD Index        5/7/09   $  3,129
                                                                   One-Month USD LIBOR
                                                             BBA minus 50 basis points
                                                                  and if negative, the
                                  If positive, the Total   absolute value of the Total
                                Return of the MSCI Daily      Return of the MSCI Daily
                 2,060,001          Gross EAFE USD Index          Gross EAFE USD Index        5/5/09    (21,263)


                      F9 | OPPENHEIMER ABSOLUTE RETURN FUND



STATEMENT OF INVESTMENTS Continued
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
TOTAL RETURN SWAP CONTRACTS Continued
--------------------------------------------------------------------------------



SWAP                NOTIONAL                         PAID BY                      RECEIVED BY   TERMINATION
COUNTERPARTY          AMOUNT                        THE FUND                         THE FUND          DATE       VALUE
-----------------------------------------------------------------------------------------------------------------------

                                           One-Month USD BBA
                                  LIBOR plus 20 basis points
                                        and if negative, the
                                 absolute value of the Total           If positive, the Total
Deutsche Bank                             Return of a custom               Return of a custom
AG, London       $ 2,059,569                   equity basket                    equity basket       9/15/08   $ 28,394
-----------------------------------------------------------------------------------------------------------------------
Goldman Sachs
International:
                                           One-Month USD BBA
                                  LIBOR plus 10 basis points
                                        and if negative, the
                                       absolute value of the           If positive, the Total
                                      MSCI Daily Net Belgium         Return of the MSCI Daily
                     394,330                       USD Index            Net Belgium USD Index        2/5/09    (20,858)
                                           One-Month USD BBA
                                  LIBOR plus 10 basis points
                                        and if negative, the           If positive, the Total
                                       absolute value of the         Return of the MSCI Daily
                     389,963      MSCI Daily Italy USD Index                  Italy USD Index        2/5/09      2,421
                                           One-Month USD BBA
                                  LIBOR and if negative, the
                                 absolute value of the Total           If positive, the Total
                                    Return of the MSCI Daily         Return of the MSCI Daily
                     412,218                    Brazil Index                     Brazil Index       5/13/09     29,586
                                                                            One-Month USD BBA
                                                                         LIBOR minus 15 basis
                                                                  points and if negative, the
                               If positive, the Total Return      absolute value of the Total
                     744,692         of the NIKKEI 225 Index   Return of the NIKKEI 225 Index       5/13/09    (13,409)
                                                                            One-Month USD BBA
                                                                         LIBOR minus 60 basis
                                                                   points and if negative,the
                                                                  absolute value of the Total
                               If positive, the Total Return            Return of the S&P ASX
                     534,318        of the S&P ASX 200 Index                        200 Index       5/11/09    (10,177)
                                                                            One-Month USD BBA
                                                                         LIBOR minus 50 basis
                                                                 points and if negative,  the
                               If positive, the Total Return        absolute value of the S&P
                                       of the S&P Canada (60          Canada (60 Index Market)
                     157,049             Index Market) Index                            Index        1/8/09     (9,186)
                                                                            One-Month USD BBA
                                                                         LIBOR minus 25 basis
                                                                  points and if negative, the
                               If positive, the Total Return      absolute value of the Total
                                      of the FTSE 100 Market           Return on the FTSE 100
                      85,812                           Index                     Market Index        5/8/09      1,892


                     F10 | OPPENHEIMER ABSOLUTE RETURN FUND





SWAP                       NOTIONAL                          PAID BY                    RECEIVED BY   TERMINATION
COUNTERPARTY                 AMOUNT                         THE FUND                       THE FUND          DATE       VALUE
-----------------------------------------------------------------------------------------------------------------------------

Goldman Sachs
International:Continued
                                                                                  One-Month USD BBA
                                                                               LIBOR minus 50 basis
                                                                        oints and if  negative, the
                                       If positive, the Total Return      absolute value of the S&P
                                               of the S&P Canada (60       Canada (60 Index  Market)
                          $ 114,282              Index Market) Index                          Index        1/8/09   $ (7,059)
                                                                                  One-Month USD BBA
                                                                               LIBOR minus 50 basis
                                                                        points and if negative, the
                                      If positive, the Total  Return      absolute value of the S&P
                                               of the S&P Canada (60        Canada (60 Index Market)
                            136,190              Index Market) Index                          Index        6/5/08    (10,177)
                                                                                  One-Month USD BBA
                                                                               LIBOR minus 14 basis
                                                                        points and if negative, the
                                                                        absolute value of the Total
                                       If positive, the Total Return              Return of the DAX
                            549,898          of the DAX Market Index                   Market Index       5/07/09     (8,460)
                                                                                  One-Month USD BBA
                                                                               LIBOR minus 25 basis
                                                                        points and if negative, the
                                       If positive, the Total Return    absolute value of the Total
                                              of the FTSE 100 Market         Return of the FTSE 100
                            762,719                            Index                   Market Index       5/08/09     17,565
                                                                                 One-Month USD BBA
                                                                               LIBOR minus 50 basis
                                                                       points and if  negative, the
                                       If positive, the Total Return    absolute value of the Total
                                               of the S&P Canada (60       Return of the S&P Canada
                             43,762              Index Market) Index        (60 Index Market) Index        1/8/09     (2,659)
                                                                                  One-Month USD BBA
                                                                               LIBOR minus 15 basis
                                                                        points and if negative, the
                                       If positive, the Total Return    absolute value of the Total
                                                of the CAC 40 Market           Return of the CAC 40
                            458,602                            Index                   Market Index       4/10/09     (8,555)
                                                                          If negative, the absolute
                                       If positive, the Total Return      value of the Total Return
                                                of the BOVESPA 06/08           of the BOVESPA 06/08
                            403,052                            Index                          Index       6/19/08    (87,491)
                                                                          If negative, the absolute
                                       If positive, the Total Return      value of the Total Return
                                               of the KOSPI200 06/08          of the KOSPI200 06/08
                            231,700                            Index                          Index       6/19/08        982


                     F11 | OPPENHEIMER ABSOLUTE RETURN FUND



STATEMENTS OF INVESTMENTS Continued
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
TOTAL RETURN SWAP CONTRACTS Continued
--------------------------------------------------------------------------------



SWAP              NOTIONAL                       PAID BY              RECEIVED BY   TERMINATION
COUNTERPARTY        AMOUNT                      THE FUND                 THE FUND          DATE         VALUE
-------------------------------------------------------------------------------------------------------------

                                       One-Month USD BBA
                              LIBOR and if negative, the
                             absolute value of the Total   If positive, the Total
                                      Return of the MSCI       Return of the MSCI
Morgan Stanley   $ 409,197              Netherland Index         Netherland Index        4/7/09   $   (2,145)
                                                                                                  -----------
                                                                                                  $ (117,470)
                                                                                                  ===========




Abbreviations are as follows:
BBA LIBOR                            British Bankers' Association London-Interbank Offered Rate
BBR Bank                             Bill Rate
BOVESPA                              Bovespa Index that trades on the Sao Paulo Stock Exchange
CAC 40 Market Index                  French Options Market. The index contains 40 stocks selected among
                                     the top 100 market capitalization and the most active stocks listed
                                     on Euronext Paris and is the underlying asset for options and futures contracts
DAX Market Index                     Frankfurt Stock Exchange comprised of the 30 largest and most liquid
                                     issues traded on the exchange
FTSE 100 Market Index                United Kingdom 100 most highly capitalized blue chip companies
KOSPI200                             Korean Stock Exchange Capitalization-weighted Index made up of 200
                                     Korean stocks
LIBOR                                London-Interbank Offered Rate
MSCI                                 Morgan Stanley Capital International
MSCI EAFE Index                      Morgan Stanley Capital International Europe, Australasia and Far East. A
                                     stock market index of foreign stocks from the perspective of a North
                                     American investor
Nikkei 225 Index                     225 top-rated Japanese companies listed on the Tokyo Stock Exchange
S&P ASX 200 Index                    S&P Australian Securities Exchange. The investable benchmark for the
                                     Australian equity market. The S&P/ASX 200 is comprised of the
                                     S&P/ASX 100 plus an additional 100 stocks
S&P Canada (60 Index Market) Index   S&P/Toronto Stock Exchange Capitalization-weighted Index made up of
                                     60 Canadian stocks


SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.

                     F12 | OPPENHEIMER ABSOLUTE RETURN FUND



STATEMENT OF ASSETS AND LIABILITIES May 31, 2008
--------------------------------------------------------------------------------



-----------------------------------------------------------------------------------------------------
ASSETS
-----------------------------------------------------------------------------------------------------

Investments,at value--see accompanying statement of investments:
Unaffiliated companies (cost$9,894,791)                                                $ 10,414,163
Affiliated companies (cost $10,460,287)                                                  10,460,287
                                                                                       --------------
                                                                                         20,874,450
-----------------------------------------------------------------------------------------------------
Cash                                                                                         66,419
-----------------------------------------------------------------------------------------------------
Cash used for collateral on futures                                                         400,000
-----------------------------------------------------------------------------------------------------
Unrealized appreciation on foreign currency exchange contracts                               52,386
-----------------------------------------------------------------------------------------------------
Swaps, at value                                                                             127,840
-----------------------------------------------------------------------------------------------------
Receivables and other assets:
Interest and dividends                                                                       93,468
Closed foreign currency contracts                                                             3,180
Other                                                                                         6,491
                                                                                       --------------
Total assets                                                                             21,624,234

-----------------------------------------------------------------------------------------------------
LIABILITIES
-----------------------------------------------------------------------------------------------------

Bank overdraft-foreign currencies (cost $28,356)                                             28,356
-----------------------------------------------------------------------------------------------------
Unrealized depreciation on foreign currency exchange contracts                               25,223
-----------------------------------------------------------------------------------------------------
Swaps, at value                                                                             213,341
-----------------------------------------------------------------------------------------------------
Payables and other liabilities:
Investments purchased                                                                       493,572
Shareholder communications                                                                   19,321
Closed foreign currency contracts                                                            18,455
Futures margins                                                                               1,657
Trustees' compensation                                                                          246
Other                                                                                        32,660
                                                                                       --------------
Total liabilities                                                                           832,831
-----------------------------------------------------------------------------------------------------
NET ASSETS                                                                             $ 20,791,403
                                                                                       ==============

-----------------------------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS
-----------------------------------------------------------------------------------------------------

Par value of shares of beneficial interest                                             $        670
-----------------------------------------------------------------------------------------------------
Additional paid-in capital                                                               20,087,943
-----------------------------------------------------------------------------------------------------
Accumulated net investment income                                                           621,306
-----------------------------------------------------------------------------------------------------
Accumulated net realized loss on investments and foreign currency transactions              (41,383)
-----------------------------------------------------------------------------------------------------
Net unrealized appreciation on investments and translation of assets and liabilities
denominated in foreign currencies                                                           122,867
                                                                                       --------------
NET ASSETS                                                                             $ 20,791,403
                                                                                       ==============

-----------------------------------------------------------------------------------------------------
NET ASSET VALUE PER SHARE
-----------------------------------------------------------------------------------------------------

Class A Shares:
Net asset value and redemption price per share (based on net assets of $20,791,403
and 670,000 shares of beneficial interest outstanding)                                 $      31.03
Maximum offering price per share (net asset value plus sales charge of 5.75% of        $      32.92
offering price)


SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.

                     F13 | OPPENHEIMER ABSOLUTE RETURN FUND



STATEMENT OF OPERATIONS For the Year Ended May 31, 2008
--------------------------------------------------------------------------------



-------------------------------------------------------------------------------------
INVESTMENT INCOME
-------------------------------------------------------------------------------------

Interest                                                                  $ 439,923
-------------------------------------------------------------------------------------
Dividends:
Unaffiliated companies (net of foreign withholding taxes of $21,684)        355,837
Affiliated companies                                                        171,098
                                                                          -----------
Total investment income                                                     966,858

-------------------------------------------------------------------------------------
EXPENSES
-------------------------------------------------------------------------------------

Management fees                                                             205,538
-------------------------------------------------------------------------------------
Shareholder communications -- Class A                                        36,879
-------------------------------------------------------------------------------------
Legal, auditing and other professional fees                                  41,151
-------------------------------------------------------------------------------------
Custodian fees and expenses                                                   3,884
-------------------------------------------------------------------------------------
Other                                                                         7,497
                                                                          -----------
Total expenses                                                              294,949
Less reduction to custodian expenses                                         (1,028)
Less waivers and reimbursements of expenses                                  (4,542)
                                                                          -----------
Net expenses                                                                289,379

-------------------------------------------------------------------------------------
NET INVESTMENT INCOME                                                       677,479

-------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
-------------------------------------------------------------------------------------

Net realized gain (loss) on:
Investments (including premiums on options exercised)                      (506,666)
Closing and expiration of option contracts written                          269,010
Closing and expiration of futures contracts                                 482,983
Foreign currency transactions                                               (67,283)
Swap contracts                                                             (113,104)
                                                                          -----------
Net realized gain                                                            64,940
-------------------------------------------------------------------------------------
Net change in unrealized appreciation (depreciation) on:
Investments                                                                (258,672)
Translation of assets and liabilities denominated in foreign currencies     133,858
Futures contracts                                                           (65,180)
Swap contracts                                                               25,204
                                                                          -----------
Net change in unrealized appreciation                                      (164,790)

-------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS                      $ 577,629
                                                                          ===========


SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.

                     F14 | OPPENHEIMER ABSOLUTE RETURN FUND



STATEMENT OF CHANGES IN NET ASSETS
--------------------------------------------------------------------------------



YEAR ENDED MAY 31,                                                          2008           2007 1
---------------------------------------------------------------------------------------------------

---------------------------------------------------------------------------------------------------
OPERATIONS
---------------------------------------------------------------------------------------------------

Net investment income                                               $    677,479   $    129,239
---------------------------------------------------------------------------------------------------
Net realized gain (loss)                                                  64,940       (104,849)
---------------------------------------------------------------------------------------------------
Net change in unrealized appreciation                                   (164,790)       287,657
                                                                    -------------------------------
Net increase in net assets resulting from operations                     577,629        312,047

---------------------------------------------------------------------------------------------------
DIVIDENDS AND/OR DISTRIBUTIONS TO SHAREHOLDERS
---------------------------------------------------------------------------------------------------

Dividends from net investment income                                     (71,697)            --
---------------------------------------------------------------------------------------------------
Distributions from net realized gain                                    (126,576)            --

---------------------------------------------------------------------------------------------------
BENEFICIAL INTEREST TRANSACTIONS
---------------------------------------------------------------------------------------------------

Net increase in net assets resulting from beneficial interest                 --     20,000,000
transactions

---------------------------------------------------------------------------------------------------
NET ASSETS
---------------------------------------------------------------------------------------------------

Total increase                                                           379,356     20,312,047
---------------------------------------------------------------------------------------------------
Beginning of period                                                   20,412,047        100,000 2
                                                                    -------------------------------
End of period (including accumulated net investment income (loss)
of $621,306 and $(37,768), respectively)                            $ 20,791,403   $ 20,412,047
                                                                    ===============================


1. For the period from March 5, 2007 (commencement of operations) to May 31,
2007.

2. Reflects the value of the Manager's initial seed money investment on August
21, 2006.

SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.

                     F15 | OPPENHEIMER ABSOLUTE RETURN FUND



FINANCIAL HIGHLIGHTS
--------------------------------------------------------------------------------



CLASS A YEAR ENDED MAY 31,                                   2008         2007 1
----------------------------------------------------------------------------------

----------------------------------------------------------------------------------
PER SHARE OPERATING DATA
----------------------------------------------------------------------------------

Net asset value, beginning of period                   $    30.47   $    30.00
----------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income 2                                      1.01          .20
Net realized and unrealized gain (loss)                      (.15)         .27
                                                       ---------------------------
Total from investment operations                              .86          .47
----------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income                         (.11)          --
Distributions from net realized gain                         (.19)          --
                                                       ---------------------------
Total dividends and/or distributions to shareholders         (.30)
----------------------------------------------------------------------------------

Net asset value, end of period                         $    31.03   $    30.47
                                                       ===========================

----------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 3                           2.83%        1.57%
----------------------------------------------------------------------------------

----------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
----------------------------------------------------------------------------------

Net assets, end of period (in thousands)               $   20,791   $   20,412
----------------------------------------------------------------------------------
Average net assets (in thousands)                      $   20,522   $   20,264
----------------------------------------------------------------------------------
Ratios to average net assets: 4
Net investment income                                        3.30%        2.65%
Total expenses 5                                             1.44%        1.62%
Expenses after payments, waivers and/or
reimbursements and reduction to custodian expenses           1.41%        1.62%
----------------------------------------------------------------------------------
Portfolio turnover rate                                       357%          75%


1. For the period from March 5, 2007 (commencement of operations) to May 31,
2007.

2. Per share amounts calculated based on the average shares outstanding during
the period.

3. Assumes an initial investment on the business day before the first day of the
fiscal period, with all dividends and distributions reinvested in additional
shares on the reinvestment date, and redemption at the net asset value
calculated on the last business day of the fiscal period. Total returns are not
annualized for periods less than one full year. Returns do not reflect the
deduction of taxes that a shareholder would pay on fund distributions or the
redemption of fund shares.

4. Annualized for periods less than one full year.

5. Total expenses including indirect expenses from affiliated fund were as
follows:



        Year Ended May 31, 2008     1.46%
        Period Ended May 31, 2007   1.62%


SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.

                     F16 | OPPENHEIMER ABSOLUTE RETURN FUND



NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES

Oppenheimer Absolute Return Fund (the "Fund") is registered under the Investment
Company Act of 1940, as amended, as an open-end management investment company.
The Fund's investment objective is to seek total return. The Fund's investment
adviser is OppenheimerFunds, Inc. (the "Manager").

      The Fund currently offers Class A shares only. Class A shares are sold at
their offering price, which is normally net asset value plus a front-end sales
charge. As of May 31, 2008, 670,000 shares of Class A were owned by the Manager
and its affiliates, which represents 100% of the Fund's total shares
outstanding.

      The following is a summary of significant accounting policies consistently
followed by the Fund.

--------------------------------------------------------------------------------
SECURITIES VALUATION. The Fund calculates the net asset value of its shares as
of the close of the New York Stock Exchange (the "Exchange"), normally 4:00 P.M.
Eastern time, on each day the Exchange is open for trading. Securities may be
valued primarily using dealer-supplied valuations or a portfolio pricing service
authorized by the Board of Trustees. Securities traded on a registered U.S.
securities exchange 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.
Securities whose principal exchange is NASDAQ(R) are valued based on the closing
price reported by NASDAQ prior to the time when the Fund's assets are valued. In
the absence of a sale, the security is valued at the last sale price on the
prior trading day, if it is within the spread of the closing "bid" and "asked"
prices, and if not, at the closing bid price. Securities traded on foreign
exchanges are valued based on the last sale price on the principal exchange on
which the security is traded, as identified by the portfolio pricing service,
prior to the time when the Fund's assets are valued. In the absence of a sale,
the security is valued at the official closing price on the principal exchange.
Corporate, government and municipal debt instruments having a remaining maturity
in excess of sixty days and all mortgage-backed securities, collateralized
mortgage obligations and other asset-backed securities will be valued at the
mean between the "bid" and "asked" prices. Securities for which market
quotations are not readily available are valued at their fair value. Securities
whose values have been materially affected by what the Manager identifies as a
significant event occurring before the Fund's assets are valued but after the
close of their respective exchanges will be fair valued. Fair value is
determined in good faith using consistently applied procedures under the
supervision of the Board of Trustees. Shares of a registered investment company
that are not traded on an exchange are valued at the acquired investment
company's net asset value per share. "Money market-type" debt instruments with
remaining maturities of sixty days or less are valued at cost adjusted by the
amortization of discount or premium to maturity (amortized cost), which
approximates market value.

--------------------------------------------------------------------------------
STRUCTURED SECURITIES. The Fund invests in structured securities whose market
values, interest rates and/or redemption prices are linked to the performance of
underlying foreign currencies, interest rate spreads, stock market indices,
prices of individual securities,

                     F17 | OPPENHEIMER ABSOLUTE RETURN FUND



NOTES TO FINANCIAL STATEMENTS Continued
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES Continued

commodities or other financial instruments or the occurrence of other specific
events. The structured securities are often leveraged, increasing the volatility
of each note's market value relative to the change in the underlying linked
financial element or event. Fluctuations in value of these securities are
recorded as unrealized gains and losses in the accompanying Statement of
Operations. The Fund records a realized gain or loss when a structured security
is sold or matures.

--------------------------------------------------------------------------------
FOREIGN CURRENCY TRANSLATION. The Fund's accounting records are maintained in
U.S. dollars. The values of securities denominated in foreign currencies and
amounts related to the purchase and sale of foreign securities and foreign
investment income are translated into U.S. dollars as of the close of the
Exchange, normally 4:00 P.M. Eastern time, on each day the Exchange is open for
trading. Foreign exchange rates may be valued primarily using a reliable bank,
dealer or service authorized by the Board of Trustees.

      Reported net realized gains and losses from foreign currency transactions
arise from sales of portfolio securities, sales and maturities of short-term
securities, sales of foreign currencies, exchange rate fluctuations between the
trade and settlement dates on securities transactions, and the difference
between the amounts of dividends, interest, and foreign withholding taxes
recorded on the Fund's books and the U.S. dollar equivalent of the amounts
actually received or paid. Net unrealized appreciation and depreciation on the
translation of assets and liabilities denominated in foreign currencies arise
from changes in the values of assets and liabilities, including investments in
securities at fiscal period end, resulting from changes in exchange rates.

      The effect of changes in foreign currency exchange rates on investments is
separately identified from the fluctuations arising from changes in market
values of securities held and reported with all other foreign currency gains and
losses in the Fund's Statement of Operations.

--------------------------------------------------------------------------------
INVESTMENTS IN OPPENHEIMER INSTITUTIONAL MONEY MARKET FUND. The Fund is
permitted to invest daily available cash balances in an affiliated money market
fund. The Fund may invest the available cash in Class E shares of Oppenheimer
Institutional Money Market Fund ("IMMF") to seek current income while preserving
liquidity. IMMF is a registered open-end management investment company,
regulated as a money market fund under the Investment Company Act of 1940, as
amended. The Manager is also the investment adviser of IMMF. The Fund's
investment in IMMF is included in the Statement of Investments. As a
shareholder, the Fund is subject to its proportional share of IMMF's Class E
expenses, including its management fee. The Manager will waive fees and/or
reimburse Fund expenses in an amount equal to the indirect management fees
incurred through the Fund's investment in IMMF.

--------------------------------------------------------------------------------
INVESTMENTS WITH OFF-BALANCE SHEET RISK. The Fund enters into financial
instrument transactions (such as swaps, futures, options and other derivatives)
that may have

                     F18 | OPPENHEIMER ABSOLUTE RETURN FUND



off-balance sheet market risk. Off-balance sheet market risk exists when the
maximum potential loss on a particular financial instrument is greater than the
value of such financial instrument, as reflected in the Fund's Statement of
Assets and Liabilities.

--------------------------------------------------------------------------------
FEDERAL TAXES. The Fund intends to comply with provisions of the Internal
Revenue Code applicable to regulated investment companies and to distribute
substantially all of its investment company taxable income, including any net
realized gain on investments not offset by capital loss carryforwards, if any,
to shareholders. Therefore, no federal income or excise tax provision is
required. The Fund files income tax returns in U.S. federal and applicable state
jurisdictions. The statute of limitations on the Fund's tax return filings
generally remain open for the three preceding fiscal reporting period ends.

The tax components of capital shown in the following table represent
distribution requirements the Fund must satisfy under the income tax
regulations, losses the Fund may be able to offset against income and gains
realized in future years and unrealized appreciation or depreciation of
securities and other investments for federal income tax purposes.



                                                                         NET UNREALIZED
                                                                           APPRECIATION
                                                                       BASED ON COST OF
                                                                         SECURITIES AND
             UNDISTRIBUTED    UNDISTRIBUTED            ACCUMULATED    OTHER INVESTMENTS
             NET INVESTMENT       LONG-TERM                   LOSS   FOR FEDERAL INCOME
             INCOME                    GAIN   CARRYFORWARD 1,2,3,4         TAX PURPOSES
             --------------------------------------------------------------------------

             $ 662,113             $ 77,179             $ 562,718             $ 525,337


1. The Fund had $551,429 post-October foreign currency losses which were
deferred.

2. The Fund had $11,289 post-October passive foreign investment company losses
which were deferred.

3. During the fiscal year ended May 31, 2008, the Fund did not utilize any
capital loss carryforward.

4. During the fiscal year ended May 31, 2007, the Fund did not utilize any
capital loss carryforward.

Net investment income (loss) and net realized gain (loss) may differ for
financial statement and tax purposes. The character of dividends and
distributions made during the fiscal year from net investment income or net
realized gains may differ from their ultimate characterization for federal
income tax purposes. Also, due to timing of dividends and distributions, the
fiscal year in which amounts are distributed may differ from the fiscal year in
which the income or net realized gain was recorded by the Fund.

Accordingly, the following amounts have been reclassified for May 31, 2008. Net
assets of the Fund were unaffected by the reclassifications.



                                          INCREASE TO                      REDUCTION TO
                                          ACCUMULATED                   ACCUMULATED NET
             INCREASE TO               NET INVESTMENT                     REALIZED GAIN
             PAID-IN CAPITAL                   INCOME                    ON INVESTMENTS
             --------------------------------------------------------------------------

             $ 15,640                        $ 53,292                          $ 68,932


The tax character of distributions paid during the year ended May 31, 2008 and
the period ended May 31, 2007 was as follows:

                     F19 | OPPENHEIMER ABSOLUTE RETURN FUND



NOTES TO FINANCIAL STATEMENTS Continued
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES Continued



                                          YEAR ENDED        PERIOD ENDED
                                        MAY 31, 2008        MAY 31, 2007
             -----------------------------------------------------------

             Distributions paid from:
             Ordinary income               $ 198,273                $ --


The aggregate cost of securities and other investments and the composition of
unrealized appreciation and depreciation of securities and other investments for
federal income tax purposes as of May 31, 2008 are noted in the following table.
The primary difference between book and tax appreciation or depreciation of
securities and other investments, if applicable, is attributable to the tax
deferral of losses or tax realization of financial statement unrealized gain or
loss.



             Federal tax cost of securities         $ 20,403,758
             Federal tax cost of other investments    (6,599,502)
                                                    ------------
             Total federal tax cost                 $ 13,804,256
                                                    ============

             Gross unrealized appreciation          $    918,325
             Gross unrealized depreciation              (392,988)
                                                    ------------
             Net unrealized appreciation            $    525,337
                                                    ============


--------------------------------------------------------------------------------
TRUSTEES' COMPENSATION. The Board of Trustees has adopted a compensation
deferral plan for independent trustees that enables trustees to elect to defer
receipt of all or a portion of the annual compensation they are entitled to
receive from the Fund. For purposes of determining the amount owed to the
Trustee under the plan, deferred amounts are treated as though equal dollar
amounts had been invested in shares of the Fund or in other Oppenheimer funds
selected by the Trustee. The Fund purchases shares of the funds selected for
deferral by the Trustee in amounts equal to his or her deemed investment,
resulting in a Fund asset equal to the deferred compensation liability. Such
assets are included as a component of "Other" within the asset section of the
Statement of Assets and Liabilities. Deferral of trustees' fees under the plan
will not affect the net assets of the Fund, and will not materially affect the
Fund's assets, liabilities or net investment income per share. Amounts will be
deferred until distributed in accordance to the compensation deferral plan.

--------------------------------------------------------------------------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS. Dividends and distributions to
shareholders, which are determined in accordance with income tax regulations and
may differ from U.S. generally accepted accounting principles, are recorded on
the ex-dividend date. Income and capital gain distributions, if any, are
declared and paid annually or at other times as deemed necessary by the Manager.

--------------------------------------------------------------------------------
INVESTMENT INCOME. Dividend income is recorded on the ex-dividend date or upon
ex-dividend notification in the case of certain foreign dividends where the
ex-dividend date may have passed. Non-cash dividends included in dividend
income, if any, are recorded at the fair market value of the securities
received. Interest income is recognized on an

                     F20 | OPPENHEIMER ABSOLUTE RETURN FUND

accrual basis. Discount and premium, which are included in interest income on
the Statement of Operations, are amortized or accreted daily.

--------------------------------------------------------------------------------
CUSTODIAN FEES. "Custodian fees and expenses" in the Statement of Operations may
include interest expense incurred by the Fund on any cash overdrafts of its
custodian account during the period. Such cash overdrafts may result from the
effects of failed trades in portfolio securities and from cash outflows
resulting from unanticipated shareholder redemption activity. The Fund pays
interest to its custodian on such cash overdrafts, to the extent they are not
offset by positive cash balances maintained by the Fund, at a rate equal to the
Federal Funds Rate plus 0.50%. The "Reduction to custodian expenses" line item,
if applicable, represents earnings on cash balances maintained by the Fund
during the period. Such interest expense and other custodian fees may be paid
with these earnings.

--------------------------------------------------------------------------------
SECURITY TRANSACTIONS. Security transactions are recorded on the trade date.
Realized gains and losses on securities sold are determined on the basis of
identified cost.

--------------------------------------------------------------------------------
INDEMNIFICATIONS. The Fund's organizational documents provide current and former
trustees and officers with a limited indemnification against liabilities arising
in connection with the performance of their duties to the Fund. In the normal
course of business, the Fund may also enter into contracts that provide general
indemnifications. The Fund's maximum exposure under these arrangements is
unknown as this would be dependent on future claims that may be made against the
Fund. The risk of material loss from such claims is considered remote.

--------------------------------------------------------------------------------
OTHER. The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and liabilities at
the date of the financial statements and the reported amounts of increases and
decreases in net assets from operations during the reporting period. Actual
results could differ from those estimates.

--------------------------------------------------------------------------------
2. SHARES OF BENEFICIAL INTEREST

The Fund has authorized an unlimited number of $0.001 par value shares of
beneficial interest. Transactions in shares of beneficial interest were as
follows:



              YEAR ENDED MAY 31, 2008  PERIOD ENDED MAY 31, 2007 1,2
                   SHARES      AMOUNT          SHARES         AMOUNT
---------------------------------------------------------------------

CLASS A
Sold                   --        $ --         666,667  $  20,000,000
Redeemed               --          --              --             --
              -------------------------------------------------------
Net increase           --        $ --         666,667  $  20,000,000
              =======================================================


1. For the period from March 5, 2007 (commencement of operations) to May 31,
2007.

2. The Fund sold 3,333 shares of Class A at a value of $100,000 to the Manager
upon seeding of the Fund on August 21, 2006.

                     F21 | OPPENHEIMER ABSOLUTE RETURN FUND



NOTES TO FINANCIAL STATEMENTS Continued
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
3. PURCHASES AND SALES OF SECURITIES

The aggregate cost of purchases and proceeds from sales of securities, other
than short-term obligations and investments in IMMF, for the year ended May 31,
2008, were as follows:



                                     PURCHASES          SALES
-------------------------------------------------------------

Investment securities             $ 37,659,550   $ 42,225,751
U.S. government and government
agency obligations                          --      1,304,737


--------------------------------------------------------------------------------
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES

MANAGEMENT FEES. Under the investment advisory agreement, the Fund pays the
Manager a management fee based on the daily net assets of the Fund at an annual
rate of 1.00%.

--------------------------------------------------------------------------------
TRANSFER AGENT FEES. OppenheimerFunds Services ("OFS"), a division of the
Manager, acts as the transfer and shareholder servicing agent for the Fund. The
Fund pays OFS a per account fee.

--------------------------------------------------------------------------------
DISTRIBUTION AND SERVICE PLAN (12B-1) FEES. Under its General Distributor's
Agreement with the Fund, in accordance with 12b-1 under the Investment Company
Act of 1940, OppenheimerFunds Distributor, Inc. (the "Distributor") acts as the
Fund's principal underwriter in the continuous public offering of the Fund's
Class A shares.

--------------------------------------------------------------------------------
SERVICE PLAN FOR CLASS A SHARES. The Fund has adopted a Service Plan ("the
Plan") for Class A shares under Rule 12b-1 of the Investment Company Act of
1940. It reimburses the Distributor for a portion of its costs incurred for
services provided to accounts that hold Class A shares. Reimbursement is made
periodically at an annual rate of up to 0.25% of the average annual net assets
of Class A shares of the Fund. Any unreimbursed expenses the Distributor incurs
with respect to Class A shares in any fiscal year cannot be recovered in
subsequent periods. Fees incurred by the Fund under the Plan are detailed in the
Statement of Operations.

--------------------------------------------------------------------------------
WAIVERS AND REIMBURSEMENTS OF EXPENSES. OFS has voluntarily agreed to limit
transfer and shareholder servicing agent fees to 0.35% of average annual net
assets of the Fund. This undertaking may be amended or withdrawn at any time.

      The Manager will waive fees and/or reimburse Fund expenses in an amount
equal to the indirect management fees incurred through the Fund's investment in
IMMF. During the year ended May 31, 2008, the Manager waived $4,542 for IMMF
management fees.

--------------------------------------------------------------------------------
5. FOREIGN CURRENCY EXCHANGE CONTRACTS

The Fund may enter into foreign currency exchange contracts ("forward
contracts") for the purchase or sale of a foreign currency at a negotiated rate
at a future date.

                     F22 | OPPENHEIMER ABSOLUTE RETURN FUND



      Forward contracts are reported on a schedule following the Statement of
Investments. Forward contracts will be valued daily based upon the closing
prices of the forward currency rates determined at the close of the Exchange as
provided by a bank, dealer or pricing service. The resulting unrealized
appreciation (depreciation) is reported in the Statement of Assets and
Liabilities as a receivable or payable and in the Statement of Operations within
the change in unrealized appreciation (depreciation). At contract close, the
difference between the original cost of the contract and the value at the close
date is recorded as a realized gain (loss) in the Statement of Operations.

      Risks to the Fund include both market and credit risk. Market risk is the
risk that the value of the forward contract will depreciate due to unfavorable
changes in the exchange rates. Credit risk arises from the possibility that the
counterparty will default. If the counterparty defaults, the Fund's loss will
consist of the net amount of contractual payments that the Fund has not yet
received.

--------------------------------------------------------------------------------
6. FUTURES CONTRACTS

A futures contract is a commitment to buy or sell a specific amount of a
financial instrument at a negotiated price on a stipulated future date. The Fund
may buy and sell futures contracts and may also buy or write put or call options
on these futures contracts.

      Futures contracts traded on a commodities or futures exchange will be
valued at the final settlement price or official closing price on the principal
exchange as reported by such principal exchange at its trading session ending
at, or most recently prior to, the time when the Fund's assets are valued.

      Upon entering into a futures contract, the Fund is required to deposit
either cash or securities (initial margin) in an amount equal to a certain
percentage of the contract value. Subsequent payments (variation margin) are
made or received by the Fund each day. The variation margin payments are equal
to the daily changes in the contract value and are recorded as unrealized gains
and losses.

      Futures contracts are reported on a schedule following the Statement of
Investments. Securities held in collateralized accounts to cover initial margin
requirements on open futures contracts are noted in the Statement of
Investments. Cash held by the broker to cover initial margin requirements on
open futures contracts and the receivable and/or payable for the daily mark to
market for the variation margin are noted in the Statement of Assets and
Liabilities. The net change in unrealized appreciation and depreciation is
reported in the Statement of Operations. Realized gains (losses) are reported in
the Statement of Operations at the closing or expiration of futures contracts.

      Risks of entering into futures contracts (and related options) include the
possibility that there may be an illiquid market where the Fund is unable to
liquidate the contract or enter into an offsetting position and, if used for
hedging purposes, the risk that the price of the contract will correlate
imperfectly with the prices of the Fund's securities.

                     F23 | OPPENHEIMER ABSOLUTE RETURN FUND



NOTES TO FINANCIAL STATEMENTS Continued
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
7. OPTION ACTIVITY

The Fund may buy and sell put and call options, or write put and covered call
options. When an option is written, the Fund receives a premium and becomes
obligated to sell or purchase the underlying security at a fixed price, upon
exercise of the option.

      Options are valued daily based upon the last sale price on the principal
exchange on which the option is traded. The difference between the premium
received or paid, and market value of the option, is recorded as unrealized
appreciation or depreciation. The net change in unrealized appreciation or
depreciation is reported in the Statement of Operations. When an option is
exercised, the cost of the security purchased or the proceeds of the security
sale are adjusted by the amount of premium received or paid. Upon the expiration
or closing of the option transaction, a gain or loss is reported in the
Statement of Operations.

      Securities designated to cover outstanding call or put options are noted
in the Statement of Investments where applicable. Options written are reported
in a schedule following the Statement of Investments and as a liability in the
Statement of Assets and Liabilities.

      The risk in writing a call option is that the Fund gives up the
opportunity for profit if the market price of the security increases and the
option is exercised. The risk in writing a put option is that the Fund may incur
a loss if the market price of the security decreases and the option is
exercised. The risk in buying an option is that the Fund pays a premium whether
or not the option is exercised. The Fund also has the additional risk that there
may be an illiquid market where the Fund is unable to close the contract.

Written option activity for the year ended May 31, 2008 was as follows:



                                             CALL OPTIONS                    PUT OPTIONS
                             ----------------------------   ------------------------------
                                 NUMBER OF      AMOUNT OF       NUMBER OF      AMOUNT OF
                                 CONTRACTS       PREMIUMS       CONTRACTS       PREMIUMS
------------------------------------------------------------------------------------------

Options outstanding as of
May 31, 2007                            --   $         --              --   $         --
Options written              1,126,590,000        268,117   1,126,520,000        267,952
Options closed or expired     (567,810,000)      (135,651)   (567,830,000)      (133,804)
Options exercised             (558,780,000)      (132,466)   (558,690,000)      (134,148)
                             -------------------------------------------------------------
Options outstanding as of
May 31, 2008                            --   $         --              --   $         --
                             =============================================================


--------------------------------------------------------------------------------
8. SWAP CONTRACTS

The Fund may enter into swap contract agreements with a counterparty to exchange
a series of cash flows based on either specified reference rates, or the
occurrence of a credit event, over a specified period. Such contracts may
include interest rate, equity, debt, index, total return, credit and currency
swaps.

                     F24 | OPPENHEIMER ABSOLUTE RETURN FUND



      Swaps are marked to market daily using primarily quotations from pricing
services, counterparties and brokers. Swap contracts are reported on a schedule
following the Statement of Investments. The value of the contracts is separately
disclosed on the Statement of Assets and Liabilities. The unrealized
appreciation (depreciation) related to the change in the valuation of the
notional amount of the swap is combined with the accrued interest due to (owed
by) the Fund at termination or settlement. The net change in this amount during
the period is included on the Statement of Operations. The Fund also records any
periodic payments received from (paid to) the counterparty, including at
termination, under such contracts as realized gain (loss) on the Statement of
Operations.

      Risks of entering into swap contracts include credit, market and liquidity
risk. Credit risk arises from the possibility that the counterparty will
default. If the counterparty defaults, the Fund's loss will consist of the net
amount of contractual payments that the Fund has not yet received. Market risk
is the risk that the value of the contract will depreciate due to unfavorable
changes in the reference asset. If there is an illiquid market for the
agreement, the Fund may be unable to close the contract prior to contract
termination.

--------------------------------------------------------------------------------
INTEREST RATE SWAP CONTRACTS. An interest rate swap is an agreement between
counterparties to exchange periodic interest payments on the notional amount of
the contract. One cash flow stream will typically be a floating rate payment
based upon a specified index while the other is typically a fixed rate.

      Interest rate swap agreements include interest rate risk. There is a risk,
based on future movements of interest rates where the payments made by the Fund
under a swap agreement will be greater than the payments it received.

--------------------------------------------------------------------------------
TOTAL RETURN SWAP CONTRACTS. A total return swap is an agreement between
counterparties to exchange a set of future cash flows on the notional amount of
the contract. One cash flow is typically based on a reference interest rate or
index and the other on the total return of a reference asset such as a security,
a basket of securities, or an index. The total return includes appreciation or
depreciation on the reference asset, plus any interest or dividend payments.

--------------------------------------------------------------------------------
9. ILLIQUID SECURITIES

As of May 31, 2008, investments in securities included issues that are illiquid.
Investments may be illiquid because they do not have an active trading market,
making it difficult to value them or dispose of them promptly at an acceptable
price. The Fund will not invest more than 15% of its net assets (determined at
the time of purchase and reviewed periodically) in illiquid securities.
Securities that are illiquid are marked with an applicable footnote on the
Statement of Investments.

                     F25 | OPPENHEIMER ABSOLUTE RETURN FUND



NOTES TO FINANCIAL STATEMENTS Continued
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
10. RECENT ACCOUNTING PRONOUNCEMENT

In September 2006, Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards ("SFAS") No. 157, FAIR VALUE
MEASUREMENTS. This standard establishes a single authoritative definition of
fair value, sets out a framework for measuring fair value and expands
disclosures about fair value measurements. SFAS No. 157 applies to fair value
measurements already required or permitted by existing standards. SFAS No. 157
is effective for financial statements issued for fiscal years beginning after
November 15, 2007, and interim periods within those fiscal years. As of May 31,
2008, the Manager does not believe the adoption of SFAS No. 157 will materially
impact the financial statement amounts; however, additional disclosures may be
required about the inputs used to develop the measurements and the effect of
certain of the measurements on changes in net assets for the period.

                     F26 | OPPENHEIMER ABSOLUTE RETURN FUND





OPPENHEIMER INSTITUTIONAL MONEY MARKET FUND (UNDERLYING FUND)
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
THE BOARD OF TRUSTEES AND SHAREHOLDERS OF OPPENHEIMER INSTITUTIONAL MONEY MARKET
FUND:

We have audited the accompanying statement of assets and liabilities of
Oppenheimer Institutional Money Market Fund, including the statement of
investments, as of May 31, 2008, the related statement of operations for the
year then ended, and the statements of changes in net assets and financial
highlights for the year then ended and the period from October 3, 2006
(commencement of operations) to May 31, 2007. These financial statements and
financial highlights are the responsibility of the Fund's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits.

      We conducted our audits in accordance with the standards of the Public
Company Accounting Oversight Board (United States). Those standards require that
we plan and perform the audit to obtain reasonable assurance about whether the
financial statements and financial highlights are free of material misstatement.
An audit includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. Our procedures included
confirmation of securities owned as of May 31, 2008, by correspondence with the
custodian. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

      In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of
Oppenheimer Institutional Money Market Fund as of May 31, 2008, the results of
its operations for the year then ended, and the changes in its net assets and
financial highlights for the year then ended and the period from October 3, 2006
(commencement of operations) to May 31, 2007, in conformity with U.S. generally
accepted accounting principles.


/s/ KPMG LLP
KPMG LLP

Denver, Colorado
July 16, 2008

                      41 | OPPENHEIMER ABSOLUTE RETURN FUND





OPPENHEIMER INSTITUTIONAL MONEY MARKET FUND (UNDERLYING FUND)
STATEMENT OF INVESTMENTS May 31, 2008
--------------------------------------------------------------------------------



                                                   PRINCIPAL
                                                      AMOUNT             VALUE
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
CERTIFICATES OF DEPOSIT--22.6%
--------------------------------------------------------------------------------

DOMESTIC CERTIFICATES OF DEPOSIT--4.6%
Bank of the West,
2.76%, 7/31/08                               $   100,000,000   $   100,001,655
--------------------------------------------------------------------------------
HSBC Bank USA NA:
2.33%, 8/25/08                                    50,000,000        50,000,000
2.66%, 9/5/08                                     50,000,000        50,000,000
2.97%, 6/16/08                                    50,000,000        50,004,332
--------------------------------------------------------------------------------
Wells Fargo Bank NA,
2.25%, 6/5/08                                     50,000,000        50,000,000
                                                               -----------------
                                                                   300,005,987

--------------------------------------------------------------------------------
YANKEE CERTIFICATES OF DEPOSIT--18.0%
Banco Santander,
New York:
2.72%, 9/12/08                                    50,000,000        50,000,000
2.73%, 9/18/08                                    60,000,000        60,035,791
2.80%, 10/7/08                                    50,000,000        50,000,000
2.88%, 9/4/08                                     36,000,000        36,049,550
3.04%, 10/21/08                                   50,000,000        50,000,000
--------------------------------------------------------------------------------
Bank of Scotland plc,
New York:
2.65%, 9/3/08                                     20,000,000        20,000,000
2.94%, 6/16/08                                    50,000,000        50,000,000
3.07%, 6/3/08                                    100,000,000       100,000,000
--------------------------------------------------------------------------------
Barclays Bank plc,
New York:
2.65%, 6/20/08                                   150,000,000       150,000,000
2.70%, 8/27/08                                    50,000,000        50,000,000
2.81%, 7/2/08                                     50,000,000        50,000,000
--------------------------------------------------------------------------------
Fortis Bank SA/NV,
New York:
2.70%, 6/23/08                                   100,000,000       100,000,000
2.75%, 6/30/08                                   100,000,000       100,000,000
2.78%, 7/1/08                                     50,000,000        50,000,000
2.80%, 7/2/08                                     30,000,000        30,000,000
--------------------------------------------------------------------------------
Governor & Co. of
the Bank of Ireland,
Stamford, CT,
2.80%, 7/11/08                                    40,000,000        40,000,221
--------------------------------------------------------------------------------
Rabobank
Nederland NV,
New York,
2.56%, 9/11/08                                    75,000,000        75,000,000
--------------------------------------------------------------------------------
Skandinaviska
Enskilda Banken,
New York,
2.92%, 7/22/08                                    50,000,000        50,000,000
--------------------------------------------------------------------------------
Toronto Dominion
Bank,
New York,
2.72%, 9/5/08                                     50,000,000        50,000,000
                                                               -----------------
                                                                 1,161,085,562

Total Certificates of Deposit
(Cost $ 1,461,091,549)                                           1,461,091,549

--------------------------------------------------------------------------------
DIRECT BANK OBLIGATIONS--25.2%
--------------------------------------------------------------------------------

Anglo Irish Bank
Corp. plc, 2.42%,
6/9/08 1                                          30,315,000        30,298,697
--------------------------------------------------------------------------------
Bank of Scotland plc:
2.65%, 8/5/08                                     30,000,000        29,856,458
2.65%, 8/15/08                                    30,000,000        29,834,375
2.94%, 6/5/08                                     80,000,000        79,973,867
--------------------------------------------------------------------------------
Capital One
Funding Corp.,
Series 1996E,
2.90%, 6/2/08 2                                    7,857,000         7,857,000
--------------------------------------------------------------------------------
Dexia Delaware LLC:
2.62%, 8/7/08                                     50,000,000        49,756,194
2.69%, 6/26/08                                   150,000,000       149,719,792
--------------------------------------------------------------------------------
DnB NOR Bank ASA:
2.74%, 7/9/08                                     50,000,000        49,855,389
2.75%, 7/8/08                                    100,000,000        99,717,361
2.77%, 7/1/08 1                                   50,000,000        49,884,583
2.80%, 11/3/08                                    24,000,000        23,710,667
2.95%, 7/18/08 1                                 100,000,000        99,614,861
--------------------------------------------------------------------------------
Governor & Co.
of the Bank of Ireland:
2.75%, 7/3/08 1                                   23,500,000        23,442,556
2.75%, 7/7/08 1                                   51,600,000        51,458,100
2.76%, 7/8/08 1                                  101,300,000       101,012,646
--------------------------------------------------------------------------------
Intesa Funding LLC:
2.21%, 6/2/08                                     50,000,000        49,996,931
2.40%, 6/20/08                                    27,275,000        27,240,452
--------------------------------------------------------------------------------
Nordea North
America, Inc.,
2.35%, 6/5/08                                     21,150,000        21,144,595


                      25 | OPPENHEIMER ABSOLUTE RETURN FUND



OPPENHEIMER INSTITUTIONAL MONEY MARKET FUND (UNDERLYING FUND)
STATEMENT OF INVESTMENTS Continued
--------------------------------------------------------------------------------



                                                   PRINCIPAL
                                                      AMOUNT             VALUE
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
DIRECT BANK OBLIGATIONS Continued
--------------------------------------------------------------------------------

Royal Bank of
Scotland plc,
2.868%, 7/21/08 2,3                          $    49,000,000   $    49,005,219
--------------------------------------------------------------------------------
Santander Central
Hispano Finance
(Delaware), Inc.,
2.32%, 9/17/08                                    75,000,000        74,431,500
--------------------------------------------------------------------------------
Skandinaviska
Enskilda Banken AB,
2.47%, 6/10/08 1                                  50,000,000        49,969,125
--------------------------------------------------------------------------------
Societe Generale
North America, Inc.,
2.60%, 6/6/08                                     22,704,000        22,695,801
--------------------------------------------------------------------------------
Stadshypotek
Delaware, Inc.,
2.60%, 8/12/08 1                                  52,100,000        51,829,080
--------------------------------------------------------------------------------
Suntrust Bank,
Grand Cayman,
1.75%, 6/2/08                                     68,000,000        68,000,000
--------------------------------------------------------------------------------
Svenska
Handelsbanken NY,
2.65%, 7/7/08                                      4,450,000         4,438,208
--------------------------------------------------------------------------------
Swedbank AB,
2.80%, 6/4/08                                     29,500,000        29,493,117
--------------------------------------------------------------------------------
Swedbank
Mortgage AB:
2.65%, 6/17/08                                    72,000,000        71,903,680
3.01%, 6/19/08                                   128,000,000       127,807,360
3.01%, 6/23/08                                    50,000,000        49,908,028
--------------------------------------------------------------------------------
Toronto Dominion
Holdings (USA), Inc.,
2.925%, 6/20/08 1                                 50,000,000        49,922,813
                                                               -----------------

Total Direct Bank Obligations
(Cost $ 1,623,778,455)                                           1,623,778,455

--------------------------------------------------------------------------------
SHORT-TERM NOTES--47.6%
--------------------------------------------------------------------------------

ASSET-BACKED SECURITIES--23.1%
Barton Capital Corp.,
2.40%, 6/2/08 1                                   50,000,000        49,996,667
--------------------------------------------------------------------------------
FCAR Owner Trust II:
2.50%, 6/2/08                                     70,000,000        69,995,139
2.89%, 6/18/08                                   100,000,000        99,863,528
--------------------------------------------------------------------------------
Gemini Securitization Corp.:
2.65%, 6/17/08 1                                  50,000,000        49,941,111
2.85%, 7/1/08 1                                  100,000,000        99,762,500
2.95%, 7/28/08 1                                  50,000,000        49,766,458
--------------------------------------------------------------------------------
Gotham Funding
Corp., 2.47%,
6/23/08 1                                         50,000,000        49,912,917
--------------------------------------------------------------------------------
Legacy Capital LLC:
2.90%, 8/15/08                                    75,000,000        74,546,875
2.95%, 7/7/08                                     50,000,000        49,852,500
3%, 7/23/08                                       20,000,000        19,913,333
3%, 7/24/08                                       50,000,000        49,779,167
3%, 7/25/08                                       50,000,000        49,775,000
3.30%, 6/4/08                                     17,000,000        16,995,325
3.325%, 6/12/08                                   50,000,000        49,949,201
--------------------------------------------------------------------------------
Lexington Parker
Capital Co. LLC:
3.20%, 7/24/08 1                                  32,600,000        32,446,418
3.325%, 6/5/08 1                                  50,000,000        49,981,528
3.325%, 6/6/08 1                                  90,000,000        89,958,438
3.35%, 6/13/08 1                                 100,000,000        99,888,667
3.35%, 6/20/08 1                                  50,000,000        49,911,597
--------------------------------------------------------------------------------
New Center Asset Trust:
2.47%, 6/2/08                                     32,616,000        32,613,762
3.25%, 6/20/08                                    75,000,000        74,871,354
--------------------------------------------------------------------------------
Perry Global
Funding LLC,
Series A, 2.85%,
6/2/08 1                                         194,106,000       194,089,285
--------------------------------------------------------------------------------
Victory Receivables Corp.:
2.75%, 6/19/08 1                                  50,000,000        49,931,250
2.80%, 6/23/08 1                                  40,000,000        39,931,556
                                                               -----------------
                                                                 1,493,673,576

--------------------------------------------------------------------------------
CAPITAL MARKETS--5.1%
Citigroup Funding, Inc.:
2.685%, 8/13/08 2                                100,000,000       100,000,000
2.98%, 7/22/08                                    30,000,000        29,873,350
3%, 7/18/08                                      100,000,000        99,608,333
3.02%, 7/21/08                                   100,000,000        99,580,556
                                                               -----------------
                                                                   329,062,239


                      26 | OPPENHEIMER ABSOLUTE RETURN FUND





                                                   PRINCIPAL
                                                      AMOUNT             VALUE
--------------------------------------------------------------------------------

COMMERCIAL FINANCE--0.3%
Madison Hotel
Investors I LLC,
Series 2005A, 2.53%,
6/2/08 2                                     $    20,300,000   $    20,300,000
--------------------------------------------------------------------------------
CONSTRUCTION MATERIALS--0.3%
Foxworth-Galbraith
Lumber Co., 2.90%,
6/2/08 2                                          17,920,000        17,920,000
--------------------------------------------------------------------------------
CONSUMER FINANCE--0.5%
American Express
Credit Corp., 2.80%,
6/5/08                                            30,000,000        29,990,667
--------------------------------------------------------------------------------
CONTAINERS & PACKAGING--0.3%
Massachusetts
Development
Finance Agency
Solid Waste Disposal
Revenue Bonds,
Newark Group
Project, Series 2001,
2.45%, 6/1/08 2                                   16,370,000        16,370,000
--------------------------------------------------------------------------------
DIVERSIFIED FINANCIAL SERVICES--0.8%
General Electric
Capital Services,
3.20%, 7/21/08                                    50,000,000        49,777,778
--------------------------------------------------------------------------------
ENERGY EQUIPMENT & SERVICES--0.2%
Mississippi Business
Finance Corp.
Revenue Bonds,
Signal International
LLC Project,
6/2/08 2                                          12,800,000        12,800,000
--------------------------------------------------------------------------------
HEALTH CARE EQUIPMENT & SUPPLIES--0.7%
Bronson Lifestyle
Improvement &
Research Center Co.,
Series A, 2.78%,
6/2/08 2                                          16,425,000        16,425,000
--------------------------------------------------------------------------------
OK University
Hospitals Trust
Revenue Bonds,
Series B, 2.45%,
6/1/08 2                                           3,000,000         3,000,000
--------------------------------------------------------------------------------
Premier Senior
Living LLC,
Series 2007 A-H,
2.42%, 6/2/08 2                                   23,250,000        23,250,000
                                                               -----------------
                                                                    42,675,000

--------------------------------------------------------------------------------
HEALTH CARE PROVIDERS & SERVICES--0.1%
BRCH Corp., Series
1999, 2.45%, 6/2/08 2                              8,000,000         8,000,000
--------------------------------------------------------------------------------
INSURANCE--3.1%
ING America
Insurance Holdings, Inc.:
2.55%, 6/19/08                                    25,000,000        24,968,750
2.75%, 6/23/08                                    50,000,000        49,920,556
--------------------------------------------------------------------------------
Jackson National Life
Global Funding,
Series 2008-1,
3.016%, 2/10/09 2,3                               50,000,000        50,000,000
--------------------------------------------------------------------------------
Security Life of
Denver, 2.898%,
6/6/08 4                                          73,000,000        73,000,000
                                                               -----------------
                                                                   197,889,306

--------------------------------------------------------------------------------
LEASING & FACTORING--2.7%
American Honda
Finance Corp.:
2.784%, 8/6/08 2,3                               100,000,000       100,000,000
2.796%, 7/11/08 2,3                               10,000,000        10,001,142
2.98%, 5/5/09 2,3                                 50,000,000        50,000,000
--------------------------------------------------------------------------------
MRN Ltd.
Partnership, MRN
Ltd. Partnership
Project, Series 2001,
2.81%, 6/2/08 2                                    9,200,000         9,200,000
--------------------------------------------------------------------------------
South Elgin Leasing,
Inc., 2.90%, 6/2/08 2                              7,090,000         7,090,000
                                                               -----------------
                                                                   176,291,142

--------------------------------------------------------------------------------
LEISURE EQUIPMENT & PRODUCTS--0.1%
Bloomingdale Life
Time Fitness LLC,
Series 2000, 2.90%,
6/2/08 2                                           7,350,000         7,350,000


                      27 | OPPENHEIMER ABSOLUTE RETURN FUND



OPPENHEIMER INSTITUTIONAL MONEY MARKET FUND (UNDERLYING FUND)
STATEMENT OF INVESTMENTS Continued
--------------------------------------------------------------------------------



                                                   PRINCIPAL
                                                      AMOUNT             VALUE
--------------------------------------------------------------------------------

METALS & MINING--0.1%
Warren Cnty., KY
Industrial Building
Revenue Bonds,
Series B2, 2.45%,
6/1/08 2                                     $     7,300,000   $     7,300,000
--------------------------------------------------------------------------------
MUNICIPAL--2.4%
Denver City & Cnty.,
CO School District,
Series 2008A, 2.58%,
6/15/08 2                                         35,000,000        35,000,000
--------------------------------------------------------------------------------
Gwinnett
Instructional SC LLC,
Gwinnett County
Public School
Project, Series 2005,
2.48%, 6/5/08 2                                   20,000,000        20,000,000
--------------------------------------------------------------------------------
Las Vegas, NV
Economic
Development
Revenue Bonds,
Keep Memory Alive
Project, Series 2007B,
2.411%, 6/2/08 2                                   4,400,000         4,400,000
--------------------------------------------------------------------------------
Liberty Cnty., GA
Industrial Improvement
Revenue Bonds,
Hugo Boss USA, Inc.
Project, Series 2002,
2.52%, 6/2/08 2                                    3,900,000         3,900,000
--------------------------------------------------------------------------------
Madison, WI
Community
Development
Authority, Overture
Development Corp.,
Series 2001, 2.90%,
6/2/08 2                                          59,000,000        59,000,000
--------------------------------------------------------------------------------
Pinnacle Ridge Apts.
Ltd. Partnership,
Series 2006, 2.48%,
6/5/08 2                                          15,725,000        15,725,000
--------------------------------------------------------------------------------
Private Colleges &
Universities
Authority Revenue
Bonds, Mercer
University Project,
Series 2006B, 2.46%,
6/2/08 2                                           7,760,000         7,760,000
--------------------------------------------------------------------------------
Richmond, VA
Redevelopment &
Housing Authority
Revenue Refunding
Bonds, Old
Manchester Project,
Series B, 2.79%,
6/1/08 2                                           1,810,000         1,810,000
--------------------------------------------------------------------------------
Roanoke, NC Music
& Entertainment
District Special
Revenue Bonds,
Series 2007, 2.45%,
6/2/08 2                                          10,000,000        10,000,000
                                                               -----------------
                                                                   157,595,000

--------------------------------------------------------------------------------
PERSONAL PRODUCTS--3.7%
Reckitt Benckiser
Treasury Services plc:
2.75%, 8/6/08 1                                   50,000,000        49,747,917
3%, 7/21/08 1                                     90,000,000        89,625,000
3%, 7/23/08 1                                    100,000,000        99,566,667
                                                               -----------------
                                                                   238,939,584

--------------------------------------------------------------------------------
SPECIAL PURPOSE FINANCIAL--4.1%
LINKS Finance LLC:
2.656%, 8/15/08 2,4                               50,000,000        49,996,959
2.764%, 8/6/08 2,4                                50,000,000        49,998,219
--------------------------------------------------------------------------------
Parkland (USA) LLC,
2.689%, 7/16/08 2,4                               50,000,000        49,999,397
--------------------------------------------------------------------------------
Ticonderoga Funding LLC:
2.37%, 6/18/08                                    43,000,000        42,951,876
2.50%, 6/2/08                                     71,658,000        71,653,019
                                                               -----------------
                                                                   264,599,470
                                                               -----------------

Total Short-Term Notes
(Cost $3,070,533,762)                                            3,070,533,762


                      28 | OPPENHEIMER ABSOLUTE RETURN FUND





                                  SHARES              VALUE
-------------------------------------------------------------

-------------------------------------------------------------
INVESTMENT COMPANY--4.7%
-------------------------------------------------------------

Dreyfus Institutional
Preferred Money
Market Fund
(Cost $ 300,725,089)         300,725,089   $    300,725,089

-------------------------------------------------------------
TOTAL INVESTMENTS, AT VALUE
(COST $ 6,456,128,855)             100.1%     6,456,128,855
-------------------------------------------------------------
LIABILITIES IN EXCESS
OF OTHER ASSETS                     (0.1)        (4,755,634)
                             --------------------------------
NET ASSETS                         100.0%  $  6,451,373,221
                             ================================


FOOTNOTES TO STATEMENT OF INVESTMENTS

SHORT-TERM NOTES AND DIRECT BANK OBLIGATIONS ARE GENERALLY TRADED ON A DISCOUNT
BASIS; THE INTEREST RATE SHOWN IS THE DISCOUNT RATE RECEIVED BY THE FUND AT THE
TIME OF PURCHASE. OTHER SECURITIES NORMALLY BEAR INTEREST AT THE RATES SHOWN.

1. Security issued in an exempt transaction without registration under the
Securities Act of 1933. Such securities amount to $1,651,890,437, or 25.61% of
the Fund's net assets, and have been determined to be liquid pursuant to
guidelines adopted by the Board of Trustees.

2. Represents the current interest rate for a variable or increasing rate
security.

3. Represents securities sold under Rule 144A, which are exempt from
registration under the Securities Act of 1933, as amended. These securities have
been determined to be liquid under guidelines established by the Board of
Trustees. These securities amount to $259,006,361 or 4.01% of the Fund's net
assets as of May 31, 2008.

4. Illiquid security. The aggregate value of illiquid securities as of May 31,
2008 was $222,994,575, which represents 3.46% of the Fund's net assets. See Note
4 of accompanying Notes.

SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.

                      29 | OPPENHEIMER ABSOLUTE RETURN FUND



OPPENHEIMER INSTITUTIONAL MONEY MARKET FUND (UNDERLYING FUND)
STATEMENT OF ASSETS AND LIABILITIES May 31, 2008
--------------------------------------------------------------------------------



--------------------------------------------------------------------------------
ASSETS
--------------------------------------------------------------------------------

Investments, at value (cost $6,456,128,855) --
see accompanying statement of investments                   $    6,456,128,855
--------------------------------------------------------------------------------
Cash                                                                   797,008
--------------------------------------------------------------------------------
Receivables and other assets:
Interest and dividends                                              10,420,095
Shares of beneficial interest sold                                      18,666
Due from Manager                                                         1,855
Other                                                                   63,771
                                                            --------------------
Total assets                                                     6,467,430,250

--------------------------------------------------------------------------------
LIABILITIES
--------------------------------------------------------------------------------

Payables and other liabilities:
Dividends                                                           15,528,848
Trustees' compensation                                                 311,888
Transfer and shareholder servicing agent fees                           21,809
Shareholder communications                                              11,341
Distribution and service plan fees                                         211
Other                                                                  182,932
                                                            --------------------
Total liabilities                                                   16,057,029

--------------------------------------------------------------------------------
NET ASSETS                                                  $    6,451,373,221
                                                            ====================

--------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS
--------------------------------------------------------------------------------

Par value of shares of beneficial interest                  $        6,451,235
--------------------------------------------------------------------------------
Additional paid-in capital                                       6,444,783,773
--------------------------------------------------------------------------------
Accumulated net investment loss                                        (20,169)
--------------------------------------------------------------------------------
Accumulated net realized gain on investments                           158,382
                                                            --------------------
NET ASSETS                                                  $    6,451,373,221
                                                            ====================

--------------------------------------------------------------------------------
NET ASSET VALUE PER SHARE
--------------------------------------------------------------------------------

Class E Shares:
Net asset value and redemption price per share (based
on net assets of $5,697,092,312 and 5,696,961,438
shares of beneficial interest outstanding)                  $             1.00
--------------------------------------------------------------------------------
Class L Shares:
Net asset value and redemption price per share (based
on net assets of $753,342,431 and 753,334,657 shares
of beneficial interest outstanding)                         $             1.00
--------------------------------------------------------------------------------
Class P Shares:
Net asset value and redemption price per share (based
on net assets of $938,478 and 938,913 shares of
beneficial interest)                                        $             1.00
--------------------------------------------------------------------------------


SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.

                      30 | OPPENHEIMER ABSOLUTE RETURN FUND



OPPENHEIMER INSTITUTIONAL MONEY MARKET FUND (UNDERLYING FUND)
STATEMENT OF OPERATIONS For the Year Ended May 31, 2008
--------------------------------------------------------------------------------



--------------------------------------------------------------------------------
INVESTMENT INCOME
--------------------------------------------------------------------------------

Interest                                                     $     268,079,116
--------------------------------------------------------------------------------
Dividends                                                            4,450,685
                                                             -------------------
Total investment income                                            272,529,801

--------------------------------------------------------------------------------
EXPENSES
--------------------------------------------------------------------------------

Management fees                                                      5,908,340
--------------------------------------------------------------------------------
Distribution and service plan fees--Class P                                211
--------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees:
Class E                                                                 10,000
Class L                                                                 10,000
Class P                                                                 10,000
--------------------------------------------------------------------------------
Shareholder communications:
Class E                                                                  8,163
Class L                                                                  4,650
Class P                                                                    284
--------------------------------------------------------------------------------
Trustees' compensation                                                 205,920
--------------------------------------------------------------------------------
Custodian fees and expenses                                             36,003
--------------------------------------------------------------------------------
Other                                                                  302,360
                                                             -------------------
Total expenses                                                       6,495,931
Less waivers and reimbursements of expenses                            (10,046)
                                                             -------------------
Net expenses                                                         6,485,885

--------------------------------------------------------------------------------
NET INVESTMENT INCOME                                              266,043,916

--------------------------------------------------------------------------------
NET REALIZED GAIN ON INVESTMENTS                                       244,737

--------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS         $     266,288,653
                                                             ===================


SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.

                      31 | OPPENHEIMER ABSOLUTE RETURN FUND




OPPENHEIMER INSTITUTIONAL MONEY MARKET FUND (UNDERLYING FUND)
STATEMENTS OF CHANGES IN NET ASSETS
--------------------------------------------------------------------------------



YEAR ENDED MAY 31,                                    2008              2007 1
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
OPERATIONS
--------------------------------------------------------------------------------

Net investment income                      $   266,043,916    $   125,717,759
--------------------------------------------------------------------------------
Net realized gain (loss)                           244,737             (6,875)
                                           -------------------------------------
Net increase in net assets
resulting from operations                      266,288,653        125,710,884

--------------------------------------------------------------------------------
DIVIDENDS AND/OR DISTRIBUTIONS
TO SHAREHOLDERS
--------------------------------------------------------------------------------

Dividends from net investment income:
Class E                                       (248,672,603)      (125,721,867)
Class L                                        (17,445,181)            (1,625)
Class P                                            (20,034)               (14)
                                           -------------------------------------
                                              (266,137,818)      (125,723,506)

--------------------------------------------------------------------------------
BENEFICIAL INTEREST TRANSACTIONS
--------------------------------------------------------------------------------

Net increase in net assets resulting from
beneficial interest transactions:
Class E                                      1,733,750,762      3,963,110,676
Class L                                        752,833,041            500,616
Class P                                            928,913             10,000
                                           -------------------------------------
                                             2,487,512,716      3,963,621,292

--------------------------------------------------------------------------------
NET ASSETS
--------------------------------------------------------------------------------

Total increase                               2,487,663,551      3,963,608,670
--------------------------------------------------------------------------------
Beginning of period                          3,963,709,670            101,000 2
                                           -------------------------------------

End of period (including accumulated
net investment loss of $20,169 and
$5,747, respectively)                      $ 6,451,373,221    $ 3,963,709,670
                                           =====================================


1. For the period from October 3, 2006 (commencement of operations) to May 31,
2007.

2. Reflects the value of the Manager's initial seed money investment on
August 2, 2006.

SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.

                       32 | OPPENHEIMER ABSOLUTE RETURN FUND



OPPENHEIMER INSTITUTIONAL MONEY MARKET FUND (UNDERLYING FUND)
FINANCIAL HIGHLIGHTS
--------------------------------------------------------------------------------



CLASS E YEAR ENDED MAY 31,                              2008            2007 1
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
PER SHARE OPERATING DATA
--------------------------------------------------------------------------------

Net asset value, beginning of period            $       1.00      $      1.00
--------------------------------------------------------------------------------
Income from investment operations--net
investment income and net realized gain 2                .05              .03
--------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income                    (.05)            (.03)
--------------------------------------------------------------------------------

Net asset value, end of period                  $       1.00      $      1.00
                                                ================================

--------------------------------------------------------------------------------
TOTAL RETURN 3                                          4.69%            3.52%
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
--------------------------------------------------------------------------------

Net assets, end of period (in thousands)       $   5,697,092      $ 3,963,198
--------------------------------------------------------------------------------
Average net assets (in thousands)              $   5,462,546      $ 3,623,302
--------------------------------------------------------------------------------
Ratios to average net assets: 4
Net investment income                                   4.55%            5.25%
Total expenses                                          0.11%            0.11%


1. For the period from October 3, 2006 (commencement of operations) to May 31,
2007.

2. Per share amounts calculated based on the average shares outstanding during
the period.

3. Assumes an initial investment on the business day before the first day of the
fiscal period, with all dividends and distributions reinvested in additional
shares on the reinvestment date, and redemption at the net asset value
calculated on the last business day of the fiscal period. Total returns are not
annualized for periods less than one full year. Returns do not reflect the
deduction of taxes that a shareholder would pay on fund distributions or the
redemption of fund shares.

4. Annualized for periods less than one full year.

SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.

                      33 | OPPENHEIMER ABSOLUTE RETURN FUND



OPPENHEIMER INSTITUTIONAL MONEY MARKET FUND (UNDERLYING FUND)
FINANCIAL HIGHLIGHTS Continued
--------------------------------------------------------------------------------



CLASS L YEAR ENDED MAY 31,                                 2008         2007 1
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
PER SHARE OPERATING DATA
--------------------------------------------------------------------------------

Net asset value, beginning of period               $       1.00    $     1.00
--------------------------------------------------------------------------------
Income from investment operations--net
investment income and net realized gain 2                   .05           .04
--------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income                       (.05)         (.04)
--------------------------------------------------------------------------------

Net asset value, end of period                     $       1.00    $     1.00
                                                   =============================

--------------------------------------------------------------------------------
TOTAL RETURN 3                                             4.69%         3.61%
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
--------------------------------------------------------------------------------

Net assets, end of period (in thousands)           $    753,342    $      502
--------------------------------------------------------------------------------
Average net assets (in thousands)                  $    443,323    $       68
--------------------------------------------------------------------------------
Ratios to average net assets: 4
Net investment income                                      3.93%         3.62%
Total expenses                                             0.12%         0.08%


1. For the period from October 3, 2006 (commencement of operations) to May 31,
2007.

2. Per share amounts calculated based on the average shares outstanding during
the period.

3. Assumes an initial investment on the business day before the first day of the
fiscal period, with all dividends and distributions reinvested in additional
shares on the reinvestment date, and redemption at the net asset value
calculated on the last business day of the fiscal period. Total returns are not
annualized for periods less than one full year. Returns do not reflect the
deduction of taxes that a shareholder would pay on fund distributions or the
redemption of fund shares.

4. Annualized for periods less than one full year.

SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.

                      34 | OPPENHEIMER ABSOLUTE RETURN FUND





CLASS P YEAR ENDED MAY 31,                                 2008          2007 1
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
PER SHARE OPERATING DATA
--------------------------------------------------------------------------------

Net asset value, beginning of period                  $    1.00   $     1.00
--------------------------------------------------------------------------------
Income from investment operations --
net investment income and net realized gain 2               .05           -- 3
--------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income                       (.05)          -- 3
--------------------------------------------------------------------------------

Net asset value, end of period                        $    1.00   $     1.00
                                                      ==========================

--------------------------------------------------------------------------------
TOTAL RETURN 4                                             4.68%        0.15%
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
--------------------------------------------------------------------------------

Net assets, end of period (in thousands)              $     939   $       10
--------------------------------------------------------------------------------
Average net assets (in thousands)                     $     517   $       10
--------------------------------------------------------------------------------
Ratios to average net assets: 5
Net investment income                                      3.78%        4.79%
Total expenses                                             2.14%        0.10%

Expenses after payments, waivers and/or
reimbursements and reduction to
custodian expenses                                         0.20%        0.10%


1. For the period from May 21, 2007 (inception of offering) to May 31, 2007.

2. Per share amounts calculated based on the average shares outstanding during
the period.

3. Less than $0.005 per share.

4. Assumes an initial investment on the business day before the first day of the
fiscal period, with all dividends and distributions reinvested in additional
shares on the reinvestment date, and redemption at the net asset value
calculated on the last business day of the fiscal period. Total returns are not
annualized for periods less than one full year. Returns do not reflect the
deduction of taxes that a shareholder would pay on fund distributions or the
redemption of fund shares.

5. Annualized for periods less than one full year.

SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.

                      35 | OPPENHEIMER ABSOLUTE RETURN FUND



OPPENHEIMER INSTITUTIONAL MONEY MARKET FUND (UNDERLYING FUND)
NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES

Oppenheimer Institutional Money Market 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 current income and stability
of principal. The Fund's investment adviser is OppenheimerFunds, Inc. (the
"Manager").

      The Fund offers Class E, Class L and Class P shares. All classes of shares
are sold at net asset value per share without any initial sales charge. Class E
shares are only offered to other Oppenheimer Funds, the Manager and their
affiliates. Class L shares are offered directly to institutional investors.
Class P shares may only be sold through an investment professional. Brokers or
other investment professionals that offer Class P shares may impose charges on
those accounts. As of May 31, 2008, the Manager owned approximately 54% of the
Fund's Class P shares. All classes of shares have identical rights and voting
privileges with respect to the Fund in general and exclusive voting rights on
matters that affect that class alone. Earnings, net assets and net asset value
per share may differ due to each class having its own expenses, such as transfer
and shareholder servicing agent fees and shareholder communications, directly
attributable to that class.

      The following is a summary of significant accounting policies consistently
followed by the Fund.

--------------------------------------------------------------------------------
SECURITIES VALUATION. Securities are valued at cost adjusted by the amortization
of discount or premium to maturity (amortized cost), which approximates market
value. If amortized cost is determined not to approximate market value, the fair
value of the portfolio securities will be determined under procedures approved
by the Fund's Board of Trustees.

--------------------------------------------------------------------------------
ALLOCATION OF INCOME, EXPENSES, GAINS AND LOSSES. Income, expenses (other than
those attributable to a specific class), gains and losses are allocated on a
daily basis to each class of shares based upon the relative proportion of net
assets represented by such class. Operating expenses directly attributable to a
specific class are charged against the operations of that class.

--------------------------------------------------------------------------------
FEDERAL TAXES. The Fund intends to comply with provisions of the Internal
Revenue Code applicable to regulated investment companies and to distribute
substantially all of its investment company taxable income to shareholders.
Therefore, no federal income or excise tax provision is required. The Fund files
income tax returns in U.S. federal and applicable state jurisdictions. The
statute of limitations on the Fund's tax return filings generally remain open
for the three preceding fiscal reporting period ends.

The tax components of capital shown in the following table represent
distribution requirements the Fund must satisfy under the income tax
regulations, losses the Fund may be able to offset against income and gains
realized in future years for federal income tax purposes.

                       36 | OPPENHEIMER ABSOLUTE RETURN FUND





              UNDISTRIBUTED            UNDISTRIBUTED            ACCUMULATED
              NET INVESTMENT               LONG-TERM                   LOSS
              INCOME                           GAINS       CARRYFORWARD 1,2
              -------------------------------------------------------------

              $ 430,297                         $ --                   $ --


1. During the fiscal year ended May 31, 2008, the Fund did not utilize any
capital loss carryforwards.

2. During the fiscal year ended May 31, 2007, the Fund did not utilize any
capital loss carryforwards.

Net investment income (loss) and net realized gain (loss) may differ for
financial statement and tax purposes. The character of dividends and
distributions made during the fiscal year from net investment income or net
realized gains may differ from their ultimate characterization for federal
income tax purposes. Also, due to timing of dividends and distributions, the
fiscal year in which amounts are distributed may differ from the fiscal year in
which the income or net realized gain was recorded by the Fund.

Accordingly, the following amounts have been reclassified for May 31, 2008. Net
assets of the Fund were unaffected by the reclassifications.



                                            REDUCTION TO
              REDUCTION TO               ACCUMULATED NET
              ACCUMULATED NET           REALIZED GAIN ON
              INVESTMENT LOSS                INVESTMENTS

              ------------------------------------------
              $ 79,480                          $ 79,480


The tax character of distributions paid during the year ended May 31, 2008 and
for the period ended May 31, 2007 was as follows:



                                              YEAR ENDED         PERIOD ENDED
                                            MAY 31, 2008         MAY 31, 2007
              ---------------------------------------------------------------

              Distributions paid from:
              Ordinary income              $ 266,137,818       $  125,723,506


------------------------------------------------------------------------------
TRUSTEES' COMPENSATION. The Fund has adopted an unfunded retirement plan (the
"Plan") for the Fund's independent trustees. Benefits are based on years of
service and fees paid to each trustee during their period of service. The Plan
was frozen with respect to adding new participants effective December 31, 2006
(the "Freeze Date") and existing Plan Participants as of the Freeze Date will
continue to receive accrued benefits under the Plan. Active independent trustees
as of the Freeze Date have each elected a distribution method with respect to
their benefits under the Plan. During the year ended May 31, 2008, the Fund's
projected benefit obligations, payments to retired trustees and accumulated
liability were as follows:



              Projected Benefit Obligations Increased     $  101,451
              Payments Made to Retired Trustees               30,645
              Accumulated Liability as of May 31, 2008       241,405


The Board of Trustees has adopted a compensation deferral plan for independent
trustees that enables trustees to elect to defer receipt of all or a portion of
the annual compensation they are entitled to receive from the Fund. For purposes
of determining the amount owed to the Trustee under the plan, deferred amounts
are treated as though equal dollar amounts had been invested in shares of the
Fund or in other Oppenheimer funds selected by the

                  37 | OPPENHEIMER ABSOLUTE RETURN FUND



OPPENHEIMER INSTITUTIONAL MONEY MARKET FUND (UNDERLYING FUND)
NOTES TO FINANCIAL STATEMENTS Continued
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES Continued

Trustee. The Fund purchases shares of the funds selected for deferral by the
Trustee in amounts equal to his or her deemed investment, resulting in a Fund
asset equal to the deferred compensation liability. Such assets are included as
a component of "Other" within the asset section of the Statement of Assets and
Liabilities. Deferral of trustees' fees under the plan will not affect the net
assets of the Fund, and will not materially affect the Fund's assets,
liabilities or net investment income per share. Amounts will be deferred until
distributed in accordance to the compensation deferral plan.

--------------------------------------------------------------------------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS. Dividends and distributions to
shareholders, which are determined in accordance with income tax regulations and
may differ from U.S. generally accepted accounting principles, are recorded on
the ex-dividend date. Income distributions, if any, are declared daily and paid
monthly. Capital gain distributions, if any, are declared and paid annually but
may be paid at other times to maintain the net asset value per share at $1.00.

--------------------------------------------------------------------------------
CUSTODIAN FEES. "Custodian fees and expenses" in the Statement of Operations may
include interest expense incurred by the Fund on any cash overdrafts of its
custodian account during the period. Such cash overdrafts may result from the
effects of failed trades in portfolio securities and from cash outflows
resulting from unanticipated shareholder redemption activity. The Fund pays
interest to its custodian on such cash overdrafts, to the extent they are not
offset by positive cash balances maintained by the Fund, at a rate equal to the
Federal Funds Rate plus 0.50%. The "Reduction to custodian expenses" line item,
if applicable, represents earnings on cash balances maintained by the Fund
during the period. Such interest expense and other custodian fees may be paid
with these earnings.

--------------------------------------------------------------------------------
SECURITY TRANSACTIONS. Security transactions are recorded on the trade date.
Realized gains and losses on securities sold are determined on the basis of
identified cost.

--------------------------------------------------------------------------------
INDEMNIFICATIONS. The Fund's organizational documents provide current and former
trustees and officers with a limited indemnification against liabilities arising
in connection with the performance of their duties to the Fund. In the normal
course of business, the Fund may also enter into contracts that provide general
indemnifications. The Fund's maximum exposure under these arrangements is
unknown as this would be dependent on future claims that may be made against the
Fund. The risk of material loss from such claims is considered remote.

--------------------------------------------------------------------------------
OTHER. The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and liabilities at
the date of the financial statements and the reported amounts of increases and
decreases in net assets from operations during the reporting period. Actual
results could differ from those estimates.

                     38 | OPPENHEIMER ABSOLUTE RETURN FUND



--------------------------------------------------------------------------------
2. SHARES OF BENEFICIAL INTEREST

The Fund has authorized an unlimited number of $0.001 par value shares of
beneficial interest of each class. Transactions in shares of beneficial interest
were as follows:



                                           YEAR ENDED MAY 31, 2008         PERIOD ENDED MAY 31, 2007 1,2
                                        SHARES              AMOUNT            SHARES              AMOUNT
----------------------------------------------------------------------------------------------------------

CLASS E
Sold                            52,370,394,439   $  52,370,394,439    29,429,248,572   $  29,429,248,572
Dividends and/or
distributions reinvested            27,054,601          27,054,601         8,258,245           8,258,245
Redeemed                       (50,663,698,278)    (50,663,698,278)  (25,474,396,141)    (25,474,396,141)
                               ---------------------------------------------------------------------------
Net increase                     1,733,750,762   $   1,733,750,762     3,963,110,676   $   3,963,110,676
                               ===========================================================================

----------------------------------------------------------------------------------------------------------
CLASS L
Sold                             7,423,498,426   $   7,423,498,426           499,000   $         499,000
Dividends and/or
distributions reinvested            15,204,958          15,204,958             1,616               1,616
Redeemed                        (6,685,870,343)     (6,685,870,343)               --                  --
                               ---------------------------------------------------------------------------
Net increase                       752,833,041   $     752,833,041           500,616   $         500,616
                               ===========================================================================

----------------------------------------------------------------------------------------------------------
CLASS P
Sold                                 1,635,907   $       1,635,907            10,000   $          10,000
Dividends and/or
distributions reinvested                17,517              17,517                --                  --
Redeemed                              (724,511)           (724,511)               --                  --
                               ---------------------------------------------------------------------------
Net increase                           928,913   $         928,913            10,000   $          10,000
                               ===========================================================================


1. For the period from October 3, 2006 (commencement of operations) to May 31,
2007 for Class E shares and Class L shares and for the period from May 21, 2007
(inception of offering) to May 31, 2007 for Class P shares.

2. The Fund sold 100,000 Class E shares at a value of $100,000 and 1,000 Class L
shares at a value of $1,000 to the Manager upon seeding of the Fund on August 2,
2006.

--------------------------------------------------------------------------------
3. FEES AND OTHER TRANSACTIONS WITH AFFILIATES

MANAGEMENT FEES. Under the investment advisory agreement, the Fund pays the
Manager a management fee based on the daily net assets of the Fund at an annual
rate of 0.10%.

--------------------------------------------------------------------------------
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 annual fee of $10,000 for each class of shares.

--------------------------------------------------------------------------------
DISTRIBUTION AND SERVICE PLAN (12B-1) FEES. Under its General Distributor's
Agreement with the Fund, OppenheimerFunds Distributor, Inc. (the "Distributor")
acts as the Fund's principal underwriter in the continuous public offering of
the Fund's classes of shares.

--------------------------------------------------------------------------------
SERVICE PLAN FOR CLASS P SHARES. The Fund has adopted a Service Plan (the
"Plan") for Class P shares under Rule 12b-1 of the Investment Company Act of
1940. Under the Plan, the Fund reimburses the Distributor for a portion of its
costs incurred for services provided to accounts that hold Class P shares.
Reimbursement is made periodically at an

                      39 | OPPENHEIMER ABSOLUTE RETURN FUND



OPPENHEIMER INSTITUTIONAL MONEY MARKET FUND (UNDERLYING FUND)
NOTES TO FINANCIAL STATEMENTS Continued
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
3. FEES AND OTHER TRANSACTIONS WITH AFFILIATES Continued

annual rate of up to 0.25% of the average annual net assets of Class P shares of
the Fund. The Distributor currently uses all of those fees to pay dealers,
brokers, banks and other financial institutions periodically for providing
personal service and maintenance of accounts of their customers that hold Class
P shares. Any unreimbursed expenses the Distributor incurs with respect to Class
P shares in any fiscal year cannot be recovered in subsequent periods. Fees
incurred by the Fund under the Plan are detailed in the Statement of Operations.

--------------------------------------------------------------------------------
WAIVERS AND REIMBURSEMENTS OF EXPENSES. OFS has voluntarily agreed to limit
transfer and shareholder servicing agent fees for all classes to 0.35% of
average annual net assets per class. During the year ended, OFS waived $8,191
for Class P. This undertaking may be amended or withdrawn at any time.

      Effective October 9, 2007, the Distributor has voluntarily undertaken to
waive the fees payable under the Service Plan for Class P shares so that those
fees are 0.05% of the average net assets for Class P shares of the Fund. That
undertaking may be amended or withdrawn at any time.

      The Manager has agreed to waive its management fees and/or reimburse
expenses such that "Expenses after waivers, payments and/or reimbursements and
reduction to custodian expenses" will not exceed 0.15% for Class E and Class L
shares and 0.20% for Class P shares. During the year ended May 31, 2008, the
Manager waived $1,855 for Class P. These undertakings are voluntary and may be
amended or withdrawn at any time.

--------------------------------------------------------------------------------
4. ILLIQUID SECURITIES

As of May 31, 2008, investments in securities included issues that are illiquid.
Investments may be illiquid because they do not have an active trading market,
making it difficult to value them or dispose of them promptly at an acceptable
price. The Fund will not invest more than 10% of its net assets (determined at
the time of purchase and reviewed periodically) in illiquid securities.
Securities that are illiquid are marked with an applicable footnote on the
Statement of Investments.

--------------------------------------------------------------------------------
5. RECENT ACCOUNTING PRONOUNCEMENT

In September 2006, Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards ("SFAS") No. 157, FAIR VALUE
MEASUREMENTS. This standard establishes a single authoritative definition of
fair value, sets out a framework for measuring fair value and expands
disclosures about fair value measurements. SFAS No. 157 applies to fair value
measurements already required or permitted by existing standards. SFAS No. 157
is effective for financial statements issued for fiscal years beginning after
November 15, 2007, and interim periods within those fiscal years. As of May 31,
2008, the Manager does not believe the adoption of SFAS No. 157 will materially
impact the financial statement amounts; however, additional disclosures may be
required about the inputs used to develop the measurements and the effect of
certain of the measurements on changes in net assets for the period.

                      40 | OPPENHEIMER ABSOLUTE RETURN FUND







                                                    Appendix A

                                                RATINGS DEFINITIONS

Below are summaries of the rating definitions used by the nationally-recognized rating agencies listed below.
Those ratings represent the opinion of the agency as to the credit quality of issues that they rate. The
summaries below are based upon publicly available information provided by the rating organizations.

Moody's Investors Service, Inc. ("Moody's")

Long-Term Ratings: Bonds and Preferred Stock Issuer Ratings

Aaa: Bonds and preferred stock rated "Aaa" are judged to be the best quality. They carry the smallest degree of
investment risk.  Interest payments are protected by a large or by an exceptionally stable margin and principal
is secure.  While the various protective elements are likely to change, the changes that can be expected are most
unlikely to impair the fundamentally strong position of such issues.

Aa: Bonds and preferred stock rated "Aa" are judged to be of high quality by all standards. Together with the
"Aaa" group, they comprise what are generally known as high-grade bonds.  They are rated lower than the best bonds
because margins of protection may not be as large as with "Aaa" securities or fluctuation of protective elements
may be of greater amplitude or there may be other elements present which make the long-term risk appear somewhat
larger than that of "Aaa" securities.

A: Bonds and preferred stock rated "A" possess many favorable investment attributes and are to be considered as
upper-medium grade obligations.  Factors giving security to principal and interest are considered adequate but
elements may be present which suggest a susceptibility to impairment some time in the future.

Baa: Bonds and preferred stock rated "Baa" are considered medium-grade obligations; that is, they are neither
highly protected nor poorly secured.  Interest payments and principal security appear adequate for the present
but certain protective elements may be lacking or may be characteristically unreliable over any great length of
time. Such bonds lack outstanding investment characteristics and have speculative characteristics as well.

Ba: Bonds and preferred stock rated "Ba" are judged to have speculative elements. Their future cannot be
considered well-assured.  Often the protection of interest and principal payments may be very moderate and
thereby not well safeguarded during both good and bad times over the future.  Uncertainty of position
characterizes bonds in this class.

B: Bonds and preferred stock rated "B" generally lack characteristics of the desirable investment. Assurance of
interest and principal payments or of maintenance of other terms of the contract over any long period of time may
be small.

Caa: Bonds and preferred stock rated "Caa" are of poor standing. Such issues may be in default or there may be
present elements of danger with respect to principal or interest.
Ca: Bonds and preferred stock rated "Ca" represent obligations which are speculative in a high degree. Such
issues are often in default or have other marked shortcomings.

C:  Bonds and preferred stock rated "C" are the lowest class of rated bonds and can be regarded as having
extremely poor prospects of ever attaining any real investment standing.

Moody's applies numerical modifiers 1, 2, and 3 in each generic rating classification from "Aa" through "Caa."
The modifier "1" indicates that the obligation ranks in the higher end of its generic rating category; the
modifier "2" indicates a mid-range ranking; and the modifier "3" indicates a ranking in the lower end of that
generic rating category. Advanced refunded issues that are secured by certain assets are identified with a #
symbol.

Prime Rating System (Short-Term Ratings - Taxable Debt)
These ratings are opinions of the ability of issuers to honor senior financial obligations and contracts. Such
obligations generally have an original maturity not exceeding one year, unless explicitly noted.

Prime-1: Issuer has a superior ability for repayment of senior short-term debt obligations.

Prime-2: Issuer has a strong ability for repayment of senior short-term debt obligations. Earnings trends and
coverage ratios, while sound, may be more subject to variation. Capitalization characteristics, while
appropriate, may be more affected by external conditions. Ample alternate liquidity is maintained.

Prime-3: Issuer has an acceptable ability for repayment of senior short-term obligations. The effect of industry
characteristics and market compositions may be more pronounced. Variability in earnings and profitability may
result in changes in the level of debt protection measurements and may require relatively high financial
leverage. Adequate alternate liquidity is maintained.

Not Prime: Issuer does not fall within any Prime rating category.

Standard & Poor's Ratings Services ("Standard & Poor's"), a division of The McGraw-Hill Companies, Inc.

Long-Term Issue Credit Ratings
Issue credit ratings are based in varying degrees, on the following considerations:
o        Likelihood of payment-capacity and willingness of the obligor to meet its financial commitment on an
         obligation in accordance with the terms of the obligation;
o        Nature of and provisions of the obligation; and
o        Protection afforded by, and relative position of, the obligation in the event of bankruptcy,
         reorganization, or other arrangement under the laws of bankruptcy and other laws affecting creditors'
         rights.
     The issue ratings definitions are expressed in terms of default risk. As such, they pertain to senior
obligations of an entity. Junior obligations are typically rated lower than senior obligations, to reflect the
lower priority in bankruptcy, as noted above.

AAA: An obligation rated "AAA" have the highest rating assigned by Standard & Poor's. The obligor's capacity to
meet its financial commitment on the obligation is extremely strong.

AA:  An obligation rated "AA" differ from the highest rated obligations only in small degree. The obligor's
capacity to meet its financial commitment on the obligation is very strong.

A: An obligation rated "A" are somewhat more susceptible to the adverse effects of changes in circumstances and
economic conditions than obligations in higher-rated categories. However, the obligor's capacity to meet its
financial commitment on the obligation is still strong.

BBB: An obligation rated "BBB" exhibit adequate protection parameters. However, adverse economic conditions or
changing circumstances are more likely to lead to a weakened capacity of the obligor to meet its financial
commitment on the obligation.

BB, B, CCC, CC, and C
An obligation rated 'BB', 'B', 'CCC', 'CC', and 'C' are regarded as having significant speculative
characteristics. 'BB' indicates the least degree of speculation and 'C' the highest. While such obligations will
likely have some quality and protective characteristics, these may be outweighed by large uncertainties or major
exposures to adverse conditions.

BB: An obligation rated "BB" are less vulnerable to nonpayment than other speculative issues. However, they face
major ongoing uncertainties or exposure to adverse business, financial, or economic conditions which could lead
to the obligor's inadequate capacity to meet its financial commitment on the obligation.

B: An obligation rated "B" are more vulnerable to nonpayment than obligations rated "BB", but the obligor
currently has the capacity to meet its financial commitment on the obligation. Adverse business, financial, or
economic conditions will likely impair the obligor's capacity or willingness to meet its financial commitment on
the obligation.

CCC: An obligation rated "CCC" are currently vulnerable to nonpayment, and are dependent upon favorable business,
financial, and economic conditions for the obligor to meet its financial commitment on the obligation. In the
event of adverse business, financial, or economic conditions, the obligor is not likely to have the capacity to
meet its financial commitment on the obligation.

CC: An obligation rated "CC" are currently highly vulnerable to nonpayment.

C: Subordinated debt or preferred stock obligations rated "C" are currently highly vulnerable to nonpayment. The
"C" rating may be used to cover a situation where a bankruptcy petition has been filed or similar action taken,
but payments on this obligation are being continued. A "C" also will be assigned to a preferred stock issue in
arrears on dividends or sinking fund payments, but that is currently paying.

D: An obligation rated "D" are in payment default. The "D" rating category is used when payments on an obligation
are not made on the date due even if the applicable grace period has not expired, unless Standard & Poor's
believes that such payments will be made during such grace period. The "D" rating also will be used upon the
filing of a bankruptcy petition or the taking of a similar action if payments on an obligation are jeopardized.

The ratings from "AA" to "CCC" may be modified by the addition of a plus (+) or minus (-) sign to show relative
standing within the major rating categories.

c: The 'c' subscript is used to provide additional information to investors that the bank may terminate its
obligation to purchase tendered bonds if the long-term credit rating of the issuer is below an investment-grade
level and/or the issuer's bonds are deemed taxable.

p: The letter 'p' indicates that the rating is provisional. A provisional rating assumes the successful
completion of the project financed by the debt being rated and indicates that payment of debt service
requirements is largely or entirely dependent upon the successful, timely completion of the project. This rating,
however, while addressing credit quality subsequent to completion of the project, makes no comment on the
likelihood of or the risk of default upon failure of such completion. The investor should exercise his own
judgment with respect to such likelihood and risk.

Continuance of the ratings is contingent upon Standard & Poor's receipt of an executed copy of the escrow
agreement or closing documentation confirming investments and cash flows.

r: The 'r' highlights derivative, hybrid, and certain other obligations that Standard & Poor's believes may
experience high volatility or high variability in expected returns as a result of noncredit risks. Examples of
such obligations are securities with principal or interest return indexed to equities, commodities, or
currencies; certain swaps and options; and interest-only and principal-only mortgage securities. The absence of
an 'r' symbol should not be taken as an indication that an obligation will exhibit no volatility or variability
in total return.

N.R. Not rated.

Debt obligations of issuers outside the United States and its territories are rated on the same basis as domestic
corporate and municipal issues. The ratings measure the creditworthiness of the obligor but do not take into
account currency exchange and related uncertainties.

Bond Investment Quality Standards

Under present commercial bank regulations issued by the Comptroller of the Currency, bonds rated in the top four
categories ('AAA', 'AA', 'A', 'BBB', commonly known as investment-grade ratings) generally are regarded as
eligible for bank investment. Also, the laws of various states governing legal investments impose certain rating
or other standards for obligations eligible for investment by savings banks, trust companies, insurance
companies, and fiduciaries in general

Short-Term Issue Credit Ratings
Short-term ratings are generally assigned to those obligations considered short-term in the relevant market. In
the U.S., for example, that means obligations with an original maturity of no more than 365 days-including
commercial paper.

A-1: A short-term obligation rated "A-1" is rated in the highest category by Standard & Poor's. The obligor's
capacity to meet its financial commitment on the obligation is strong. Within this category, certain obligations
are designated with a plus sign (+). This indicates that the obligor's capacity to meet its financial commitment
on these obligations is extremely strong.

A-2: A short-term obligation rated "A-2" is somewhat more susceptible to the adverse effects of changes in
circumstances and economic conditions than obligations in higher rating categories. However, the obligor's
capacity to meet its financial commitment on the obligation is satisfactory.
A-3: A short-term obligation rated "A-3" exhibits adequate protection parameters. However, adverse economic
conditions or changing circumstances are more likely to lead to a weakened capacity of the obligor to meet its
financial commitment on the obligation.

B: A short-term obligation rated "B" is regarded as having significant speculative characteristics. The obligor
currently has the capacity to meet its financial commitment on the obligation; however, it faces major ongoing
uncertainties which could lead to the obligor's inadequate capacity to meet its financial commitment on the
obligation.

C: A short-term obligation rated "C" is currently vulnerable to nonpayment and is dependent upon favorable
business, financial, and economic conditions for the obligor to meet its financial commitment on the obligation.

D: A short-term obligation rated "D" is in payment default. The "D" rating category is used when payments on an
obligation are not made on the date due even if the applicable grace period has not expired, unless Standard &
Poor's believes that such payments will be made during such grace period. The "D" rating also will be used upon
the filing of a bankruptcy petition or the taking of a similar action if payments on an obligation are
jeopardized.

Notes:
A Standard & Poor's note rating reflects the liquidity factors and market access risks unique to notes. Notes due
in three years or less will likely receive a note rating. Notes maturing beyond three years will most likely
receive a long-term debt rating. The following criteria will be used in making that assessment:
o        Amortization schedule-the larger the final maturity relative to other maturities, the more likely it will
         be treated as a note; and
o        Source of payment-the more dependent the issue is on the market for its refinancing, the more likely
         it will be treated as a note.

SP-1: Strong capacity to pay principal and interest. An issue with a very strong capacity to pay debt service is
given a (+) designation.

SP-2: Satisfactory capacity to pay principal and interest, with some vulnerability to adverse financial and
economic changes over the term of the notes.

SP-3: Speculative capacity to pay principal and interest.

Fitch, Inc.
International credit ratings assess the capacity to meet foreign currency or local currency commitments. Both
"foreign currency" and "local currency" ratings are internationally comparable assessments. The local currency
rating measures the probability of payment within the relevant sovereign state's currency and jurisdiction and
therefore, unlike the foreign currency rating, does not take account of the possibility of foreign exchange
controls limiting transfer into foreign currency.

International Long-Term Credit Ratings
The following ratings scale applies to foreign currency and local currency ratings.

Investment Grade:

AAA: Highest Credit Quality. "AAA" ratings denote the lowest expectation of credit risk. They are assigned only
in the case of exceptionally strong capacity for timely payment of financial commitments. This capacity is highly
unlikely to be adversely affected by foreseeable events.
AA: Very High Credit Quality. "AA" ratings denote a very low expectation of credit risk. They indicate a very
strong capacity for timely payment of financial commitments. This capacity is not significantly vulnerable to
foreseeable events.

A: High Credit Quality. "A" ratings denote a low expectation of credit risk. The capacity for timely payment of
financial commitments is considered strong. This capacity may, nevertheless, be more vulnerable to changes in
circumstances or in economic conditions than is the case for higher ratings.

BBB: Good Credit Quality. "BBB" ratings indicate that there is currently a low expectation of credit risk. The
capacity for timely payment of financial commitments is considered adequate, but adverse changes in circumstances
and in economic conditions are more likely to impair this capacity. This is the lowest investment-grade category.

Speculative Grade:

BB: Speculative. "BB" ratings indicate that there is a possibility of credit risk developing, particularly as the
result of adverse economic change over time. However, business or financial alternatives may be available to
allow financial commitments to be met. Securities rated in this category are not investment grade.


B: Highly Speculative. "B" ratings indicate that significant credit risk is present, but a limited margin of
safety remains. Financial commitments are currently being met. However, capacity for continued payment is
contingent upon a sustained, favorable business and economic environment.

CCC, CC C: High Default Risk.  Default is a real possibility. Capacity for meeting financial commitments is
solely reliant upon sustained, favorable business or economic developments. A "CC" rating indicates that default
of some kind appears probable. "C" ratings signal imminent default.

DDD, DD, and D: Default. The ratings of obligations in this category are based on their prospects for achieving
partial or full recovery in a reorganization or liquidation of the obligor. While expected recovery values are
highly speculative and cannot be estimated with any precision, the following serve as general guidelines. "DDD"
obligations have the highest potential for recovery, around 90%-100% of outstanding amounts and accrued interest.
"DD" indicates potential recoveries in the range of 50%-90%, and "D" the lowest recovery potential, i.e., below
50%.

Entities rated in this category have defaulted on some or all of their obligations. Entities rated "DDD" have the
highest prospect for resumption of performance or continued operation with or without a formal reorganization
process. Entities rated "DD" and "D" are generally undergoing a formal reorganization or liquidation process;
those rated "DD" are likely to satisfy a higher portion of their outstanding obligations, while entities rated
"D" have a poor prospect for repaying all obligations.

Plus (+) and minus (-) signs may be appended to a rating symbol to denote relative status within the major rating
categories.  Plus and minus signs are not added to the "AAA" category or to categories below "CCC," nor to
short-term ratings other than "F1" (see below).

International Short-Term Credit Ratings
The following ratings scale applies to foreign currency and local currency ratings. A short-term rating has a
time horizon of less than 12 months for most obligations, or up to three years for U.S. public finance
securities, and thus places greater emphasis on the liquidity necessary to meet financial commitments in a timely
manner.

F1: Highest credit quality. Strongest capacity for timely payment of financial commitments. May have an added "+"
to denote any exceptionally strong credit feature.

F2: Good credit quality. A satisfactory capacity for timely payment of financial commitments, but the margin of
safety is not as great as in the case of higher ratings.

F3: Fair credit quality. Capacity for timely payment of financial commitments is adequate. However, near-term
adverse changes could result in a reduction to non-investment grade.

B: Speculative. Minimal capacity for timely payment of financial commitments, plus vulnerability to near-term
adverse changes in financial and economic conditions.

C: High default risk. Default is a real possibility. Capacity for meeting financial commitments is solely reliant
upon a sustained, favorable business and economic environment.

D: Default. Denotes actual or imminent payment default.



                                                    Appendix B

                          OppenheimerFunds Special Sales Charge Arrangements and Waivers

In certain cases, the initial sales charge that applies to purchases of Class A shares(2) of the Oppenheimer
funds or the contingent deferred sales charge that may apply to Class A, Class B or Class C shares may be
waived.(3) 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 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 created or qualified under Sections 401(a) or 401(k) of the Internal Revenue Code,
              2)  non-qualified deferred compensation plans,
              3)  employee benefit plans(4)
              4)  Group Retirement Plans(5)
              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 shares of Oppenheimer Rochester National Municipals and
Rochester Fund Municipals purchased prior to October 22, 2007) 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."(6) This waiver provision applies to:
|_|      Purchases of Class A shares aggregating $1 million or more.
|_|      Purchases of Class A shares, prior to March 1, 2007, 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 adviser 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 $5 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).

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 advisers 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 advisers 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 advisers 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
              adviser 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 adviser (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 advisers 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 adviser 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.
|_|      Effective March 1, 2007, 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.
|_|      Effective October 1, 2005, taxable accounts established with the proceeds of Required Minimum
              Distributions from Retirement Plans.
|_|      Purchases of Class A shares by former shareholders of Atlas Strategic Income Fund in any Oppenheimer
              fund into which shareholders of Oppenheimer Strategic Income Fund may exchange.
|_|      Purchases prior to June 15, 2008 by former shareholders of Oppenheimer Tremont Market Neutral Fund, LLC
              or Oppenheimer Tremont Opportunity Fund, LLC, directly from the proceeds from mandatory redemptions.


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

1.       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 or unit investment trusts for which reinvestment arrangements have been
              made with the Distributor.
|_|      Shares purchased by certain Retirement Plans that are part of a retirement plan or platform offered by
              banks, broker-dealers, financial advisors or insurance companies, or serviced by recordkeepers.
|_|      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.
|_|      Shares purchased in amounts of less than $5.

2.       Class A shares issued and purchased in the following transactions are not subject to sales charges (a
     dealer concession at the annual rate of 0.25% is paid by the Distributor on purchases made within the first
     6 months of plan establishment):
|_|      Retirement Plans that have $5 million or more in plan assets.
|_|      Retirement Plans with a single plan sponsor that have $5 million or more in aggregate assets invested in
              Oppenheimer funds.

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.(7)
              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.(8)
              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.
|_|      At the sole discretion of the Distributor, the contingent deferred sales charge may be waived for
              redemptions of shares requested by the shareholder of record within 60 days following the
              termination by the Distributor of the selling agreement between the Distributor and the shareholder
              of record's broker-dealer of record for the account.

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. 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.
|_|      The contingent deferred sales charges are generally not waived following the death or disability of a
              grantor or trustee for a trust account. The contingent deferred sales charges will only be waived
              in the limited case of the death of the 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 (as defined in the Internal Revenue Code).
|_|      Distributions from accounts for which the broker-dealer of record has entered into a special agreement
              with the Distributor allowing this waiver.
|_|      At the sole discretion of the Distributor, the contingent deferred sales charge may be waived for
              redemptions of shares requested by the shareholder of record within 60 days following the
              termination by the Distributor of the selling agreement between the Distributor and the shareholder
              of record's broker-dealer of record for the account.
|_|      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 of Class C shares of an Oppenheimer fund in amounts of $1 million or more requested in
              writing by a Retirement Plan sponsor and submitted more than 12 months after the Retirement Plan's
              first purchase of Class C shares, if the redemption proceeds are invested to purchase Class N
              shares of one or more Oppenheimer funds.
|_|      Distributions(9) 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.(10)
              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.(11)
              9)  On account of the participant's separation from service.(12)
              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.
|_|      Redemptions of Class B shares by a Retirement Plan that is either created or qualified under Section
              401(a) or 401(k) (excluding owner-only 401(k) plans) of the Internal Revenue Code or that is a
              non-qualified deferred compensation plan, either (1) purchased after June 30, 2008, or (2)
              beginning on July 1, 2011, held longer than three years.
|_|      Redemptions by owner-only 401(k) plans of Class B shares purchased after June 30, 2008.

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

The contingent deferred sales charge is also waived on Class B and Class C 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
adviser to those former Quest for Value Funds. Those funds include:
     Oppenheimer Rising Dividends Fund, Inc.Oppenheimer Small- & Mid- Cap Value Fund
     Oppenheimer Quest Balanced Fund        Oppenheimer Quest International 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 sales 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 Core Bond Fund,
     Oppenheimer Value Fund and
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 adviser to the Former Connecticut Mutual Funds:
     Connecticut Mutual Liquid Account      Connecticut Mutual Total Return Account
     Connecticut Mutual Government Securities AccountCMIA 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 AMT-Free Municipals, 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 current Class M shareholders, 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 a 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 adviser 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 adviser 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 advisers 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 advisers 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 adviser provides
              administrative services.



Oppenheimer Absolute Return Fund

Internet Website:
         www.oppenheimerfunds.com

Investment Adviser
         OppenheimerFunds, Inc.
         Two World Financial Center
         225 Liberty Street, 11th Floor
         New York, New York 10281-1008

Distributor
         OppenheimerFunds Distributor, Inc.
         Two World Financial Center
         225 Liberty Street, 11th Floor
         New York, New York 10281-1008

Transfer Agent
         OppenheimerFunds Services
         P.O. Box 5270
         Denver, Colorado 80217
         1.800.CALL OPP (225.5677)

Custodian Bank
         JPMorgan Chase Bank
         4 Chase Metro Tech Center
         Brooklyn, New York 11245


Independent Registered Public Accounting Firm
         KPMG llp
         707 Seventeenth Street
         Denver, Colorado 80202

Legal Counsel
         Kramer Levin Naftalis & Frankel LLP
         1177 Avenue of the Americas
         New York, New York 10036




PX0853.001.rev0509



(1) In accordance with Rule 12b-1 of the Investment Company Act, the term "Independent Trustees" in this SAI
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.
(2) Certain waivers also apply to Class M shares of Oppenheimer Convertible Securities Fund.
(3) 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.
(4) 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.
(5) 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.
(6) 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.
(7) This provision does not apply to IRAs.
(8) This provision only applies to qualified retirement plans and 403(b)(7) custodial plans after your separation
from service in or after the year you reached age 55.
(9) The distribution must be requested prior to Plan termination or the elimination of the Oppenheimer funds as
an investment option under the Plan.
(10) This provision does not apply to IRAs.
(11) This provision does not apply to loans from 403(b)(7) custodial plans and loans from the
OppenheimerFunds-sponsored Single K retirement plan.
(12) This provision does not apply to 403(b)(7) custodial plans if the participant is less than age 55, nor to
IRAs.