Registration No. 2-62076
                                                             File No. 811-2849

                             SECURITIES AND EXCHANGE COMMISSION
                                    WASHINGTON, DC 20549

                                         FORM N-1A

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933                  [ X ]

Pre-Effective Amendment No.                                              [   ]


Post-Effective Amendment No. 47                                          [ X ]


                                           and/or

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY
ACT OF 1940                                                              [ X ]


Amendment No. 39                                                         [ X ]


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                                OPPENHEIMER HIGH YIELD FUND
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                     (Exact Name of Registrant as Specified in Charter)

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                      6803 South Tucson Way, Englewood, Colorado 80112
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                    (Address of Principal Executive Offices) (Zip Code)

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                                       1-303-768-3200
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                    (Registrant's Telephone Number, including Area Code)

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                                    Robert G. Zack, Esq.
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                                   OppenheimerFunds, Inc.
                           498 Seventh Avenue, New York, NY 10018
                     (Name and Address of Agent for Service)

It is proposed that this filing will become effective (check appropriate box):


[   ] Immediately upon filing pursuant to paragraph (b)
[ X ] On August 22, 2003, pursuant to paragraph (b)
[   ] 60 days after filing pursuant to paragraph (a)(1)
[   ] On ______________, pursuant to paragraph (a)(1)
[   ] 75 days after filing pursuant to paragraph (a)(2)
[   ] On ______________, pursuant to paragraph (a)(2) of Rule 485


If appropriate, check the following box:

[    ] This post-effective amendment designates a new effective date for a
     previously filed post effective amendment.



Oppenheimer
High Yield Fund





Prospectus dated August 22, 2003


                                          Oppenheimer High Yield Fund is a
                                          mutual fund. It seeks high current
                                          income by investing mainly in
                                          high-yield, lower-rated fixed-income
                                          securities as its primary goal. The
                                          Fund secondarily seeks capital growth
                                          when consistent with its main goal.
                                             This Prospectus contains important
                                          information about the Fund's
                                          objective, its investment policies,
                                          strategies and risks. It also contains
                                          important information about how to buy
                                          and sell shares of the Fund and other
                                          account features.
As with all mutual funds, the             Please read this Prospectus
Securities and Exchange Commission        carefully before you invest and keep
has not approved or disapproved the       it for future reference about your
Fund's securities nor has it              account.
determined that this Prospectus is
accurate or complete. It is a
criminal offense to represent
otherwise.

                                                       (logo) OppenheimerFunds
                                                       The Right Way to Invest





CONTENTS

            ABOUT THE FUND

            The Fund's Investment Objectives and Strategies

            Main Risks of Investing in the Fund

            The Fund's Past Performance

            Fees and Expenses of the Fund

            About the Fund's Investments

            How the Fund is Managed


            ABOUT YOUR ACCOUNT

            How to Buy Shares
            Class A Shares
            Class B Shares
            Class C Shares
            Class N Shares
            Class Y Shares

            Special Investor Services
            AccountLink
            PhoneLink
            OppenheimerFunds Internet Web Site
            Retirement Plans

            How to Sell Shares
            By Wire
            By Mail
            By Telephone
            By Checkwriting

            How to Exchange Shares

            Shareholder Account Rules and Policies

            Dividends, Capital Gains and Taxes

            Financial Highlights





A B O U T  T H E  F U N D

The Fund's Investment Objectives and Strategies

WHAT ARE THE FUND'S INVESTMENT OBJECTIVES? The Fund's primary objective is to
seek a high level of current income by investing in a diversified portfolio of
high-yield, lower-rated fixed-income securities the Fund's investment Manager,
OppenheimerFunds, Inc., believes do not involve undue risk. The Fund's secondary
objective is to seek capital growth when consistent with its primary objective.

WHAT DOES THE FUND MAINLY INVEST IN? The Fund invests mainly in a variety of
high-yield debt securities of domestic and foreign issuers for high current
income. These securities primarily include:
o     Lower-grade bonds and notes of corporate issuers
o     Foreign corporate and government bonds
o     Mortgage-related securities and other asset backed securities
o     "Structured" notes
o     Preferred stock


      Under normal circumstances, the Fund invests at least 80% of its net
assets (plus borrowings for investment purposes) in high-yield, lower-grade
investments which will include high yield bonds, commonly called "junk bonds,"
and may also include convertible securities, preferred stock, loan participation
interests, structured notes and asset-based securities that are rated below
investment grade. The Fund's non-fundamental policy of investing at least 80% of
its net assets in high yield, lower-grade investments will not be changed by the
Fund's Board of Trustees without first providing shareholders 60 days written
notice.


      The remainder of the Fund's assets may be invested in other debt
securities, cash or cash equivalents, rights or warrants, or common stock and
other equity securities when the Manager believes those are consistent with the
Fund's objectives.

      Since the Fund may invest in lower-grade securities without limit, the
Fund's investments should be considered speculative. Further, since market risks
are inherent in all securities to varying degrees, there can be no assurance
that the Fund's investment objectives will be met. See "Main Risks of Investing
in the Fund," below.

HOW DO THE PORTFOLIO MANAGERS DECIDE WHAT SECURITIES TO BUY OR SELL? In
selecting securities for the Fund, the Fund's portfolio managers analyze the
overall investment opportunities and risks in different market sectors,
industries and countries. The overall strategy is to build a broadly diversified
portfolio of debt securities to help moderate the special risks of investing in
high-yield debt securities. The portfolio managers currently use a "bottom up"
approach, focusing on the performance of individual securities before
considering industry trends. They evaluate an issuer's liquidity, financial
strength and earnings power, and also consider the factors below (which may vary
in particular cases and may change over time), looking for:
o Changes in the business cycle that might affect corporate profits, o Corporate
sectors that in the portfolio managers' view are currently
      undervalued in the marketplace,
o     Issuers with earnings growth rates that are faster than the growth rate
      of the overall economy,
o     Securities or sectors that will help the overall diversification of the
      portfolio, and
o     Issuers with improvements in relative cash flows and liquidity to help
      them meet their obligations.


      The portfolio managers employ a disciplined approach in deciding whether
to sell particular portfolio securities based on quantitative models and
fundamental research. If a particular stock exhibits a material decrease in
revenue and earnings growth, they will consider selling the stock. In addition,
if the reason that the portfolio managers originally purchased the stock of a
particular company materially changes, then they may also decide to sell the
stock.


WHO IS THE FUND DESIGNED FOR? The Fund is designed primarily for investors
seeking high current income from a fund that invests mainly in lower-grade
domestic and foreign debt securities. Those investors should be willing to
assume the greater risks of short-term share price fluctuations that are typical
for a fund that invests in those debt securities, which also have special credit
risks. Since the Fund's income level will fluctuate, it is not designed for
investors needing an assured level of current income. The Fund is intended to be
a long-term investment and may be appropriate as a part of a retirement plan
portfolio. The Fund is not a complete investment program.

Main Risks of Investing in the Fund

All investments carry risks to some degree. The Fund's investments are subject
to changes in their value from a number of factors described below. They include
changes in general bond and stock market movements in the U.S. and abroad (this
is referred to as "market risk"), or the change in value of particular bonds or
stocks because of an event affecting the issuer (this is known as "credit
risk"). Changes in interest rates can also affect prices of debt securities
(this is known as "interest rate risk"). The Fund can invest in foreign debt
securities. Its foreign investments will be subject to the risks of economic,
political or other events that can affect the values of securities of issuers in
particular foreign countries. There is also the risk that poor security
selection by the Manager will cause the Fund to underperform other funds having
similar investment objectives.

CREDIT RISK. Debt securities are subject to credit risk. Credit risk is the risk
that the issuer of a security might not make interest and principal payments on
the security as they become due. If the issuer fails to pay interest, the Fund's
income might be reduced, and if the issuer fails to repay interest or principal,
the value of that security and of the Fund's shares might be reduced.
High-yield, lower-grade debt securities are especially subject to risks of
default. A downgrade in an issuer's credit rating or other adverse news about an
issuer can reduce a security's market value.

Special Risks of Lower-Grade Securities. The Fund's credit risks are greater
   than those of funds that buy only investment-grade securities. Lower-grade
   debt securities may be subject to greater market fluctuations and greater
   risks of loss of income and principal than investment-grade debt securities.
   Securities that are (or that have fallen) below investment grade are exposed
   to a greater risk that the issuers of those securities might not meet their
   debt obligations. These risks can reduce the Fund's share prices and the
   income it earns.

   While investment-grade securities are subject to risks of non-payment of
   interest and principal, generally, higher yielding lower-grade bonds, whether
   rated or unrated, have greater risks than investment-grade securities. The
   market for lower-grade securities may be less liquid, especially during times
   of general economic distress, and therefore they may be harder to value and
   sell at an acceptable price.

INTEREST RATE RISKS. The values of debt securities are subject to change when
prevailing interest rates change. When interest rates fall, the values of
already-issued debt securities generally rise. When interest rates rise, the
values of already-issued debt securities generally fall, and they may sell at a
discount from their face amount. The magnitude of these fluctuations will often
be greater for longer-term debt securities than shorter-term debt securities and
at times the Fund's average portfolio maturity may be relatively long-term. The
Fund's share prices can go up or down when interest rates change because of the
effect of the changes on the value of the Fund's investments in debt securities.

RISKS OF FOREIGN INVESTING. The Fund can invest up to 100% of its assets in
foreign securities. It can buy securities of governments and companies in both
developed markets and emerging markets. The Fund currently does not intend to
invest more than 25% of its net assets in foreign securities. While foreign
securities offer special investment opportunities, they are subject to special
risks that can reduce the Fund's share prices and returns.

      The change in value of a foreign currency against the U.S. dollar will
affect the U.S. dollar value of securities denominated in that foreign currency.
Currency rate changes can also affect the distributions the Fund makes from the
income it receives from foreign securities. Foreign investing can result in
higher transaction and operating costs for the Fund. Foreign issuers are not
subject to the same accounting and disclosure requirements that U.S. companies
are subject to. The value of foreign investments may be affected by exchange
control regulations, expropriation or nationalization of a company's assets,
foreign taxes, delays in settlement of transactions, changes in governmental
economic or monetary policy in the U.S. or abroad, or other political and
economic factors.

Special Risks of Emerging Markets. Securities of issuers in emerging markets may
      offer special investment opportunities but present risks not found in more
      mature markets. Those securities might be more difficult to sell at an
      acceptable price and their prices may be more volatile than securities of
      issuers in more developed markets. Settlements of trades may be subject to
      greater delays so that the Fund may not receive the proceeds of a sale of
      a security on a timely basis.

      Emerging markets might have less developed trading markets and exchanges,
      and less developed legal and accounting systems. Investments may be
      subject to greater risks of government restrictions on withdrawing the
      sales proceeds of securities from the country. Economies of developing
      countries may be more dependent on relatively few industries that may be
      highly vulnerable to local and global changes. Governments may be more
      unstable and present greater risks of nationalization or restrictions on
      foreign ownership of stocks of local companies. These investments may be
      substantially more volatile than debt securities of issuers in the U.S.
      and other developed countries and may be very speculative.

RISKS OF DERIVATIVE INVESTMENTS. The Fund can use derivatives to seek increased
income or to try to hedge investment risks. In general terms, a derivative
investment is an investment contract whose value depends on (or is derived from)
the value of an underlying asset, interest rate or index. Options, futures,
interest rate swaps, structured notes, and mortgage-related securities are
examples of derivatives the Fund can use.

      If the issuer of the derivative does not pay the amount due, the Fund can
lose money on the investment. Also, the underlying security or investment on
which the derivative is based, and the derivative itself, might not perform the
way the Manager expected it to perform. If that happens, the Fund's share prices
could decline or the Fund could receive less income than expected. The Fund has
limits on the amount of particular types of derivatives it can hold. However,
using derivatives can cause the Fund to lose money on its investment and/or
increase the volatility of its share prices.

HOW RISKY IS THE FUND OVERALL? The risks described above collectively form the
overall risk profile of the Fund and can affect the value of the Fund's
investments, its investment performance and the prices of its shares. These
risks mean that you can lose money by investing in the Fund. When you redeem
your shares, they may be worth more or less than what you paid for them. There
is no assurance that the Fund will achieve its objectives.

      In the short term, the values of high-yield debt securities can fluctuate
substantially because of interest rate changes and perceptions about the
high-yield market among investors. Foreign debt securities can be volatile, and
the prices of the Fund's shares can go up and down substantially because of
events affecting foreign markets or issuers. Defaults by issuers of lower-grade
securities could reduce the Fund's income and share prices.

      Debt securities are subject to credit and interest rate risks that can
affect their values and the share prices of the Fund. In the OppenheimerFunds
spectrum, the Fund is likely to be more volatile and have more risks than funds
that focus on investing in U. S. government securities and investment-grade
bonds.

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An investment in the Fund is not a deposit of any bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency.
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The Fund's Past Performance


The bar chart and table below show one measure of the risks of investing in the
Fund, by showing changes in the Fund's performance (for its Class A shares) from
year to year for the last 10 calendar years and by showing how the average
annual total returns of the Fund's shares, both before and after taxes, compare
to those of broad-based market indices. The after-tax returns for the other
classes of shares will vary.

      The after-tax returns are shown for Class A shares only and are calculated
using the historical highest individual federal marginal income tax rates in
effect during the periods shown, and do not reflect the impact of state or local
taxes. In certain cases, the figure representing "Return After Taxes on
Distributions and Sale of Fund Shares" may be higher than the other return
figures for the same period. A higher after-tax return results when a capital
loss occurs upon redemption and translates into an assumed tax deduction that
benefits the shareholder. The after-tax returns are calculated based on certain
assumptions mandated by regulation and your actual after-tax returns may differ
from those shown, depending on your individual tax situation. The after-tax
returns set forth below are not relevant to investors who hold their fund shares
through tax-deferred arrangements such as 401(k) plans or IRAs or to
institutional investors not subject to tax. The Fund's past investment
performance, before and after taxes, is not necessarily an indication of how the
Fund will perform in the future.


            Annual Total Returns (Class A) (as of 12/31 each year)

    [See appendix to prospectus for data in bar chart showing annual total
                                   returns]


Sales charges and taxes are not included in the calculations of return in this
bar chart, and if those charges and taxes were included, the returns may be less
than those shown.
For the period from 1/1/03 through 6/30/03, the cumulative total return (not
annualized) for Class A shares before taxes was 15.98%. During the period shown
in the bar chart, the highest return (not annualized) before taxes for a
calendar quarter was 6.74% (1stQtr93) and the lowest return (not annualized)
before taxes for a calendar quarter was -7.40% (3rdQtr98).


--------------------------------------------------------------------------------
                                                        5 Years      10 Years
                                                      (or life of  (or life of

Average Annual Total Returns                           class, if    class, if
for the periods ended December 31, 2002     1 Year       less)        less)

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--------------------------------------------------------------------------------
Class A Shares (inception 7/28/78)

  Return Before Taxes                       -8.92%       -1.82%       4.68%
  Return After Taxes on Distributions       -12.74%      -5.71%       0.67%
  Return  After  Taxes  on  Distributions   -5.42%       -3.17%       1.83%
  and Sale of Fund Shares

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Merrill Lynch High Yield Master Index
(reflects no deduction for fees,

expenses or taxes)                          -1.14%       1.24%        6.35%1

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Lehman  Brothers.  Corporate  bond  Index
(reflects   no   deduction    for   fees,

expenses or taxes)                          10.53%       7.28%        7.86%1

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Class B Shares (inception 5/3/93)           -9.36%       -1.87%       4.02%

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Class C Shares (inception 11/1/95)          -5.97%       -1.62%       2.39%

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Class N Shares (inception 3/1/01)           -5.32%       -6.37%        N/A

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Class Y Shares (inception 10/15/97)         -4.29%       -0.73%       -0.55%

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1 From 12/31/92.

The Fund's average annual total returns include the applicable sales charge: for
Class A, the current maximum initial sales charge of 4.75%; for Class B, the
contingent deferred sales charges of 5% (1 year) and 2% (5 years); and for Class
C, the 1% contingent deferred sales charge for the 1-year period. Because Class
B shares convert to Class A shares 72 months after purchase, Class B
"life-of-class" performance does not include any contingent deferred sales
charge and uses Class A performance for the period after conversion. There is no
sales charge for Class Y shares.

The returns measure the performance of a hypothetical account and assume that
all dividends and capital gains distributions have been reinvested in additional
shares. The performance of the Fund's Class A shares is compared to the Merrill
Lynch High Yield Master Index, an unmanaged index of below-investment-grade debt
securities of U.S. corporate issuers, and the Lehman Brothers Corporate Bond
Index, an index of non-convertible U.S. investment-grade corporate bonds. Index
performance reflects the reinvestment of income but does not reflect transaction
costs, fees, expenses or taxes. The Fund's investments vary from the securities
in the indices.



Fees and Expenses of the Fund


The following tables are provided to help you understand the fees and expenses
you may pay if you buy and hold shares of the Fund. The Fund pays a variety of
expenses directly for management of its assets, administration, distribution of
its shares and other services. Those expenses are subtracted from the Fund's
assets to calculate the Fund's net asset values per share. All shareholders
therefore pay those expenses indirectly. Shareholders pay other transaction
expenses directly, such as sales charges. The numbers below are based on the
Fund's expenses during its fiscal year ended June 30, 2003.


Shareholder Fees (charges paid directly from your investment):

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                            Class A   Class B    Class C    Class N   Class Y
                             Shares     Shares    Shares     Shares    Shares
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Maximum Sales Charge          4.75%      None      None       None      None
(Load) on purchases (as %
of offering price)
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Maximum Deferred Sales
Charge (Load) (as % of the
lower of the original         None1      5%2        1%3       1%4       None
offering price or
redemption proceeds)
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1. A contingent deferred sales charge may apply to redemptions of investments of
$1 million or more ($500,000 for certain retirement plan accounts) of Class A
shares. See "How to Buy Shares" for details.
2. Applies to redemptions in first year after purchase. The contingent deferred
sales charge declines to 1% in the sixth year and is eliminated after that.
3. Applies to shares redeemed within 12 months of purchase. 4. Applies to shares
redeemed within 18 months of a retirement plan's first purchase of Class N
shares.

Annual Fund Operating Expenses (deducted from Fund assets):
(% of average daily net assets)

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                                  Class A  Class B  Class C  Class N  Class Y
                                   Shares   Shares   Shares   Shares   Shares
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Management Fees                    0.63%    0.63%    0.63%    0.63%    0.63%
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Distribution    and/or    Service  0.24%    1.00%    1.00%    0.50%     N/A
(12b-1) Fees

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Other Expenses                     0.20%    0.21%    0.20%    0.28%    0.71%

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Total Annual Operating Expenses    1.07%    1.84%    1.83%    1.41%    1.34%

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Expenses may vary in future years. "Other Expenses" include transfer agent fees,
custodial expenses and accounting and legal expenses the Fund pays. The "Other
Expenses" in the table are based on, among other things, the fees the Fund would
have paid if the transfer agent had not waived a portion of its fee under a
voluntary undertaking to the Fund to limit these fees to 0.35% per annum for all
classes. That undertaking may be amended or withdrawn at any time. After the
waiver, the actual "Other Expenses" and "Total Annual Operating Expenses" as
percentages of average daily net assets were 0.35% and .98% for Class Y shares.
Class A, Class B, Class C and Class N shares were the same as shown above.


EXAMPLES. The following examples are intended to help you compare the cost of
investing in the Fund with the cost of investing in other mutual funds. The
examples assume that you invest $10,000 in a class of shares of the Fund for the
time periods indicated and reinvest your dividends and distributions.

      The first example assumes that you redeem all of your shares at the end of
those periods. The second example assumes that you keep your shares. Both
examples also assume that your investment has a 5% return each year and that the
class's operating expenses remain the same. Your actual costs may be higher or
lower because expenses will vary over time. Based on these assumptions your
expenses would be as follows:

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If shares are redeemed:      1 Year        3 Years       5 Years      10 Years
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Class A Shares                $579          $799         $1,037        $1,719

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Class B Shares                $687          $879         $1,196        $1,7721

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Class C Shares                $286          $576         $990          $2,148

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Class N Shares                $244          $446         $771          $1,691

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Class Y Shares                $136          $425         $734          $1,613

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---------------------------------------------------------------------------------
If shares are not            1 Year        3 Years       5 Years      10 Years
redeemed:
---------------------------------------------------------------------------------
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Class A Shares                $579          $799         $1,037        $1,719

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Class B Shares                $187          $579         $996          $1,7721

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Class C Shares                $186          $576         $990          $2,148

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Class N Shares                $144          $446         $771          $1,691

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Class Y Shares                $136          $425         $734          $1,613

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In the first example, expenses include the initial sales charge for Class A and
the applicable Class B, Class C or Class N contingent deferred sales charges. In
the second example, the Class A expenses include the sales charge, but Class B,
Class C and Class N expenses do not include the contingent deferred sales
charges. There are no sales charges on Class Y shares.

1. Class B expenses for years 7 through 10 are based on Class A expenses because
Class B shares automatically convert to Class A shares 72 months after purchase.



About the Fund's Investments

THE FUND'S PRINCIPAL INVESTMENT POLICIES. The allocation of the Fund's portfolio
among different types of investments will vary over time based upon the
Manager's evaluation of economic and market trends. However, under normal market
conditions, the Fund emphasizes investments in high-yield, lower-grade debt
securities. The Fund has no requirements as to the range of maturities of the
debt securities it can buy or as to the market capitalization of the issuers of
those securities.

      The Manager does not rely solely on ratings of debt securities by rating
organizations when selecting investments for the Fund. The Fund can buy unrated
securities. The Manager assigns a rating to an unrated security that is
equivalent to what the Manager believes are comparable rated securities.

      The Fund can invest some of its assets in other types of debt securities,
as well as common stocks and other equity securities of foreign and U.S.
companies when consistent with the Fund's goals. The Fund's portfolio might not
always include all of the different types of investments described below. The
Statement of Additional Information contains more detailed information about the
Fund's investment policies and risks.

What Is A "Debt" Security? A debt security is essentially a loan by the buyer to
the issuer of the debt security. The issuer promises to pay back the principal
amount of the loan and normally pays interest, at a fixed or variable rate, on
the debt while it is outstanding.

      The Manager tries to reduce risks by carefully researching securities
before they are purchased. The Fund attempts to reduce its exposure to market
risks by diversifying its investments, that is, by not holding a substantial
amount of securities of any one issuer and by not investing too great a
percentage of the Fund's assets in any one issuer. Also, the Fund does not
concentrate 25% or more of its total assets in the securities of issuers in any
one industry or the securities of any one foreign government.

      However, changes in the overall market prices of securities and the income
they pay can occur at any time. The share price and yield of the Fund will
change daily based on changes in market prices of securities and market
conditions, and in response to other economic events.

HIGH-YIELD, LOWER-GRADE DEBT SECURITIES. The Fund mainly buys lower-grade,
high-yield debt securities of U.S. and foreign issuers, including bonds,
debentures, notes, preferred stocks, loan participation interests and
"structured" notes described below, and asset-backed securities, among others,
to seek high current income. There are no limits on the amount of the Fund's
assets that can be invested in debt securities rated below investment grade.

      The Fund can invest in securities rated as low as "C" or "D" or which may
be in default at the time the Fund buys them. While securities rated "Baa" by
Moody's or "BBB" by S&P are considered "investment grade," they have some
speculative characteristics.

FOREIGN SECURITIES. The Fund can buy a variety of debt securities issued by
foreign governments and companies, as well as "supra-national" entities, such as
the World Bank. They include bonds, debentures and notes, including derivative
investments. The Fund buys foreign currency only in connection with the purchase
and sale of foreign securities and not for speculation.

"STRUCTURED" NOTES. The Fund can buy "structured" notes, which are
specially-designed debt investments with principal payments or interest payments
that are linked to the value of an index (such as a currency or securities
index) or commodity. The terms of the instrument may be "structured" by the
purchaser (the Fund) and the borrower issuing the note.

      The values of these notes will fall or rise in response to the changes in
the values of the underlying security or index. They are subject to both credit
and interest rate risks and therefore the Fund could receive more or less than
it originally invested when the notes mature or it might receive less interest
than the stated coupon payment if the underlying investment or index does not
perform as anticipated. Their values may be very volatile and they may have a
limited trading market, making it difficult for the Fund to value or sell its
investment at an acceptable price.

Convertible Securities. The Fund may invest in high yield convertible
   securities. A convertible security is one that can be converted into or
   exchanged for a set amount of common stock of an issuer within a particular
   period of time at a specified price or according to a price formula.
   Convertible debt securities pay interest and convertible preferred stocks pay
   dividends until they mature or are converted, exchanged or redeemed. The
   Manager considers some convertible securities to be "equity equivalents"
   because of the conversion feature and in that case their rating has less
   impact on the investment decision than in the case of debt securities.
   Because of the conversion feature, the price of a convertible security will
   normally vary in some proportion to changes in the price of the underlying
   common stock. In general, convertible securities:
o  have higher yields than common stocks but lower yields than comparable
   non-convertible securities
o  may be subject to less fluctuation in value than the underlying stock
   because of their income, and
o  provide potential for capital appreciation if the market price of the
   underlying common stock increases (and in those cases may be thought of as
   "equity substitutes").

Convertible Preferred Stock. The Fund may invest in high yield convertible
   preferred stock. Unlike common stock, preferred stock typically has a stated
   dividend rate. When prevailing interest rates rise, the value of preferred
   stock having a fixed dividend rate tends to fall. The right to payment of
   dividends on preferred stock generally is subordinate to the rights of the
   company's debt securities. Preferred stock dividends may be cumulative (they
   remain a liability of the company until paid) or noncumulative.


   Some convertible preferred stock with a mandatory conversion feature has a
   set call price to buy the underlying common stock. If the underlying common
   stock price is less than the call price, the holder will pay more for the
   common stock than its market price. The issuer might also be able to redeem
   the stock prior to the mandatory conversion date, which could diminish the
   potential for capital appreciation on the investment.


DERIVATIVE INVESTMENTS. The Fund can invest in a number of different kinds of
"derivative" investments. Options, futures, interest rate swaps, structured
notes, and mortgage-related securities are "derivative investments" the Fund can
use. In addition to using derivatives to hedge risk, the Fund can use other
derivative investments because they offer the potential for increased income and
principal value.

CAN THE FUND'S INVESTMENT OBJECTIVES AND POLICIES CHANGE? The Fund's Board of
Trustees can change non-fundamental investment policies without shareholder
approval, although significant changes will be described in amendments to this
Prospectus. Fundamental policies are those that cannot be changed without the
approval of a majority of the Fund's outstanding voting shares. The Fund's
objectives are fundamental policies. Investment restrictions that are
fundamental policies are listed in the Statement of Additional Information. An
investment policy or technique is not fundamental unless this Prospectus or the
Statement of Additional Information says that it is.

OTHER INVESTMENT STRATEGIES. To seek its investment objectives, the Fund can
also use some or all the investment techniques and strategies described below.
The Fund might not always use all of them. These techniques have risks, although
some are designed to help reduce overall investment or market risks.

Common Stocks and Other Equity Securities. The Fund can invest in common stocks
       and other equity securities, including warrants and rights, preferred
       stock and convertible securities, when consistent with the Fund's
       objectives.


Loans of Portfolio Securities. The Fund has entered into a Securities Lending
      Agreement with JP Morgan Chase. Under that agreement portfolio securities
      of the Fund may be loaned to brokers, dealers and other financial
      institutions. The Securities Lending Agreement provides that loans must be
      adequately collateralized and may be made only in conformity with the
      Fund's Securities Lending Guidelines, adopted by the Fund's Board of
      Trustees. The value of the securities loaned may not exceed 25% of the
      value of the Fund's net assets. Securities lending allows the fund to
      retain ownership of the securities loaned and, at the same time, earn
      additional income. The borrower provides the Fund with collateral in an
      amount at least equal to the value of the securities loaned. The Fund
      maintains the ability to obtain the right to vote or consent on proxy
      proposals involving material events affecting securities loaned. If the
      borrower defaults on its obligation to return the securities loaned
      because of insolvency or other reasons, the Fund could experience delays
      and costs in recovering the securities loaned or in gaining access to the
      collateral. These delays and costs could be greater for foreign
      securities. If the Fund is not able to recover the securities loaned, the
      Fund may sell the collateral and purchase a replacement investment in the
      market. The value of the collateral could decrease below the value of the
      replacement investment by the time the replacement investment is
      purchased. Loans will be made only to parties deemed to be in sound
      financial condition and when, in the Manager's judgment, the income earned
      would justify the risks.


RISKS OF INVESTING IN STOCKS. Stocks fluctuate in price, and their short-term
volatility at times may be great. To the extent that the Fund invests in equity
securities, the value of the Fund's portfolio will be affected by changes in the
stock markets. Market risk can affect the Fund's net asset values per share,
which will fluctuate as the values of the Fund's portfolio securities change.
The prices of individual stocks do not all move in the same direction uniformly
or at the same time. Different stock markets may behave differently from each
other.

      Other factors can affect a particular stock's price, such as poor earnings
reports by the issuer, loss of major customers, major litigation against the
issuer, or changes in government regulations affecting the issuer or its
industry.

Mortgage-Related Securities. The Fund can buy interests in pools of residential
      or commercial mortgages, in the form of collateralized mortgage
      obligations ("CMOs") and other "pass-through" mortgage securities. They
      may be issued or guaranteed by the U.S. government or its agencies and
      instrumentalities or by private issuers. CMOs that are U.S. government
      securities have collateral to secure payment of interest and principal.
      They may be issued in different series, each having different interest
      rates and maturities. The collateral is either in the form of mortgage
      pass-through certificates issued or guaranteed by a U.S. government agency
      or instrumentality or mortgage loans insured by a U.S. government agency.

      The prices and yields of CMOs are determined, in part, by assumptions
      about the cash flows from the rate of payments of the underlying
      mortgages. Changes in interest rates may cause the rate of expected
      prepayments of those mortgages to change. In general, prepayments increase
      when general interest rates fall and decrease when interest rates rise.

      If prepayments of mortgages underlying a CMO occur faster than expected
      when interest rates fall, the market value and yield of the CMO could be
      reduced. Additionally, the Fund might have to reinvest the prepayment
      proceeds in other securities paying interest at lower rates, which could
      reduce the Fund's yield. The impact of prepayments on the price of a
      security may be difficult to predict and may increase the volatility of
      the price. Additionally, the Fund may buy mortgage-related securities at a
      premium. Accelerated prepayments on those securities could cause the Fund
      to lose a portion of its principal investment represented by the premium
      the Fund paid.

      When interest rates rise rapidly, and if prepayments occur more slowly
      than expected, a short- or medium-term CMO can in effect become a
      long-term security, subject to greater fluctuations in value. These
      prepayment risks can make the prices of CMOs very volatile when interest
      rates change. The prices of longer-term debt securities tend to fluctuate
      more than those of shorter-term debt securities. That volatility will
      affect the Fund's share prices.

      The Fund may enter into "forward roll" (also referred to as "mortgage
      dollar rolls") transactions with respect to mortgage-related securities.
      In this type of transaction, the Fund sells a mortgage-related security to
      a buyer and simultaneously agrees to repurchase a similar security at a
      later date at a set price.

      During the period between the sale and the purchase, the Fund will not be
      entitled to receive interest and principal payments on the securities that
      have been sold. It is possible that the market value of the securities the
      Fund sells may decline below the price at which the Fund is obligated to
      repurchase securities, or that the counterparty might default in its
      obligation.

Private-Issuer Mortgage-Backed Securities. Mortgage-backed securities issued by
      private issuers do not offer the credit backing of U.S. government
      securities. Primarily these include multi-class debt or pass-through
      certificates secured by mortgage loans. They may be issued by banks,
      savings and loans, mortgage bankers and other non-governmental issuers.
      Private issuer mortgage-backed securities are subject to the credit risks
      of the issuers (as well as the interest rate risks and prepayment risks of
      CMOs), although in some cases they may be supported by insurance or
      guarantees.

Participation Interests in Loans. These securities represent an undivided
      fractional interest in a loan obligation by a borrower. They are typically
      purchased from banks or dealers that have made the loan or are members of
      the loan syndicate. The loans may be to foreign or U.S. companies. The
      Fund does not invest more than 5% of its net assets in participation
      interests of any one borrower. They are subject to the risk of default by
      the borrower. If the borrower fails to pay interest or repay principal,
      the Fund can lose money on its investment. The Fund can also purchase
      interests in trusts or other entities that hold loan obligations. In that
      case the Fund will also be subject to the trust's credit risks.

Illiquid and Restricted Securities. 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. A restricted security is
      one that has a contractual restriction on its resale or which cannot be
      sold publicly until it is registered under the Securities Act of 1933. The
      Fund will not invest more than 10% of its net assets in illiquid or
      restricted securities. The Board can increase that limit to 15%. That
      percentage limitation is not a fundamental policy. Certain restricted
      securities that are eligible for resale to qualified institutional
      purchasers may not be subject to that limit. The Manager monitors holdings
      of illiquid securities on an ongoing basis to determine whether to sell
      any holdings to maintain adequate liquidity.

Hedging. The Fund can buy and sell futures contracts, put and call options and
      forward contracts. These are all referred to as "hedging instruments." The
      Fund is not required to use hedging instruments to seek its objectives.
      The Fund will not use hedging instruments for speculative purposes, and
      has limits on its use of them.

      The Fund could buy and sell options, futures and forward contracts for a
      number of purposes. It might do so to try to manage its exposure to the
      possibility that the prices of its portfolio securities may decline, or to
      establish a position in the securities market as a temporary substitute
      for purchasing individual securities. It might do so to try to manage its
      exposure to changing interest rates. The Fund can use forward contracts to
      try to manage foreign currency risks on the Fund's foreign investments.

      Options trading involves the payment of premiums and has special tax
      effects on the Fund. There are also special risks in particular hedging
      strategies. For example, 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 and will not be able to
      realize any profit if the investment has increased in value above the call
      price. In writing a put, there is a risk that the Fund may be required to
      buy the underlying security at a disadvantageous price.

      If the Manager used a hedging instrument at the wrong time or judged
      market conditions incorrectly, the strategy could 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 or if
      it could not close out a position because of an illiquid market.

Portfolio Turnover. The Fund may engage in short-term trading to achieve its
      objectives. It might have a turnover rate in excess of 100% annually.
      Portfolio turnover affects brokerage costs, although the Fund does not pay
      for brokerage on most of its portfolio transactions. If the Fund realizes
      capital gains when it sells its portfolio investments, it must generally
      pay those gains out to shareholders, increasing their taxable
      distributions. The Financial Highlights table at the end of this
      Prospectus shows the Fund's portfolio turnover rates during prior fiscal
      years.


Temporary Defensive and Interim Investments. In times of unstable adverse market
      or economic conditions, the Fund can invest up to 100% of its assets in
      temporary investments that are inconsistent with the Funds' principal
      investment strategies. Generally they would be cash or cash equivalents,
      such as U.S. Treasury Bills and other short-term U.S. government
      obligations or high-grade commercial paper. The Fund may also hold these
      types of securities pending the investment of proceeds from the sale of
      Fund shares or portfolio securities or to meet anticipated redemptions of
      Fund shares. To the extent the Fund invests defensively in these
      securities, it might not achieve its investment objectives.


How the Fund Is Managed

THE MANAGER. The Manager chooses the Fund's investment program and handles its
day-to-day business. The Manager carries out its duties, subject to the policies
established by the Fund's Board of Trustees, under an investment advisory
agreement that states the Manager's responsibilities. The agreement sets the
fees the Fund pays to the Manager and describes the expenses that the Fund is
responsible to pay to conduct its business.


      The Manager has been an investment adviser since January 1960. The Manager
and its subsidiaries and controlled affiliates managed more than $130 billion in
assets as of June 30, 2003, including other Oppenheimer funds with more than 7
million shareholder accounts. The Manager is located at 498 Seventh Avenue, New
York, New York 10018.

Portfolio  Managers.  The  portfolio  managers  of  the  Fund  are  Arthur  P.
     Steinmetz and Dimitrios  Kourkoulakos.  They are the persons  principally
     responsible for the day-to-day management of the Fund's investments,  Mr.
     Steinmetz  since February 5, 2003 and Mr.  Kourkoulakos  since June 2002.
     Prior to becoming a portfolio  manager of the Fund, Mr.  Kourkoulakos was
     an analyst with the Manager's high yield group.  Both are Vice Presidents
     of the  Fund  and  Mr.  Steinmetz  is a  Senior  Vice  President  and Mr.
     Kourkoulakos  is a Vice  President  of the  Manager.  They also  serve as
     officers and portfolio managers of other Oppenheimer funds.

Advisory Fees. Under the Fund's investment advisory agreement, the Fund pays the
      Manager an advisory fee at an annual rate that declines as the Fund's
      assets grow: 0.75% of the first $200 million of average annual net assets,
      0.72% of the next $200 million, 0.69% of the next $200 million, 0.66% of
      the next $200 million, 0.60% of the next $200 million and 0.50% of average
      annual net assets over $1 billion. The Fund's management fee for its last
      fiscal year ended June 30, 2003 was 0.63% of average annual net assets for
      each class of shares.



A B O U T  Y O U R  A C C O U N T

How to Buy Shares

You can buy shares several ways, as described below. The Fund's Distributor,
OppenheimerFunds Distributor, Inc., may appoint servicing agents to accept
purchase (and redemption) orders. The Distributor, in its sole discretion,
may reject any purchase order for the Fund's shares.

Buying Shares Through Your Dealer. You can buy shares through any dealer, broker
      or financial institution that has a sales agreement with the Distributor.
      Your dealer will place your order with the Distributor on your behalf.
Buying Shares Through the Distributor. Complete an OppenheimerFunds New Account
      Application and return it with a check payable to "OppenheimerFunds
      Distributor, Inc." Mail it to P.O. Box 5270, Denver, Colorado 80217. If
      you don't list a dealer on the application, the Distributor will act as
      your agent in buying the shares. However, we recommend that you discuss
      your investment with a financial advisor before you make a purchase to be
      sure that the Fund is appropriate for you.


o     Paying by Federal Funds Wire. Shares purchased through the Distributor may
      be paid for by Federal Funds wire. The minimum investment is $2,500.
      Before sending a wire, call the Distributor's Wire Department at
      1.800.225.5677 to notify the Distributor of the wire and to receive
      further instructions.

o     Buying Shares Through OppenheimerFunds AccountLink. With AccountLink,
      you pay for shares by electronic funds transfers from your bank
      account. Shares are purchased for your account by a transfer of money
      from your bank account through the Automated Clearing House (ACH)
      system. You can provide those instructions automatically, under an
      Asset Builder Plan, described below, or by telephone instructions using
      OppenheimerFunds PhoneLink, also described below. Please refer to
      "AccountLink," below for more details.
o     Buying Shares Through Asset Builder Plans. You may purchase shares of the
      Fund automatically each month from your account at a bank or other
      financial institution under an Asset Builder Plan with AccountLink.
      Details are in the Asset Builder Application and the Statement of
      Additional Information.


WHAT IS THE MINIMUM AMOUNT YOU MUST INVEST? In most cases, you can buy Fund
shares with a minimum initial investment of $1,000 and make additional
investments at any time with as little as $50. There are reduced minimums
available under the following special investment plans:
   If you establish one of the many types of retirement plan accounts that
      OppenheimerFunds offers, more fully described below under "Special
      Investor Services," you can start your account with as little as $500.
o     By using an Asset Builder Plan or Automatic Exchange Plan (details are in
      the Statement of Additional Information), or government allotment plan,
      you can make subsequent investments (after making the initial investment
      of $500) for as little as $50. For any type of account established under
      one of these plans prior to November 1, 2002, the minimum additional
      investment will remain $25.

o     The minimum investment requirement does not apply to reinvesting dividends
      from the Fund or other Oppenheimer funds (a list of them appears in the
      Statement of Additional Information, or you can ask your dealer or call
      the Transfer Agent), or reinvesting distributions from unit investment
      trusts that have made arrangements with the Distributor.

AT WHAT PRICE ARE SHARES SOLD? Shares are sold at their offering price which is
the net asset value per share plus any initial sales charge that applies. The
offering price that applies to a purchase order is based on the next calculation
of the net asset value per share that is made after the Distributor receives the
purchase order at its offices in Colorado, or after any agent appointed by the
Distributor receives the order.


Net   Asset Value. The Fund calculates the net asset value of each class of
      shares as of the close of The New York Stock Exchange (the "Exchange"), on
      each day the Exchange is open for trading (referred to in this Prospectus
      as a "regular business day"). The Exchange normally closes at 4:00 P.M.,
      Eastern time, but may close earlier on some days. All references to time
      in this Prospectus mean "Eastern time."


      The net asset value per share is determined by dividing the value of the
      Fund's net assets attributable to a class by the number of shares of that
      class that are outstanding. To determine net asset value, the Fund's Board
      of Trustees has established procedures to value the Fund's securities, in
      general, based on market value. The Board has adopted special procedures
      for valuing illiquid and restricted securities and obligations for which
      market values cannot be readily obtained. Because some foreign securities
      trade in markets and on exchanges that operate on weekends and U.S.
      holidays, the values of some of the Fund's foreign investments may change
      on days when investors cannot buy or redeem Fund shares.

      If, after the close of the principal market on which a security held by
      the Fund is traded, and before the time the Fund's securities are priced
      that day, an event occurs that the Manager deems likely to cause a
      material change in the value of such security, the Fund's Board of
      Trustees has authorized the Manager, subject to the Board's review, to
      ascertain a fair value for such security. A security's valuation may
      differ depending on the method used for determining value.


The Offering Price. To receive the offering price for a particular day, in
      most cases the Distributor or its designated agent must receive your order
      by the time of day the Exchange closes that day. If your order is received
      on a day when the Exchange is closed or after it has closed, the order
      will receive the next offering price that is determined after your order
      is received.
Buying Through a Dealer. If you buy shares through a dealer, your dealer must
      receive the order by the close of the Exchange and transmit it to the
      Distributor so that it is received before the Distributor's close of
      business on a regular business day (normally 5:00 P.M.) to receive that
      day's offering price, unless your dealer has made alternative arrangements
      with the Distributor. Otherwise, the order will receive the next offering
      price that is determined.


------------------------------------------------------------------------------
WHAT CLASSES OF SHARES DOES THE FUND OFFER? The Fund offers investors five
different classes of shares. The different classes of shares represent
investments in the same portfolio of securities, but the classes are subject to
different expenses and will likely have different share prices. When you buy
shares, be sure to specify the class of shares. If you do not choose a class,
your investment will be made in Class A shares.
------------------------------------------------------------------------------
------------------------------------------------------------------------------

Class A Shares. If you buy Class A shares, you pay an initial sales charge (on
      investments up to $1 million for regular accounts or lesser amounts for
      certain retirement plans). The amount of that sales charge will vary
      depending on the amount you invest. The sales charge rates are listed in
      "How Can You Buy Class A Shares?" below.

------------------------------------------------------------------------------
Class B Shares. If you buy Class B shares, you pay no sales charge at the time
      of purchase, but you will pay an annual asset-based sales charge. If you
      sell your shares within 6 years of buying them, you will normally pay a
      contingent deferred sales charge. That contingent deferred sales charge
      varies depending on how long you own your shares, as described in "How Can
      You Buy Class B Shares?" below.
------------------------------------------------------------------------------
Class C Shares. If you buy Class C shares, you pay no sales charge at the time
      of purchase, but you will pay an annual asset-based sales charge. If you
      sell your shares within 12 months of buying them, you will normally pay a
      contingent deferred sales charge of 1.0%, as described in "How Can You Buy
      Class C Shares?" below.
------------------------------------------------------------------------------
Class N Shares. If you buy Class N shares (available only through certain
      retirement plans), you pay no sales charge at the time of purchase, but
      you will pay an annual asset-based sales charge. If you sell your shares
      within 18 months of the retirement plan's first purchase of Class N
      shares, you may pay a contingent deferred sales charge of 1.0%, as
      described in "How Can You Buy Class N Shares?" below.
Class Y Shares. Class Y shares are offered only to certain institutional
      investors that have special agreements with the Distributor.

WHICH CLASS OF SHARES SHOULD YOU CHOOSE? Once you decide that the Fund is an
appropriate investment for you, the decision as to which class of shares is best
suited to your needs depends on a number of factors that you should discuss with
your financial advisor. Some factors to consider are how much you plan to invest
and how long you plan to hold your investment. If your goals and objectives
change over time and you plan to purchase additional shares, you should
re-evaluate those factors to see if you should consider another class of shares.
The Fund's operating costs that apply to a class of shares and the effect of the
different types of sales charges on your investment will vary your investment
results over time.

      The discussion below is not intended to be investment advice or a
recommendation, because each investor's financial considerations are different.
The discussion below assumes that you will purchase only one class of shares and
not a combination of shares of different classes. Of course, these examples are
based on approximations of the effects of current sales charges and expenses
projected over time, and do not detail all of the considerations in selecting a
class of shares. You should analyze your options carefully with your financial
advisor before making that choice.

How Long Do You Expect to Hold Your Investment? While future financial needs
      cannot be predicted with certainty, knowing how long you expect to hold
      your investment will assist you in selecting the appropriate class of
      shares. Because of the effect of class-based expenses, your choice will
      also depend on how much you plan to invest. For example, the reduced sales
      charges available for larger purchases of Class A shares may, over time,
      offset the effect of paying an initial sales charge on your investment,
      compared to the effect over time of higher class-based expenses on shares
      of Class B, Class C or Class N. For retirement plans that qualify to
      purchase Class N shares, Class N shares will generally be more
      advantageous than Class B and Class C shares.

   o  Investing for the Shorter Term. While the Fund is meant to be a long-term
      investment, if you have a relatively short-term investment horizon (that
      is, you plan to hold your shares for not more than six years), you should
      probably consider purchasing Class A or Class C shares rather than Class B
      shares. That is because of the effect of the Class B contingent deferred
      sales charge if you redeem within six years, as well as the effect of the
      Class B asset-based sales charge on the investment return for that class
      in the short-term. Class C shares might be the appropriate choice
      (especially for investments of less than $100,000), because there is no
      initial sales charge on Class C shares, and the contingent deferred sales
      charge does not apply to amounts you sell after holding them one year.

      However, if you plan to invest more than $100,000 for the shorter term,
      then as your investment horizon increases toward six years, Class C shares
      might not be as advantageous as Class A shares. That is because the annual
      asset-based sales charge on Class C shares will have a greater impact on
      your account over the longer term than the reduced front-end sales charge
      available for larger purchases of Class A shares.

      And for non-retirement plan investors who invest $1 million or more, in
      most cases Class A shares will be the most advantageous choice, no matter
      how long you intend to hold your shares. For that reason, the Distributor
      normally will not accept purchase orders of $500,000 or more of Class B
      shares or $1 million or more of Class C shares from a single investor.

o     Investing for the Longer Term. If you are investing less than $100,000 for
      the longer-term, for example for retirement, and do not expect to need
      access to your money for seven years or more, Class B shares may be
      appropriate.

Are There Differences in Account Features That Matter to You? Some account
      features may not be available to Class B, Class C and Class N
      shareholders. Other features may not be advisable (because of the effect
      of the contingent deferred sales charge) for Class B, Class C and Class N
      shareholders. Therefore, you should carefully review how you plan to use
      your investment account before deciding which class of shares to buy.


      Additionally, the dividends payable to Class B, Class C and Class N
      shareholders will be reduced by the additional expenses borne by those
      classes that are not borne by Class A or Class Y shares, such as the Class
      B, Class C and Class N asset-based sales charge described below and in the
      Statement of Additional Information. Share certificates are only available
      for Class A shares. If you are considering using your shares as collateral
      for a loan, that may be a factor to consider. Also, checkwriting is not
      available on accounts subject to a contingent deferred sales charge.


How Do Share Classes Affect Payments to Your Broker? A financial advisor may
      receive different compensation for selling one class of shares than for
      selling another class. It is important to remember that Class B, Class C
      and Class N contingent deferred sales charges and asset-based sales
      charges have the same purpose as the front-end sales charge on sales of
      Class A shares: to compensate the Distributor for concessions and expenses
      it pays to dealers and financial institutions for selling shares. The
      Distributor may pay additional compensation from its own resources to
      securities dealers or financial institutions based upon the value of
      shares of the Fund owned by the dealer or financial institution for its
      own account or for its customers.


SPECIAL SALES CHARGE ARRANGEMENTS AND WAIVERS. Appendix C to the Statement of
Additional Information details the conditions for the waiver of sales charges
that apply in certain cases, and the special sales charge rates that apply to
purchases of shares of the Fund by certain groups, or under specified retirement
plan arrangements or in other special types of transactions. To receive a waiver
or special sales charge rate, you must advise the Distributor when purchasing
shares or the Transfer Agent when redeeming shares that a special condition
applies.


HOW CAN YOU BUY CLASS A SHARES? Class A shares are sold at their offering price,
which is normally net asset value plus an initial sales charge. However, in some
cases, described below, purchases are not subject to an initial sales charge,
and the offering price will be the net asset value. In other cases, reduced
sales charges may be available, as described below or in the Statement of
Additional Information. Out of the amount you invest, the Fund receives the net
asset value to invest for your account.

      The sales charge varies depending on the amount of your purchase. A
portion of the sales charge may be retained by the Distributor or allocated to
your dealer as a concession. The Distributor reserves the right to reallow the
entire concession to dealers. The current sales charge rates and concessions
paid to dealers and brokers are as follows:

 ------------------------------------------------------------------------------
                          Front-End Sales   Front-End Sales    Concession As
                            Charge As a       Charge As a
                           Percentage of   Percentage of Net   Percentage of
 Amount of Purchase        Offering Price   Amount Invested   Offering Price
 ------------------------------------------------------------------------------
 ------------------------------------------------------------------------------
 Less than $50,000             4.75%             4.98%             4.00%
 ------------------------------------------------------------------------------
 ------------------------------------------------------------------------------
 $50,000 or more but           4.50%             4.71%             3.75%
 less than $100,000
 ------------------------------------------------------------------------------
 ------------------------------------------------------------------------------
 $100,000 or more but          3.50%             3.63%             2.75%
 less than $250,000
 ------------------------------------------------------------------------------
 ------------------------------------------------------------------------------
 $250,000 or more but          2.50%             2.56%             2.00%
 less than $500,000
 ------------------------------------------------------------------------------
 ------------------------------------------------------------------------------
 $500,000 or more but          2.00%             2.04%             1.60%
 less than $1 million
 ------------------------------------------------------------------------------

Can You Reduce Class A Sales Charges? You may be eligible to buy Class A
      shares at reduced sales charge rates under the Fund's "Right of
      Accumulation" or a Letter of Intent, as described in "Reduced Sales
      Charges" in the Statement of Additional Information.


Class A Contingent Deferred Sales Charge. There is no initial sales charge on
      purchases of Class A shares of any one or more of the Oppenheimer funds
      aggregating $1 million or more, or for certain purchases of Class A shares
      by particular types of retirement plans that were permitted to purchase
      such shares prior to March 1, 2001 ("grandfathered retirement accounts").
      Qualified retirement plans (other than single 401(k) plans, SEP and SIMPLE
      plans) are not permitted to make initial purchases of Class A shares
      subject to a contingent deferred sales charge. The Distributor pays
      dealers of record concessions in an amount equal to 1.0% of purchases of
      $1 million or more other than by grandfathered retirement accounts. For
      grandfathered retirement accounts, the concession is 0.75% of the first
      $2.5 million of purchases plus 0.25% of purchases in excess of $2.5
      million. In either case, the concession will not be paid on purchases of
      shares by exchange or that were previously subject to a front-end sales
      charge and dealer concession.

      If you redeem any of those shares within an 18-month "holding period"
      measured from the beginning of the calendar month of their purchase, a
      contingent deferred sales charge (called the "Class A contingent deferred
      sales charge") may be deducted from the redemption proceeds. That sales
      charge will be equal to 1.0% of the lesser of:
o     the aggregate net asset value of the redeemed shares at the time of
      redemption (excluding shares purchased by reinvestment of dividends or
      capital gain distributions) or
o     the original net asset value of the redeemed shares.

      The Class A contingent deferred sales charge will not exceed the aggregate
      amount of the concessions the Distributor paid to your dealer on all
      purchases of Class A shares of all Oppenheimer funds you made that were
      subject to the Class A contingent deferred sales charge.

Purchases by Certain Retirement Plans. There is no initial sales charge on
      purchases of Class A shares of any one or more Oppenheimer funds by
      retirement plans that have $10 million or more in plan assets and that
      have entered into a special agreement with the Distributor and by
      retirement plans which are part of a retirement plan product or platform
      offered by certain banks, broker-dealers, financial advisors, insurance
      companies or recordkeepers which have entered into a special agreement
      with the Distributor. The Distributor currently pays dealers of record
      concessions in an amount equal to 0.25% of the purchase price of Class A
      shares by those retirement plans from its own resources at the time of
      sale, subject to certain exceptions as described in the Statement of
      Additional Information. There is no contingent deferred sales charge upon
      the redemption of such shares.

HOW CAN YOU BUY CLASS B SHARES? Class B shares are sold at net asset value per
share without an initial sales charge. However, if Class B shares are redeemed
within six years from the beginning of the calendar month of their purchase, a
contingent deferred sales charge will be deducted from the redemption proceeds.
The Class B contingent deferred sales charge is paid to compensate the
Distributor for its expenses of providing distribution-related services to the
Fund in connection with the sale of Class B shares.

      The amount of the contingent deferred sales charge will depend on the
number of years since you invested and the dollar amount being redeemed,
according to the following schedule for the Class B contingent deferred sales
charge holding period:

-------------------------------------------------------------------------------
Years Since Beginning of Month in    Contingent Deferred Sales Charge on
Which Purchase Order was Accepted    Redemptions in That Year (As % of Amount
                                     Subject to Charge)
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
0 - 1                                5.0%
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
1 - 2                                4.0%
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
2 - 3                                3.0%
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
3 - 4                                3.0%
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
4 - 5                                2.0%
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
5 - 6                                1.0%
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------

More than 6                          None

-------------------------------------------------------------------------------
In the table, a "year" is a 12-month period. In applying the contingent deferred
sales charge, all purchases are considered to have been made on the first
regular business day of the month in which the purchase was made.

Automatic Conversion of Class B Shares. Class B shares automatically convert to
      Class A shares 72 months after you purchase them. This conversion feature
      relieves Class B shareholders of the asset-based sales charge that applies
      to Class B shares under the Class B Distribution and Service Plan,
      described below. The conversion is based on the relative net asset value
      of the two classes, and no sales load or other charge is imposed. When any
      Class B shares that you hold convert, any other Class B shares that were
      acquired by reinvesting dividends and distributions on the converted
      shares will also convert to Class A shares. For further information on the
      conversion feature and its tax implications, see "Class B Conversion" in
      the Statement of Additional Information.

How Can you Buy Class C Shares? Class C shares are sold at net asset value per
share without an initial sales charge. However, if Class C shares are redeemed
within a holding period of 12 months from the beginning of the calendar month of
their purchase, a contingent deferred sales charge of 1.0% will be deducted from
the redemption proceeds. The Class C contingent deferred sales charge is paid to
compensate the Distributor for its expenses of providing distribution-related
services to the Fund in connection with the sale of Class C shares.

HOW CAN YOU BUY CLASS N SHARES? Class N shares are offered for sale to
retirement plans (including IRAs and 403(b) plans) that purchase $500,000 or
more of Class N shares of one or more Oppenheimer funds or to group retirement
plans (which do not include IRAs and 403(b) plans) that have assets of $500,000
or more or 100 or more eligible participants. See "Availability of Class N
shares" in the Statement of Additional Information for other circumstances where
Class N shares are available for purchase.


      Class N shares are sold at net asset value without an initial sales
charge. Class N shares are sold at net asset value without an initial sales
charge. A contingent deferred sales charge of 1.0% will be imposed upon the
redemption of Class N shares, if:

o     The group retirement plan 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
o     With respect to an IRA 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.


      Retirement plans that offer Class N shares may impose charges on plan
participant accounts. The procedures for buying, selling, exchanging and
transferring the Fund's other classes of shares (other than the time those
orders must be received by the Distributor or Transfer Agent in Colorado) and
the special account features applicable to purchasers of those other classes of
shares described elsewhere in this Prospectus do not apply to Class N shares
offered through a group retirement plan. Instructions for buying, selling,
exchanging or transferring Class N shares offered through a group retirement
plan must be submitted by the plan, not by plan participants for whose benefit
the shares are held.


Who Can Buy Class Y Shares? Class Y shares are sold at net asset value per share
without a sales charge directly to institutional investors that have special
agreements with the Distributor for this purpose. They may include insurance
companies, registered investment companies and employee benefit plans.
Individual investors cannot buy Class Y shares directly.

      An institutional investor that buys Class Y shares for its customers'
accounts may impose charges on those accounts. The procedures for buying,
selling, exchanging and transferring the Fund's other classes of shares (other
than the time those orders must be received by the Distributor or Transfer Agent
at their Colorado office) and the special account features available to
investors buying those other classes of shares do not apply to Class Y shares.
Instructions for buying, selling, exchanging or transferring Class Y shares must
be submitted by the institutional investor, not by its customers for whose
benefit the shares are held.

DISTRIBUTION AND SERVICE (12b-1) PLANS.


Service Plan for Class A Shares. The Fund has adopted a Service Plan for Class A
      shares. It reimburses the Distributor for a portion of its costs incurred
      for services provided to accounts that hold Class A shares. Reimbursement
      is made quarterly at an annual rate of up to 0.25% of the average annual
      net assets of Class A shares of the Fund. The Distributor currently uses
      all of those fees to pay dealers, brokers, banks and other financial
      institutions quarterly for providing personal service and maintenance of
      accounts of their customers that hold Class A shares. With respect to
      Class A shares subject to a Class A contingent deferred sales charge
      purchased by grandfathered retirement accounts, the Distributor pays the
      0.25% service fee to dealers in advance for the first year after the
      shares are sold by the dealer. During the first year the shares are sold
      to grandfathered retirement accounts, the Distributor retains the service
      fee. After the shares have been held by grandfathered retirement accounts
      for a year, the Distributor pays the service fee to dealers on a quarterly
      basis.

Distribution and Service Plans for Class B, Class C and Class N Shares. The Fund
      has adopted Distribution and Service Plans for Class B, Class C and Class
      N shares to pay the Distributor for its services and costs in distributing
      Class B, Class C and Class N shares and servicing accounts. Under the
      plans, the Fund pays the Distributor an annual asset-based sales charge of
      0.75% on Class B and Class C shares and 0.25% on Class N shares. The
      Distributor also receives a service fee of 0.25% per year under the Class
      B, Class C and Class N plans.

      The asset-based sales charge and service fees increase Class B and Class C
      expenses by 1.0% and increase Class N expenses by 0.50% of the net assets
      per year of the respective class. Because these fees are paid out of the
      Fund's assets on an on-going basis, over time these fees will increase the
      cost of your investment and may cost you more than other types of sales
      charges.


      The Distributor uses the service fees to compensate dealers for providing
      personal services for accounts that hold Class B, Class C or Class N
      shares. The Distributor normally pays the 0.25% service fees to dealers in
      advance for the first year after the shares are sold by the dealer. After
      the shares have been held for a year, the Distributor pays the service
      fees to dealers on a quarterly basis. The Distributor retains the service
      fees for accounts for which it renders the required personal services.

      The Distributor currently pays a sales concession of 3.75% of the purchase
      price of Class B shares to dealers from its own resources at the time of
      sale. Including the advance of the service fee, the total amount paid by
      the Distributor to the dealer at the time of sale of Class B shares is
      therefore 4.00% of the purchase price. The Distributor normally retains
      the Class B asset-based sales charge. See the Statement of Additional
      Information for exceptions.

      The Distributor currently pays a sales concession of 0.75% of the purchase
      price of Class C shares to dealers from its own resources at the time of
      sale. Including the advance of the service fee, the total amount paid by
      the Distributor to the dealer at the time of sale of Class C shares is
      therefore 1.0% of the purchase price. The Distributor normally pays the
      asset-based sales charge as an ongoing concession to the dealer on Class C
      shares that have been outstanding for a year or more. See the Statement of
      Additional Information for exceptions.

      The Distributor currently pays a sales concession of 0.75% of the purchase
      price of Class N shares to dealers from its own resources at the time of
      sale. Including the advance of the service fee, the total amount paid by
      the Distributor to the dealer at the time of sale of Class N shares is
      therefore 1.0% of the purchase price. The Distributor normally retains the
      asset-based sales charge on Class N shares. See the Statement of
      Additional Information for exceptions.



Special Investor Services

ACCOUNTLINK. You can use our AccountLink feature to link your Fund account with
an account at a U.S. bank or other financial institution. It must be an
Automated Clearing House (ACH) member. AccountLink lets you:
    o transmit funds electronically to purchase shares by telephone (through a
      service representative or by PhoneLink) or automatically under Asset
      Builder Plans, or
    o have the Transfer Agent send redemption proceeds or transmit dividends and
      distributions directly to your bank account. Please call the Transfer
      Agent for more information.


      You may purchase shares by telephone only after your account has been
established. To purchase shares in amounts up to $250,000 through a telephone
representative, call the Distributor at 1.800.225.5677. The purchase payment
will be debited from your bank account.

      AccountLink privileges should be requested on your Application or your
dealer's settlement instructions if you buy your shares through a dealer. After
your account is established, you can request AccountLink privileges by sending
signature-guaranteed instructions and proper documentation to the Transfer
Agent. AccountLink privileges will apply to each shareholder listed in the
registration on your account as well as to your dealer representative of record
unless and until the Transfer Agent receives written instructions terminating or
changing those privileges. After you establish AccountLink for your account, any
change of bank account information must be made by signature-guaranteed
instructions to the Transfer Agent signed by all shareholders who own the
account.

PHONELINK. PhoneLink is the OppenheimerFunds automated telephone system that
enables shareholders to perform a number of account transactions automatically
using a touch-tone phone. PhoneLink may be used on already-established Fund
accounts after you obtain a Personal Identification Number (PIN), by calling the
PhoneLink number, 1.800.225.5677. Purchasing Shares. You may purchase shares in
amounts up to $100,000 by
      phone, by calling 1.800.225.5677. You must have established AccountLink
      privileges to link your bank account with the Fund to pay for these
      purchases.

Exchanging Shares. With the OppenheimerFunds Exchange Privilege, described
      below, you can exchange shares automatically by phone from your Fund
      account to another OppenheimerFunds account you have already established
      by calling the special PhoneLink number.
Selling Shares. You can redeem shares by telephone automatically by calling the
      PhoneLink number and the Fund will send the proceeds directly to your
      AccountLink bank account. Please refer to "How to Sell Shares," below for
      details.


CAN YOU SUBMIT TRANSACTION REQUESTS BY FAX? You may send requests for certain
types of account transactions to the Transfer Agent by fax (telecopier). Please
call 1.800.225.5677 for information about which transactions may be handled this
way. Transaction requests submitted by fax are subject to the same rules and
restrictions as written and telephone requests described in this Prospectus.

OPPENHEIMERFUNDS INTERNET WEBSITE. You can obtain information about the Fund, as
well as your account balance, on the OppenheimerFunds Internet website, at
www.oppenheimerfunds.com. Additionally, shareholders listed in the account
registration (and the dealer of record) may request certain account transactions
through a special section of that website. To perform account transactions or
obtain account information online, you must first obtain a user I.D. and
password on that website. If you do not want to have Internet account
transaction capability for your account, please call the Transfer Agent at
1.800.225.5677. At times, the website may be inaccessible or its transaction
features may be unavailable.


AUTOMATIC WITHDRAWAL AND EXCHANGE PLANS. The Fund has several plans that enable
you to sell shares automatically or exchange them to another OppenheimerFunds
account on a regular basis. Please call the Transfer Agent or consult the
Statement of Additional Information for details.


REINVESTMENT PRIVILEGE. If you redeem some or all of your Class A or Class B
shares of the Fund, you have up to six months to reinvest all or part of the
redemption proceeds in Class A shares of the Fund or other Oppenheimer funds
without paying a sales charge. This privilege applies only to Class A shares
that you purchased subject to an initial sales charge and to Class A or Class B
shares on which you paid a contingent deferred sales charge when you redeemed
them. This privilege does not apply to Class C, Class N or Class Y shares. You
must be sure to ask the Distributor for this privilege when you send your
payment.


RETIREMENT PLANS. You may buy shares of the Fund for your retirement plan
account. If you participate in a plan sponsored by your employer, the plan
trustee or administrator must buy the shares for your plan account. The
Distributor also offers a number of different retirement plans that individuals
and employers can use:
Individual Retirement Accounts (IRAs). These include regular IRAs, Roth IRAs,
      SIMPLE IRAs and rollover IRAs.
SEP-IRAs. These are Simplified Employee Pension Plan IRAs for small business
      owners or self-employed individuals.
403(b)(7) Custodial Plans. These are tax-deferred plans for employees of
      eligible tax-exempt organizations, such as schools, hospitals and
      charitable organizations.
401(k)Plans. These are special retirement plans for businesses. Pension and
      Profit-Sharing Plans. These plans are designed for businesses and
      self-employed individuals.

      Please call the Distributor for OppenheimerFunds retirement plan
documents, which include applications and important plan information.

How to Sell Shares


You can sell (redeem) some or all of your shares on any regular business day.
Your shares will be sold at the next net asset value calculated after your order
is received in proper form (which means that it must comply with the procedures
described below) and is accepted by the Transfer Agent. The Fund lets you sell
your shares by writing a letter, by wire, by using the Fund's checkwriting
privilege, or by telephone. You can also set up Automatic Withdrawal Plans to
redeem shares on a regular basis. If you have questions about any of these
procedures, and especially if you are redeeming shares in a special situation,
such as due to the death of the owner or from a retirement plan account, please
call the Transfer Agent first, at 1.800.225.5677, for assistance.


Certain Requests Require a Signature Guarantee. To protect you and the Fund from
      fraud, the following redemption requests must be in writing and must
      include a signature guarantee (although there may be other situations that
      also require a signature guarantee):
   o You wish to redeem more than $100,000 and receive a check o The redemption
     check is not payable to all shareholders listed on the
      account statement
   o  The redemption check is not sent to the address of record on your
      account statement
   o  Shares are being transferred to a Fund account with a different owner
      or name
   o  Shares are being redeemed by someone (such as an Executor) other than the
      owners.

Where Can You Have Your Signature Guaranteed? The Transfer Agent will accept a
      guarantee of your signature by a number of financial institutions,
      including:
o     a U.S. bank, trust company, credit union or savings association,
o     a foreign bank that has a U.S. correspondent bank,
o     a U.S. registered dealer or broker in securities, municipal securities
      or government securities, or
o     a U.S. national securities exchange, a registered securities
      association or a clearing agency.
      If you are signing on behalf of a corporation, partnership or other
      business or as a fiduciary, you must also include your title in the
      signature.

Retirement Plan Accounts. There are special procedures to sell shares in an
      OppenheimerFunds retirement plan account. Call the Transfer Agent for a
      distribution request form. Special income tax withholding requirements
      apply to distributions from retirement plans. You must submit a
      withholding form with your redemption request to avoid delay in getting
      your money and if you do not want tax withheld. If your employer holds
      your retirement plan account for you in the name of the plan, you must ask
      the plan trustee or administrator to request the sale of the Fund shares
      in your plan account.


Sending Redemption Proceeds by Wire. While the Fund normally sends your money by
      check, you can arrange to have the proceeds of shares you sell sent by
      Federal Funds wire to a bank account you designate. It must be a
      commercial bank that is a member of the Federal Reserve wire system. The
      minimum redemption you can have sent by wire is $2,500. There is a $10 fee
      for each wire. To find out how to set up this feature on your account or
      to arrange a wire, call the Transfer Agent at 1.800.225.5677.

Checkwriting. To write checks against your Fund account, request that privilege
on your account application, or contact the Transfer Agent for signature cards.
They must be signed (with a signature guarantee) by all owners of the account
and returned to the Transfer Agent so that checks can be sent to you to use.
Shareholders with joint accounts can elect in writing to have checks paid over
the signature of one owner. If you previously signed a signature card to
establish checkwriting in another Oppenheimer fund, simply call 1.800.225.5677
to request checkwriting for an account in this Fund with the same registration
as the other account.

   o  Checks can be written to the order of whomever you wish, but may not be
      cashed at the bank the checks are payable through or the Fund's custodian
      bank.
   o  Checkwriting privileges are not available for accounts holding shares that
      are subject to a contingent deferred sales charge.

   Checks must be written for at least $500. Checks written below the stated
      amount on the check will not be accepted. However, if you have existing
      checks indicating a $100 minimum, you may still use them for amounts of
      $100 or more.

   Checks cannot be paid if they are written for more than your account value.
      Remember, your shares fluctuate in value and you should not write a check
      close to the total account value.
o     You may not write a check that would require the Fund to redeem shares
      that were purchased by check or Asset Builder Plan payments within the
      prior 10 days.
o     Don't use your checks if you changed your Fund account number, until you
      receive new checks.

HOWDO you SELL SHARES BY MAIL? Write a letter of instruction that includes: o
   Your name o The Fund's name o Your Fund account number (from your account
   statement) o The dollar amount or number of shares to be redeemed o Any
   special payment instructions o Any share certificates for the shares you are
   selling o The signatures of all registered owners exactly as the account is
      registered, and
   o  Any special documents requested by the Transfer Agent to assure proper
      authorization of the person asking to sell the shares.

Use the following address for            Send courier or express mail

requests by mail:                        requests to:
OppenheimerFunds Services                OppenheimerFunds Services
P.O. Box 5270                            10200 E. Girard Avenue, Building D
Denver, Colorado 80217                   Denver, Colorado 80231

HOW DO you SELL SHARES BY TELEPHONE? You and your dealer representative of
record may also sell your shares by telephone. To receive the redemption price
calculated on a particular regular business day, your call must be received by
the Transfer Agent by the close of the Exchange that day, which is normally 4:00
P.M., but may be earlier on some days. You may not redeem shares held in an
OppenheimerFunds retirement plan account or under a share certificate by
telephone.
   o  To redeem shares through a service representative or automatically on
      PhoneLink, call 1.800.225.5677 Whichever method you use, you may have a
      check sent to the address on the account statement, or, if you have linked
      your Fund account to your bank account on AccountLink, you may have the
      proceeds sent to that bank account.


Are There Limits on Amounts Redeemed by Telephone?
Telephone Redemptions Paid by Check. Up to $100,000 may be redeemed by
      telephone in any seven-day period. The check must be payable to all owners
      of record of the shares and must be sent to the address on the account
      statement. This service is not available within 30 days of changing the
      address on an account.

Telephone Redemptions Through AccountLink or by Wire. There are no dollar limits
      on telephone redemption proceeds sent to a bank account designated when
      you establish AccountLink. Normally the ACH transfer to your bank is
      initiated on the business day after the redemption. You do not receive
      dividends on the proceeds of the shares you redeemed while they are
      waiting to be transferred.

      If you have requested Federal Funds wire privileges for your account, the
      wire of the redemption proceeds will normally be transmitted on the next
      bank business day after the shares are redeemed. There is a possibility
      that the wire may be delayed up to seven days to enable the Fund to sell
      securities to pay the redemption proceeds. No dividends are accrued or
      paid on the proceeds of shares that have been redeemed and are awaiting
      transmittal by wire.

CAN YOU SELL SHARES THROUGH your DEALER? The Distributor has made arrangements
to repurchase Fund shares from dealers and brokers on behalf of their customers.
Brokers or dealers may charge for that service. If your shares are held in the
name of your dealer, you must redeem them through your dealer.

HOW CONTINGENT DEFERRED SALES CHARGES AFFECT REDEMPTIONS. If you purchase shares
subject to a Class A, Class B, Class C or Class N contingent deferred sales
charge and redeem any of those shares during the applicable holding period for
the class of shares, the contingent deferred sales charge will be deducted from
the redemption proceeds (unless you are eligible for a waiver of that sales
charge based on the categories listed in Appendix C to the Statement of
Additional Information and you advise the Transfer Agent of your eligibility for
the waiver when you place your redemption request.)

      A contingent deferred sales charge will be based on the lesser of the net
asset value of the redeemed shares at the time of redemption or the original net
asset value. A contingent deferred sales charge is not imposed on:
o     the amount of your  account  value  represented  by an  increase  in net
      asset value over the initial purchase price,
o     shares  purchased by the  reinvestment  of  dividends  or capital  gains
      distributions, or

o     shares redeemed in the special circumstances  described in Appendix C to
      the Statement of Additional Information.
      To determine whether a contingent deferred sales charge applies to a

redemption, the Fund redeems shares in the following order:
   1. shares acquired by reinvestment of dividends and capital gains
      distributions,
   2. shares held for the holding period that applies to the class, and 3.
   shares held the longest during the holding period.

      Contingent deferred sales charges are not charged when you exchange shares
of the Fund for shares of other Oppenheimer funds. However, if you exchange them
within the applicable contingent deferred sales charge holding period, the
holding period will carry over to the fund whose shares you acquire. Similarly,
if you acquire shares of this Fund by exchanging shares of another Oppenheimer
fund that are still subject to a contingent deferred sales charge holding
period, that holding period will carry over to this Fund.

How to Exchange Shares

Shares of the Fund may be exchanged for shares of certain Oppenheimer funds at
net asset value per share at the time of exchange, without sales charge. Shares
of the Fund can be purchased by exchange of shares of other Oppenheimer funds on
the same basis. To exchange shares, you must meet several conditions:
   o  Shares of the fund selected for exchange must be available for sale in
      your state of residence.
   o The prospectuses of both funds must offer the exchange privilege. o You
   must hold the shares you buy when you establish your account for at
      least seven days before you can exchange them. After the account is open
      seven days, you can exchange shares every regular business day.
   o  You must meet the minimum purchase requirements for the fund whose shares
      you purchase by exchange.

   o  Before exchanging into a fund, you must obtain and read its prospectus.
      Shares of a particular class of the Fund may be exchanged only for

shares of the same class in the other Oppenheimer funds. For example, you can
exchange Class A shares of this Fund only for Class A shares of another fund. In
some cases, sales charges may be imposed on exchange transactions. For tax
purposes, exchanges of shares involve a sale of the shares of the fund you own
and a purchase of the shares of the other fund, which may result in a capital
gain or loss. Please refer to "How to Exchange Shares" in the Statement of
Additional Information for more details.


      You can find a list of Oppenheimer funds currently available for exchanges
in the Statement of Additional Information or obtain one by calling a service
representative at 1.800.225.5677. That list can change from time to time.


HOW DO you SUBMIT EXCHANGE REQUESTS? Exchanges may be requested in writing or
by telephone:

Written Exchange Requests. Submit an OppenheimerFunds Exchange Request form,
      signed by all owners of the account. Send it to the Transfer Agent at the
      address on the back cover. Exchanges of shares held under certificates
      cannot be processed unless the Transfer Agent receives the certificates
      with the request.

Telephone Exchange Requests. Telephone exchange requests may be made either by
      calling a service representative or by using PhoneLink for automated
      exchanges by calling 1.800.225.5677. Telephone exchanges may be made only
      between accounts that are registered with the same name(s) and address.
      Shares held under certificates may not be exchanged by telephone.


ARE THERE LIMITATIONS ON EXCHANGES? There are certain exchange policies you
should be aware of:
o     Shares are redeemed from one fund and purchased from the other fund in

   the exchange transaction on the same regular business day on which the
   Transfer Agent receives an exchange request that conforms to the policies
   described above. It must be received by the close of the Exchange that day,
   which is normally 4:00 P.M. but may be earlier on some days.
o  The interests of the Fund's long-term shareholders and its ability to manage
   its investments may be adversely affected when its shares are repeatedly
   bought and sold in response to short-term market fluctuations--also known as
   "market timing." When large dollar amounts are involved, the Fund may have
   difficulty implementing long-term investment strategies, because it cannot
   predict how much cash it will have to invest. Market timing also may force
   the Fund to sell portfolio securities at disadvantageous times to raise the
   cash needed to buy a market timer's Fund shares. These factors may hurt the
   Fund's performance and its shareholders. When the Manager believes frequent
   trading would have a disruptive effect on the Fund's ability to manage its
   investments, the Manager and the Fund may reject purchase orders and
   exchanges into the Fund by any person, group or account that the Manager
   believes to be a market timer. All accounts under common ownership or control
   within the Oppenheimer funds complex may be counted together for purposes of
   determining market timing with respect to any exchange involving this Fund.
o  The Fund may amend, suspend or terminate the exchange privilege at any time.
   The Fund may refuse any exchange order and is currently not obligated to
   provide notice before rejecting an exchange order.

o  If the Transfer Agent cannot exchange all the shares you request because of a
   restriction cited above, only the shares eligible for exchange will be
   exchanged.

Shareholder Account Rules and Policies

More information about the Fund's policies and procedures for buying, selling
and exchanging shares is contained in the Statement of Additional Information.


A $12 annual fee is assessed on any account valued at less than $500. The
      fee is automatically deducted from accounts annually on or about the
      second to last business day of September. See the Statement of Additional
      Information, or existing shareholders may visit the OppenheimerFunds
      website, to learn how you can avoid this fee and for circumstances when
      this fee will not be assessed.

The offering of shares may be suspended during any period in which the
      determination of net asset value is suspended, and the offering may be
      suspended by the Board of Trustees at any time the Board believes it is in
      the Fund's best interest to do so.
Telephone transaction privileges for purchases, redemptions or exchanges may be
      modified, suspended or terminated by the Fund at any time. The Fund will
      provide you notice whenever it is required to do so by applicable law. If
      an account has more than one owner, the Fund and the Transfer Agent may
      rely on the instructions of any one owner. Telephone privileges apply to
      each owner of the account and the dealer representative of record for the
      account unless the Transfer Agent receives cancellation instructions from
      an owner of the account.
The Transfer Agent will record any telephone calls to verify data concerning
      transactions and has adopted other procedures to confirm that telephone
      instructions are genuine, by requiring callers to provide tax
      identification numbers and other account data or by using PINs, and by
      confirming such transactions in writing. The Transfer Agent and the Fund
      will not be liable for losses or expenses arising out of telephone
      instructions reasonably believed to be genuine.
Redemption or transfer requests will not be honored until the Transfer Agent
      receives all required documents in proper form. From time to time, the
      Transfer Agent in its discretion may waive certain of the requirements for
      redemptions stated in this Prospectus.
Dealers that perform account transactions for their clients by participating in
      NETWORKING through the National Securities Clearing Corporation are
      responsible for obtaining their clients' permission to perform those
      transactions, and are responsible to their clients who are shareholders of
      the Fund if the dealer performs any transaction erroneously or improperly.
The redemption price for shares will vary from day to day because the value of
      the securities in the Fund's portfolio fluctuates. The redemption price,
      which is the net asset value per share, will normally differ for each
      class of shares. The redemption value of your shares may be more or less
      than their original cost.
Payment for redeemed shares ordinarily is made in cash. It is forwarded by
      check, or through AccountLink or by Federal Funds wire (as elected by the
      shareholder) within seven days after the Transfer Agent receives
      redemption instructions in proper form. However, under unusual
      circumstances determined by the Securities and Exchange Commission,
      payment may be delayed or suspended. For accounts registered in the name
      of a broker-dealer, payment will normally be forwarded within three
      business days after redemption.

The Transfer Agent may delay processing any type of redemption described under
      "How to Sell Shares" for recently purchased shares, but only until the
      purchase payment has cleared. That delay may be as much as 10 days from
      the date the shares were purchased. That delay may be avoided if you
      purchase shares by Federal Funds wire or certified check, or arrange with
      your bank to provide telephone or written assurance to the Transfer Agent
      that your purchase payment has cleared.

Involuntary redemptions of small accounts may be made by the Fund if the account
      value has fallen below $200 for reasons other than the fact that the
      market value of shares has dropped. In some cases, involuntary redemptions
      may be made to repay the Distributor for losses from the cancellation of
      share purchase orders.
Sharesmay be "redeemed in kind" under unusual circumstances (such as a lack of
      liquidity in the Fund's portfolio to meet redemptions). This means that
      the redemption proceeds will be paid with liquid securities from the
      Fund's portfolio.

Customer Identification Program. Federal regulations may require the Fund to
      obtain your name, your date of birth (for a natural person), your
      residential street address or principal place of business and your Social
      Security number, employer identification number or other government issued
      identification when you open an account. Additional information may be
      required in certain circumstances or to open corporate accounts. The Fund
      or the Transfer Agent may use this information to attempt to verify your
      identity. The Fund may not be able to establish an account if the
      necessary information is not received. The Fund may also place limits on
      account transactions while it is in the process of attempting to verify
      your identity. Additionally, if the Fund is unable to verify your identity
      after your account is established, the Fund may be required to redeem your
      shares and close your account.

"Backup withholding" of federal income tax may be applied against taxable
      dividends, distributions and redemption proceeds (including exchanges) if
      you fail to furnish the Fund your correct, certified Social Security or
      Employer Identification Number when you sign your application, or if you
      under-report your income to the Internal Revenue Service.
To avoid sending duplicate copies of materials to households, the Fund will
      mail only one copy of each prospectus, annual and semi-annual report and
      annual notice of the Fund's privacy policy to shareholders having the same
      last name and address on the Fund's records. The consolidation of these
      mailings, called householding, benefits the Fund through reduced mailing
      expense.


      If you want to receive multiple copies of these materials, you may call
      the Transfer Agent at 1.800.225.5677. You may also notify the Transfer
      Agent in writing. Individual copies of prospectuses, reports and privacy
      notices will be sent to you commencing within 30 days after the Transfer
      Agent receives your request to stop householding.


Dividends, Capital Gains and Taxes

DIVIDENDS. The Fund intends to declare dividends separately for each class of
shares from net investment income on each regular business day and to pay those
dividends to shareholders monthly on a date selected by the Board of Trustees.
Daily dividends will not be declared or paid on newly-purchased shares until
Federal Funds are available to the Fund from the purchase payment for the
shares.

       The Fund attempts to pay dividends on Class A shares at a constant level.
There is no assurance that it will be able to do so. The Board of Trustees may
change the targeted dividend rate at any time without prior notice to
shareholders. The amount of those dividends and the dividends paid on the Fund's
other classes of shares may vary over time, depending on market conditions, the
composition of the Fund's portfolio, and expenses borne by the particular class
of shares. Dividends and distributions paid on Class A and Class Y shares will
generally be higher than dividends for Class B, Class C and Class N shares,
which normally have higher expenses than Class A and Class Y.

Capital Gains. The Fund may realize capital gains on the sale of portfolio
securities. If it does, it may make distributions out of any net short-term or
long-term capital gains in December of each year. The Fund may make supplemental
distributions of dividends and capital gains following the end of its fiscal
year. There can be no assurance that the Fund will pay any capital gains
distributions in a particular year.

WHAT CHOICES DO YOU HAVE FOR RECEIVING DISTRIBUTIONS? When you open your
account, specify on your application how you want to receive your dividends and
distributions. You have four options:
Reinvest All Distributions in the Fund. You can elect to reinvest all dividends
      and capital gains distributions in additional shares of the Fund.
Reinvest Dividends or Capital Gains. You can elect to reinvest some
      distributions (dividends, short-term capital gains or long-term capital
      gains distributions) in the Fund while receiving the other types of
      distributions by check or having them sent to your bank account through
      AccountLink.
Receive All Distributions in Cash. You can elect to receive a check for all
      dividends and capital gains distributions or have them sent to your bank
      through AccountLink.
Reinvest Your Distributions in Another OppenheimerFunds Account. You can
      reinvest all distributions in the same class of shares of another
      OppenheimerFunds account you have established.

TAXES. If your shares are not held in a tax-deferred retirement account, you
should be aware of the following tax implications of investing in the Fund.
Distributions are subject to federal income tax and may be subject to state or
local taxes. Dividends paid from short-term capital gains and net investment
income are taxable as ordinary income. Long-term capital gains are taxable as
long-term capital gains when distributed to shareholders. It does not matter how
long you have held your shares. Whether you reinvest your distributions in
additional shares or take them in cash, the tax treatment is the same.

      Every year the Fund will send you and the IRS a statement showing the
amount of any taxable distribution you received in the previous year. Any
long-term capital gains will be separately identified in the tax information the
Fund sends you after the end of the calendar year.


Avoid "Buying a Distribution." If you buy shares on or just before the Fund
      declares a capital gains distribution, you will pay the full price for the
      shares and then receive a portion of the price back as a taxable capital
      gain.

Remember, There May be Taxes on Transactions. Because the Fund's share prices
      fluctuate, you may have a capital gain or loss when you sell or exchange
      your shares. A capital gain or loss is the difference between the price
      you paid for the shares and the price you received when you sold them. Any
      capital gain is subject to capital gains tax.
Returns of Capital Can Occur. In certain cases, distributions made by the Fund
      may be considered a non-taxable return of capital to shareholders. If that
      occurs, it will be identified in notices to shareholders.

      This information is only a summary of certain federal income tax
information about your investment. You should consult with your tax advisor
about the effect of an investment in the Fund on your particular tax situation.


Financial Highlights

     The  Financial  Highlights  Table is presented to help you  understand  the
Fund's financial performance for the past five fiscal years. Certain information
reflects  financial  results for a single Fund share.  The total  returns in the
table  represent  the rate that an  investor  would have  earned (or lost) on an
investment   in  the  Fund   (assuming   reinvestment   of  all   dividends  and
distributions).  This information has been audited by Deloitte & Touche LLP,
the Fund's independent  auditors,  whose report, along with the Fund's financial
statements,  is included in the  Statement of Additional  Information,  which is
available on request.


FINANCIAL HIGHLIGHTS




Class  A            Year Ended June 30,            2003          2002         2001          2000           1999
-----------------------------------------------------------------------------------------------------------------

 Per Share Operating Data
 Net asset value, beginning of period            $ 8.62        $10.20      $ 11.89       $ 13.06         $ 14.44
-----------------------------------------------------------------------------------------------------------------
 Income (loss) from investment operations:
 Net investment income                              .84           .92         1.18          1.26            1.26
 Net realized and unrealized gain (loss)            .47         (1.44)       (1.59)        (1.18)          (1.39)
                                                 ----------------------------------------------------------------
 Total from investment operations                  1.31          (.52)        (.41)          .08            (.13)
-----------------------------------------------------------------------------------------------------------------
 Dividends and/or distributions to shareholders:
 Dividends from net investment income              (.69)        (1.01)       (1.28)        (1.25)          (1.25)
 Tax return of capital distribution                (.09)         (.05)          --            --              --
                                                 ----------------------------------------------------------------
 Total dividends and/or distributions
 to shareholders                                   (.78)        (1.06)       (1.28)        (1.25)          (1.25)
-----------------------------------------------------------------------------------------------------------------
 Net asset value, end of period                   $9.15         $8.62       $10.20        $11.89          $13.06
                                                 ================================================================

-----------------------------------------------------------------------------------------------------------------
 Total Return, at Net Asset Value 1               16.38%        (5.47)%      (3.69)%        0.71%          (0.71)%

-----------------------------------------------------------------------------------------------------------------
 Ratios/Supplemental Data

 Net assets, end of period (in thousands)    $1,150,055      $858,834   $  962,017    $1,065,220      $1,027,730
-----------------------------------------------------------------------------------------------------------------
 Average net assets (in thousands)           $  934,227      $948,097   $1,038,442    $1,125,834      $1,198,756
-----------------------------------------------------------------------------------------------------------------
 Ratios to average net assets: 2
 Net investment income                             9.54%         9.68%       10.66%        10.12%           9.40%
 Expenses, gross                                   1.07%         1.10%        1.00%         1.02%           0.99%
 Expenses, net                                     1.07% 3       1.10% 3      1.00% 3       1.02% 3         0.99% 3
-----------------------------------------------------------------------------------------------------------------
 Portfolio turnover rate                             68%           47%          33%           24%             43%



1. Assumes an investment on the business day before the first day of the fiscal
period, with all dividends and distributions reinvested in additional shares on
the reinvestment date, and redemption at the net asset value calculated on the
last business day of the fiscal period. Sales charges are not reflected in the
total returns. Total returns are not annualized for periods less than one year.
Returns do not reflect the deduction of taxes that a shareholder would pay on
Fund distributions or the redemption of Fund shares.
2. Annualized for periods of less than one full year.
3. Reduction to custodian expenses less than 0.01%.

See accompanying Notes to Financial Statements.

                        37 | OPPENHEIMER HIGH YIELD FUND



FINANCIAL HIGHLIGHTS  Continued



 Class  B            Year Ended June 30,                   2003           2002          2001           2000          1999
-----------------------------------------------------------------------------------------------------------------------------

 Per Share Operating Data
 Net asset value, beginning of period                     $8.51         $10.09        $11.77         $12.95        $14.33
-----------------------------------------------------------------------------------------------------------------------------
 Income (loss) from investment operations:
 Net investment income                                      .74            .84          1.10           1.15          1.14
 Net realized and unrealized gain (loss)                    .49          (1.43)        (1.58)         (1.18)        (1.38)
                                                     ------------------------------------------------------------------------
 Total from investment operations                          1.23           (.59)         (.48)          (.03)         (.24)
-----------------------------------------------------------------------------------------------------------------------------
 Dividends and/or distributions to shareholders:
 Dividends from net investment income                      (.62)          (.94)        (1.20)         (1.15)        (1.14)
 Tax return of capital distribution                        (.09)          (.05)           --             --            --
                                                     ------------------------------------------------------------------------
 Total dividends and/or distributions
 to shareholders                                           (.71)          (.99)        (1.20)         (1.15)        (1.14)
-----------------------------------------------------------------------------------------------------------------------------
 Net asset value, end of period                           $9.03          $8.51        $10.09         $11.77        $12.95
                                                     ========================================================================

-----------------------------------------------------------------------------------------------------------------------------
 Total Return, at Net Asset Value 1                       15.60%         (6.23)%       (4.37)%        (0.13)%       (1.48)%

-----------------------------------------------------------------------------------------------------------------------------
 Ratios/Supplemental Data

 Net assets, end of period (in thousands)              $372,947       $338,654      $386,309       $453,375      $580,468
-----------------------------------------------------------------------------------------------------------------------------
 Average net assets (in thousands)                     $321,200       $366,869      $414,648       $509,815      $544,925
-----------------------------------------------------------------------------------------------------------------------------
 Ratios to average net assets: 2
 Net investment income                                     8.81%          8.93%         9.91%          9.35%         8.61%
 Expenses, gross                                           1.84%          1.86%         1.76%          1.79%         1.78%
 Expenses, net                                             1.84% 3        1.86% 3       1.76% 3        1.79% 3       1.78% 3
-----------------------------------------------------------------------------------------------------------------------------
 Portfolio turnover rate                                     68%            47%           33%            24%           43%



1. Assumes an investment on the business day before the first day of the fiscal
period, with all dividends and distributions reinvested in additional shares on
the reinvestment date, and redemption at the net asset value calculated on the
last business day of the fiscal period. Sales charges are not reflected in the
total returns. Total returns are not annualized for periods less than one year.
Returns do not reflect the deduction of taxes that a shareholder would pay on
Fund distributions or the redemption of Fund shares.
2. Annualized for periods of less than one full year.
3. Reduction to custodian expenses less than 0.01%.

See accompanying Notes to Financial Statements.

                        38 | OPPENHEIMER HIGH YIELD FUND





 Class C          Year Ended June 30,                      2003            2002           2001           2000           1999
-------------------------------------------------------------------------------------------------------------------------------
 Per Share Operating Data

 Net asset value, beginning of period                $     8.60     $     10.18     $    11.87     $    13.04     $    14.42
-------------------------------------------------------------------------------------------------------------------------------
 Income (loss) from investment operations:
 Net investment income                                      .78             .86           1.11           1.16           1.15
 Net realized and unrealized gain (loss)                    .46           (1.45)         (1.60)         (1.18)         (1.39)
                                                     --------------------------------------------------------------------------
 Total from investment operations                          1.24            (.59)          (.49)          (.02)          (.24)
-------------------------------------------------------------------------------------------------------------------------------
 Dividends and/or distributions to shareholders:
 Dividends from net investment income                      (.62)           (.94)         (1.20)         (1.15)         (1.14)
 Tax return of capital distribution                        (.09)           (.05)            --             --             --
                                                     --------------------------------------------------------------------------
 Total dividends and/or distributions
 to shareholders                                           (.71)           (.99)         (1.20)         (1.15)         (1.14)
-------------------------------------------------------------------------------------------------------------------------------
 Net asset value, end of period                      $     9.13     $      8.60     $    10.18     $    11.87     $    13.04
                                                     ==========================================================================

-------------------------------------------------------------------------------------------------------------------------------
 Total Return, at Net Asset Value 1                       15.55%          (6.08)%        (4.43)%        (0.06)%        (1.49)%

-------------------------------------------------------------------------------------------------------------------------------
 Ratios/Supplemental Data

 Net assets, end of period (in thousands)            $  160,713     $   106,884     $   90,603     $   82,204     $   93,607
-------------------------------------------------------------------------------------------------------------------------------
 Average net assets (in thousands)                   $  120,997     $   104,882     $   83,776     $   87,141     $   79,889
-------------------------------------------------------------------------------------------------------------------------------
 Ratios to average net assets: 2
 Net investment income                                     8.78%           8.75%          9.90%          9.35%          8.60%
 Expenses, gross                                           1.83%           1.86%          1.76%          1.79%          1.78%
 Expenese, net                                             1.83% 3         1.86% 3        1.76% 3        1.79% 3        1.78% 3
-------------------------------------------------------------------------------------------------------------------------------
 Portfolio turnover rate                                     68%             47%            33%            24%            43%



1. Assumes an investment on the business day before the first day of the fiscal
period, with all dividends and distributions reinvested in additional shares on
the reinvestment date, and redemption at the net asset value calculated on the
last business day of the fiscal period. Sales charges are not reflected in the
total returns. Total returns are not annualized for periods less than one year.
Returns do not reflect the deduction of taxes that a shareholder would pay on
Fund distributions or the redemption of Fund shares.
2. Annualized for periods of less than one full year.
3. Reduction to custodian expenses less than 0.01%.

See accompanying Notes to Financial Statements.

                        39 | OPPENHEIMER HIGH YIELD FUND


FINANCIAL HIGHLIGHTS  Continued




 Class N     Year Ended June 30,                            2003      2002      2001 1
---------------------------------------------------------------------------------------
 Per Share Operating Data

 Net asset value, beginning of period                      $8.63    $10.20   $ 11.33
---------------------------------------------------------------------------------------
 Income (loss) from investment operations:
 Net investment income                                       .80       .96       .41
 Net realized and unrealized gain (loss)                     .49     (1.48)    (1.13)
                                                           ----------------------------
 Total from investment operations                           1.29      (.52)     (.72)
---------------------------------------------------------------------------------------
 Dividends and/or distributions to shareholders:
 Dividends from net investment income                       (.66)    (1.00)     (.41)
 Tax return of capital distribution                         (.09)     (.05)       --
                                                           ----------------------------
 Total dividends and/or distributions to shareholders       (.75)    (1.05)     (.41)
---------------------------------------------------------------------------------------
 Net asset value, end of period                            $9.17     $8.63    $10.20
                                                           ============================

---------------------------------------------------------------------------------------
 Total Return, at Net Asset Value 2                        16.08%    (5.53)%   (6.43)%

---------------------------------------------------------------------------------------
 Ratios/Supplemental Data

 Net assets, end of period (in thousands)                 $8,324    $2,396      $146
---------------------------------------------------------------------------------------
 Average net assets (in thousands)                        $4,827    $  799      $ 46
---------------------------------------------------------------------------------------
 Ratios to average net assets: 3
 Net investment income                                      9.14%     8.41%    11.47%
 Expenses, gross                                            1.41%     1.35%     1.04%
 Expenses, net                                              1.41% 4   1.35% 4   1.04% 4
---------------------------------------------------------------------------------------
 Portfolio turnover rate                                      68%       47%       33%


1. For the period from March 1, 2001 (inception of offering) to June 30, 2001.
2. Assumes an investment on the business day before the first day of the fiscal
period (or inception of offering), with all dividends and distributions
reinvested in additional shares on the reinvestment date, and redemption at the
net asset value calculated on the last business day of the fiscal period. Sales
charges are not reflected in the total returns. Total returns are not annualized
for periods of less than one full year. Returns do not reflect the deduction of
taxes that a shareholder would pay on Fund distributions or the redemption of
Fund shares.
3. Annualized for periods of less than one full year.
4. Reduction to custodian expenses less than 0.01%.

See accompanying Notes to Financial Statements.

                        40 | OPPENHEIMER HIGH YIELD FUND






 Class Y    Year Ended June 30,                            2003         2002         2001           2000            1999
--------------------------------------------------------------------------------------------------------------------------

 Per Share Operating Data
 Net asset value, beginning of period                $     8.56     $  10.14     $  11.82     $    13.02     $     14.42
--------------------------------------------------------------------------------------------------------------------------
 Income (loss) from investment operations:
 Net investment income                                      .86          .90         1.20           1.27            1.28
 Net realized and unrealized gain (loss)                    .45        (1.41)       (1.59)         (1.18)          (1.39)
                                                     ---------------------------------------------------------------------
 Total from investment operations                          1.31         (.51)        (.39)           .09            (.11)
--------------------------------------------------------------------------------------------------------------------------
 Dividends and/or distributions to shareholders:
 Dividends from net investment income                      (.69)       (1.02)       (1.29)         (1.29)          (1.29)
 Tax return of capital distribution                        (.09)        (.05)          --             --              --
                                                     ---------------------------------------------------------------------
 Total dividends and/or distributions
 to shareholders                                           (.78)       (1.07)       (1.29)         (1.29)          (1.29)
--------------------------------------------------------------------------------------------------------------------------
 Net asset value, end of period                      $     9.09     $   8.56     $  10.14     $    11.82     $     13.02
                                                     =====================================================================

--------------------------------------------------------------------------------------------------------------------------
 Total Return, at Net Asset Value 1                       16.51%       (5.37)%      (3.57)%         0.85%          (0.54)%


--------------------------------------------------------------------------------------------------------------------------
 Ratios/Supplemental Data

 Net assets, end of period (in thousands)            $   54,102     $ 38,500     $ 60,244     $   54,117     $    52,993
--------------------------------------------------------------------------------------------------------------------------
 Average net assets (in thousands)                   $   43,178     $ 44,583     $ 56,669     $   54,022     $    34,043
--------------------------------------------------------------------------------------------------------------------------
 Ratios to average net assets: 2
 Net investment income                                     9.63%        9.88%       10.72%         10.30%           9.73%
 Expenses, gross                                           1.34%        1.01%        0.94%          0.86%           0.76%
 Expenses, net                                             0.98% 3,4    0.98% 3,4    0.94% 3        0.86% 3         0.76% 3
--------------------------------------------------------------------------------------------------------------------------
 Portfolio turnover rate                                     68%          47%          33%            24%             43%



1. Assumes an investment on the business day before the first day of the fiscal
period, with all dividends and distributions reinvested in additional shares on
the reinvestment date, and redemption at the net asset value calculated on the
last business day of the fiscal period. Sales charges are not reflected in the
total returns. Total returns are not annualized for periods of 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.
2. Annualized for periods of less than one full year.
3. Reduction to custodian expenses less than 0.01%.
4. Net of voluntary waiver of transfer agent fees.

See accompanying Notes to Financial Statements.





INFORMATION AND SERVICES

For More Information on Oppenheimer High Yield Fund


The following additional information about the Fund is available without charge
upon request.


STATEMENT OF ADDITIONAL INFORMATION. This document includes additional
information about the Fund's investment policies, risks, and operations. It is
incorporated by reference into this Prospectus (which means it is legally part
of this Prospectus).

ANNUAL AND SEMI-ANNUAL REPORTS. Additional information about the Fund's
investments and performance is available in the Fund's Annual and Semi-Annual
Reports to shareholders. The Annual Report includes a discussion of market
conditions and investment strategies that significantly affected the Fund's
performance during its last fiscal year.

How to Get More Information
You can request the Statement of Additional Information, the Annual and
Semi-Annual Reports, the notice explaining the Fund's privacy policy and other
information about the Fund or your account:

----------------------------------------------------------------------------
By Telephone:                 Call OppenheimerFunds Services toll-free:

                              1.800.CALL OPP (225.5677)

----------------------------------------------------------------------------
----------------------------------------------------------------------------
By Mail:                      Write to:
                              OppenheimerFunds Services
                              P.O. Box 5270
                              Denver, Colorado 80217-5270
----------------------------------------------------------------------------
----------------------------------------------------------------------------
On the Internet:              You can send us a request by e-mail or
                              read or down-load documents on the
                              OppenheimerFunds website:
                              www.oppenheimerfunds.com
----------------------------------------------------------------------------

Information about the Fund including the Statement of Additional Information can
be reviewed and copied at the SEC's Public Reference Room in Washington, D.C.
Information on the operation of the Public Reference Room may be obtained by
calling the SEC at 1.202.942.8090. Reports and other information about the Fund
are available on the EDGAR database on the SEC's Internet website at
www.sec.gov. Copies may be obtained after payment of a duplicating fee by
electronic request at the SEC's e-mail address: publicinfo@sec.gov or by writing
to the SEC's Public Reference Section, Washington, D.C. 20549-0102.

No one has been authorized to provide any information about the Fund or to make
any representations about the Fund other than what is contained in this
Prospectus. This Prospectus is not an offer to sell shares of the Fund, nor a
solicitation of an offer to buy shares of the Fund, to any person in any state
or other jurisdiction where it is unlawful to make such an offer.

The Fund's SEC File No. 811-2849               The Fund's shares are
distributed by:

PRO280.001.0803                                [logo] OppenheimerFunds
Distributor, Inc.
Printed on recycled paper.





                            Appendix to Prospectus of
                           Oppenheimer High Yield Fund


      Graphic material included in the Prospectus of Oppenheimer High Yield Fund
under the heading "Annual Total Returns (Class A)(as of 12/31 each year)":

      A bar chart will be included in the Prospectus of Oppenheimer High Yield
Fund (the "Fund") depicting the annual total returns of a hypothetical
investment in Class A shares of the Fund for each of the past 10 calendar years,
without deducting sales charges. Set forth below are the relevant data points
that will appear in the bar chart:

Calendar      Annual
Year          Total
Ended         Returns


12/31/93      20.57%
12/31/94      -2.36%
12/31/95      15.07%
12/31/96      14.26%
12/31/97      11.93%
12/31/98       0.10%
12/31/99       4.17%
12/31/00      -3.89%
12/31/01      -0.06%
12/31/02      -4.38%




Oppenheimer High Yield Fund


6803 South Tucson Way, Centennial, Colorado 80112-3924

1.800.525.7048


Statement of Additional Information dated August 22, 2003

This Statement of Additional Information is not a Prospectus. This document
contains additional information about the Fund and supplements information in
the Prospectus dated August 22, 2003. 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 web site at
www.oppenheimerfunds.com.


Contents
                                                                            Page
About the Fund
Additional Information About the Fund's Investment Policies and Risks..
    The Fund's Investment Policies.....................................
    Other Investment Techniques and Strategies.........................
    Investment Restrictions............................................
How the Fund is Managed ...............................................
    Organization and History...........................................
    Trustees and Officers of the Fund..................................
    The Manager........................................................
Brokerage Policies of the Fund.........................................
Distribution and Service Plans.........................................
Performance of the Fund................................................

About Your Account
How To Buy Shares......................................................
How To Sell Shares.....................................................
How To Exchange Shares.................................................
Dividends, Capital Gains and Taxes.....................................
Additional Information About the Fund..................................

Financial Information About the Fund
Independent Auditors' Report...........................................
Financial Statements...................................................

Appendix A: Ratings Definitions........................................ A-1
Appendix B: Industry Classifications................................... B-1
Appendix C: Special Sales Charge Arrangements and Waivers.............. C-1





ABOUT THE FUND

Additional Information About the Fund's Investment Policies and Risks

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

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

      In selecting securities for the Fund's portfolio, the Manager evaluates
the merits of particular securities primarily through the exercise of its own
investment analysis. That process may include, among other things, evaluation of
the issuer's historical operations, prospects for the industry of which the
issuer is part, the issuer's financial condition, its pending product
developments and business (and those of competitors), the effect of general
market and economic conditions on the issuer's business, and legislative
proposals that might affect the issuer.

      Additionally, in analyzing a particular issuer, the Manager may consider
the trading activity in the issuer's securities, present and anticipated cash
flow, estimated current value of its assets in relation to their historical
cost, the issuer's experience and managerial expertise, responsiveness to
changes in interest rates and business conditions, debt maturity schedules,
current and future borrowing requirements, and any change in the financial
condition of an issuer and the issuer's continuing ability to meet its future
obligations. The Manager also may consider anticipated changes in business
conditions, levels of interest rates of bonds as contrasted with levels of cash
dividends, industry and regional prospects, the availability of new investment
opportunities and the general economic, legislative and monetary outlook for
specific industries, the nation and the world.

      |X| Debt Securities. The Fund can invest in a variety of debt securities
to seek its objective. Foreign debt securities are subject to the risks of
foreign securities described below. In general, debt securities are also subject
to two additional types of risk: credit risk and interest rate risk.

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

      The Fund's debt investments mainly include high yield,
non-investment-grade bonds (commonly referred to as "junk bonds").
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 Services
("Standard & Poor's") or Fitch, Inc. ("Fitch") or that have comparable ratings
by another nationally-recognized rating organization.

      In making investments in debt securities, the Manager may rely to some
extent on the ratings of ratings organizations or it may use its own research to
evaluate a security's credit-worthiness. If securities the Fund buys are
unrated, they are assigned a rating by the Manager of comparable quality to
bonds having similar yield and risk characteristics within a rating category of
a rating organization.

      The Fund does not have investment policies establishing specific maturity
ranges for the Fund's investments, and they may be within any maturity range
(short, medium or long) depending on the Manager's evaluation of investment
opportunities available within the debt securities markets. Generally, however,
it is expected that the Fund's average portfolio maturity will be of a longer
average maturity. The Fund may shift its investment focus to securities of
longer maturity as interest rates decline and to securities of shorter maturity
as interest rates rise.

            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 debt 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.

      While the changes in value of the Fund's portfolio securities after they
are purchased will be reflected in the net asset value of the Fund's shares,
those changes normally do not affect the interest income paid by those
securities (unless the security's interest is paid at a variable rate pegged to
particular 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 Special Risks of Lower-Grade Securities. The Fund can invest
without limit in lower-grade debt securities, and the Fund will normally invest
at least 80% of its total assets in these securities to seek the Fund's main
objective. Lower-grade securities tend to offer higher yields than investment
grade securities, but also are subject to greater risks of default by the issuer
in its obligations to pay interest and/or repay principal on the maturity of the
security.

      "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 Standard & Poor's or Fitch, or similar ratings by other rating organizations.
If they are unrated, and are determined by the 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. The Fund can invest in
securities rated as low as "C" or "D" or which may be in default at the time the
Fund buys them.

      Some of the special credit risks of lower-grade securities 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 Statement of Additional
Information.

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

      While securities rated "Baa" by Moody's or "BBB" by Standard & Poor'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.
Definitions of the debt security ratings categories of the principal rating
organizations are included in Appendix A to this Statement of Additional
Information.

      |X| Foreign Securities. The percentage of the Fund's assets that will be
allocated to foreign securities will vary over time depending on a number of
factors. Those factors may include the relative yields of foreign and U.S.
securities, the economies of foreign countries, the condition of a country's
financial markets, the interest rate climate of particular foreign countries and
the relationship of particular foreign currencies to the U.S. dollar. The
Manager analyzes fundamental economic criteria (for example, relative inflation
levels and trends, growth rate forecasts, balance of payments status, and
economic policies) as well as technical and political data.

      The Fund can invest up to 100% of its assets in foreign securities. While
it currently limits investment in foreign securities to 25% of its net assets,
the Fund expects from time to time to have substantial investments in foreign
securities. These primarily will be debt securities issued or guaranteed by
foreign companies or governments, including supra-national entities. "Foreign
securities" include equity and debt securities of companies organized under the
laws of countries other than the United States and debt securities issued or
guaranteed by governments other than the U.S. government or by foreign
supra-national entities. They 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 not considered "foreign securities" for the purpose
of the Fund's investment allocations, because they are not subject to many of
the special considerations and risks, discussed below, that apply to foreign
securities traded and held abroad.

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

      Investing in foreign securities offers potential benefits not available
from investing solely in securities of domestic issuers. They include the
opportunity to invest in foreign issuers that appear to offer high income
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 securities markets that do not move in a manner
parallel to U.S. markets. The Fund will hold foreign currency only in connection
with the purchase or sale of foreign securities.

            o Foreign Debt Obligations. The debt obligations of foreign
governments and entities may or may not be supported by the full faith and
credit of the foreign government. The Fund may 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.

      The Fund can invest in U.S. dollar-denominated "Brady Bonds." These
foreign debt obligations may be fixed-rate par bonds or floating-rate discount
bonds. They are generally collateralized in full as to repayment of principal at
maturity by U.S. Treasury zero-coupon obligations that have the same maturity as
the Brady Bonds. Brady Bonds can be viewed as having three or four valuation
components: (i) the collateralized repayment of principal at final maturity;
(ii) the collateralized interest payments; (iii) the uncollateralized interest
payments; and (iv) any uncollateralized repayment of principal at maturity.
Those uncollateralized amounts constitute what is called the "residual risk."

      If there is a default on collateralized Brady Bonds resulting in
acceleration of the payment obligations of the issuer, the zero coupon U.S.
Treasury securities held as collateral for the payment of principal will not be
distributed to investors, nor will those obligations be sold to distribute the
proceeds. The collateral will be held by the collateral agent to the scheduled
maturity of the defaulted Brady Bonds. The defaulted bonds will continue to
remain outstanding, and the face amount of the collateral will equal the
principal payments which would have then been due on the Brady Bonds in the
normal course. Because of the residual risk of Brady Bonds and the history of
defaults with respect to commercial bank loans by public and private entities of
countries issuing Brady Bonds, Brady Bonds are considered speculative
investments.

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

      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 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. The Manager will consider these factors
when evaluating securities in these markets, because the selection of those
securities must be consistent with the Fund's investment objectives.

      |X| U.S. Government Securities. These are securities issued or guaranteed
by the U.S. Treasury or other government agencies or federally-chartered
corporate 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
risk with respect to such instrumentality is minimal.

            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 pass-through mortgage certificates
(called "Ginnie Maes"). 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 bonds ("Fannie Maes"). Others are supported only by the
credit of the entity that issued them, such as Federal Home Loan Mortgage
Corporation obligations ("Freddie Macs").

            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 GNMA (Ginnie Mae) Certificates. The Government National Mortgage
Association ("GNMA") is a wholly-owned corporate instrumentality of the United
States within the U.S. Department of Housing and Urban Development. GNMA's
principal programs involve its guarantees of privately-issued securities backed
by pools of mortgages. Ginnie Maes 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 Maes in which the Fund invests 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 the Ginnie Maes,
whether or not the interest on the underlying mortgages has been collected by
the issuers.

      The Ginnie Maes purchased by the Fund are guaranteed as to timely payment
of principal and interest by GNMA. In giving that guaranty, GNMA expects that
payments received by the issuers of Ginnie Macs on account of the mortgages
backing the Certificates will be sufficient to make the required payments of
principal of and interest on those Ginnie Maes. However, if those payments are
insufficient, the guaranty agreements between the issuers of the Ginnie Maes and
GNMA require the issuers to make advances sufficient for the payments. If the
issuers fail to make those payments, GNMA 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 GNMA 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." GNMA 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 Maes 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
Maes do not constitute a liability of those issuers, nor do they evidence any
recourse against those issuers. Recourse is solely against GNMA. Holders of
Ginnie Maes (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 Maes held by the Fund. All of the mortgages in the pools relating to the
Ginnie Maes 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 Maes have a stated maturity of
up to thirty (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 Federal Home Loan Mortgage Corporation (FHLMC) Certificates.
FHLMC, a corporate instrumentality of the United States, issues FHLMC
Certificates representing interests in mortgage loans. FHLMC guarantees to each
registered holder of a FHLMC 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 FHLMC Certificate, in each
      case whether or not such amounts are actually received.

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

            o Federal National Mortgage Association (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 United States or any
of its agencies or instrumentalities other than Fannie Mae.

      |X| Preferred Stocks. 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 allowing calls or redemptions prior to maturity, which also can
have a negative impact on prices when interest rates decline. The rights of
preferred stock on distribution of a corporation's assets in the event of a
liquidation are generally subordinate to the rights associated with the
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
liquidation of the corporation.

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

      |X| Asset-Backed Securities. Asset-backed securities are fractional
interests in pools of assets, typically accounts receivable or consumer loans.
They are issued by trusts or special-purpose corporations. They are similar to
mortgage-related securities, described below, and are backed by a pool of assets
that consist of obligations of individual borrowers. The income from the pool is
passed through to the holders of participation interest in the pools. The pools
may offer a credit enhancement, such as a bank letter of credit, to try to
reduce the risks that the underlying debtors will not pay their obligations when
due. However, the enhancement, if any, might not be for the full par value of
the security. If the enhancement is exhausted and any required payments of
interest or repayments of principal are not made, the Fund could suffer losses
on its investment or delays in receiving payment.

      The value of an asset-backed security is affected by changes in the
market's perception of the asset backing the security, the creditworthiness of
the servicing agent for the loan pool, the originator of the loans, or the
financial institution providing any credit enhancement, and is also affected if
any credit enhancement has been exhausted. The risks of investing in
asset-backed securities are ultimately related to payment of consumer loans by
the individual borrowers. As a purchaser of an asset-backed security, the Fund
would generally have no recourse to the entity that originated the loans in the
event of default by a borrower. The underlying loans are subject to prepayments,
which may shorten the weighted average life of asset-backed securities and may
lower their return, in the same manner as in the case of mortgage-backed
securities and CMOs, described below. Unlike mortgage-backed securities,
asset-backed securities typically do not have the benefit of a security interest
in the underlying collateral.

      |X| 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.

      During periods of rapidly rising interest rates, prepayments of
mortgage-related securities may occur at slower than expected rates. Slower
prepayments effectively may lengthen a mortgage-related security's expected
maturity. Generally, that would cause the value of the security to fluctuate
more widely in response to changes in interest rates. If the prepayments on the
Fund's mortgage-related securities were to decrease broadly, the Fund's
effective duration, and therefore its sensitivity to interest rate changes,
would increase.

      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.

            o Forward Rolls. The Fund can enter into "forward roll" transactions
with respect to mortgage-related securities. In this type of transaction, the
Fund sells a mortgage-related security to a buyer and simultaneously agrees to
repurchase a similar security (the same type of security, and having the same
coupon and maturity) at a later date at a set price. The securities that are
repurchased will have the same interest rate as the securities that are sold,
but typically will be collateralized by different pools of mortgages (with
different prepayment histories) than the securities that have been sold.
Proceeds from the sale are invested in short-term instruments, such as
repurchase agreements. The income from those investments, plus the fees from the
forward roll transaction, are expected to generate income to the Fund in excess
of the yield on the securities that have been sold.

      The Fund will only enter into "covered" rolls. To assure its future
payment of the purchase price, the Fund will identify on its books liquid assets
in an amount equal to the payment obligation under the roll.

      These transactions have risks. During the period between the sale and the
repurchase, the Fund will not be entitled to receive interest and principal
payments on the securities that have been sold. It is possible that the market
value of the securities the Fund sells may decline below the price at which the
Fund is obligated to repurchase securities.

            o Floating Rate and Variable Rate Obligations. Variable rate
obligations can have a demand feature that allows the Fund to tender the
obligation to the issuer or a third party prior to its maturity. The tender may
be at par value plus accrued interest, according to the terms of the
obligations.

      The interest rate on a floating rate demand note is adjusted automatically
according to a stated prevailing market rate, such as a bank's prime rate, the
ninety-one (91) day U.S. Treasury Bill rate, or some other standard. The
instrument's rate is adjusted automatically each time the base rate is adjusted.
The interest rate on a variable rate demand note is also based on a stated
prevailing market rate but is adjusted automatically at specified intervals.
Generally, the changes in the interest rate on such securities reduce the
fluctuation in their market value. As interest rates decrease or increase, the
potential for capital appreciation or depreciation is less than that for
fixed-rate obligations of the same maturity. The Manager may determine that an
unrated floating rate or variable rate demand obligation meets the Fund's
quality standards by reason of being backed by a letter of credit or guarantee
issued by a bank that meets those quality standards.

      Floating rate and variable rate demand notes that have a stated maturity
in excess of one (1) year may have features that permit the holder to recover
the principal amount of the underlying security at specified intervals not
exceeding one (1) year and upon no more than thirty (30) days' notice. The
issuer of that type of note normally has a corresponding right in its
discretion, after a given period, to prepay the outstanding principal amount of
the note plus accrued interest. Generally the issuer must provide a specified
number of days' notice to the holder.

      |X| Participation Interests. The Fund can invest in participation
interests, subject to the Fund's limitation on investments in illiquid
investments. A participation interest is an undivided interest in a loan made by
the issuing financial institution in the proportion that the buyers
participation interest bears to the total principal amount of the loan. Not more
than 5% of the Fund's net assets can be invested in participation interests of
the same borrower. The issuing financial institution may have no obligation to
the Fund other than to pay the Fund the proportionate amount of the principal
and interest payments it receives.

      Participation interests are primarily dependent upon the creditworthiness
of the borrowing corporation, which is obligated to make payments of principal
and interest on the loan. There is a risk that a borrower may have difficulty
making payments. If a borrower fails to pay scheduled interest or principal
payments, the Fund could experience a reduction in its income. The value of that
participation interest might also decline, which could affect the net asset
value of the Fund's shares. If the issuing financial institution fails to
perform its obligations under the participation agreement, the Fund might incur
costs and delays in realizing payment and suffer a loss of principal and/or
interest.

      |X| Portfolio Turnover. "Portfolio turnover" describes the rate at which
the Fund traded its portfolio securities during its last fiscal year. For
example, if a fund sold all of its securities during the year, its portfolio
turnover rate would have been 100%. The Fund's portfolio turnover rate will
fluctuate from year to year, and the Fund may have a portfolio turnover rate of
more than 100% annually.

      Increased portfolio turnover can result in 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.

      |X| "When-Issued" and "Delayed-Delivery" Transactions. The Fund may invest
in securities on a "when-issued" basis and may purchase or sell securities on a
"delayed-delivery" (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 normally 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 until it receives the security at
settlement.

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

      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, as described below.

      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. The Fund will not enter into a
repurchase agreement that causes more than 10% of its net assets to be subject
to repurchase agreements having a maturity beyond seven (7) days. There is no
limit on the amount of the Fund's net assets that may be subject to repurchase
agreements having maturities of seven (7) days or less.


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

      Pursuant to an Exemptive Order issued by the Securities and Exchange
Commission, the Fund, along with other affiliated entities managed by the
Manager, may transfer uninvested cash balances into one or more joint repurchase
agreement 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 of the collateral may be subject to legal proceedings.


      |X| Illiquid and Restricted Securities. Under the policies and procedures
established by the Fund's Board of Trustees, the Manager determines the
liquidity of certain of the Fund's investments. To enable the Fund to sell its
holdings of a restricted security not registered under the Securities Act of
1933, 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.

      Illiquid securities include repurchase agreements maturing in more than
seven (7) days and participation interests that do not have puts exercisable
within seven (7) days.

      |X| Investments in Other Equity Securities. The Fund can invest limited
amounts of its assets in securities other than debt securities, including
certain types of equity securities of both foreign and U.S. companies. Those
equity securities include preferred stocks (described above), common stocks,
rights and warrants, and securities convertible into common stock. Certain
equity securities may be selected because they may provide dividend income.

            o Convertible Securities. While some convertible securities are a
form of debt security, in some cases their conversion feature (allowing
conversion into equity securities) causes the Manager to regard them more as
"equity equivalents." In those cases the rating assigned to the security has
less impact on the Manager's investment decision with respect to them than in
the case of non-convertible debt fixed income securities. Convertible securities
are subject to the credit risks and interest rate risks described above in "Debt
Securities."

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

      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.

            o Rights and Warrants. Warrants basically are options to purchase
equity securities at specific prices valid for a specific period of time. Their
prices do not necessarily move parallel to the prices of the underlying
securities. Rights are similar to warrants, but normally have a short duration
and are distributed directly by the issuer to its shareholders. Rights and
warrants have no voting rights, receive no dividends and have no rights with
respect to the assets of the issuer. The Fund does not expect that it will have
significant investments in warrants and rights.


      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. 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| Loans of Portfolio Securities. The Fund may lend its portfolio
securities to brokers, dealers and other financial institutions pursuant to the
Securities Lending Agreement (the "Securities Lending Agreement") with JP Morgan
Chase, subject to the restrictions stated in the Prospectus. Under the
Securities Lending Agreement and applicable regulatory requirements (which are
subject to change), the loan collateral must, on each business day, be at least
equal to the value of the loaned securities and must consist of cash, bank
letters of credit or securities of the U.S. Government (or its agencies or
instrumentalities), or other cash equivalents in which the Fund is permitted to
invest. To be acceptable as collateral, letters of credit must obligate a bank
to pay to JP Morgan Chase, as agent, amounts demanded by the Fund if the demand
meets the terms of the letter. Such terms of the letter of credit and the
issuing bank must be satisfactory to JP Morgan Chase and the Fund. The Fund will
receive, pursuant to the Securities Lending Agreement, 80% of all annual net
income (i.e., net of rebates to the Borrower) from securities lending
transactions. JP Morgan Chase has agreed, in general, to guarantee the
obligations of borrowers to return loaned securities and to be responsible for
expenses relating to securities lending. The Fund will be responsible, however,
for risks associated with the investment of cash collateral, including the risk
that the issuer of the security in which the cash collateral has been invested
defaults. The Securities Lending Agreement may be terminated by either JP Morgan
Chase or the Fund on 30 days' written notice. The terms of the Fund's loans must
also meet applicable tests under the Internal Revenue Code and permit the Fund
to reacquire loaned securities on five business days' notice or in time to vote
on any important matter. The Fund will lend its portfolio securities in
conformity with the Fund's Securities Lending Guidelines, as adopted by the
Fund's Board.


      |X| Derivatives. The Fund can invest in a variety of derivative
investments to seek income or for hedging purposes. Some derivative investments
the Fund can use are the hedging instruments described below in this Statement
of Additional Information.

      Among the derivative investments the Fund can invest in are "index-linked"
or "currency-linked" notes. Principal and/or interest payments on index-linked
notes depend on the performance of an underlying index. Currency-indexed
securities are typically short-term or intermediate-term debt securities. Their
value at maturity or the rates at which they pay income are determined by the
change in value of the U.S. dollar against one or more foreign currencies or an
index. In some cases, these securities may pay an amount at maturity based on a
multiple of the amount of the relative currency movements. This type of index
security offers the potential for increased income or principal payments but at
a greater risk of loss than a typical debt security of the same maturity and
credit quality.

      Other derivative investments the Fund can use include "debt exchangeable
for common stock" of an issuer or "equity-linked debt securities" of an issuer.
At maturity, the debt security is exchanged for common stock of the issuer or it
is payable in an amount based on the price of the issuer's common stock at the
time of maturity. Both alternatives present a risk that the amount payable at
maturity will be less than the principal amount of the debt because the price of
the issuer's common stock might not be as high as the Manager expected. Certain
derivative investments the Fund can use will require the Fund to segregate
liquid assets to enable the Fund to satisfy its obligations.

      Credit Derivatives. The Fund may enter into credit default swaps, both
directly ("unfunded swaps") and indirectly in the form of a swap embedded within
a structured note ("funded swaps"), to protect against the risk that a security
will default. Unfunded and funded credit default swaps may be on a single
security, or on a basket of securities. The Fund pays a fee to enter into the
swap and receives a fixed payment during the life of the swap. The Fund may take
a short position in the credit default swap (also known as "buying credit
protection"), or may take a long position in the credit default swap note (also
known as "selling credit protection").

      The Fund would take a short position in a credit default swap (the
"unfunded swap") against a long portfolio position to decrease exposure to
specific high yield issuers. If the short credit default swap is against a
corporate issue, the Fund must own that corporate issue. However, if the short
credit default swap is against sovereign debt, the Fund may own either: (i) the
reference obligation, (ii) any sovereign debt of that foreign country, or (iii)
sovereign debt of any country that the Manager determines is closely correlated
as an inexact bona fide hedge.

      If the Fund takes a short position in the credit default swap, 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. An associated risk
is adverse pricing when purchasing bonds to satisfy the delivery obligation. 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.

      Taking a long position in the credit default swap note (i.e., purchasing
the "funded swap") would increase the Fund's exposure to specific high yield
corporate 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.

      If the Fund takes a long position in the credit default swap note, if
there is a credit event the Fund will pay the par amount of the bonds and the
swap counterparty will deliver the bonds. 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.

      The Fund will invest no more than 25 % of its total assets in "unfunded"
credit default swaps.

      The Fund will limit its investments in "funded" credit default swap notes
to no more than 10% of its total assets.

      Other 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, and the need to fund the
delivery obligation (either cash or the defaulted bonds, depending on whether
the Fund is long or short the swap, respectively).

      |X| Hedging. Although the Fund does not anticipate the extensive use of
hedging instruments, the Fund can use hedging instruments. It is not obligated
to use them in seeking its objective. To attempt to protect against declines in
the market value of the Fund's portfolio, to permit the Fund to retain
unrealized gains in the value of portfolio securities that have appreciated, or
to facilitate selling securities for investment reasons, the Fund could:
o     sell futures contracts,
o     buy puts on such futures or on securities, or
o     write covered calls on securities or futures. Covered calls may also
      be used to increase the Fund's income, but the Manager does not expect
      to engage extensively in that practice.

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

      The Fund's strategy of hedging with futures and options on futures will be
incidental to the Fund's activities in the underlying cash market. The
particular hedging instruments the Fund can use are described below. The Fund
may employ new hedging instruments and strategies when they are developed, if
those investment methods are consistent with the Fund's investment objective and
are permissible under applicable regulations governing the Fund.

            o Futures. The Fund can buy and sell futures contracts that relate
to debt securities (these are referred to as "interest rate futures"),
broadly-based securities indices (stock index futures and bond index futures),
foreign currencies, and commodities. 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.

      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
securities included in the index and its value fluctuates in response to the
changes in value of the underlying securities. 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.

      The Fund can invest a portion of its assets in commodity futures
contracts. Commodity futures may be based upon commodities within five (5) 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;
and (5) precious metals, which includes gold, platinum and silver. The Fund may
purchase and sell commodity futures contracts, options on futures contracts and
options and futures on commodity indices with respect to these five (5) 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"). Initial margin payments will be deposited with the Fund's
custodian bank in an account registered in the futures broker's name. However,
the futures broker can gain access to that account only under specified
conditions. As the future is marked to market (that is, its value on the Fund's
books is changed) to reflect changes in its market value, subsequent margin
payments, called variation margin, will be paid to or by the futures broker
daily.

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

            o Put and Call Options. The Fund can buy and sell exchange-traded
and over-the-counter put options ("puts") and call options ("calls"), including
index options, securities options, currency options, commodities options and
options on futures.

                 o Writing Covered Call Options. The Fund may write (that is,
sell) covered calls on equity and debt securities, interest rate futures and
foreign currencies. If the Fund sells a call option, it must be covered. That
means the Fund must own the security subject to the call while the call is
outstanding, or, for calls on futures and indices, the call must be covered by
segregating liquid assets to enable the Fund to satisfy its obligations if the
call is exercised. There is no limit on the amount of the Fund's total assets
that may be subject to covered calls the Fund writes.

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

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

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

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

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

      The Fund may also write calls on a futures contract without owning the
futures contract or securities deliverable under the contract. To do so, at the
time the call is written, the Fund must cover the call by segregating an
equivalent dollar amount of liquid assets as identified on the Fund's books. 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 on debt
securities, broadly-based securities indices, futures, or foreign currency
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. A put written on debt securities must be covered
by segregated liquid assets and the Fund cannot write puts if, as a result, more
than 50% of the Fund's net assets would be required to be segregated to cover
such put options.

      If the Fund writes a put, the put must be covered by liquid assets
identified on the Fund's books. The premium the Fund receives from writing a put
represents a profit, as long as the price of the underlying investment remains
equal to or above the exercise price of the put. However, the Fund also assumes
the obligation during the option period to buy the underlying investment from
the buyer of the put at the exercise price, even if the value of the investment
falls below the exercise price.

      If a put the Fund has written expires unexercised, the Fund realizes a
gain in the amount of the premium less the transaction costs incurred. If the
put is exercised, the Fund must fulfill its obligation to purchase the
underlying investment at the exercise price. That price will usually exceed the
market value of the investment at that time. In that case, the Fund may incur a
loss if it sells the underlying investment. That loss will be equal to the sum
of the sale price of the underlying investment and the premium received minus
the sum of the exercise price and any transaction costs the Fund incurred.

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

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

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

                 o Purchasing Calls and Puts. The Fund can purchase puts and
calls on debt securities, foreign currencies or futures. 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 owns the underlying investment.
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 a
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.

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

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

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

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

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

            o 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 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 can use them to "lock in" the U.S. dollar price of a
security denominated in a foreign currency that the Fund has bought or sold, or
to protect against possible losses from changes in the relative values of the
U.S. dollar and a foreign currency. The Fund limits its exposure in foreign
currency exchange contracts in a particular foreign currency to the amount of
its assets denominated in that currency or a closely-correlated currency. The
Fund can also use "cross-hedging" where the Fund hedges against changes in
currencies other than the currency in which a security it holds is denominated.

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

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

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

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

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

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

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

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

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

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

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

            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. The Fund can enter into swaps only on
securities that it owns. The Fund will not enter into swaps with respect to more
than 25% of its total assets. Also, the Fund will identify on its books liquid
assets (such as cash or U.S. government securities) to cover any amounts it
could owe under swaps that exceed the amounts it is entitled to receive, and it
will adjust that amount daily, as needed.

      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. 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. The
Manager will monitor the creditworthiness of counterparties to the Fund's
interest rate swap transactions on an ongoing basis.

      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
is generally referred to as "aggregation."

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

      Transactions in options by the Fund are subject to limitations established
by the option exchanges. The exchanges limit the maximum number of options that
may be written or held by a single investor or group of investors acting in
concert. Those limits apply regardless of whether the options were written or
purchased on the same or different exchanges or are held in one or more accounts
or through one or more different exchanges or through one or more brokers. Thus,
the number of options that the Fund may write or hold may be affected by options
written or held by other entities, including other investment companies having
the same 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 the Investment Company Act, when the Fund purchases a future, it
must maintain cash or readily marketable short-term debt instruments in an
amount equal to the market value of the securities underlying the future, less
the margin deposit applicable to it.

            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
mark-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| Temporary Defensive and Interim Investments. When market 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. 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 (1) 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) rated in the
      highest rating category by an established rating organization,
o     debt obligations of domestic or foreign corporate issuers rated "Baa"
      or higher by Moody's or "BBB" or higher by Standard & Poor's,
o     certificates of deposit and bankers' acceptances and other bank
      obligations, 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.

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

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

            o The Fund cannot buy securities issued or guaranteed by any one
issuer if more than 5% of its total assets would be invested in securities of
that issuer or if it would then own more than 10% of that issuer's voting
securities. That restriction applies to 75% of the Fund's total assets. The
limit does not apply to securities issued by the U.S. government or any of its
agencies or instrumentalities 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. Under this policy,
utilities are divided into "industries" according to the services they provide
(for example, gas, gas transmission, electric and telephone utilities will be
considered to be in separate industries).

            o The Fund cannot borrow money in excess of 33-1/3% of the value of
its total assets. The Fund may only borrow from banks and/or affiliated
investment companies. The Fund cannot make any investment at a time during which
its borrowings exceed 5% of the value of its assets. With respect to this
fundamental policy, the Fund can borrow only if it maintains a 300% ratio of
assets to borrowings at all times in the manner set forth in the Investment
Company Act of 1940.

            o The Fund cannot make loans except (a) through lending of
securities, (b) through the purchase of debt instruments or similar evidences of
indebtedness, (c) through an inter-fund lending program with other affiliated
funds, and (d) through repurchase agreements.

            o The Fund cannot invest in real estate. However, the Fund can
purchase debt securities secured by real estate or interests in real estate, or
issued by companies, including real estate investment trusts, that invest in
real estate or interests in real estate.

            o The Fund cannot invest in commodities or commodity contracts.
However, the Fund may buy and sell any of the hedging instruments permitted by
its other investment policies, whether or not the hedging instrument is
considered a commodity or commodity contract.

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

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

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

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

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 originally incorporated in Maryland in 1978 but was
reorganized as a Massachusetts business trust in 1986.

      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.


Classes of Shares. The Trustees are authorized, without shareholder approval, to
create new series and classes of shares. The Trustees may reclassify unissued
shares of the Fund into additional series or classes of shares. The Trustees
also may 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 or
preemptive or subscription rights. Shares may be voted in person or by proxy by
record shareholders at shareholder meetings.


      The Fund currently has five classes of shares: Class A, Class B, Class C,
Class N and Class Y. All classes invest in the same investment portfolio. Only
retirement plans may purchase Class N shares. Only certain institutional
investors may elect to purchase Class Y shares. Each class of shares: o has its
own dividends and distributions, o pays certain expenses which may be different
for the different classes, o may have a different net asset value, o may have
separate voting rights on matters in which interests of one class are different
from interests of another class, and o votes as a class on matters that affect
that class alone.

      Shares are freely transferable, and each share of each class has one vote
at shareholder meetings, with fractional shares voting proportionally on matters
submitted to the 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. The Fund will hold meetings when required to do so by the
Investment Company Act or other applicable law. It will also do so when a
shareholder meeting is called by the Trustees or upon proper request of the
shareholders.

      Shareholders have the right, upon the declaration in writing or vote of
two-thirds of the outstanding shares of the Fund, to remove a Trustee. The
Trustees will call a meeting of shareholders to vote on the removal of a Trustee
upon the written request of the record holders of 10% of its outstanding shares.
If the Trustees receive a request from at least 10 shareholders stating that
they wish to communicate with 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. Although the Fund will not normally hold annual meetings of its
shareholders, it may hold shareholder meetings from time to time on important
matters, and shareholders have the right to call a meeting to remove a Trustee
or to take other action described in the Fund's Declaration of Trust.


      The Board of Trustees has an Audit Committee and a Review Committee. The
members of the Audit Committee are Edward L. Cameron (Chairman), William L.
Armstrong, George C. Bowen and Robert J. Malone. The Audit Committee held 7
meetings during the fiscal year ended June 30, 2003. The Audit Committee
furnishes the Board with recommendations regarding the selection of the Fund's
independent auditors. Other main functions of the Audit Committee 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) review reports from the Manager's Internal Audit Department;
(iv) maintaining a separate line of communication between the Fund's independent
auditors and its Independent Trustees; and (v) exercise all other functions
outlined in the Audit Committee Charter, including but not limited to reviewing
the independence of the Fund's independent auditors and the pre-approval of the
performance by the Fund's independent auditors of any non-audit service,
including tax service, for the Fund that is not prohibited by the Sarbanes-Oxley
Act.

      The Audit Committee's functions include selecting and nominating, to the
full Board, nominees for election as Trustees, and selecting and nominating
Independent Trustees for election. The Audit 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 Committee has been able to identify from its own resources an
ample number of qualified candidates. Nonetheless, shareholders may submit names
of individuals, accompanied by complete and properly supported resumes, for the
Audit Committee's consideration by mailing such information to the Committee in
care of the Fund. The Committee may consider such persons at such time as it
meets to consider possible nominees. The Committee, however, reserves sole
discretion to determine the candidates to present to the Board and/or
shareholders when it meets for the purpose considering potential nominees.

      The members of the Review Committee are Jon S. Fossel (Chairman), Robert
G. Avis, Sam Freedman, Beverly Hamilton and F. William Marshall, Jr. The Review
Committee held 6 meetings during the fiscal year ended June 30, 2003. Among
other functions, the Review Committee reviews reports and makes recommendations
to the Board concerning the fees paid to the Fund's transfer agent and the
services provided to the Fund by the transfer agent. The Review Committee also
reviews the Fund's investment performance and policies and procedures adopted by
the Fund to comply with Investment Company Act and other applicable law.

Trustees and Officers of the Fund. Except for Mr. Murphy, each of the Trustees
is an "Independent Trustee," as defined in the Investment Company Act. 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. Mr. Murphy was elected as a Trustee of the
Fund with the understanding that in the event he ceases to be the chief
executive officer of the Manager, he will resign as a trustee of the Fund and
the other Board II Funds (defined below) for which he is a trustee or director.

      The Fund's Trustees and officers and their positions held with the Fund
and length of service in such position(s) and their principal occupations and
business affiliations during the past five years are listed in the chart below.
The information for the Trustees also includes the dollar range of shares of the
Fund as well as the aggregate dollar range of shares beneficially owned in any
of the Oppenheimer funds overseen by the Trustees. All of the Trustees are also
trustees or directors of the following Oppenheimer funds (except for Mrs.
Hamilton and Mr. Malone, who are not Trustees of Oppenheimer Senior Floating
Rate Fund and Mr. Murphy is not a Trustee or Managing General Partner of any of
the Centennial trusts) (referred to as "Board II Funds"):


Oppenheimer Cash Reserves                Oppenheimer Select Managers
Oppenheimer Champion Income Fund         Oppenheimer Senior Floating Rate Fund
Oppenheimer Capital Income Fund          Oppenheimer Strategic Income Fund
Oppenheimer High Yield Fund              Oppenheimer Total Return Fund, Inc.
Oppenheimer International Bond Fund      Oppenheimer Variable Account Funds
Oppenheimer Integrity Funds              Panorama Series Fund, Inc.
Oppenheimer Limited-Term Government Fund Centennial America Fund, L. P.
Oppenheimer Main Street Funds, Inc.      Centennial California Tax Exempt Trust
Oppenheimer Main Street Opportunity
Fund                                     Centennial Government Trust
Oppenheimer Main Street Small Cap Fund   Centennial Money Market Trust
Oppenheimer Municipal Fund               Centennial New York Tax Exempt Trust
Oppenheimer Real Asset Fund              Centennial Tax Exempt Trust


      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 economies of sales efforts realized by the
Distributor.

      Messrs. Murphy, Steinmetz, Kourkoulakos, Masterson, Molleur, Vottiero,
Wixted and Zack, and Mses. Bechtolt, Feld and Ives who are officers of the Fund,
respectively hold the same offices with one or more of the other Board II Funds
as with the Fund. As of July 28, 2003, the Trustees and officers of the Fund, as
a group, owned of record or beneficially less than 1% of each class of shares of
the Fund. The foregoing statement does not reflect ownership of shares 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, each Independent Trustee, and his family members, do not own
securities of either the Manager or Distributor of the Board II Funds or any
person directly or indirectly controlling, controlled by or under common control
with the Manager or Distributor.

      Affiliated Transactions and Material Business Relationships. In 2001, Mr.
Swain surrendered for cancellation 60,000 options of Oppenheimer Acquisition
Company ("OAC") (the Manager's parent holding company) to MassMutual for a cash
payment of $2,700,600.


      Mr. Swain has reported that he sold a residential property to Mr. Freedman
on October 23, 2001 for $1.2 million. An independent appraisal of the property
supported the sale price.


      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,
until his or her resignation, retirement, death or removal.


                                Independent Trustees
                                                                          Aggregate
                                                                           Dollar
                                                                          Range of
                                                                           Shares
                                                               Dollar     Beneficially
                                                               Range of   Owned in
                                                               Shares     any of the
Name/                Principal Occupation(s) During Past 5     Beneficial Oppenheimer
Position(s) Held     Years/                                    Owned in     Funds
with Fund/           Other Trusteeships/Directorships Held by  the Fund   Overseen
Length of Service/   Trustee/                                             by Trustee
Age                  Number of Portfolios in Fund Complex
                     Currently Overseen by Trustee
                                                              As of December 31,
                                                                        2002

James C. Swain,      Formerly, Chief Executive Officer (until  $0       Over
Chairman and         August 27, 2002) of the Board II funds.           $100,000
Trustee (since 1978) Vice Chairman (until January 2, 2002) of
Age: 68              the Manager and President and a director
                     (until 1997) of Centennial Asset Management Corporation (a
                     wholly-owned investment advisory subsidiary of the
                     Manager). Oversees 43 portfolios in the OppenheimerFunds
                     complex.

William L.           Chairman of the following private         $0       $50,001-
Armstrong,           mortgage banking companies: Cherry Creek           $100,000
Vice Chairman        Mortgage Company (since 1991),
(since 2003) and     Centennial State Mortgage Company (since
Trustee (since 1999) 1994), The El Paso Mortgage Company
Age: 66              (since 1993), Transland Financial
                     Services, Inc. (since 1997); Chairman of
                     the following private companies: Great
                     Frontier Insurance (insurance agency)
                     (since 1995), Ambassador Media
                     Corporation and Broadway Ventures (since
                     1984); a director of the following
                     public companies: Helmerich & Payne,
                     Inc. (oil and gas drilling/production
                     company) (since 1992) and UNUMProvident
                     (insurance company) (since 1991). Mr.
                     Armstrong is also a Director/Trustee of
                     Campus Crusade for Christ and the
                     Bradley Foundation. Formerly a director
                     of the following: Storage Technology
                     Corporation (a publicly-held computer
                     equipment company) (1991-February 2003),
                     and International Family Entertainment
                     (television channel) (1992-1997),
                     Frontier Real Estate, Inc. (residential
                     real estate brokerage) (1994-1999), and
                     Frontier Title (title insurance agency)
                     (1995-June 1999); a U.S. Senator
                     (January 1979-January 1991). Oversees 43
                     portfolios in the OppenheimerFunds
                     complex.

Robert G. Avis,      Formerly, Director and President of A.G.  $0       Over
Trustee (since 1993) Edwards Capital, Inc. (General Partner             $100,000
Age: 72              of private equity funds) (until February
                 2001); Chairman, President and Chief
                  Executive Officer of A.G. Edwards
                     Capital, Inc. (until March 2000); Vice
                     Chairman and Director of A.G. Edwards,
                     Inc. and Vice Chairman of A.G. Edwards &
                     Sons, Inc. (its brokerage company
                     subsidiary) (until March 1999); Chairman
                     of A.G. Edwards Trust Company and A.G.E.
                     Asset Management (investment advisor)
                     (until March 1999); and a Director
                     (until March 2000) of A.G. Edwards &
                     Sons and A.G. Edwards Trust Company.
                     Oversees 43 portfolios in the
                     OppenheimerFunds complex.

George C. Bowen,     Formerly (until April 1999): Senior Vice  $10,001-  Over
Trustee (since 1997) President (from September 1987) and       $50,000  $100,000
Age: 66              Treasurer (from March 1985) of the
                     Manager; Vice President (from June 1983) and Treasurer
                     (since March 1985) of OppenheimerFunds Distributor, Inc. (a
                     subsidiary of the Manager); Senior Vice President (since
                     February 1992), Treasurer (since July 1991) Assistant
                     Secretary and a director (since December 1991) of
                     Centennial Asset Management Corporation; Vice President
                     (since October 1989) and Treasurer (since April 1986) of
                     HarbourView Asset Management Corporation (an investment
                     advisory subsidiary of the Manager); President, Treasurer
                     and a director (June 1989-January 1990) of Centennial
                     Capital Corporation (an investment advisory subsidiary of
                     the Manager); Vice President and Treasurer (since August
                     1978) and Secretary (since April 1981) of Shareholder
                     Services, Inc. (a transfer agent subsidiary of the
                     Manager); Vice President, Treasurer and Secretary (since
                     November 1989) of Shareholder Financial Services, Inc. (a
                     transfer agent subsidiary of the Manager); Assistant
                     Treasurer (since March 1998) of Oppenheimer Acquisition
                     Corp. (the Manager's parent corporation); Treasurer (since
                     November 1989) of Oppenheimer Partnership Holdings, Inc. (a
                     holding company subsidiary of the Manager); Vice President
                     and Treasurer (since July 1996) of Oppenheimer Real Asset
                     Management, Inc. (an investment advisory subsidiary of the
                     Manager); Chief Executive Officer and director (since March
                     1996) of MultiSource Services, Inc. (a broker-dealer
                     subsidiary of the Manager); Treasurer (since October 1997)
                     of OppenheimerFunds International Ltd. and OppenheimerFunds
                     plc (offshore fund management subsidiaries of the Manager).
                     Oversees 43 portfolios in the OppenheimerFunds complex.

Edward L. Cameron,   A member of The Life Guard of Mount       $10,001 - $50,001 -
Trustee (since 1999) Vernon, George Washington's home (since   $50,000   $100,000
Age: 64              June 2000). Formerly (March 2001 - May
                     2002) Director of Genetic ID, Inc. and its subsidiaries (a
                     privately held biotech company); a partner with
                     PricewaterhouseCoopers LLP (from 1974-1999) (an accounting
                     firm) and Chairman (from 1994-1998), Price Waterhouse LLP
                     Global Investment Management Industry Services Group.
                     Oversees 43 portfolios in the OppenheimerFunds complex.

Jon S. Fossel,       Chairman and Director (since 1998) of     $0       Over
Trustee (since 1990) Rocky Mountain Elk Foundation (a                  $100,000
Age: 61              not-for-profit foundation); and a
                 director (since October 1999) of P.R.
                  Pharmaceuticals (a privately held
                     company) and UNUMProvident (an insurance
                     company) (since June 1, 2002). Formerly
                     Chairman and a director (until October
                     1996) and President and Chief Executive
                     Officer (until October 1995) of the
                     Manager; President, Chief Executive
                     Officer and a director of Oppenheimer
                     Acquisition Corp., Shareholders Services
                     Inc. and Shareholder Financials
                     Services, Inc. (until October 1995).
                     Oversees 43 portfolios in the
                     OppenheimerFunds complex.

Sam Freedman,        Director of Colorado Uplift (a            $10,001-  Over
Trustee (since 1996) non-profit charity) (since September      $50,000  $100,000
Age: 61              1984). Formerly (until October 1994) Mr.
                 Freedman held several positions in
                     subsidiary or affiliated companies of
                  the Manager. Oversees 43 portfolios in
                     the OppenheimerFunds complex.

Beverly L.           Trustee (since 1996) of MassMutual        $0     $10,001 -
Hamilton, Trustee    Institutional Funds and of MML Series             $50,000
(since 2002)         Investment Fund (open-end investment
Age: 56              companies); Director of MML Services
                 (since April 1987) and America Funds
                     Emerging Markets Growth Fund (since
                  October 1991) (both are investment companies), The
                     California Endowment (a philanthropy organization) (since
                     April 2002), and Community Hospital of Monterey Peninsula,
                     (since February 2002); a trustee (since February 2000) of
                     Monterey International Studies (an educational
                     organization), and an advisor to Unilever (Holland)'s
                     pension fund and to Credit Suisse First Boston's Sprout
                     venture capital unit. Mrs. Hamilton also is a member of the
                     investment committees of the Rockefeller Foundation, the
                     University of Michigan and Hartford Hospital. Formerly,
                     President (February 1991-April 2000) ARCO Investment
                     Management Company. Oversees 44 portfolios in the
                     OppenheimerFunds complex.

Robert J. Malone,    Director (since 2001) of Jones            $0      Over
Trustee (since 2002) Knowledge, Inc. (a privately held                 $100,000
Age: 58              company), U.S. Exploration, Inc., (since
                     1997), Colorado UpLIFT (a non-profit organization) (since
                     1986) and a trustee of the Gallagher Family Foundation
                     (non-profit organization) (since 2000). Formerly, Chairman
                     of U.S. Bank (a subsidiary of U.S. Bancorp and formerly
                     Colorado National Bank,) (July 1996-April 1, 1999) and a
                     director of Commercial Assets, Inc. (a REIT) (1993-2000).
                     Oversees 44 portfolios in the OppenheimerFunds complex.

F. William           Trustee (since 1996) of MassMutual        $0      Over
Marshall, Jr.,       Institutional Funds and of MML Series             $100,000
Trustee (since 2000) Investment Fund (open-end investment
Age: 61              companies); Trustee (since 1987),
                     Chairman of the Board (since 2003) and Chairman of the
                     investment committee (since 1994) for the Worcester
                     Polytech Institute; President and Treasurer (since January
                     1999) of the SIS Fund (a private not for profit charitable
                     fund); Trustee (since 1995) of the Springfield Library and
                     Museum Association; Trustee (since 1996) of the Community
                     Music School of Springfield. Formerly, member of the
                     investment committee of the Community Foundation of Western
                     Massachusetts (1998 - 2003); Chairman (January 1999-July
                     1999) of SIS & Family Bank, F.S.B. (formerly SIS Bank);
                     President, Chief Executive Officer and Director (May
                     1993-December 1998) of SIS Bankcorp, Inc. and SIS Bank
                     (formerly Springfield Institution for Savings) and
                     Executive Vice President (January 1999-July 1999) of
                     Peoples Heritage Financial Group, Inc. Oversees 43
                     portfolios in the OppenheimerFunds complex.


      The address of Mr. Murphy in the chart below, is 498 Seventh Avenue,
New York, New York 10018. Mr. Murphy serves for an indefinite term, until his
resignation, death or removal.

                           Interested Trustee and Officer
                                                                          Aggregate
                                                                           Dollar
                                                               Dollar       Range
                                                               Range of   of Shares
                                                               Shares     Beneficially
Name/                Principal Occupation(s) During Past 5     Beneficially Owned in
Position(s) Held     Years/                                    Owned in    any of the
with Fund/           Other Trusteeships/Directorships Held by  the Fund    Oppenheimer
Length of Service/   Trustee/                                               Funds
Age                  Number of Portfolios in Fund Complex
                     Currently Overseen by Trustee
                                                              As of December 31,
                                                                      2002                                                                            2002

John V. Murphy,      Chairman, Chief Executive Officer and     $10,001- Over
President and        director (since June 2001) and President  $50,000  $100,000
Trustee (since 2001) (since September 2000) of the Manager;
Age: 54              President and a director or trustee of
                     other Oppenheimer funds; President and a director (since
                     July 2001) of Oppenheimer Acquisition Corp. and of
                     Oppenheimer Partnership Holdings, Inc.; a director (since
                     November 2001) of OppenheimerFunds Distributor, Inc.;
                     Chairman and a director (since July 2001) of Shareholder
                     Services, Inc. and of Shareholder Financial Services, Inc.;
                     President and a director (since July 2001) of
                     OppenheimerFunds Legacy Program (a charitable trust program
                     established by the Manager); a director of the following
                     investment advisory subsidiaries of OppenheimerFunds, Inc.:
                     OFI Institutional Asset Management, Inc. and Centennial
                     Asset Management Corporation (since November 2001),
                     HarbourView Asset Management Corporation and OFI Private
                     Investments, Inc. (since July 2001); President (since
                     November 1, 2001) and a director (since July 2001) of
                     Oppenheimer Real Asset Management, Inc.; a director (since
                     November 2001) of Trinity Investment Management Corp. and
                     Tremont Advisers, Inc. (investment advisory affiliates of
                     the Manager); Executive Vice President (since February
                     1997) of Massachusetts Mutual Life Insurance Company (the
                     Manager's parent company); a director (since June 1995) of
                     DLB Acquisition Corporation (a holding company that owns
                     shares of David L. Babson & Company, Inc.); formerly, Chief
                     Operating Officer (September 2000-June 2001) of the
                     Manager; President and trustee (November 1999-November
                     2001) of MML Series Investment Fund and MassMutual
                     Institutional Funds (open-end investment companies); a
                     director (September 1999-August 2000) of C.M. Life
                     Insurance Company; President, Chief Executive Officer and
                     director (September 1999-August 2000) of MML Bay State Life
                     Insurance Company; a director (June 1989-June 1998) of
                     Emerald Isle Bancorp and Hibernia Savings Bank (a
                     wholly-owned subsidiary of Emerald Isle Bancorp). Oversees
                     73 portfolios in the OppenheimerFunds complex.

      The address of the Officers in the chart below is 498 Seventh Avenue, New
York, New York 10018 except for Messrs. Wixted, Masterson and Vottiero and Mses.
Bechtolt and Ives whose address is 6803 S. Tucson Way, Centennial, Colorado
80112-3924. Each Officer serves for an annual term or until his or her earlier
resignation, death or removal.


                                Officers of the Fund
Name, Position(s) Held with

Fund,                          Principal Occupation(s) During Past 5 Years
Length of Service and Age

Arthur P. Steinmetz,           Senior Vice President of the Manager (since March
Vice President and Portfolio   1993) and of HarbourView Asset Management
Manager                        Corporation (since March 2000); an officer of 6
(since 2003)                   portfolios in the OppenheimerFunds complex.
Age: 44

Dimitrios Kourkoulakos,        Vice President of the Manager (since December 2001);
Vice President and Portfolio   an officer of 3 portfolios in the OppenheimerFunds
Manager                        complex; formerly a High Yield Analyst (1998 - 2001)
(since 2002)                   and a Securities Analyst (1995 - 1998) of the
Age: 36                        Manager.

Brian W. Wixted,               Senior Vice President and Treasurer (since March
Treasurer (since April 1999)   1999) of the Manager; Treasurer (since March 1999)
Age: 43                        of HarbourView Asset Management Corporation,
                               Shareholder Services, Inc., Oppenheimer Real Asset
                               Management Corporation, Shareholder Financial
                               Services, Inc., Oppenheimer Partnership Holdings,
                               Inc., OFI Private Investments, Inc. (since March
                               2000), OppenheimerFunds International Ltd. and
                               OppenheimerFunds plc (since May 2000) and OFI
                               Institutional Asset Management, Inc. (since November
                               2000); Treasurer and Chief Financial Officer (since
                               May 2000) of Oppenheimer Trust Company (a trust
                               company subsidiary of the Manager); Assistant
                               Treasurer (since March 1999) of Oppenheimer
                               Acquisition Corp. and OppenheimerFunds Legacy
                               Program (since April 2000); formerly Principal and
                               Chief Operating Officer (March 1995-March 1999),
                               Bankers Trust Company-Mutual Fund Services Division.
                               An officer of 91 portfolios in the OppenheimerFunds
                               complex.

Connie Bechtolt,               Assistant Vice President of the Manager (since
Assistant Treasurer since 2002 September 1998); formerly Manager/Fund Accounting
Age: 40                        (September 1994-September 1998) of the Manager. An
                               officer of 91 portfolios in the OppenheimerFunds
                               complex.

Philip Vottiero,               Vice President/Fund Accounting of the Manager (since
Assistant Treasurer (since     March 2002); formerly Vice President/Corporate
2002)                          Accounting of the Manager (July 1999-March 2002)
Age: 40                        prior to which he was Chief Financial Officer at
                               Sovlink Corporation (April 1996-June 1999). An
                               officer of 91 portfolios in the OppenheimerFunds
                               complex.

Robert G. Zack,                Senior Vice President (since May 1985) and General
Vice President & Secretary     Counsel (since February 2002) of the Manager;
(since 2001)                   General Counsel and a director (since November 2001)

Age: 55                        of OppenheimerFunds Distributor, Inc.; Senior Vice
                               President and General Counsel (since November 2001)
                               of HarbourView Asset Management Corporation; Vice
                               President and a director (since November 2000) of
                               Oppenheimer Partnership Holdings, Inc.; Senior Vice
                               President, General Counsel and a director (since
                               November 2001) of Shareholder Services, Inc.,
                               Shareholder Financial Services, Inc., OFI Private
                               Investments, Inc., Oppenheimer Trust Company and OFI
                               Institutional Asset Management, Inc.; General
                               Counsel (since November 2001) of Centennial Asset
                               Management Corporation; a director (since November
                               2001) of Oppenheimer Real Asset Management, Inc.;
                               Assistant Secretary and a director (since November
                               2001) of OppenheimerFunds International Ltd.; Vice
                               President (since November 2001) of OppenheimerFunds
                               Legacy Program; Secretary (since November 2001) of
                               Oppenheimer Acquisition Corp.; formerly Acting
                               General Counsel (November 2001-February 2002) and
                               Associate General Counsel (May 1981-October 2001) of
                               the Manager; Assistant Secretary of Shareholder
                               Services, Inc. (May 1985-November 2001), Shareholder
                               Financial Services, Inc. (November 1989-November
                               2001); OppenheimerFunds International Ltd. And
                               OppenheimerFunds plc (October 1997-November 2001).
                               An officer of 91 portfolios in the OppenheimerFunds
                               complex.

Philip T. Masterson,           Vice President and Assistant Counsel of the Manager
Assistant Secretary  (since    (since July 1998); formerly, an associate with
2002)                          Davis, Graham, & Stubbs LLP (January 1997-June
Age: 39                        1998). An officer of 91 portfolios in the
                           OppenheimerFunds complex.


Denis R. Molleur,              Vice President and Senior Counsel of the Manager
Assistant Secretary (since     (since July 1999); formerly a Vice President and
2001)                          Associate Counsel of the Manager (September
Age: 45                        1995-July 1999). An officer of 82 portfolios in the
                           OppenheimerFunds complex.


Katherine P. Feld,             Vice President and Senior Counsel (since July 1999)
Assistant Secretary (since     of the Manager; Vice President (since June 1990) of
2001)                          OppenheimerFunds Distributor, Inc.; Director, Vice
Age: 45                        President and Assistant Secretary (since June 1999)
                               of Centennial Asset Management Corporation; Vice
                               President (since 1997) of Oppenheimer Real Asset
                               Management, Inc.; formerly Vice President and
                               Associate Counsel of the Manager (June 1990-July
                               1999). An officer of 91 portfolios in the
                               OppenheimerFunds complex.

Kathleen T. Ives,              Vice President and Assistant Counsel (since June
Assistant Secretary  (since    1998) of the Manager; Vice President (since 1999) of
2001)                          OppenheimerFunds Distributor, Inc.; Vice President
Age: 37                        and Assistant Secretary (since 1999) of Shareholder
                               Services, Inc.; Assistant Secretary (since December
                               2001) of OppenheimerFunds Legacy Program and
                               Shareholder Financial Services, Inc.; formerly
                               Assistant Vice President and Assistant Counsel of
                               the Manager (August 1997-June 1998); Assistant
                               Counsel of the Manager (August 1994-August 1997). An
                               officer of 91 portfolios in the OppenheimerFunds
                               complex.

      |X| Remuneration of Trustees. The officers of the Fund and one Trustee of
the Fund (Mr. Murphy) are affiliated with the Manager and receive no salary or
fee from the Fund. The remaining Trustees of the Fund received the compensation
shown below from the Fund with respect to the Fund's fiscal year ended June 30,
2003. The compensation from all 41 of the Board II Funds (including the Fund)
represents compensation received for serving as a director or trustee and member
of a committee (if applicable) of the boards of those funds during the calendar
year ended December 31, 2002.

                                      Aggregate        Total Compensation from
Trustee Name and Other Fund       Compensation from     Fund and Fund Complex
Position(s) (as applicable)             Fund1             Paid to Trustees*

James C. Swain5
Chairman of the Board of
Trustees                                $7,548                $177,996

William L. Armstrong                    $4,064                 $92,076
Audit Committee Member

Robert G. Avis                          $4,064                 $92,199
Review Committee Member

George C. Bowen                         $4,064                 $91,124
Audit Committee Member

Edward L. Cameron                       $4,588                 $99,743
Audit Committee Chairman

Jon S. Fossel                           $4,588                 $94,590
Review Committee Chairman

Sam Freedman                            $4,064                 $92,199
Review Committee Member

Beverly L. Hamilton2                   $4,0643                $113,6594
Review Committee Member

Robert J. Malone2                      $4,0645                 $58,326
Audit Committee Member

F. William Marshall                     $4,064                $138,1246
Review Committee Member


Effective July 1, 2002, C. Howard Kast and Robert M. Kirchner retired as
Trustees from the Board II Funds. For the calendar year ended December 31, 2002,
Mr. Kast received $41,451 and Mr. Kirchner received $38,001 total compensation
from all of the Oppenheimer funds for which they served as Trustee.
1. Aggregate Compensation from Fund includes fees and deferred compensation, if
   any, for a Trustee.
2. Mrs. Hamilton and Mr. Malone were elected as Trustees of the Board II Funds
   effective June 1, 2002. Compensation for Mrs. Hamilton and Mr. Malone was
   paid by all the Board II Funds, with the exception of Oppenheimer Senior
   Floating Rate Fund for which they currently do not serve as Trustees (total
   of 40 Oppenheimer funds at December 31, 2002).
3. Includes $4,064 deferred under Deferred Compensation Plan described below.
4. Includes $55,333 compensation (of which 100% was deferred under a deferred
   compensation plan) paid to Mrs. Hamilton for serving as a trustee by two
   open-end investment companies (MassMutual Institutional Funds and MML Series
   Investment Fund) the investment adviser for which is the indirect parent
   company of the Fund's Manager. The Manager also serves as the Sub-Advisor to
   the MassMutual International Equity Fund, a series of MassMutual
   Institutional Funds.
5. Includes $4,064 deferred under Deferred Compensation Plan described below.
6. Includes $47,000 compensation paid to Mr. Marshall for serving as a trustee
   by two open-end investment companies (MassMutual Institutional Funds and MML
   Series Investment Fund) the investment adviser for which is the indirect
   parent company of the Fund's Manager. The Manager also serves as the
   Sub-Advisor to the MassMutual International Equity Fund, a series of
   MassMutual Institutional Funds.
* For purposes of this section only, "Fund Complex" includes the Oppenheimer
funds, MassMutual Institutional Funds and MML Series Investment Fund in
accordance with the instructions for Form N-1A. The Manager does not consider
MassMutual Institutional Funds and MML Series Investment Fund to be part of the
OppenheimerFunds "Fund Complex" as that term may be otherwise interpreted.


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

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


      |X| Major Shareholders. As of July 28, 2003 the only persons who owned of
record or was known by the Fund to own of record 5% or more of any class of the
Fund's outstanding shares were:

      RPSS TR ROLLOVER IRA FBO Howard A. Vollmer, 7838 Eaton CT, El Paso, TX
      79915-4506, who owned 54,763.697 Class N shares (representing
      approximately 5.92% of the Fund's then outstanding Class N shares).

      Massachusetts Mutual Life Insurance Company, Separate Investment Account,
      1295 State Street, Springfield, MA 01111-0001 which owned 5,634,167.527
      Class Y shares (representing approximately 95.29% of the Fund's then
      outstanding Class Y shares).


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

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

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


Portfolio Proxy Voting. The Fund has adopted Portfolio Proxy Voting Policies and
Procedures under which the Fund votes proxies relating to securities ("portfolio
proxies") held by the Fund. The Fund's primary consideration in voting portfolio
proxies is the financial interests of the Fund and its shareholders. The Fund
has retained an unaffiliated third-party as its agent to vote portfolio proxies
in accordance with the Fund's Portfolio Proxy Voting Guidelines and to maintain
records of the Fund's voting of portfolio proxies pursuant to such portfolio
Proxy Voting Guidelines. The Proxy Voting Guidelines include provisions to
address conflicts of interest that may arise between the Fund and OFI where an
OFI directly-controlled affiliate manages or administers the assets of a pension
plan of the company soliciting the proxy. The Fund's Portfolio Proxy Voting
Guidelines on routine and non-routine proxy proposals are summarized below.

     o  The Fund votes with the recommendation of the issuer's management on
        routine matters, including election of directors nominated by management
        and ratification of auditors, unless circumstances indicate otherwise.
     o  In general, the Fund opposes anti-takeover proposals and supports
        elimination of anti-takeover proposals, absent unusual circumstances.
     o  The Fund supports shareholder proposals to reduce a super-majority vote
        requirement, and opposes management proposals to add a super-majority
        vote requirement.
     o The Fund opposes proposals to classify the board of directors. o The Fund
     supports proposals to eliminate cumulative voting. o The Fund opposes
     re-pricing of stock options. o The Fund generally considers executive
     compensation questions such as
        stock option plans and bonus plans to be ordinary business activity. The
        Fund analyzes stock option plans, paying particular attention to their
        dilutive effect. While the Fund generally supports management proposals,
        the Fund opposes plans it considers to be excessive.

      The Fund will be required to file new 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 first such filing is due no later than August 31, 2004, for the
twelve months ended June 30, 2004. Once filed, the Fund's Form N-PX filing will
be available (i) without charge, upon request, by calling the Fund toll-free at
1.800.225.5677 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 managers
of the Fund are employed by the Manager and are the persons who are principally
responsible for the day-to-day management of the Fund's portfolio. Other members
of the Manager's Fixed-Income Portfolio Team provide the portfolio managers 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 each class of shares based upon the relative proportion of the Fund's net
assets represented by that class.

-------------------------------------------------------------------------------
 Fiscal Year ended 6/30:     Management Fees Paid to OppenheimerFunds, Inc.
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
           2001                                $9,796,423
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
           2002                                $9,168,198
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------

           2003                                $8,956,614

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

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

      The agreement permits the Manager to act as investment 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.

      |X| Annual Approval of Investment Advisory Agreement. Each year, the Board
of Trustees, including a majority of the Independent Trustees, is required to
approve the renewal of the investment advisory agreement. The Investment Company
Act requires that the Board request and evaluate and the Manager provide such
information as may be reasonably necessary to evaluate the terms of the
investment advisory agreement. The Board employs an independent consultant to
prepare a report that provides such information as the Board requests for this
purpose.

      The Board also receives information about the 12b-1 distribution fees the
Fund pays. These distribution fees are reviewed and approved at a different time
of the year.

      The Board reviewed the foregoing information in arriving at its decision
to renew the investment advisory agreement. Among other factors, the Board
considered:
o     The nature, cost, and quality of the services provided to the Fund and
         its shareholders;
o     The profitability of the Fund to the Manager;
o     The investment performance of the Fund in comparison to regular market
         indices
o Economies of scale that may be available to the Fund from the Manager; o Fees
paid by other mutual funds for similar services; o The value and quality of any
other benefits or services received by the
         Fund from its relationship with the Manager, and
o     The direct and indirect benefits the Manager received from its
         relationship with the Fund. These included services provided by the
         Distributor and the Transfer Agent, and brokerage and soft dollar
         arrangements permissible under Section 28(e) of the Securities Exchange
         Act.

      The Board considered that the Manager must be able to pay and retain high
quality personnel at competitive rates to provide services to the Fund. The
Board also considered that maintaining the financial viability of the Manager is
important so that the Manager will be able to continue to provide quality
services to the Fund and its shareholders in adverse times. The Board also
considered the investment performance of other mutual funds advised by the
Manager. The Board is aware that there are alternatives to the use of the
Manager.


      These matters were also considered by the Independent Trustees, meeting
separately from the full Board with experienced Counsel to the Independent
Trustees who assisted them in their deliberations. The Fund's Independent
Trustees Counsel is independent of the Manager within the meaning and intent of
the SEC Rules regarding the independence of counsel.

      After careful deliberation, the Board concluded that it was in the best
interest of shareholders to continue the investment advisory agreement for
another year. In arriving at a decision, the Board did not single out any one
factor or group of factors as being more important than other factors, but
considered all factors together. The Board judged the terms and conditions of
the investment advisory agreement, including the investment advisory fee, in
light of all of the surrounding circumstances.


Brokerage Policies of the Fund

Brokerage Provisions of the Investment Advisory Agreement. One of the duties of
the Manager under the investment advisory agreement is to arrange the portfolio
transactions for the Fund. The advisory agreement contains provisions relating
to the employment of broker-dealers to effect the Fund's portfolio transactions.
The Manager is authorized by the advisory agreement to employ broker-dealers,
including "affiliated" brokers, as that term is defined in the Investment
Company Act. The Manager may employ broker-dealers that the 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. The Manager need not seek competitive
commission bidding. However, it is expected to be aware of the current rates of
eligible brokers and to minimize the commissions paid to the extent consistent
with the interests and policies of the Fund as established by its Board of
Trustees.

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

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

      Transactions in securities other than those for which an exchange is the
primary market are generally done with principals or market makers. In
transactions on foreign exchanges, the Fund may be required to pay fixed
brokerage commissions and therefore would not have the benefit of negotiated
commissions available in U.S. markets. Brokerage commissions are paid primarily
for transactions in listed securities or for certain fixed-income agency
transactions in the secondary market. Otherwise brokerage commissions are paid
only if it appears likely that a better price or execution can be obtained by
doing so. In an option transaction, the Fund ordinarily uses the same broker for
the purchase or sale of the option and any transaction in the securities to
which the option relates. Other funds advised by the Manager have investment
policies similar to those of the Fund. Those other funds may purchase or sell
the same securities as the Fund at the same time as the Fund, which could affect
the supply and price of the securities. If two or more funds advised by the
Manager purchase the same security on the same day from the same dealer, the
transactions under those combined orders are averaged as to price and allocated
in accordance with the purchase or sale orders actually placed for each account.

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

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

      Investment research services include information and analysis on
particular companies and industries as well as market or economic trends and
portfolio strategy, market quotations for portfolio evaluations, information
systems, computer hardware and similar products and services. If a research
service also assists the Manager in a non-research capacity (such as bookkeeping
or other administrative functions), then only the percentage or component that
provides assistance to the Manager in the investment decision-making process may
be paid in commission dollars.

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

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

-------------------------------------------------------------------------------
 Fiscal Year Ended 6/30:      Total Brokerage Commissions Paid by the Fund1
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
           2001                                 $489,436
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
           2002                                  $56,141
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------

           2003                                 $22,5362

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

1. Amounts do not include spreads or commissions on principal transactions on a
net trade basis. 2. In the fiscal year ended 6/30/03, there were no transactions
directed to brokers for research services.


Distribution and Service Plans

The Distributor. Under its General Distributor's Agreement with the Fund, the
Distributor acts as the Fund's principal underwriter in the continuous public
offering of the different classes of shares of the Fund. The Distributor bears
the expenses normally attributable to sales, including advertising and the cost
of printing and mailing prospectuses, other than those furnished to existing
shareholders. The Distributor is not obligated to sell a specific number of
shares. Expenses normally attributable to sales are borne by the Distributor.

    The compensation paid to (or retained by) the Distributor from the sale of
shares or on the redemption of shares during the Fund's three most recent fiscal
years are shown in the tables below.

-------------------------------------------------------
             Aggregate Front-End   Class A Front-End
                                   Sales Charges
Fiscal Year  Sales Charges on      Retained by
Ended 6/30:  Class A Shares        Distributor
-------------------------------------------------------
-------------------------------------------------------
    2001          $1,872,242            $507,067
-------------------------------------------------------
-------------------------------------------------------
    2002          $1,987,927            $577,531
-------------------------------------------------------
-------------------------------------------------------

    2003          $2,298,314            $365,9161

-------------------------------------------------------
1. Includes amounts retained by a broker-dealer that is an affiliate or a parent
of the Distributor.

-------------------------------------------------------------------------------
Fiscal    Concessions on   Concessions on   Concessions on    Concessions on
Year      Class A Shares   Class B Shares   Class C Shares    Class N Shares
Ended     Advanced by      Advanced by      Advanced by       Advanced by
6/30:     Distributor1     Distributor1     Distributor1      Distributor1
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
  2001        $190,052        $3,149,905        $285,892          $1,4732
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
  2002        $162,172        $2,840,777        $412,210          $20,507
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------

  2003        $871,461        $1,777,505        $340,624          $31,482

-------------------------------------------------------------------------------
1. The Distributor advances concession payments to dealers for certain sales of
Class A shares and for sales of Class B, Class C and Class N shares from its own
resources at the time of sale.
2. The inception date of Class N shares was March 1, 2001.

-------------------------------------------------------------------------------
Fiscal       Class A          Class B         Class C          Class N
             Contingent       Contingent      Contingent       Contingent
Year         Deferred Sales   Deferred Sales  Deferred Sales   Deferred Sales
Ended        Charges          Charges         Charges          Charges
6/30         Retained by      Retained by     Retained by      Retained by
             Distributor      Distributor     Distributor      Distributor
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------

    2003         $76,355        $1,319,090        $32,756          $5,858

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

Distribution and Service Plans. The Fund has adopted a Service Plan for Class A
shares and Distribution and Service Plans for Class B, Class C and Class N
shares under Rule 12b-1 of the Investment Company Act. Under those plans the
Fund pays the Distributor for all or a portion of its costs incurred in
connection with the distribution and/or servicing of the shares of the
particular class. Each plan has been approved by a vote of the Board of
Trustees, including a majority of the Independent Trustees1, cast in person at a
meeting called for the purpose of voting on that plan.

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

      Unless a plan is terminated as described below, the plan continues in
effect from year to year but only if the Fund's Board of Trustees and its
Independent Trustees specifically vote annually to approve its continuance.
Approval must be by a vote cast in person at a meeting called for the purpose of
voting on continuing the plan. 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. Because Class B shares of the Fund automatically
convert into Class A shares 72 months after purchase, the Fund must obtain the
approval of both Class A and Class B shareholders for a proposed material
amendment to the Class A Plan that would materially increase payments under the
Plan. That approval must be by a "majority" (as defined in the Investment
Company Act) of the shares of each Class, voting separately by class.


      While the plans are in effect, the Treasurer of the Fund shall provide
separate written reports on the plans to the Board of Trustees at least
quarterly for its review. The Reports shall detail the amount of all payments
made under a plan, and the purpose for which the payments were made. 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 for a class, no payment will be made to any recipient in
any quarter in which the aggregate net asset value of all Fund shares of that
class held by the recipient for itself and its customers does not exceed a
minimum amount, if any, that may be set from time to time by a majority of the
Independent Trustees. The Board of Trustees has set no minimum amount of assets
to qualify for payments under the plans.


      |X| Class A Service Plan. Under the Class A service plan, the Distributor
currently uses the fees it receives from the Fund to pay brokers, dealers and
other financial institutions (they are referred to as "recipients") for personal
services and account maintenance services they provide for their customers who
hold Class A shares. The services include, among others, answering customer
inquiries about the Fund, assisting in establishing and maintaining accounts in
the Fund, making the Fund's investment plans available and providing other
services at the request of the Fund or the Distributor. 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 the
special arrangement described below. The Distributor makes payments to plan
recipients quarterly at an annual rate not to exceed 0.25% of the average annual
net assets consisting of Class A shares held in the accounts of the recipients
or their customers.

      With respect to purchases of Class A shares subject to a contingent
deferred sales charge by certain retirement plans that purchased such shares
prior to March 1, 2001 ("grandfathered retirement accounts"), the Distributor
currently intends to pay the service fee to Recipients in advance for the first
year after the shares are purchased. During the first year after the shares are
sold, the Distributor retains the service fee to reimburse itself for the costs
of distributing the shares. After the first year shares are outstanding, the
Distributor makes service fee payments to Recipients quarterly on those shares.
The advance payment is based on the net asset value of shares sold. Shares
purchased by exchange do not qualify for the advance service fee payment. If
Class A shares purchased by grandfathered retirement accounts are redeemed
during the first year after their purchase, the Recipient of the service fees on
those shares will be obligated to repay the Distributor a pro rata portion of
the advance payment of the service fee made on those shares.

      For the fiscal year ended June 30, 2003, payments under the Class A Plan
totaled $2,236,804, of which $925 was retained by the Distributor under the
arrangement described above, and included $71,456 paid to an affiliate of the
Distributor's parent company. 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.


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

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

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

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

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

o     pays sales concessions to authorized brokers and dealers at the time of
      sale and pays service fees as described above,
o     may finance payment of sales concessions and/or the advance of the
      service fee payment to recipients under the plans, or may provide such
      financing from its own resources or from the resources of an affiliate,
o     employs personnel to support distribution of Class B, Class C and Class
      N shares, and
o     bears the costs of sales literature, advertising and prospectuses
      (other than those furnished to current shareholders) and state "blue
      sky" registration fees and certain other distribution expenses.

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

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

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

     Distribution Fees Paid to the Distributor for the Year Ended 6/30/03

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

Class B Plan      $3,211,081    $2,535,3071      $15,822,557         4.24%

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

Class C Plan      $1,208,519     $336,8302       $3,125,542          1.94%

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

Class N Plan       $24,053        $22,3073        $107,631           1.29%

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

1. Includes $20,272 paid to an affiliate of the Distributor's parent company.
2. Includes $19,346 paid to an affiliate of the Distributor's parent company.
3. Includes $509 paid to an affiliate of the Distributor's parent company.


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

Performance of the Fund

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

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

      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 Yields and 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 do 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 its yields 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 Yields and total returns for any given past period represent historical
performance information and are not, and should not be considered, a prediction
of future yields or returns.

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

      |X| Yields. The Fund uses a variety of different yields to illustrate its
current returns. Each class of shares calculates its yield separately because of
the different expenses that affect each class.

            o Standardized Yield. The "standardized yield" (sometimes referred
to just as "yield") is shown for a class of shares for a stated 30-day period.
It is not based on actual distributions paid by the Fund to shareholders in the
30-day period, but is a hypothetical yield based upon the net investment income
from the Fund's portfolio investments for that period. It may therefore differ
from the "dividend yield" for the same class of shares, described below.

      Standardized yield is calculated using the following formula set forth in
rules adopted by the Securities and Exchange Commission, designed to assure
uniformity in the way that all funds calculate their yields:

 Standardized Yield = 2a-b + 1)6 -1]
                       ---
                     [(cd

      The symbols above represent the following factors:

      a =  dividends and interest earned during the 30-day period.
      b =  expenses accrued for the period (net of any expense assumptions).
      c =  the average daily number of shares of that class outstanding during
           the 30-day period that were entitled to receive dividends.
      d =  the maximum offering price per share of that class on the last day of
           the period, adjusted for undistributed net investment income.

      The standardized yield for a particular 30-day period may differ from the
yield for other periods. The SEC formula assumes that the standardized yield for
a 30-day period occurs at a constant rate for a six-month period and is
annualized at the end of the six-month period. Additionally, because each class
of shares is subject to different expenses, it is likely that the standardized
yields of the Fund's classes of shares will differ for any 30-day period.

            o Dividend Yield. The Fund may quote a "dividend yield" for each
class of its shares. Dividend yield is based on the dividends paid on a class of
shares during the actual dividend period. To calculate dividend yield, the
dividends of a class declared during a stated period are added together, and the
sum is multiplied by 12 (to annualize the yield) and divided by the maximum
offering price on the last day of the dividend period. The formula is shown
below:

  Dividend Yield = dividends paid x 12/maximum offering price (payment date)

      The maximum offering price for Class A shares includes the current maximum
initial sales charge. The maximum offering price for Class B, Class C and Class
N shares is the net asset value per share, without considering the effect of
contingent deferred sales charges. There is no sales charge on Class Y shares.
The Class A dividend yield may also be quoted without deducting the maximum
initial sales charge.

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

           The Fund's Yields for the 30-Day Periods Ended 6/30/03

------------------------------------------------------------------------------
------------------------------------------------------------------------------
Class of           Standardized Yield                Dividend Yield
Shares
------------------------------------------------------------------------------
------------------------------------------------------------------------------
                Without          After          Without           After
              Sales Charge   Sales Charge     Sales Charge     Sales Charge
------------------------------------------------------------------------------
------------------------------------------------------------------------------

Class A          7.71%           7.34%           8.07%            7.69%

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

Class B          6.92%            N/A            7.45%             N/A

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

Class C          6.93%            N/A            7.36%             N/A

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

Class N          7.36%            N/A            7.72%             N/A

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

Class Y          7.72%            N/A            8.14%             N/A

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

      |X| Total Return Information. There are different types of "total returns"
to measure the Fund's performance. Total return is the change in value of a
hypothetical investment in the Fund over a given period, assuming that all
dividends and capital gains distributions are reinvested in additional shares
and that the investment is redeemed at the end of the period. Because of
differences in expenses for each class of shares, the total returns for each
class are separately measured. The cumulative total return measures the change
in value over the entire period (for example, 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 4.75% (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). For Class B shares, payment of the
applicable contingent deferred sales charge is applied, depending on the period
for which the return is shown: 5.0% in the first year, 4.0% in the second year,
3.0% in the third and fourth years, 2.0% in the fifth year, 1.0% in the sixth
year and none thereafter. For Class C shares, the 1% contingent deferred sales
charge is deducted for returns for the 1-year period. For Class N shares, the 1%
contingent deferred sales charge is deducted for returns for the one year
period. Class N total returns may also be calculated for the periods prior to
March 1, 2001 (the inception date for Class N shares), based on the Fund's Class
A returns, adjusted to reflect the higher Class N 12b-1 fees.


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

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


ATV DR  1/n
---          - 1 = Average Annual Total Return (After Taxes on Distributions
 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, Class B, Class C or Class N
shares. There is no sales charge on Class Y shares. Each is based on the
difference in net asset value per share at the beginning and the end of the
period for a hypothetical investment in that class of shares (without
considering front-end or contingent deferred sales charges) and takes into
consideration the reinvestment of dividends and capital gains distributions.


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

             The Fund's Total Returns for the Periods Ended 6/30/03

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Class of   Cumulative Total             Average Annual Total Returns
Shares    Returns (10 years
          or life-of-class)
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
                                  1-Year           5-Year           10-Year
                                                    (or               (or
                                               life-of-class)    life-of-class)
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
          After    Without   After   Without  After    Without After    Without
          Sales    Sales     Sales   Sales    Sales    Sales   Sales    Sales
           Charge   Charge   Charge   Charge   Charge  Charge   Charge   Charge
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

Class A1   63.81%   71.99%   10.85%   16.38%   0.18%    1.16%   5.06%    5.57%

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

Class B   63.81%2   63.81%2  10.60%   15.60%   0.15%    0.40%   5.06%2   5.06%2

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

Class C   36.92%3   36.92%3   14.41%  15.41%   0.40%    0.40%   4.19%3   4.19%3

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

Class N    2.62%4   2.62%4    15.08%  16.08%   1.11%4   1.11%4   N/A      N/A

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

Class Y   12.84%5   12.84%5   16.51%  16.51%   1.29%    1.29%5  2.145    2.145

---------------------------------------------------------------------------------
1. Inception of Class A: 7/28/78.
2. Inception of Class B: 5/3/93. Because Class B convert to Class A shares 72
   months after purchase, the "life-of-class" return for Class B uses Class A
   performance for the period after conversion.
3. Inception of Class C: 11/1/95 4. Inception of Class N: 3/1/01 5. Inception of
   Class Y: 10/15/97

---------------------------------------------------------------------------------
     Average Annual Total Returns for Class A Shares1 (After Sales Charge)

                          For the Periods Ended 6/30/03

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
                                                                        10 years
                                              1 year    5 years    (or life of
                                                                          class)
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

After Taxes on Distributions                  7.16%      -3.74%       1.11%

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

After Taxes on Distributions and Redemption   6.61%      -2.27%       1.82%

of Fund Shares
---------------------------------------------------------------------------------
1. Inception of Class A shares: 7/28/78

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

      |X| Lipper Rankings. From time to time the Fund may publish the ranking of
the performance of its classes of shares by Lipper Analytical Services, Inc.
("Lipper") based on investment styles. Lipper is a widely-recognized independent
mutual fund monitoring service. Lipper monitors the performance of regulated
investment companies, including the Fund, and ranks their performance for
various periods based on 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 classes of shares by Morningstar, Inc., an
independent mutual fund monitoring service. Morningstar rates mutual funds in
their specialized market sector. The Fund is rated in the high yield bond funds
category.

      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(TM) 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. (Each share class is counted as a
fraction of one fund within this scale and rated separately, which may cause
slight variations in the distribution percentages.) 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 classes of shares may be compared in publications to the performance of
various market indices or other investments, and averages, performance rankings
or other benchmarks prepared by recognized mutual fund statistical services.

      Investors may also wish to compare the returns on the Fund's share classes
to the return on fixed-income investments available from banks and thrift
institutions. Those include certificates of deposit, ordinary interest-paying
checking and savings accounts, and other forms of fixed or variable time
deposits, and various other instruments such as Treasury bills. However, the
Fund's returns and share 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,
o comparisons of various market sectors or indices to demonstrate
  performance, risk, or other characteristics of the Fund.

ABOUT your account

How to Buy Shares

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


AccountLink. When shares are purchased through AccountLink, each purchase must
be at least $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 Exchange"). The Exchange 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 Exchange, 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 C to this
Statement of Additional Information because the Distributor or dealer or broker
incurs little or no selling expenses.

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

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


Oppenheimer AMT-Free New York Municipals  Oppenheimer Municipal Bond Fund
Oppenheimer Bond Fund                     Oppenheimer New Jersey Municipal Fund
Oppenheimer California Municipal Fund     Oppenheimer Pennsylvania Municipal Fund
                                          Oppenheimer Principal Protected Main
Oppenheimer Capital Appreciation Fund     Street Fund
Oppenheimer Capital Preservation Fund     Oppenheimer Quest Balanced Value Fund
                                          Oppenheimer  Quest  Capital  Value Fund,
Oppenheimer Capital Income Fund           Inc.

                                          Oppenheimer  Quest  Global  Value  Fund,

Oppenheimer Champion Income Fund          Inc.

Oppenheimer Convertible Securities Fund   Oppenheimer Quest Opportunity Value Fund
Oppenheimer Developing Markets Fund       Oppenheimer Quest Value Fund, Inc.
Oppenheimer Disciplined Allocation Fund   Oppenheimer Real Asset Fund
                                          Oppenheimer Rochester National
Oppenheimer Discovery Fund                Municipals

Oppenheimer Emerging Growth Fund          Oppenheimer Senior Floating Rate Fund
Oppenheimer Emerging Technologies Fund    Oppenheimer Small Cap Value Fund
Oppenheimer Enterprise Fund               Oppenheimer Strategic Income Fund
Oppenheimer Europe Fund                   Oppenheimer Total Return Bond Fund
Oppenheimer Global Fund                   Oppenheimer Total Return Fund, Inc.
Oppenheimer Global Opportunities Fund     Oppenheimer Trinity Core Fund

                                          Oppenheimer  Trinity  Large  Cap  Growth
Oppenheimer Gold & Special Minerals Fund  Fund

Oppenheimer Growth Fund Oppenheimer Trinity Value Fund Oppenheimer High Yield
Fund Oppenheimer U.S. Government Trust Oppenheimer International Bond Fund
Oppenheimer Value Fund Oppenheimer International Growth Fund Limited-Term New
York Municipal Fund Oppenheimer International Small Company Fund Rochester Fund
Municipals Oppenheimer Limited-Term Government Fund OSM1- Gartmore Millennium
Growth Fund II Oppenheimer Limited Term Municipal Fund OSM1 - Jennison Growth
Fund

                                          OSM1 -  Mercury  Advisors  S&P 500 Index
Oppenheimer Main Street Fund              Fund
                                          OSM1 -  Mercury  Advisors  Focus  Growth
Oppenheimer Main Street Opportunity Fund  Fund
Oppenheimer Main Street Small Cap Fund    OSM1 - QM Active Balanced Fund
Oppenheimer MidCap Fund                   OSM1 - Salomon Brothers All Cap Fund
Oppenheimer Multiple Strategies Fund


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


1 - "OSM" stands for Oppenheimer Select Managers


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


Letters of Intent. Under a Letter of Intent, if you purchase Class A shares or
Class A and Class B shares of the Fund and other Oppenheimer funds during a
13-month period, you can reduce the sales charge rate that applies to your
purchases of Class A shares. The total amount of your intended purchases of both
Class A and Class B shares will determine the reduced sales charge rate for the
Class A shares purchased during that period. You can include purchases made up
to 90 days before the date of the Letter. Letters of Intent do not consider
Class C or Class N shares you purchase or may have purchased.

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

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

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

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

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

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

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

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


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

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


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

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

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


Asset Builder Plans. 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. Asset
Builder Plans also enable shareholders of Oppenheimer Cash Reserves to use their
fund account to make monthly automatic purchases of shares of up to four other
Oppenheimer funds.


      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 charge or at reduced sales charge rates, as
described in Appendix C to this Statement of Additional Information. Certain
special sales charge arrangements described in that Appendix apply to retirement
plans whose records are maintained on a daily valuation basis by Merrill Lynch
Pierce Fenner & Smith, Inc. ("Merrill Lynch") or an independent record keeper
that has a contract or special arrangement with Merrill Lynch. If on the date
the plan sponsor signed the Merrill Lynch record keeping service agreement the
plan has less than $3 million in assets (other than assets invested in money
market funds) invested in applicable investments, then the retirement plan may
purchase only Class B shares of the Oppenheimer funds. Any retirement plans in
that category that currently invest in Class B shares of the Fund will have
their Class B shares converted to Class A shares of the Fund when the plan's
applicable investments reach $5 million. 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 level accounts of 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.

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

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

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

      |X| Class A Shares Subject to a Contingent Deferred Sales Charge. For
purchases of Class A shares 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, as described in the
Prospectus, on sales of Class A shares purchased with the redemption proceeds of
shares of another mutual fund offered as an investment option in a retirement
plan in which Oppenheimer funds are also offered as investment options under a
special arrangement with the Distributor, if the purchase occurs more than 30
days after the Oppenheimer funds are added as an investment option under that
plan. Additionally, that concession will not be paid on purchases of Class A
shares by a retirement plan made with the redemption proceeds of Class N shares
of one or more Oppenheimer funds held by the plan for more than 18 months.


      |X| Class B Conversion. Under current interpretations of applicable
federal income tax law by the Internal Revenue Service, the conversion of Class
B shares to Class A shares 72 months after purchase is not treated as a taxable
event for the shareholder. If those laws or the IRS interpretation of those laws
should change, the automatic conversion feature may be suspended. In that event,
no further conversions of Class B shares would occur while that suspension
remained in effect. Although Class B shares could then be exchanged for Class A
shares on the basis of relative net asset value of the two classes, without the
imposition of a sales charge or fee, such exchange could constitute a taxable
event for the shareholder, and absent such exchange, Class B shares might
continue to be subject to the asset-based sales charge for longer than six
years.


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

o     to all rollover IRAs (including SEP IRAs and SIMPLE IRAs),

o     to all rollover contributions made to Individual 401(k) plans,
      Profit-Sharing Plans and Money Purchase Pension Plans,
o     to all direct rollovers from OppenheimerFunds-sponsored
      Pinnacle and Ascender retirement plans,
o     to all trustee-to-trustee IRA transfers,
o     to all 90-24 type 403(b) transfers,
o     to Group Retirement Plans (as defined in Appendix C to this
      Statement of Additional Information) which have entered into a
      special agreement with the Distributor for that purpose,
o     to Retirement Plans qualified under Sections 401(a) or
      401(k) of the Internal Revenue Code, the recordkeeper or the plan
      sponsor for which has entered into a special agreement with the
      Distributor,
o     to Retirement Plans of a plan sponsor where the aggregate assets of
      all such plans invested in the Oppenheimer funds is $500,000 or
      more,

o     to OppenheimerFunds-sponsored Ascender 401(k) plans that pay for the
      purchase with the redemption proceeds of Class A shares of one or
      more Oppenheimer funds, and

o     to certain customers of broker-dealers and financial advisors that
      are identified in a special agreement between the broker-dealer or
      financial advisor and the Distributor for that purpose.

      The sales concession and the advance of the service fee, as described in
the Prospectus, will not be paid to dealers of record on sales of Class N shares
on:
o     purchases of Class N shares in
            amounts of $500,000 or more
            by a retirement plan that
            pays for the purchase with
            the redemption proceeds of
            Class A shares of one or
            more Oppenheimer funds
            (other than rollovers from
            an
            OppenheimerFunds-sponsored
            Pinnacle or Ascender 401(k)
            plan to any IRA invested in
            the Oppenheimer funds),
o     purchases of Class N shares in
            amounts of $500,000 or more
            by a retirement plan that
            pays for the purchase with
            the redemption proceeds of
            Class C shares of one or
            more Oppenheimer funds held
            by the plan for more than
            one year (other than
            rollovers from an
            OppenheimerFunds-sponsored
            Pinnacle or Ascender 401(k)
            plan to any IRA invested in
            the Oppenheimer funds), and
o     on purchases of Class N shares by
            an OppenheimerFunds-sponsored
            Pinnacle or Ascender 401(k)
            plan made with the
            redemption proceeds of Class
            A shares of one or more
            Oppenheimer funds.

      No sales concessions will be paid to the broker-dealer of record, as
described in the Prospectus, on sales of Class N shares purchased with the
redemption proceeds of shares of another mutual fund offered as an investment
option in a retirement plan in which Oppenheimer funds are also offered as
investment options under a special arrangement with the Distributor, if the
purchase occurs more than 30 days after the Oppenheimer funds are added as an
investment option under that plan.

      |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.

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

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


          Account  Fees.  As  stated  in the  Prospectus,  a $12  annual  fee is
     assessed  on any  account  valued at less than  $500.  This fee will not be
     assessed on the following accounts:

o     Accounts that have balances below $500 due to the automatic conversion
      of shares from Class B to Class A shares;
o     Accounts with an active Asset Builder Plan, payroll deduction
      plan or a military allotment plan;
o     OppenheimerFunds-sponsored group retirement accounts that are
      making continuing purchases;
o     Certain accounts held by broker-dealers through the National Securities
      Clearing Corporation; and
o     Accounts that fall below the $500 threshold due solely to market
      fluctuations within the 12-month period preceding the date the fee is
      deducted.


      The fee is automatically deducted from qualifying accounts annually on or
about the second to last business day of September. This annual fee is waived
for any shareholders who elect to access their account documents through
electronic document delivery rather than in paper copy and who elect to utilize
the Internet or PhoneLink as their primary source for their general servicing
needs. To sign up to access account documents electronically via eDocs Direct,
please visit the Service Center on our website at WWW.OPPENHEIMERFUNDS.COM or
call 1.888.470.0862 for instructions.

Determination of Net Asset Values Per Share. The net asset values per share of
each class of shares of the Fund are determined as of the close of business of
the Exchange on each day that the Exchange is open. The calculation is done by
dividing the value of the Fund's net assets attributable to a class by the
number of shares of that class that are outstanding. The Exchange normally
closes at 4:00 P.M., 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 Statement of Additional Information
mean "Eastern time." The Exchange'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, President's Day, Good Friday, Memorial Day, Independence Day,
Labor Day, Thanksgiving Day and Christmas Day. It may also close on other days.

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

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


          |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 or on
Nasdaq(R)are valued as follows:
(1) if last sale information is regularly reported, they are valued at the last
reported sale price on the principal exchange on which they are traded or on
Nasdaq, as applicable, on that day, or
(2) if last sale information is not available on a valuation date, they
are valued at the last reported sale price preceding the valuation date if it is
within the spread of the closing "bid" and "asked" prices on the valuation date
or, if not, at the closing "bid" price on the valuation date.
            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 London foreign exchange market on a particular
business day that are provided to the Manager by a bank, dealer or pricing
service that the Manager has determined to be reliable are used to value foreign
currency, including forward contracts, and to convert to U.S. dollars securities
that are denominated in foreign currency.

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

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

How to Sell Shares

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

Checkwriting. When a check is presented to United Missouri Bank (the "Bank") for
clearance, the Bank will ask the Fund to redeem a sufficient number of full and
fractional shares in the shareholder's account to cover the amount of the check.
This enables the shareholder to continue receiving dividends on those shares
until the check is presented to the Fund. Checks may not be presented for
payment at the offices of the Bank or the Fund's custodian. This limitation does
not affect the use of checks for the payment of bills or to obtain cash at other
banks. The Fund reserves the right to amend, suspend or discontinue offering
checkwriting privileges at any time. The Fund will provide you notice whenever
it is required to do so by applicable law.

      In choosing to take advantage of the Checkwriting privilege, by signing
the account application or by completing a Checkwriting card, each individual
who signs:
(1)   for individual accounts, represents that they are the registered
      owner(s) of the shares of the Fund in that account;
(2)   for accounts for corporations,
         partnerships, trusts and other
         entities, represents that they
         are an officer, general
         partner, trustee or other
         fiduciary or agent, as
         applicable, duly authorized to
         act on behalf of the registered
         owner(s);
(3)   authorizes the Fund, its Transfer
         Agent and any bank through
         which the Fund's drafts
         (checks) are payable to pay all
         checks drawn on the Fund
         account of such person(s) and
         to redeem a sufficient amount
         of shares from that account to
         cover payment of each check;
(4)   specifically acknowledges that if
         they choose to permit checks to
         be honored if there is a single
         signature on checks drawn
         against joint accounts, or
         accounts for corporations,
         partnerships, trusts or other
         entities, the signature of any
         one signatory on a check will
         be sufficient to authorize
         payment of that check and
         redemption from the account,
         even if that account is
         registered in the names of more
         than one person or more than
         one authorized signature
         appears on the Checkwriting
         card or the application, as
         applicable;
(5)      understands that the Checkwriting privilege may be terminated or
         amended at any time by the Fund and/or the Fund's bank; and
(6)      acknowledges and agrees that
         neither the Fund nor its bank
         shall incur any liability for
         that amendment or termination
         of checkwriting privileges or
         for redeeming shares to pay
         checks reasonably believed by
         them to be genuine, or for
         returning or not paying checks
         that have not been accepted for
         any reason.]

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, or
o        Class B shares that were subject to the Class B contingent deferred
         sales charge when redeemed.

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

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

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


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


Involuntary Redemptions. The Fund's Board of Trustees has the right to cause the
involuntary redemption of the shares held in any account if the aggregate net
asset value of those shares is less than $200 or such lesser amount as the Board
may fix. The Board will not cause the involuntary redemption of shares in an
account if the aggregate net asset value of such shares has fallen below the
stated minimum solely as a result of market fluctuations. If the Board exercises
this right, it may also fix the requirements for any notice to be given to the
shareholders in question (not less than 30 days). The Board may alternatively
set requirements for the shareholder to increase the investment, or set other
terms and conditions so that the shares would not be involuntarily redeemed.

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

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


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 Statement of Additional Information. The request must:

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

      Participants (other than self-employed 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 Exchange on a
regular business day, it will be processed at that day's net asset value if the
order was received by the dealer or broker from its customers prior to the time
the Exchange closes. Normally, the Exchange closes at 4:00 P.M., but may do so
earlier on some days. Additionally, the order must have been transmitted to and
received by the Distributor prior to its close of business that day (normally
5:00 P.M.).


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

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

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

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

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

      |X| Automatic Exchange Plans. Shareholders can authorize the Transfer
Agent to exchange a pre-determined amount of shares of the Fund for shares (of
the same class) of other Oppenheimer funds automatically on a monthly,
quarterly, semi-annual or annual basis under an Automatic Exchange Plan. The
minimum amount that may be exchanged to each other fund account is $50.
Instructions should be provided on the OppenheimerFunds Application or
signature-guaranteed instructions. Exchanges made under these plans are subject
to the restrictions that apply to exchanges as set forth in "How to Exchange
Shares" in the Prospectus and below in this Statement of Additional Information.

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

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

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

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

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

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

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

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

How to Exchange Shares

As stated in the Prospectus, shares of a particular class of Oppenheimer funds
having more than one class of shares may be exchanged only for shares of the
same class of other Oppenheimer funds. Shares of Oppenheimer funds that have a
single class without a class designation are deemed "Class A" shares for this
purpose. You can obtain a current list showing which funds offer which classes
of shares by calling the Distributor.

   All of the Oppenheimer funds currently offer Class A, B, C, N and Y shares
   with the following exceptions:

The following funds only offer Class A shares:

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

                                              Oppenheimer Pennsylvania Municipal
      The following funds do not offer Class  Fund
      N shares:

      Oppenheimer AMT-Free New York
      Municipals
      Oppenheimer California Municipal Fund   Oppenheimer Rochester National
                                              Municipals
Oppenheimer Limited Term Municipal Fund    Oppenheimer Senior Floating Rate Fund
Oppenheimer Municipal Bond Fund            Limited Term New York Municipal Fund
Oppenheimer New Jersey Municipal Fund      Rochester Fund Municipals


The following funds do not offer Class Y shares:

Oppenheimer AMT-Free New York Municipals   Oppenheimer Limited Term Municipal Fund
Oppenheimer California Municipal Fund      Oppenheimer Multiple Strategies Fund
Oppenheimer Capital Income Fund            Oppenheimer New Jersey Municipal Fund
Oppenheimer Cash Reserves                  Oppenheimer Pennsylvania Municipal Fund
Oppenheimer Champion Income Fund           Oppenheimer Principal Protected Main
                                           Street Fund
Oppenheimer Convertible Securities Fund    Oppenheimer Quest Capital Value Fund,
                                           Inc.
Oppenheimer Disciplined Allocation Fund Oppenheimer Quest Global Value Fund,
Inc. Oppenheimer Developing Markets Fund Oppenheimer Rochester National
Municipals Oppenheimer Gold & Special Minerals Fund Oppenheimer Senior Floating
Rate Fund Oppenheimer International Bond Fund Oppenheimer Small Cap Value Fund
Oppenheimer International Growth Fund Oppenheimer Total Return Bond Fund
Oppenheimer International Small Company Limited Term New York Municipal Fund
Fund


o     Class Y shares of Oppenheimer Real Asset Fund may not be exchanged for
      shares of any other fund.
o     Class B, Class C and Class N shares of Oppenheimer Cash Reserves are
      generally available only by exchange from the same class of shares of
      other Oppenheimer funds or through OppenheimerFunds-sponsored 401(k)
      plans.
o     Class M shares of Oppenheimer Convertible Securities Fund may be exchanged
      only for Class A shares of other Oppenheimer funds. They may not be
      acquired by exchange of shares of any class of any other Oppenheimer funds
      except Class A shares of Oppenheimer Money Market Fund or Oppenheimer Cash
      Reserves acquired by exchange of Class M shares.
o     Class X shares of Limited Term New York Municipal Fund may be exchanged
      only for Class B shares of other Oppenheimer funds and no exchanges may be
      made to Class X shares.
o     Shares of Oppenheimer Capital Preservation Fund may not be exchanged for
      shares of Oppenheimer Money Market Fund, Inc., Oppenheimer Cash Reserves
      or Oppenheimer Limited-Term Government Fund. Only participants in certain
      retirement plans may purchase shares of Oppenheimer Capital Preservation
      Fund, and only those participants may exchange shares of other Oppenheimer
      funds for shares of Oppenheimer Capital Preservation Fund.
o     Class A shares of Oppenheimer Senior Floating Rate Fund are not available
      by exchange of shares of Oppenheimer Money Market Fund or Class A shares
      of Oppenheimer Cash Reserves.
o     Shares of Oppenheimer Select Managers Mercury Advisors S&P Index Fund and
      Oppenheimer Select Managers QM Active Balanced Fund are only available to
      retirement plans and are available only by exchange from the same class of
      shares of other Oppenheimer funds held by retirement plans.
o     Class A shares of Oppenheimer funds may be exchanged at net asset value
      for shares of any money market fund offered by the Distributor. Shares of
      any money market fund purchased without a sales charge may be exchanged
      for shares of Oppenheimer funds offered with a sales charge upon payment
      of the sales charge. They may also be used to purchase shares of
      Oppenheimer funds subject to an early withdrawal charge or contingent
      deferred sales charge.
o     Shares of Oppenheimer Money Market Fund, Inc. purchased with the
      redemption proceeds of shares of other mutual funds (other than funds
      managed by the Manager or its subsidiaries) redeemed within the 30 days
      prior to that purchase may subsequently be exchanged for shares of
      other Oppenheimer funds without being subject to an initial sales
      charge or contingent deferred sales charge. To qualify for that
      privilege, the investor or the investor's dealer must notify the
      Distributor of eligibility for this privilege at the time the shares of
      Oppenheimer Money Market Fund, Inc. are purchased. If requested, they
      must supply proof of entitlement to this privilege.
o     Shares of the Fund acquired by reinvestment of dividends or distributions
      from any of the other Oppenheimer funds or from any unit investment trust
      for which reinvestment arrangements have been made with the Distributor
      may be exchanged at net asset value for shares of any of the Oppenheimer
      funds.

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


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

      |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:

      When Class A shares of any Oppenheimer fund (other than Rochester National
Municipals and Rochester Fund Municipals) 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.

            o When Class A shares of Rochester National Municipals and Rochester
Fund Municipals acquired 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.

         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 With respect to Class B shares, the Class B 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 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.

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

      |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.

      |X| 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 from
a dealer 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 feature such as an Asset Builder Plan or Automatic Withdrawal
Plan, will be switched to the new fund account unless you tell the Transfer
Agent not to do so. However, special redemption and exchange features such as
Automatic Exchange Plans and Automatic Withdrawal Plans cannot be switched to an
account in Oppenheimer Senior Floating Rate Fund.

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

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

Dividends, Capital Gains and Taxes

Dividends and Distributions. Dividends will be payable on shares held of record
at the time of the previous determination of net asset value, or as otherwise
described in "How to Buy Shares." Daily dividends will not be declared or paid
on newly purchased shares until such time as Federal Funds (funds credited to a
member bank's account at the Federal Reserve Bank) are available from the
purchase payment for such shares. Normally, purchase checks received from
investors are converted to Federal Funds on the next business day. Shares
purchased through dealers or brokers normally are paid for by the third business
day following the placement of the purchase order.

      Shares redeemed through the regular redemption procedure will be paid
dividends through and including the day on which the redemption request is
received by the Transfer Agent in proper form. Dividends will be declared on
shares repurchased by a dealer or broker for three business days following the
trade date (that is, up to and including the day prior to settlement of the
repurchase). If all shares in an account are redeemed, all dividends accrued on
shares of the same class in the account will be paid together with the
redemption proceeds.

      The Fund's practice of attempting to pay dividends on Class A shares at a
constant level requires the Manager to monitor the Fund's portfolio and, if
necessary, to select higher-yielding securities when it is deemed appropriate to
seek income at the level needed to meet the target. Those securities must be
within the Fund's investment parameters, however. The Fund expects to pay
dividends at a targeted level from its net investment income and other
distributable income without any impact on the net asset values per share.

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

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

Tax Status of the Fund's Dividends, 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 Statement of Additional
Information is based on tax law in effect on the date of the Prospectus and this
Statement of Additional Information. 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 advisers 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.


      |X| 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.

      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. 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.


      |X| 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.

      |X| 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.

      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). All income and any tax withheld by the Fund
is remitted by the Fund to the U.S. Treasury and is identified in reports mailed
to shareholders in January of each year.

      |X| 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.


      |X| 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.
All income and any tax withheld by the Fund is remitted by the Fund to the U.S.
Treasury and is identified in reports mailed to shareholders in March of each
year.

      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 30% (29% for
payments after December 31, 2003) on ordinary income dividends, capital gains
distributions and the proceeds of the redemption of shares, paid to any foreign
person. All income and any tax withheld (in this situation) by the Fund is
remitted by the Fund to the U.S. Treasury and is identified in reports mailed to
shareholders in January of each year.


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

Additional Information About the Fund

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

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


The Custodian. JP Morgan 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 Auditors. Deloitte & Touche LLP are the independent auditors of
the Fund. They audit the Fund's financial statements and perform other related
audit services. They also act as auditors for the Manager and for certain other
funds advised by the Manager and its affiliates.





INDEPENDENT AUDITORS' REPORT
--------------------------------------------------------------------------------



--------------------------------------------------------------------------------
 To the Board of Trustees and Shareholders of
 Oppenheimer High Yield Fund:
 We have audited the accompanying statement of assets and liabilities of
 Oppenheimer High Yield Fund, including the statement of investments, as of June
 30, 2003, and the related statement of operations for the year then ended, the
 statements of changes in net assets for each of the two years in the period
 then ended, and the financial highlights for the periods indicated. These
 financial statements and financial highlights are the responsibility of the
 Fund's management. Our responsibility is to express an opinion on these
 financial statements and financial highlights based on our audits.
    We conducted our audits in accordance with auditing standards generally
 accepted in the United States of America. Those standards require that we plan
 and perform the audit to obtain reasonable assurance about whether the
 financial statements and financial highlights are free of material
 misstatement. An audit includes examining, on a test basis, evidence supporting
 the amounts and disclosures in the financial statements. Our procedures
 included confirmation of securities owned as of June 30, 2003, by
 correspondence with the custodian and brokers; where replies were not received
 from brokers, we performed other auditing procedures. 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 High Yield Fund as of June 30, 2003, the results of its operations
 for the year then ended, the changes in its net assets for each of the two
 years in the period then ended, and the financial highlights for the periods
 indicated, in conformity with accounting principles generally accepted in the
 United States of America.



 /s/ Deloitte & Touche LLP
 -------------------------
 Deloitte & Touche LLP

 Denver, Colorado
 July 22, 2003

                        51 | OPPENHEIMER HIGH YIELD FUND



STATEMENT OF INVESTMENTS  June 30, 2003






                                                                                       Principal     Market Value
                                                                                          Amount       See Note 1
------------------------------------------------------------------------------------------------------------------
 Asset-Backed Securities--0.0%

 Goldman Sachs Asset Management CBO Ltd., Sub. Collateralized Bond
 Obligations, Series 1A, Cl. D, 12.54%, 6/13/11 1 (Cost $2,032,136)                  $ 2,258,663      $   135,520

------------------------------------------------------------------------------------------------------------------
 Mortgage-Backed Obligations--1.1%

 First Chicago/Lennar Trust 1, Commercial Mtg. Pass-Through Certificates,
 Series 1997-CHL1, Cl. E, 9.939%, 4/29/39 1,2                                          5,250,000        4,607,694
------------------------------------------------------------------------------------------------------------------
 GMAC Commercial Mortgage Securities, Inc., Interest-Only Stripped
 Mtg.-Backed Security Pass-Through Certificates, Series 1997-C1, Cl. X,
 8.494%, 7/15/27 3                                                                    59,429,304        3,430,616
------------------------------------------------------------------------------------------------------------------
 Morgan Stanley Capital I, Inc., Commercial Mtg. Pass-Through Certificates:
 Series 1997-RR, Cl. D, 7.642%, 4/30/39 2,4                                            5,000,269        4,776,058
 Series 1997-RR, Cl. F, 7.642%, 4/30/39 2,4                                            9,000,485        6,322,350
                                                                                                      ------------
 Total Mortgage-Backed Obligations (Cost $19,785,742)                                                  19,136,718

------------------------------------------------------------------------------------------------------------------
 Foreign Government Obligations--0.2%

 United Mexican States Bonds, Bonos de Desarrollo, 14.50%, 5/12/05 2 [MXN]
 (Cost $4,079,376)                                                                    39,735,700        4,353,764

------------------------------------------------------------------------------------------------------------------
 Loan Participations--0.0%

 Telergy, Inc., Sr. Sec. Credit Facilities Term Loan, Tranche A, 11.111%,
 1/1/02 1,5,6 (Cost $3,864,760)                                                        3,945,448             --

------------------------------------------------------------------------------------------------------------------
 Corporate Bonds and Notes--79.2%

------------------------------------------------------------------------------------------------------------------
 Consumer Discretionary--21.9%
------------------------------------------------------------------------------------------------------------------
 Auto Components--1.5%
 Collins & Aikman Floorcoverings, Inc., 9.75% Sr. Sub. Nts., Series B, 2/15/10 1       1,500,000        1,575,000
------------------------------------------------------------------------------------------------------------------
 Collins & Aikman Products Co., 10.75% Sr. Nts., 12/31/11                              1,550,000        1,371,750
------------------------------------------------------------------------------------------------------------------
 Dana Corp.:
 9% Unsec. Nts., 8/15/11                                                               5,970,000        6,492,375
 10.125% Nts., 3/15/10                                                                 1,800,000        1,993,500
------------------------------------------------------------------------------------------------------------------
 Dura Operating Corp.:
 8.625% Sr. Nts., Series B, 4/15/12                                                    3,500,000        3,605,000
 9% Sr. Sub. Nts., Series B, 5/1/09 [EUR]                                                800,000          849,779
 9% Sr. Unsec. Sub. Nts., Series D, 5/1/09                                               600,000          555,000
------------------------------------------------------------------------------------------------------------------
 Exide Corp., 10% Sr. Unsec. Nts., 4/15/05 1,5,6                                       3,200,000           80,000
------------------------------------------------------------------------------------------------------------------
 Lear Corp., 8.11% Sr. Unsec. Nts., Series B, 5/15/09                                  1,000,000        1,150,000
------------------------------------------------------------------------------------------------------------------
 Metaldyne Corp., 11% Sr. Sub. Nts., 6/15/12                                           2,150,000        1,795,250
------------------------------------------------------------------------------------------------------------------
 Stoneridge, Inc., 11.50% Sr. Nts., 5/1/12                                             3,450,000        3,881,250
------------------------------------------------------------------------------------------------------------------
 Tenneco Automotive, Inc., 10.25% Sr. Sec. Nts., 7/15/13 4                             1,700,000        1,729,750
------------------------------------------------------------------------------------------------------------------
 United Components, Inc., 9.375% Sr. Sub. Nts., 6/15/13 4                              1,300,000        1,355,250
                                                                                                      ------------
                                                                                                       26,433,904

------------------------------------------------------------------------------------------------------------------
 Automobiles--0.5%
 DirecTV Holdings LLC, 8.375% Sr. Nts., 3/15/13 4                                      7,750,000        8,680,000


                        11 | OPPENHEIMER HIGH YIELD FUND


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




                                                                                 Principal    Market Value
                                                                                    Amount      See Note 1
----------------------------------------------------------------------------------------------------------

 Hotels, Restaurants & Leisure--5.6%
 Apcoa, Inc., 9.25% Sr. Unsec. Sub. Nts., 3/15/08 1                             $3,080,000      $1,093,400
----------------------------------------------------------------------------------------------------------
 Aztar Corp., 9% Sr. Unsec. Sub. Nts., 8/15/11                                   1,300,000       1,413,750
----------------------------------------------------------------------------------------------------------
 Boca Resorts, Inc., 9.875% Sr. Sub. Nts., 4/15/09                               4,800,000       5,196,000
----------------------------------------------------------------------------------------------------------
 Boyd Gaming Corp., 8.75% Sr. Sub. Nts., 4/15/12                                 3,000,000       3,300,000
----------------------------------------------------------------------------------------------------------
 Capital Gaming International, Inc., 11.50% Promissory Nts., 8/1/1995 1,5,6         22,500              --
----------------------------------------------------------------------------------------------------------
 Coast Hotels & Casinos, Inc., 9.50% Sr. Unsec. Sub. Nts., 4/1/09                2,500,000       2,687,500
----------------------------------------------------------------------------------------------------------
 Dominos, Inc., 8.25% Sr. Sub. Nts., 7/1/11 4                                    2,650,000       2,749,375
----------------------------------------------------------------------------------------------------------
 Family Restaurants, Inc., 10.875% Sr. Sub. Disc. Nts., 2/1/04 1,5,6               450,000           3,937
----------------------------------------------------------------------------------------------------------
 Herbst Gaming, Inc., 10.75% Sr. Sec. Nts., 9/1/08                                 700,000         775,250
----------------------------------------------------------------------------------------------------------
 Hilton Hotels Corp.:
 7.625% Nts., 5/15/08                                                            3,000,000       3,240,000
 7.625% Nts., 12/1/12                                                              900,000         990,000
----------------------------------------------------------------------------------------------------------
 Hollywood Park, Inc., 9.25% Sr. Unsec. Sub. Nts., Series B, 2/15/07             2,300,000       2,277,000
----------------------------------------------------------------------------------------------------------
 Intrawest Corp., 9.75% Sr. Nts., 8/15/08                                        3,200,000       3,356,000
----------------------------------------------------------------------------------------------------------
 Isle of Capri Casinos, Inc., 9% Sr. Sub. Nts., 3/15/12                          2,200,000       2,409,000
----------------------------------------------------------------------------------------------------------
 John Q. Hammons Hotels, Inc., 8.875% Sr. Nts., Series B, 5/15/12                3,150,000       3,323,250
----------------------------------------------------------------------------------------------------------
 Jupiters Ltd., 8.50% Sr. Unsec. Nts., 3/1/06 1                                  5,200,000       5,746,000
----------------------------------------------------------------------------------------------------------
 Mandalay Resort Group:
 9.375% Sr. Sub. Nts., 2/15/10                                                   3,500,000       3,972,500
 10.25% Sr. Unsec. Sub. Nts., Series B, 8/1/07                                   3,000,000       3,405,000
----------------------------------------------------------------------------------------------------------
 MGM Mirage, Inc., 8.375% Sr. Unsec. Sub. Nts., 2/1/11                           2,500,000       2,856,250
----------------------------------------------------------------------------------------------------------
 Mohegan Tribal Gaming Authority:
 8% Sr. Sub. Nts., 4/1/12                                                        1,300,000       1,410,500
 8.375% Sr. Sub. Nts., 7/1/11                                                    1,000,000       1,087,500
 8.75% Sr. Unsec. Sub. Nts., 1/1/09                                              1,500,000       1,623,750
----------------------------------------------------------------------------------------------------------
 Park Place Entertainment Corp., 7.875% Sr. Sub. Nts., 3/15/10                   3,700,000       3,996,000
----------------------------------------------------------------------------------------------------------
 Penn National Gaming, Inc.:
 8.875% Sr. Sub. Nts., 3/15/10                                                     900,000         958,500
 11.125% Sr. Unsec. Sub. Nts., 3/1/08                                            6,000,000       6,675,000
----------------------------------------------------------------------------------------------------------
 Premier Parks, Inc., 9.75% Sr. Nts., 6/15/07                                    1,050,000       1,044,750
----------------------------------------------------------------------------------------------------------
 Prime Hospitality Corp., 8.375% Sr. Sub. Nts., 5/1/12                           1,700,000       1,640,500
----------------------------------------------------------------------------------------------------------
 Royal Caribbean Cruises Ltd.:
 8% Sr. Unsec. Nts., 5/15/10                                                       650,000         679,250
 8.75% Sr. Unsub. Nts., 2/2/11                                                   2,600,000       2,769,000
----------------------------------------------------------------------------------------------------------
 Six Flags, Inc.:
 8.875% Sr. Nts., 2/1/10                                                         1,600,000       1,544,000
 9.75% Sr. Nts., 4/15/13 4                                                       5,100,000       5,074,500
----------------------------------------------------------------------------------------------------------
 Starwood Hotels & Resorts Worldwide, Inc., 7.875% Sr. Nts., 5/1/12              5,550,000       6,105,000
----------------------------------------------------------------------------------------------------------
 Station Casinos, Inc., 9.875% Sr. Unsec. Sub. Nts., 7/1/10                        200,000         221,000
----------------------------------------------------------------------------------------------------------
 Sun International Hotels Ltd., 8.875% Sr. Unsec. Sub. Nts., 8/15/11             3,200,000       3,480,000
----------------------------------------------------------------------------------------------------------
 Trump Casino Holdings LLC/Trump Casino Funding, Inc., 11.625% Nts.,
 3/15/10 4                                                                       2,300,000       2,208,000
----------------------------------------------------------------------------------------------------------
 Universal City Development Partners, 11.75% Sr. Nts., 4/1/10 1                  2,700,000       2,976,750
----------------------------------------------------------------------------------------------------------
 Vail Resorts, Inc., 8.75% Sr. Unsec. Sub. Nts., 5/15/09 1                       1,800,000       1,890,000


                        12 | OPPENHEIMER HIGH YIELD FUND





                                                                                Principal    Market Value
                                                                                   Amount      See Note 1
----------------------------------------------------------------------------------------------------------

 Hotels, Restaurants & Leisure Continued
 Venetian Casino Resort LLC/Las Vegas Sands, Inc., 11% Sec. Nts., 6/15/10     $ 3,300,000      $ 3,737,250
----------------------------------------------------------------------------------------------------------
 Yum! Brands, Inc., 7.70% Sr. Nts., 7/1/12                                        200,000          229,000
                                                                                               -----------
                                                                                                98,144,462

----------------------------------------------------------------------------------------------------------
 Household Durables--2.3%
 Beazer Homes USA, Inc., 8.375% Sr. Nts., 4/15/12                               3,300,000        3,671,250
----------------------------------------------------------------------------------------------------------
 D.R. Horton, Inc.:
 9.375% Sr. Unsec. Sub. Nts., 3/15/11 1                                         2,000,000        2,210,000
 9.75% Sr. Sub. Nts., 9/15/10                                                     800,000          914,000
----------------------------------------------------------------------------------------------------------
 Del Webb Corp., 10.25% Sr. Unsec. Sub. Debs., 2/15/10                          6,500,000        7,117,500
----------------------------------------------------------------------------------------------------------
 Interface, Inc., 10.375% Sr. Nts., 2/1/10                                      1,500,000        1,447,500
----------------------------------------------------------------------------------------------------------
 K. Hovnanian Enterprises, Inc., 8.875% Sr. Sub. Nts., 4/1/12                   1,500,000        1,646,250
----------------------------------------------------------------------------------------------------------
 KB Home:
 8.625% Sr. Sub. Nts., 12/15/08                                                 2,750,000        3,135,000
 9.50% Sr. Unsec. Sub. Nts., 2/15/11                                            2,000,000        2,272,500
----------------------------------------------------------------------------------------------------------
 Meritage Corp., 9.75% Sr. Unsec. Nts., 6/1/11                                  1,000,000        1,110,000
----------------------------------------------------------------------------------------------------------
 Salton, Inc., 10.75% Sr. Unsec. Sub. Nts., 12/15/05                            2,300,000        2,323,000
----------------------------------------------------------------------------------------------------------
 Standard Pacific Corp., 9.25% Sr. Sub. Nts., 4/15/12 1                         1,200,000        1,353,000
----------------------------------------------------------------------------------------------------------
 Toll Corp., 8.25% Sr. Sub. Nts., 12/1/11                                       1,750,000        1,968,750
----------------------------------------------------------------------------------------------------------
 WCI Communities, Inc.:
 9.125% Sr. Sub. Nts., 5/1/12                                                   1,100,000        1,177,000
 10.625% Sr. Unsec. Sub. Nts., 2/15/11                                          4,600,000        5,106,000
----------------------------------------------------------------------------------------------------------
 William Lyon Homes, Inc., 10.75% Sr. Nts., 4/1/13                              2,500,000        2,668,750
----------------------------------------------------------------------------------------------------------
 Williams Scotsman, Inc., 9.875% Sr. Unsec. Nts., 6/1/07                        2,600,000        2,561,000
                                                                                               -----------
                                                                                                40,681,500

----------------------------------------------------------------------------------------------------------
 Leisure Equipment & Products--0.2%
 Remington Arms Co., Inc., 10.50% Sr. Nts., 2/1/11 4                            2,300,000        2,415,000
----------------------------------------------------------------------------------------------------------
 Media--8.9%
 Adelphia Communications Corp.:
 8.125% Sr. Nts., Series B, 7/15/03 5,6                                         2,000,000        1,250,000
 8.375% Sr. Nts., Series B, 2/1/08 5,6                                          2,700,000        1,687,500
 9.875% Sr. Nts., Series B, 3/1/07 5,6                                          2,200,000        1,369,500
 10.25% Sr. Unsec. Nts., 11/1/06 5,6                                            4,600,000        2,829,000
 10.25% Sr. Unsec. Sub. Nts., 6/15/11 5,6                                         200,000          129,000
 10.875% Sr. Unsec. Nts., 10/1/10 5,6                                           1,500,000          937,500
----------------------------------------------------------------------------------------------------------
 Allbritton Communications Co., 7.75% Sr. Unsec. Sub. Nts., 12/15/12            2,300,000        2,386,250
----------------------------------------------------------------------------------------------------------
 AMC Entertainment, Inc., 9.50% Sr. Unsec. Sub. Nts., 2/1/11                   10,000,000       10,400,000
----------------------------------------------------------------------------------------------------------
 American Media, Inc., 8.875% Sr. Sub. Nts., 1/15/11 4                          2,700,000        2,936,250
----------------------------------------------------------------------------------------------------------
 Block Communications, Inc., 9.25% Sr. Sub. Nts., 4/15/09                       1,100,000        1,204,500
----------------------------------------------------------------------------------------------------------
 Callahan Nordrhein-Westfalen GmbH, 14.125% Sr. Nts., 7/15/11 1,5,6 [EUR]       1,000,000           51,676
----------------------------------------------------------------------------------------------------------
 CanWest Media, Inc., 7.625% Sr. Nts., 4/15/13 4                                  900,000          960,750
----------------------------------------------------------------------------------------------------------
 CBD Media, Inc./CBD Finance, 8.625% Sr. Sub. Nts., 6/1/11 4                      700,000          724,500



                        13 | OPPENHEIMER HIGH YIELD FUND


STATEMENT OF INVESTMENTS  Continued



                                                                                 Principal     Market Value
                                                                                    Amount       See Note 1
-----------------------------------------------------------------------------------------------------------

 Media Continued
 Charter Communications Holdings LLC/Charter Communications
 Holdings Capital Corp.:
 0%/11.75% Sr. Unsec. Sub. Disc. Nts., 5/15/11 7                               $ 4,500,000      $ 2,295,000
 0%/9.92% Sr. Unsec. Disc. Nts., 4/1/11 7                                       14,000,000        9,275,000
 8.625% Sr. Unsec. Nts., 4/1/09                                                 12,600,000        9,135,000
 10% Sr. Nts., 4/1/09                                                            1,000,000          770,000
 10% Sr. Unsec. Sub. Nts., 5/15/11                                               1,000,000          725,000
 10.75% Sr. Unsec. Nts., 10/1/09                                                   900,000          702,000
 11.125% Sr. Unsec. Nts., 1/15/11                                                1,200,000          936,000
-----------------------------------------------------------------------------------------------------------
 Cinemark USA, Inc., 9% Sr. Sub. Nts., 2/1/13                                    2,500,000        2,725,000
-----------------------------------------------------------------------------------------------------------
 Classic Cable, Inc., 10.50% Sr. Sub. Nts., 3/1/10 1,5,6                         2,500,000               --
-----------------------------------------------------------------------------------------------------------
 Corus Entertainment, Inc., 8.75% Sr. Sub. Nts., 3/1/12                          1,500,000        1,620,000
-----------------------------------------------------------------------------------------------------------
 CSC Holdings, Inc., 7.625% Sr. Unsec. Unsub. Nts., Series B, 4/1/11            14,150,000       14,362,250
-----------------------------------------------------------------------------------------------------------
 Diva Systems Corp., 12.625% Sr. Unsec. Disc. Nts., Series B, 3/1/08 1,5,6       2,500,000          153,125
-----------------------------------------------------------------------------------------------------------
 EchoStar DBS Corp.:
 9.125% Sr. Nts., 1/15/09                                                        2,500,000        2,806,250
 9.375% Sr. Unsec. Nts., 2/1/09                                                  4,500,000        4,820,625
 10.375% Sr. Unsec. Nts., 10/1/07                                                3,600,000        4,005,000
-----------------------------------------------------------------------------------------------------------
 Emmis Communications Corp.:
 0%/12.50% Sr. Unsec. Disc. Nts., 3/15/11 7                                      7,505,000        6,529,350
 8.125% Sr. Unsec. Sub. Nts., Series B, 3/15/09                                  1,150,000        1,210,375
-----------------------------------------------------------------------------------------------------------
 Entercom Radio LLC/Entercom Capital, Inc., 7.625% Sr. Unsec. Sub. Nts.,
 3/1/14                                                                          1,500,000        1,642,500
-----------------------------------------------------------------------------------------------------------
 Entravision Communications Corp., 8.125% Sr. Sub. Nts., 3/15/09                 1,400,000        1,463,000
-----------------------------------------------------------------------------------------------------------
 Gray Television, Inc., 9.25% Sr. Sub. Nts., 12/15/11                            1,750,000        1,942,500
-----------------------------------------------------------------------------------------------------------
 Hollinger International Publishing, Inc., 9% Sr. Unsec. Nts., 12/15/10          2,700,000        2,902,500
-----------------------------------------------------------------------------------------------------------
 Houghton Mifflin Co., 8.25% Sr. Nts., 2/1/11 4                                  2,500,000        2,650,000
-----------------------------------------------------------------------------------------------------------
 Insight Midwest LP/Insight Capital, Inc., 9.75% Sr. Nts., 10/1/09                 350,000          371,875
-----------------------------------------------------------------------------------------------------------
 Lamar Media Corp., 7.25% Sr. Unsec. Sub. Nts., 1/1/13                           1,000,000        1,065,000
-----------------------------------------------------------------------------------------------------------
 Lin Television Corp., 6.50% Sr. Sub. Nts., 5/15/13 4                            1,800,000        1,804,500
-----------------------------------------------------------------------------------------------------------
 LodgeNet Entertainment Corp., 9.50% Sr. Sub. Debs., 6/15/13                     1,350,000        1,390,500
-----------------------------------------------------------------------------------------------------------
 Mediacom LLC/Mediacom Capital Corp., 9.50% Sr. Unsec. Nts., 1/15/13               850,000          903,125
-----------------------------------------------------------------------------------------------------------
 News America Holdings, Inc., 8.875% Sr. Debs., 4/26/23                            400,000          512,690
-----------------------------------------------------------------------------------------------------------
 PanAmSat Corp., 8.50% Sr. Unsec. Nts., 2/1/12                                   5,100,000        5,546,250
-----------------------------------------------------------------------------------------------------------
 PRIMEDIA, Inc., 8% Sr. Nts., 5/15/13 4                                          4,500,000        4,635,000
-----------------------------------------------------------------------------------------------------------
 R.H. Donnelley Financial Corp. I:
 8.875% Sr. Nts., 12/15/10 4                                                     2,600,000        2,886,000
 10.875% Sr. Sub. Nts., 12/15/12 4                                               3,900,000        4,563,000
-----------------------------------------------------------------------------------------------------------
 Radio One, Inc., 8.875% Sr. Unsec. Sub. Nts., Series B, 7/1/11                  1,450,000        1,602,250
-----------------------------------------------------------------------------------------------------------
 Regal Cinemas, Inc., 9.375% Sr. Sub. Nts., Series B, 2/1/12                     3,050,000        3,377,875
-----------------------------------------------------------------------------------------------------------
 Rogers Communications, Inc., 8.75% Sr. Nts., 7/15/07 [CAD]                      3,030,000        2,302,465
-----------------------------------------------------------------------------------------------------------
 Sinclair Broadcast Group, Inc.:
 8% Sr. Sub. Nts., 3/15/12                                                       3,250,000        3,485,625
 8% Sr. Sub. Nts., 3/15/12 4                                                     2,800,000        3,003,000
 8.75% Sr. Sub. Nts., 12/15/11                                                   1,250,000        1,378,125
-----------------------------------------------------------------------------------------------------------
 Spanish Broadcasting System, Inc., 9.625% Sr. Unsec. Sub. Nts., 11/1/09         5,000,000        5,337,500




                        14 | OPPENHEIMER HIGH YIELD FUND




                                                                                 Principal      Market Value
                                                                                    Amount        See Note 1
-------------------------------------------------------------------------------------------------------------

 Media Continued
 United Pan-Europe Communications NV:
 0%/13.375% Sr. Unsec. Disc. Nts., Series B, 11/1/09 5,6,7                    $  2,000,000      $    295,000
 0%/13.75% Sr. Unsec. Disc. Nts., Series B, 2/1/10 5,6,7                         5,000,000           712,500
 10.875% Sr. Unsec. Nts., Series B, 8/1/09 5,6                                   3,000,000           660,000
 11.25% Sr. Nts., Series B, 11/1/09 1,5,6 [EUR]                                  1,500,000           333,739
-------------------------------------------------------------------------------------------------------------
 Vertis, Inc.:
 9.75% Sr. Sec. Nts., 4/1/09 4                                                   1,350,000         1,410,750
 10.875% Sr. Unsec. Nts., Series B, 6/15/09                                      1,000,000         1,005,000
-------------------------------------------------------------------------------------------------------------
 Vivendi Universal SA, 9.25% Sr. Nts., 4/15/10 4                                 2,500,000         2,856,250
-------------------------------------------------------------------------------------------------------------
 WRC Media, Inc./Weekly Reader Corp./Compass Learning Corp.,
 12.75% Sr. Sub. Nts., 11/15/09                                                  4,000,000         4,185,000
                                                                                                ------------
                                                                                                 155,159,920

-------------------------------------------------------------------------------------------------------------
 Multiline Retail--0.5%
 J. C. Penney Co., Inc.:
 7.60% Nts., 4/1/07                                                              2,400,000         2,532,000
 8% Nts., 3/1/10                                                                 2,500,000         2,631,250
-------------------------------------------------------------------------------------------------------------
 Saks, Inc.:
 8.25% Sr. Unsec. Nts., 11/15/08                                                 1,500,000         1,593,750
 9.875% Nts., 10/1/11 1                                                          1,900,000         2,147,000
                                                                                                ------------
                                                                                                   8,904,000

-------------------------------------------------------------------------------------------------------------
 Specialty Retail--2.0%
 Asbury Automotive Group, Inc., 9% Sr. Sub. Nts., 6/15/12                        2,900,000         2,813,000
-------------------------------------------------------------------------------------------------------------
 AutoNation, Inc., 9% Sr. Unsec. Nts., 8/1/08                                    3,000,000         3,345,000
-------------------------------------------------------------------------------------------------------------
 Building Materials Corp., 8% Sr. Nts., 12/1/08                                  1,350,000         1,255,500
-------------------------------------------------------------------------------------------------------------
 CSK Auto, Inc., 12% Sr. Unsec. Nts., 6/15/06                                    7,000,000         7,805,000
-------------------------------------------------------------------------------------------------------------
 Eye Care Centers of America, Inc., 9.125% Sr. Unsec. Sub. Nts., 5/1/08 1        1,000,000           935,000
-------------------------------------------------------------------------------------------------------------
 Finlay Enterprises, Inc., 9% Debs., 5/1/08                                      3,985,000         4,044,775
-------------------------------------------------------------------------------------------------------------
 Finlay Fine Jewelry Corp., 8.375% Sr. Nts., 5/1/08 1                            2,100,000         2,184,000
-------------------------------------------------------------------------------------------------------------
 Gap, Inc. (The):
 6.90% Nts., 9/15/07                                                             2,900,000         3,139,250
 10.55% Unsub. Nts., 12/15/08                                                      800,000           976,000
-------------------------------------------------------------------------------------------------------------
 Hollywood Entertainment Corp., 9.625% Sr. Sub. Nts., 3/15/11                    2,800,000         3,076,500
-------------------------------------------------------------------------------------------------------------
 Just For Feet, Inc., 11% Sr. Sub. Nts., 5/1/09 1,5,6                              700,000                --
-------------------------------------------------------------------------------------------------------------
 Petco Animal Supplies, Inc., 10.75% Sr. Sub. Nts., 11/1/11 1                    3,500,000         4,007,500
-------------------------------------------------------------------------------------------------------------
 Rent-A-Center, Inc., 7.50% Sr. Sub. Nts., 5/1/10 4                              1,100,000         1,160,500
-------------------------------------------------------------------------------------------------------------
 United Auto Group, Inc., 9.625% Sr. Unsec. Sub. Nts., 3/15/12                     150,000           161,250
                                                                                                ------------
                                                                                                  34,903,275

-------------------------------------------------------------------------------------------------------------
 Textiles, Apparel & Luxury Goods--0.4%
 Consoltex Group, Inc., 11% Sr. Sub. Nts., 1/31/09 1,8                           4,227,524               423
-------------------------------------------------------------------------------------------------------------
 Galey & Lord, Inc., 9.125% Sr. Unsec. Sub. Nts., 3/1/08 1,5,6                   2,900,000            32,625
-------------------------------------------------------------------------------------------------------------
 Levi Strauss & Co.:
 11.625% Sr. Unsec. Nts., 1/15/08                                                1,900,000         1,638,750
 12.25% Sr. Nts., 12/15/12                                                       2,100,000         1,758,750


                        15 | OPPENHEIMER HIGH YIELD FUND


STATEMENT OF INVESTMENTS  Continued



                                                                               Principal     Market Value
                                                                                  Amount       See Note 1
----------------------------------------------------------------------------------------------------------

 Textiles, Apparel & Luxury Goods Continued
 Oxford Industries, Inc., 8.875% Sr. Nts., 6/1/11 4                          $ 1,250,000      $ 1,318,750
----------------------------------------------------------------------------------------------------------
 Phillips/Van Heusen Corp., 8.125% Sr. Nts., 5/1/13 1                            900,000          928,125
----------------------------------------------------------------------------------------------------------
 Russell Corp., 9.25% Sr. Nts., 5/1/10 1                                       1,500,000        1,642,500
                                                                                              -----------
                                                                                                7,319,923

----------------------------------------------------------------------------------------------------------
 Consumer Staples--3.5%
----------------------------------------------------------------------------------------------------------
 Beverages--0.4%
 Constellation Brands, Inc., 8.125% Sr. Sub. Nts., 1/15/12                     2,000,000        2,170,000
----------------------------------------------------------------------------------------------------------
 Packaged Ice, Inc., 9.75% Sr. Unsec. Nts., Series B, 2/1/05                   5,500,000        5,582,500
                                                                                              -----------
                                                                                                7,752,500

----------------------------------------------------------------------------------------------------------
 Food & Staples Retailing--0.6%
 Delhaize America, Inc., 8.125% Unsub. Debs., 4/15/11                          2,100,000        2,310,000
----------------------------------------------------------------------------------------------------------
 Fleming Cos., Inc.:
 10.125% Sr. Unsec. Nts., 4/1/08 5                                             2,100,000          325,500
 10.625% Sr. Unsec. Sub. Nts., Series D, 7/31/07 1,5                             400,000            2,500
----------------------------------------------------------------------------------------------------------
 Great Atlantic & Pacific Tea Co., Inc. (The), 9.125% Sr. Nts., 12/15/11         800,000          752,000
----------------------------------------------------------------------------------------------------------
 Ingles Markets, Inc., 8.875% Sr. Unsec. Sub. Nts., 12/1/11                    1,000,000        1,011,250
----------------------------------------------------------------------------------------------------------
 Pantry, Inc. (The), 10.25% Sr. Sub. Nts., 10/15/07                            1,600,000        1,656,000
----------------------------------------------------------------------------------------------------------
 Rite Aid Corp.:
 8.125% Sr. Sec. Nts., 5/1/10 4                                                2,650,000        2,756,000
 9.50% Sr. Sec. Nts., 2/15/11 4                                                1,600,000        1,728,000
                                                                                              -----------
                                                                                               10,541,250

----------------------------------------------------------------------------------------------------------
 Food Products--1.6%
 American Seafood Group LLC, 10.125% Sr. Sub. Nts., 4/15/10 1                  3,500,000        3,990,000
----------------------------------------------------------------------------------------------------------
 Aurora Foods, Inc., 8.75% Sr. Sub. Nts., Series B, 7/1/08 5                   1,600,000          572,000
----------------------------------------------------------------------------------------------------------
 Burns Philp Capital Pty Ltd., 9.75% Sr. Sub. Nts., 7/15/12 4                  1,450,000        1,421,000
----------------------------------------------------------------------------------------------------------
 Del Monte Corp.:
 8.625% Sr. Sub. Nts., 12/15/12 4                                              3,300,000        3,514,500
 9.25% Sr. Unsec. Sub. Nts., 5/15/11                                           1,450,000        1,558,750
----------------------------------------------------------------------------------------------------------
 Doane Pet Care Co., 10.75% Sr. Nts., 3/1/10                                   2,600,000        2,847,000
----------------------------------------------------------------------------------------------------------
 Dole Food Co., Inc.:
 8.625% Sr. Nts., 5/1/09                                                       2,500,000        2,656,250
 8.875% Sr. Nts., 3/15/11 4                                                    1,300,000        1,384,500
----------------------------------------------------------------------------------------------------------
 Michael Foods, Inc., 11.75% Sr. Unsec. Sub. Nts., 4/1/11 1                    1,600,000        1,848,000
----------------------------------------------------------------------------------------------------------
 New World Pasta Co., 9.25% Sr. Nts., 2/15/09                                    500,000          160,000
----------------------------------------------------------------------------------------------------------
 Smithfield Foods, Inc.:
 7.625% Sr. Unsec. Sub. Nts., 2/15/08                                          2,240,000        2,312,800
 8% Sr. Nts., Series B, 10/15/09                                                 400,000          435,000
----------------------------------------------------------------------------------------------------------
 Swift & Co., 10.125% Sr. Nts., 10/1/09 4                                      2,500,000        2,612,500
----------------------------------------------------------------------------------------------------------
 United Biscuits Finance plc, 10.625% Sr. Sub. Nts., 4/15/11 [EUR]             2,000,000        2,606,754
                                                                                              -----------
                                                                                               27,919,054

                        16 | OPPENHEIMER HIGH YIELD FUND




                                                                                Principal     Market Value
                                                                                   Amount       See Note 1
-----------------------------------------------------------------------------------------------------------

 Household Products--0.7%
 AKI, Inc., 10.50% Sr. Unsec. Nts., 7/1/08 1                                  $ 4,200,000      $ 4,326,000
-----------------------------------------------------------------------------------------------------------
 Armkel LLC/Armkel Finance, Inc., 9.50% Sr. Sub. Nts., 8/15/09                  1,900,000        2,128,000
-----------------------------------------------------------------------------------------------------------
 Holmes Products Corp., 9.875% Sr. Sub. Nts., Series C, 11/15/07 1                500,000          448,750
-----------------------------------------------------------------------------------------------------------
 Playtex Products, Inc., 9.375% Sr. Unsec. Sub. Nts., 6/1/11                    3,800,000        3,819,000
-----------------------------------------------------------------------------------------------------------
 Revlon Consumer Products Corp., 12% Sr. Sec. Nts., 12/1/05                     1,600,000        1,564,000
-----------------------------------------------------------------------------------------------------------
 Styling Technology Corp., 10.875% Sr. Unsec. Sub. Nts., 7/1/08 1,5,6           1,200,000               --
                                                                                               -----------
                                                                                                12,285,750

-----------------------------------------------------------------------------------------------------------
 Personal Products--0.2%
 French Fragrances, Inc., 10.375% Gtd. Sr. Unsec. Nts., Series D, 5/15/07       2,900,000        2,994,250
-----------------------------------------------------------------------------------------------------------
 Energy--5.6%
-----------------------------------------------------------------------------------------------------------
 Energy Equipment & Services--1.6%
 BRL Universal Equipment Corp., 8.875% Sr. Sec. Nts., 2/15/08                   3,000,000        3,270,000
-----------------------------------------------------------------------------------------------------------
 Dresser, Inc., 9.375% Sr. Sub. Nts., 4/15/11                                   1,200,000        1,242,000
-----------------------------------------------------------------------------------------------------------
 Grant Geophysical, Inc., 9.75% Sr. Unsec. Nts., Series B, 2/15/08 1,5          4,015,000        1,023,825
-----------------------------------------------------------------------------------------------------------
 Grant Prideco Escrow Corp., 9% Sr. Unsec. Nts., 12/15/09                       1,500,000        1,672,500
-----------------------------------------------------------------------------------------------------------
 Hanover Equipment Trust 2001A, 8.50% Sr. Sec. Nts., Series A, 9/1/08           1,500,000        1,582,500
-----------------------------------------------------------------------------------------------------------
 Hornbeck-Leevac Marine Services, Inc., 10.625% Sr. Nts., 8/1/08                7,000,000        7,752,500
-----------------------------------------------------------------------------------------------------------
 Ocean Rig Norway AS, 10.25% Sr. Sec. Nts., 6/1/08                              7,250,000        6,062,813
-----------------------------------------------------------------------------------------------------------
 Petroleum Helicopters, Inc., 9.375% Sr. Nts., 5/1/09                           1,500,000        1,689,375
-----------------------------------------------------------------------------------------------------------
 Universal Compression, Inc., 7.25% Sr. Nts., 5/15/10 4                         2,500,000        2,600,000
                                                                                               -----------
                                                                                                26,895,513

-----------------------------------------------------------------------------------------------------------
 Oil & Gas--4.0%
 Belden & Blake Corp., 9.875% Sr. Sub. Nts., 6/15/07                            4,000,000        3,800,000
-----------------------------------------------------------------------------------------------------------
 Chesapeake Energy Corp.:
 7.75% Sr. Unsec. Nts., 1/15/15                                                 1,300,000        1,394,250
 8.125% Sr. Unsec. Nts., 4/1/11                                                   700,000          757,750
 8.375% Sr. Unsec. Nts., 11/1/08                                                1,100,000        1,196,250
 9% Sr. Nts., 8/15/12                                                           3,500,000        3,920,000
-----------------------------------------------------------------------------------------------------------
 El Paso Energy Partners LP:
 8.50% Sr. Sub. Nts., 6/1/10 4                                                  1,500,000        1,612,500
 8.50% Sr. Unsec. Sub. Nts., Series B, 6/1/11                                   4,250,000        4,568,750
 10.625% Sr. Sub. Nts., 12/1/12                                                 1,850,000        2,146,000
-----------------------------------------------------------------------------------------------------------
 Forest Oil Corp., 7.75% Sr. Nts., 5/1/14                                       2,000,000        2,090,000
-----------------------------------------------------------------------------------------------------------
 Frontier Escrow Corp., 8% Sr. Nts., 4/15/13 4                                  1,200,000        1,260,000
-----------------------------------------------------------------------------------------------------------
 Frontier Oil Corp., 11.75% Sr. Nts., 11/15/09                                  6,000,000        6,630,000
-----------------------------------------------------------------------------------------------------------
 Leviathan Gas Pipeline Partners LP/Leviathan Finance Corp.,
 10.375% Sr. Unsec. Sub. Nts., Series B, 6/1/09 1                               3,750,000        4,021,875
-----------------------------------------------------------------------------------------------------------
 Newfield Exploration Co., 8.375% Sr. Sub. Nts., 8/15/12                        2,850,000        3,224,062
-----------------------------------------------------------------------------------------------------------
 Pioneer Natural Resources Co., 7.50% Sr. Nts., 4/15/12                         1,000,000        1,147,488
-----------------------------------------------------------------------------------------------------------
 Pogo Producing Co., 8.75% Sr. Sub. Nts., Series B, 5/15/07 1                   4,000,000        4,140,000
-----------------------------------------------------------------------------------------------------------
 Premcor Refining Group, Inc., 9.50% Sr. Nts., 2/1/13                           3,200,000        3,552,000


                        17 | OPPENHEIMER HIGH YIELD FUND


STATEMENT OF INVESTMENTS  Continued



                                                                                    Principal     Market Value
                                                                                       Amount       See Note 1
---------------------------------------------------------------------------------------------------------------

 Oil & Gas Continued
 Stone Energy Corp.:
 8.25% Sr. Unsec. Sub. Nts., 12/15/11                                             $ 3,500,000      $ 3,710,000
 8.75% Sr. Sub. Nts., 9/15/07                                                       2,510,000        2,616,675
---------------------------------------------------------------------------------------------------------------
 Teekay Shipping Corp., 8.875% Sr. Nts., 7/15/11                                    3,175,000        3,496,469
---------------------------------------------------------------------------------------------------------------
 Tesoro Petroleum Corp.:
 8% Sr. Sec. Nts., 4/15/08 4                                                        2,300,000        2,369,000
 9.625% Sr. Sub. Nts., 4/1/12                                                       7,050,000        6,486,000
---------------------------------------------------------------------------------------------------------------
 Westport Resources Corp., 8.25% Sr. Unsec. Sub. Nts., 11/1/11                      5,500,000        6,050,000
                                                                                                   -----------
                                                                                                    70,189,069

---------------------------------------------------------------------------------------------------------------
 Financials--2.7%
---------------------------------------------------------------------------------------------------------------
 Capital Markets--0.1%
 Decrane Aircraft Holdings, Inc., 12% Sr. Unsec. Sub. Nts., Series B, 9/30/08       3,700,000        1,757,500
---------------------------------------------------------------------------------------------------------------
 Commercial Banks--0.2%
 ABN Amro Bank NV (NY Branch), 4% Sec. Nts., 11/5/17 2                              2,069,459        1,138,887
---------------------------------------------------------------------------------------------------------------
 Bank Plus Corp., 12% Sr. Nts., 7/18/07 1                                              78,000           83,948
---------------------------------------------------------------------------------------------------------------
 Western Financial Bank, 9.625% Unsec. Sub. Debs., 5/15/12                          1,700,000        1,844,500
                                                                                                   -----------
                                                                                                     3,067,335

---------------------------------------------------------------------------------------------------------------
 Diversified Financial Services--0.4%
 AmeriCredit Corp., 9.875% Sr. Nts., 4/15/06                                          500,000          492,500
---------------------------------------------------------------------------------------------------------------
 Berry Plastics Corp., 10.75% Sr. Sub. Nts., 7/15/12                                2,500,000        2,762,500
---------------------------------------------------------------------------------------------------------------
 Finova Group, Inc. (The), 7.50% Nts., 11/15/09                                     2,300,000        1,012,000
---------------------------------------------------------------------------------------------------------------
 LaBranche & Co., Inc., 12% Sr. Unsec. Sub. Nts., 3/2/07                            2,500,000        2,862,500
                                                                                                   -----------
                                                                                                     7,129,500

---------------------------------------------------------------------------------------------------------------
 Insurance--0.1%
 Conseco, Inc., 10.75% Sr. Unsec. Nts., 6/15/09 1,5,6                               1,000,000          545,000
---------------------------------------------------------------------------------------------------------------
 Texas Gas Transmission Corp., 7.25% Debs., 7/15/27 1                               1,000,000        1,144,700
                                                                                                   -----------
                                                                                                     1,689,700

---------------------------------------------------------------------------------------------------------------
 Real Estate--1.9%
 Capstar Hotel Co., 8.75% Sr. Sub. Nts., 8/15/07                                    2,250,000        2,047,500
---------------------------------------------------------------------------------------------------------------
 CB Richard Ellis Services, Inc., 11.25% Sr. Unsec. Sub. Nts., 6/15/11 1              400,000          431,000
---------------------------------------------------------------------------------------------------------------
 Corrections Corp. of America:
 7.50% Sr. Nts., 5/1/11                                                             1,350,000        1,417,500
 9.875% Sr. Nts., 5/1/09                                                            1,500,000        1,681,875
---------------------------------------------------------------------------------------------------------------
 Felcor Lodging LP:
 9% Sr. Nts., 6/1/11                                                                2,405,000        2,435,062
 10% Sr. Unsec. Nts., 9/15/08                                                         800,000          830,000
---------------------------------------------------------------------------------------------------------------
 Felcor Suites LP, 7.375% Sr. Nts., 10/1/04                                         1,200,000        1,221,000
---------------------------------------------------------------------------------------------------------------
 HMH Properties, Inc., 7.875% Sr. Nts., Series B, 8/1/08                            5,500,000        5,610,000
---------------------------------------------------------------------------------------------------------------
 Host Marriott LP, 9.50% Sr. Nts., 1/15/07                                          4,800,000        5,184,000
---------------------------------------------------------------------------------------------------------------
 iStar Financial, Inc., 8.75% Sr. Unsec. Nts., 8/15/08                                200,000          219,000



                        18 | OPPENHEIMER HIGH YIELD FUND




                                                                                       Principal     Market Value
                                                                                          Amount       See Note 1
------------------------------------------------------------------------------------------------------------------

 Real Estate Continued
 MeriStar Hospitality Corp.:
 8.75% Sr. Unsec. Sub. Nts., 8/15/07                                                 $ 1,200,000      $ 1,086,000
 9.125% Sr. Unsec. Nts., 1/15/11                                                       2,650,000        2,610,250
------------------------------------------------------------------------------------------------------------------
 Saul (B.F.) Real Estate Investment Trust, 9.75% Sr. Sec. Nts., Series B, 4/1/08       9,100,000        9,145,500
                                                                                                      ------------
                                                                                                       33,918,687

------------------------------------------------------------------------------------------------------------------
 Health Care--4.7%
------------------------------------------------------------------------------------------------------------------
 Health Care Equipment & Supplies--0.5%
 Alaris Medical, Inc., 7.25% Sr. Sub. Nts., 7/1/11                                       700,000          712,250
------------------------------------------------------------------------------------------------------------------
 Dade Behring Holdings, Inc., 11.91% Sr. Unsec. Sub. Nts., 10/3/10                       900,000        1,021,500
------------------------------------------------------------------------------------------------------------------
 Fisher Scientific International, Inc., 8.125% Sr. Sub. Nts., 5/1/12                   2,000,000        2,150,000
------------------------------------------------------------------------------------------------------------------
 HMP Equity Holdings Corp., Units (each unit consists of $1,000 zero
 coupon sr. sec. disc. nts., 15.43%, 5/15/08 and one warrant to purchase
 2.8094 shares of Huntsman Corp. common stock) 9,10                                    2,800,000        1,428,000
------------------------------------------------------------------------------------------------------------------
 Kinetic Concepts, Inc., 9.625% Sr. Unsec. Sub. Nts., Series B, 11/1/07 1              1,000,000        1,045,000
------------------------------------------------------------------------------------------------------------------
 Sybron Dental Specialties, Inc., 8.125% Sr. Sub. Nts., 6/15/12                        2,200,000        2,332,000
------------------------------------------------------------------------------------------------------------------
 Vanguard Health Systems, Inc., 9.75% Sr. Unsec. Sub. Nts., 8/1/11                       500,000          500,000
                                                                                                      ------------
                                                                                                        9,188,750

------------------------------------------------------------------------------------------------------------------
 Health Care Providers & Services--4.1%
 AdvancePCS, Inc., 8.50% Sr. Unsec. Nts., 4/1/08                                       2,500,000        2,700,000
------------------------------------------------------------------------------------------------------------------
 Alderwoods Group, Inc., 12.25% Sr. Nts., 1/2/09                                       3,200,000        3,360,000
------------------------------------------------------------------------------------------------------------------
 Alliance Imaging, Inc., 10.375% Sr. Unsec. Sub. Nts., 4/15/11                         1,500,000        1,575,000
------------------------------------------------------------------------------------------------------------------
 AmeriPath, Inc., 10.50% Sr. Sub. Nts., 4/1/13 4                                       2,000,000        2,155,000
------------------------------------------------------------------------------------------------------------------
 Beverly Enterprises, Inc., 9.625% Sr. Unsec. Nts., 4/15/09                            2,300,000        2,219,500
------------------------------------------------------------------------------------------------------------------
 Extendicare Health Services, Inc., 9.50% Sr. Unsec. Sub. Nts., 7/1/10                 1,900,000        2,004,500
------------------------------------------------------------------------------------------------------------------
 Fresenius Medical Care Capital Trust II, 7.875% Nts., 2/1/08                          2,800,000        2,954,000
------------------------------------------------------------------------------------------------------------------
 Hanger Orthopedic Group, Inc., 10.375% Sr. Nts., 2/15/09                              1,250,000        1,387,500
------------------------------------------------------------------------------------------------------------------
 HCA, Inc.:
 6.95% Sr. Nts., 5/1/12                                                                5,000,000        5,337,190
 7.875% Sr. Nts., 2/1/11                                                               1,000,000        1,121,530
------------------------------------------------------------------------------------------------------------------
 HCA-Healthcare Co. (The), 8.75% Sr. Nts., 9/1/10                                      2,000,000        2,332,928
------------------------------------------------------------------------------------------------------------------
 Healthsouth Corp., 7.625% Nts., 6/1/12 5,6                                            6,000,000        4,680,000
------------------------------------------------------------------------------------------------------------------
 InSight Health Services Corp., 9.875% Sr. Sub. Nts., 11/1/11                          2,000,000        2,110,000
------------------------------------------------------------------------------------------------------------------
 Magellan Health Services, Inc.:
 9% Sr. Sub. Nts., 2/15/08 5                                                           2,150,000          935,250
 9.375% Sr. Nts., 11/15/07 4                                                           4,750,000        4,773,750
------------------------------------------------------------------------------------------------------------------
 Medquest, Inc., 11.875% Sr. Unsec. Sub. Nts., Series B, 8/15/12                       3,200,000        3,344,000
------------------------------------------------------------------------------------------------------------------
 NDCHealth Corp., 10.50% Sr. Sub. Nts., 12/1/12 4                                      4,100,000        4,417,750
------------------------------------------------------------------------------------------------------------------
 PacifiCare Health Systems, Inc., 10.75% Sr. Unsec. Unsub. Nts., 6/1/09                3,400,000        3,918,500
------------------------------------------------------------------------------------------------------------------
 Rotech Healthcare, Inc., 9.50% Sr. Unsec. Sub. Nts., 4/1/12                           2,400,000        2,478,000
------------------------------------------------------------------------------------------------------------------
 Select Medical Corp., 9.50% Sr. Unsec. Sub. Nts., 6/15/09                             1,000,000        1,091,250
------------------------------------------------------------------------------------------------------------------
 Stewart Enterprises, Inc., 10.75% Sr. Unsec. Sub. Nts., 7/1/08                        5,400,000        6,048,000
------------------------------------------------------------------------------------------------------------------
 Tenet Healthcare Corp., 6.375% Sr. Nts., 12/1/11                                      1,000,000          930,000



                        19 | OPPENHEIMER HIGH YIELD FUND


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




                                                                              Principal     Market Value
                                                                                 Amount       See Note 1
---------------------------------------------------------------------------------------------------------

 Health Care Providers & Services Continued
 Triad Hospitals, Inc., 8.75% Sr. Unsec. Nts., Series B, 5/1/09             $ 3,600,000      $ 3,847,500
---------------------------------------------------------------------------------------------------------
 US Oncology, Inc., 9.625% Sr. Sub. Nts., 2/1/12                              1,000,000        1,075,000
---------------------------------------------------------------------------------------------------------
 Vicar Operating, Inc., 9.875% Sr. Sub. Nts., 12/1/09 1                       4,000,000        4,400,000
                                                                                             ------------
                                                                                              71,196,148

---------------------------------------------------------------------------------------------------------
 Pharmaceuticals--0.1%
 aaiPharma, Inc., 11% Sr. Sub. Nts., 4/1/10                                   1,400,000        1,547,000
---------------------------------------------------------------------------------------------------------
 Industrials--9.9%
---------------------------------------------------------------------------------------------------------
 Aerospace & Defense--1.0%
 Alliant Techsystems, Inc., 8.50% Sr. Unsec. Sub. Nts., 5/15/11               2,400,000        2,676,000
---------------------------------------------------------------------------------------------------------
 American Plumbing & Mechanical, Inc., 11.625% Sr. Sub. Nts., Series B,
 10/15/08                                                                     4,700,000        1,574,500
---------------------------------------------------------------------------------------------------------
 BE Aerospace, Inc., 9.50% Sr. Unsec. Sub. Nts., 11/1/08                      1,000,000          810,000
---------------------------------------------------------------------------------------------------------
 K&F Industries, Inc., 9.625% Sr. Unsec. Sub. Nts., 12/15/10                    700,000          780,500
---------------------------------------------------------------------------------------------------------
 L-3 Communications Corp., 7.625% Sr. Sub. Nts., 6/15/12                      1,200,000        1,326,000
---------------------------------------------------------------------------------------------------------
 Rexnord Corp., 10.125% Sr. Sub. Nts., 12/15/12 4                             1,900,000        2,099,500
---------------------------------------------------------------------------------------------------------
 TransDigm, Inc., 10.375% Sr. Sub. Nts., 12/1/08                              2,000,000        2,177,860
---------------------------------------------------------------------------------------------------------
 TRW Automotive, Inc.:
 9.375% Sr. Nts., 2/15/13 4                                                   1,700,000        1,853,000
 11% Sr. Sub. Nts., 2/15/13 4                                                 2,000,000        2,190,000
---------------------------------------------------------------------------------------------------------
 Vought Aircraft Industries, Inc., 8% Sr. Nts., 7/15/11 4                     1,650,000        1,666,500
                                                                                             ------------
                                                                                              17,153,860

---------------------------------------------------------------------------------------------------------
 Air Freight & Logistics--0.0%
 Atlas Air, Inc., 9.375% Sr. Unsec. Nts., 11/15/06 5                          3,650,000          789,312
---------------------------------------------------------------------------------------------------------
 Airlines--0.3%
 Amtran, Inc., 10.50% Sr. Nts., 8/1/04                                        6,400,000        4,640,000
---------------------------------------------------------------------------------------------------------
 Building Products--0.5%
 Associated Materials, Inc., 9.75% Sr. Sub. Nts., 4/15/12                     1,500,000        1,644,375
---------------------------------------------------------------------------------------------------------
 Jacuzzi Brands, Inc., 9.625% Sr. Sec. Nts., 7/1/10 4,11                      2,800,000        2,891,000
---------------------------------------------------------------------------------------------------------
 Nortek, Inc.:
 9.125% Sr. Unsec. Nts., Series B, 9/1/07 1                                     300,000          315,000
 9.25% Sr. Nts., Series B, 3/15/07 1                                          2,200,000        2,277,000
 9.875% Sr. Unsec. Sub. Nts., 6/15/11 1                                       1,000,000        1,057,500
                                                                                             ------------
                                                                                               8,184,875

---------------------------------------------------------------------------------------------------------
 Commercial Services & Supplies--3.6%
 Allied Waste North America, Inc.:
 7.875% Sr. Nts., 4/15/13                                                     2,500,000        2,628,125
 7.875% Sr. Unsec. Nts., Series B, 1/1/09                                     1,900,000        1,997,375
 8.50% Sr. Sub. Nts., 12/1/08                                                 5,200,000        5,616,000
 8.875% Sr. Nts., Series B, 4/1/08                                            4,200,000        4,578,000
 9.25% Sr. Nts., 9/1/12 4                                                     9,850,000       10,908,875
 10% Sr. Unsec. Sub. Nts., Series B, 8/1/09                                   1,300,000        1,387,750
---------------------------------------------------------------------------------------------------------
 American Color Graphics, Inc., 10% Sr. Sec. Nts., 6/15/10 4,11               1,350,000        1,350,000
---------------------------------------------------------------------------------------------------------
 American Pad & Paper Co., 13% Sr. Sub. Nts., Series B, 11/15/05 1,5,6        2,500,000           28,125




                        20 | OPPENHEIMER HIGH YIELD FUND




                                                                              Principal     Market Value
                                                                                 Amount       See Note 1
---------------------------------------------------------------------------------------------------------
 Commercial Services & Supplies Continued

 Budget Group, Inc., 9.125% Sr. Unsec. Nts., 4/1/06 1,5,6                    $6,500,000      $ 1,535,625
---------------------------------------------------------------------------------------------------------
 Buhrmann US, Inc., 12.25% Sr. Unsec. Sub. Nts., 11/1/09                      2,500,000        2,700,000
---------------------------------------------------------------------------------------------------------
 Coinmach Corp., 9% Sr. Nts., 2/1/10                                          2,250,000        2,418,750
---------------------------------------------------------------------------------------------------------
 Comforce Operating, Inc., 12% Sr. Nts., Series B, 12/1/07 1                  2,400,000        1,164,000
---------------------------------------------------------------------------------------------------------
 Hydrochem Industrial Services, Inc., 10.375% Sr. Sub. Nts., 8/1/07 1         3,500,000        2,476,250
---------------------------------------------------------------------------------------------------------
 IT Group, Inc., 11.25% Sr. Unsec. Sub. Nts., Series B, 4/1/09 1,5,6          3,850,000               --
---------------------------------------------------------------------------------------------------------
 Kindercare Learning Centers, Inc., 9.50% Sr. Sub. Nts., 2/15/09              3,000,000        3,037,500
---------------------------------------------------------------------------------------------------------
 Mail-Well I Corp., 9.625% Sr. Nts., 3/15/12                                  4,150,000        4,388,625
---------------------------------------------------------------------------------------------------------
 Moore North American Finance, Inc., 7.875% Sr. Nts., 1/15/11 4               1,300,000        1,361,750
---------------------------------------------------------------------------------------------------------
 Park-Ohio Industries, Inc., 9.25% Sr. Sub. Nts., 12/1/07                     2,000,000        1,710,000
---------------------------------------------------------------------------------------------------------
 Protection One, Inc./Protection One Alarm Monitoring, Inc., 7.375% Sr.
 Unsec. Nts., 8/15/05                                                         1,500,000        1,237,500
---------------------------------------------------------------------------------------------------------
 Stericycle, Inc., 12.375% Sr. Unsec. Sub. Nts., Series B, 11/15/09           2,584,000        2,984,520
---------------------------------------------------------------------------------------------------------
 Synagro Technologies, Inc., 9.50% Sr. Sub. Nts., 4/1/09                      1,700,000        1,827,500
---------------------------------------------------------------------------------------------------------
 United Rentals (North America), Inc.:
 9.25% Sr. Unsec. Sub. Nts., Series B, 1/15/09                                  200,000          198,000
 10.75% Sr. Nts., 4/15/08 4                                                   1,700,000        1,865,750
 10.75% Sr. Nts., 4/15/08 4                                                   2,000,000        2,195,000
 10.75% Sr. Unsec. Nts., 4/15/08                                              2,550,000        2,798,625
                                                                                             ------------
                                                                                              62,393,645

---------------------------------------------------------------------------------------------------------
 Construction & Engineering--0.1%
 Integrated Electrical Services, Inc.:
 9.375% Sr. Sub. Nts., Series B, 2/1/09 1                                     1,100,000        1,122,000
 9.375% Sr. Sub. Nts., Series C, 2/1/09                                         500,000          510,000
---------------------------------------------------------------------------------------------------------
 URS Corp., 11.50% Sr. Unsec. Nts., 9/15/09 1                                 1,000,000        1,070,000
                                                                                             ------------
                                                                                               2,702,000

---------------------------------------------------------------------------------------------------------
 Electrical Equipment--0.1%
 Dayton Superior Corp., 13% Sr. Unsec. Sub. Nts., 6/15/09 1                   1,250,000        1,068,750
---------------------------------------------------------------------------------------------------------
 Industrial Conglomerates--1.5%
 Great Lakes Dredge & Dock Corp., 11.25% Sr. Unsec. Sub. Nts., 8/15/08        8,550,000        9,105,750
---------------------------------------------------------------------------------------------------------
 Norse CBO Ltd., 9.342% Sub. Bonds, Series 1A, Cl. C2, 8/13/10 1             11,000,000        4,235,000
---------------------------------------------------------------------------------------------------------
 Tyco International Group SA:
 6.375% Nts., 10/15/11                                                       11,850,000       12,561,000
 6.75% Sr. Unsub. Nts., 2/15/11                                                 300,000          319,500
                                                                                             ------------
                                                                                              26,221,250

---------------------------------------------------------------------------------------------------------
 Machinery--1.9%
 Actuant Corp., 13% Sr. Sub. Nts., 5/1/09                                     1,455,000        1,709,625
---------------------------------------------------------------------------------------------------------
 AGCO Corp., 9.50% Sr. Unsec. Nts., 5/1/08                                    6,000,000        6,510,000
---------------------------------------------------------------------------------------------------------
 Blount, Inc., 13% Sr. Sub. Nts., 8/1/09                                      2,800,000        2,394,000
---------------------------------------------------------------------------------------------------------
 Eagle-Picher Industries, Inc., 9.375% Sr. Unsec. Sub. Nts., 3/1/08           2,800,000        2,632,000
---------------------------------------------------------------------------------------------------------
 Insilco Corp., 12% Sr. Sub. Nts., 8/15/07 1,5,6                              7,500,000          140,625
---------------------------------------------------------------------------------------------------------
 Manitowoc Co., Inc. (The), 10.50% Sr. Sub. Nts., 8/1/12                      3,350,000        3,735,250



                        21 | OPPENHEIMER HIGH YIELD FUND


STATEMENT OF INVESTMENTS  Continued




                                                                                      Principal     Market Value
                                                                                         Amount       See Note 1
-----------------------------------------------------------------------------------------------------------------

 Machinery Continued
 NMHG Holding Co., 10% Sr. Nts., 5/15/09                                            $ 1,600,000      $ 1,768,000
-----------------------------------------------------------------------------------------------------------------
 Roller Bearing Co. of America, Inc., 9.625% Sr. Sub. Nts., Series B, 6/15/07         5,480,000        4,685,400
-----------------------------------------------------------------------------------------------------------------
 SPX Corp., 7.50% Sr. Nts., 1/1/13                                                    3,000,000        3,262,500
-----------------------------------------------------------------------------------------------------------------
 Terex Corp.:
 8.875% Sr. Unsec. Sub. Nts., 4/1/08                                                  1,400,000        1,463,000
 9.25% Sr. Unsec. Sub. Nts., 7/15/11                                                  3,900,000        4,212,000
 10.375% Sr. Unsec. Sub. Nts., Series B, 4/1/11                                         500,000          555,000
                                                                                                     ------------
                                                                                                      33,067,400

-----------------------------------------------------------------------------------------------------------------
 Marine--0.6%
 CP Ships Ltd., 10.375% Sr. Nts., 7/15/12                                             5,000,000        5,606,250
-----------------------------------------------------------------------------------------------------------------
 Millenium Seacarriers, Inc., 12% Sr. Sec. Nts., 7/15/05 1,5,6                        5,000,000        2,250,000
-----------------------------------------------------------------------------------------------------------------
 Navigator Gas Transport plc, 10.50% First Priority Ship Mtg. Nts., 6/30/07 1,5       5,800,000        1,885,000
-----------------------------------------------------------------------------------------------------------------
 Pacific & Atlantic Holdings, Inc., 10.50% Sec. Nts., 12/31/07 4                      2,103,859          746,870
                                                                                                     ------------
                                                                                                      10,488,120

-----------------------------------------------------------------------------------------------------------------
 Road & Rail--0.2%
 Kansas City Southern Railway Co. (The), 7.50% Sr. Nts., 6/15/09                      2,000,000        2,082,500
-----------------------------------------------------------------------------------------------------------------
 Stena AB, 9.625% Sr. Nts., 12/1/12                                                   2,000,000        2,207,500
                                                                                                     ------------
                                                                                                       4,290,000

-----------------------------------------------------------------------------------------------------------------
 Transportation Infrastructure--0.1%
 Worldspan LP/Worldspan Financial Corp., 9.625% Sr. Nts., 6/15/11 4                   1,250,000        1,293,750
-----------------------------------------------------------------------------------------------------------------
 Information Technology--2.0%
-----------------------------------------------------------------------------------------------------------------
 Communications Equipment--0.1%
 Orion Network Systems, Inc., 12.50% Sr. Disc. Nts., 1/15/07 5                        5,310,000        1,839,915
-----------------------------------------------------------------------------------------------------------------
 Computers & Peripherals--0.2%
 Seagate Technology Hdd Holdings, 8% Sr. Nts., 5/15/09                                2,900,000        3,153,750
-----------------------------------------------------------------------------------------------------------------
 Electronic Equipment & Instruments--0.4%
 Communications & Power Industries, Inc., 12% Sr. Sub. Nts., Series B, 8/1/05 1         350,000          354,375
-----------------------------------------------------------------------------------------------------------------
 Flextronics International Ltd., 9.875% Sr. Unsec. Sub. Nts., 7/1/10                  2,100,000        2,310,000
-----------------------------------------------------------------------------------------------------------------
 Ingram Micro, Inc., 9.875% Sr. Unsec. Sub. Nts., 8/15/08 1                           3,000,000        3,255,000
-----------------------------------------------------------------------------------------------------------------
 Xerox Capital plc (Europe), 5.875% Nts., 5/15/04                                       800,000          808,000
                                                                                                     ------------
                                                                                                       6,727,375

-----------------------------------------------------------------------------------------------------------------
 Internet Software & Services--0.1%
 Exodus Communications, Inc., 10.75% Sr. Nts., 12/15/09 1,5,6 [EUR]                   4,331,508          223,834
-----------------------------------------------------------------------------------------------------------------
 FirstWorld Communications, Inc., 0%/13% Sr. Disc. Nts., 4/15/08 1,5,6,7              5,000,000              500
-----------------------------------------------------------------------------------------------------------------
 Globix Corp., 11% Sr. Nts., 4/26/08 1                                                  765,517          577,965
-----------------------------------------------------------------------------------------------------------------
 PSINet, Inc.:
 10.50% Sr. Unsec. Nts., 12/1/06 1,5,6 [EUR]                                          1,000,000           57,418
 11% Sr. Nts., 8/1/09 5,6                                                             2,160,313          148,522
-----------------------------------------------------------------------------------------------------------------
 Ziff Davis Media, Inc., 12% Sr. Unsec. Sub. Nts., Series B, 8/12/09 1,5                566,864          286,266
                                                                                                     ------------
                                                                                                       1,294,505



                        22 | OPPENHEIMER HIGH YIELD FUND





                                                                                     Principal     Market Value
                                                                                        Amount       See Note 1
----------------------------------------------------------------------------------------------------------------

 IT Services--0.3%
 Iron Mountain, Inc.:
 7.75% Sr. Sub. Nts., 1/15/15                                                      $ 1,200,000      $ 1,275,000
 8.625% Sr. Unsec. Sub. Nts., 4/1/13                                                 2,400,000        2,580,000
----------------------------------------------------------------------------------------------------------------
 Titan Corp. (The), 8% Sr. Sub. Nts., 5/15/11 4                                      1,400,000        1,491,000
                                                                                                    ------------
                                                                                                      5,346,000

----------------------------------------------------------------------------------------------------------------
 Office Electronics--0.0%
 Xerox Corp., 7.15% Nts., 8/1/04                                                       900,000          918,000
----------------------------------------------------------------------------------------------------------------
 Semiconductors & Semiconductor Equipment--0.9%
 AMI Semiconductor, Inc., 10.75% Sr. Sub. Nts., 2/1/13 4                             4,000,000        4,540,000
----------------------------------------------------------------------------------------------------------------
 Amkor Technology, Inc.:
 7.75% Sr. Nts., 5/15/13 4                                                           3,350,000        3,199,250
 9.25% Sr. Unsec. Sub. Nts., 2/15/08                                                 3,500,000        3,657,500
----------------------------------------------------------------------------------------------------------------
 ChipPAC International Co. Ltd., 12.75% Sr. Unsec. Sub. Nts., Series B, 8/1/09       2,500,000        2,825,000
----------------------------------------------------------------------------------------------------------------
 Fairchild Semiconductor Corp., 10.375% Sr. Unsec. Nts., 10/1/07                     1,475,000        1,558,898
                                                                                                    ------------
                                                                                                     15,780,648

----------------------------------------------------------------------------------------------------------------
 Materials--10.8%
----------------------------------------------------------------------------------------------------------------
 Chemicals--3.6%
 Applied Extrusion Technologies, Inc., 10.75% Sr. Nts., Series B, 7/1/11             1,700,000        1,258,000
----------------------------------------------------------------------------------------------------------------
 Avecia Group plc, 11% Sr. Unsec. Nts., 7/1/09                                         950,000          864,500
----------------------------------------------------------------------------------------------------------------
 ClimaChem, Inc., 10.75% Sr. Unsec. Nts., Series B, 12/1/07 1                        2,000,000          810,000
----------------------------------------------------------------------------------------------------------------
 Compass Minerals Group, Inc., 10% Sr. Sub. Nts., 8/15/11                            3,200,000        3,600,000
----------------------------------------------------------------------------------------------------------------
 Equistar Chemicals LP/Equistar Funding Corp.:
 8.75% Sr. Unsec. Nts., 2/15/09                                                      1,000,000          975,000
 10.625% Sr. Nts., 5/1/11 4                                                          2,000,000        2,060,000
----------------------------------------------------------------------------------------------------------------
 Huntsman Corp./ICI Chemical Co. plc:
 Zero Coupon Sr. Unsec. Disc. Nts., 13.09%, 12/31/09 10                              4,000,000        1,580,000
 10.125% Sr. Unsec. Sub. Nts., 7/1/09                                                7,850,000        7,575,250
----------------------------------------------------------------------------------------------------------------
 Huntsman International LLC:
 9.875% Sr. Nts., 3/1/09                                                             5,500,000        5,747,500
 9.875% Sr. Nts., 3/1/09 4                                                             600,000          627,000
----------------------------------------------------------------------------------------------------------------
 IMC Global, Inc., 7.625% Bonds, 11/1/05                                             1,400,000        1,491,000
----------------------------------------------------------------------------------------------------------------
 ISP Chemco, Inc., 10.25% Sr. Unsec. Sub. Nts., 7/1/11                               2,700,000        3,064,500
----------------------------------------------------------------------------------------------------------------
 ISP Holdings, Inc., 10.625% Sr. Sec. Nts., 12/15/09                                 1,800,000        1,921,500
----------------------------------------------------------------------------------------------------------------
 Lyondell Chemical Co.:
 9.50% Sec. Nts., 12/15/08                                                             600,000          573,000
 9.50% Sr. Sec. Debs., 12/15/08 4                                                      700,000          668,500
 9.625% Sr. Sec. Nts., Series A, 5/1/07                                              6,900,000        6,796,500
 9.875% Sec. Nts., Series B, 5/1/07                                                  7,100,000        6,993,500
 10.875% Sr. Sub. Nts., 5/1/09                                                       3,600,000        3,366,000
----------------------------------------------------------------------------------------------------------------
 Millennium America, Inc., 9.25% Sr. Nts., 6/15/08 4                                 1,100,000        1,188,000
----------------------------------------------------------------------------------------------------------------
 Noveon, Inc., 11% Sr. Unsec. Sub. Nts., Series B, 2/28/11 1                         3,500,000        3,990,000
----------------------------------------------------------------------------------------------------------------
 OM Group, Inc., 9.25% Sr. Sub. Nts., 12/15/11                                         100,000           98,000
----------------------------------------------------------------------------------------------------------------
 PCI Chemicals Canada, 10% Sr. Sec. Nts., 12/31/08                                     989,550          863,382
----------------------------------------------------------------------------------------------------------------
 Pioneer Cos., Inc., 4.60% Sr. Sec. Nts., 12/31/06 2                                   313,358          267,921


                        23 | OPPENHEIMER HIGH YIELD FUND


STATEMENT OF INVESTMENTS  Continued




                                                                                  Principal     Market Value
                                                                                     Amount       See Note 1
-------------------------------------------------------------------------------------------------------------

 Chemicals Continued
 Resolution Performance Products LLC/RPP Capital Corp.,
 9.50% Sr. Sec. Nts., 4/15/10 4                                                 $   700,000      $   731,500
-------------------------------------------------------------------------------------------------------------
 Royster-Clark, Inc., 10.25% First Mtg. Nts., 4/1/09 1                            1,500,000        1,335,000
-------------------------------------------------------------------------------------------------------------
 Sterling Chemicals, Inc.:
 10% Sr. Sec. Nts., 12/19/07 1                                                    1,917,458        1,780,839
 11.25% Sr. Sub. Nts., 8/15/06 5,6                                                3,000,000               --
 11.75% Sr. Unsec. Sub. Nts., 8/15/06 5,6                                         3,000,000               --
-------------------------------------------------------------------------------------------------------------
 Unifrax Investment Corp., 10.50% Sr. Nts., 11/1/03 1                             2,526,000        2,541,788
                                                                                                 ------------
                                                                                                  62,768,180

-------------------------------------------------------------------------------------------------------------
 Construction Materials--0.2%
 Formica Corp., 10.875% Sr. Unsec. Sub. Nts., Series B, 3/1/09 5,6                3,500,000          892,500
-------------------------------------------------------------------------------------------------------------
 Texas Industries, Inc., 10.25% Sr. Nts., 6/15/11 4                               2,600,000        2,730,000
                                                                                                 ------------
                                                                                                   3,622,500

-------------------------------------------------------------------------------------------------------------
 Containers & Packaging--3.1%
 Ball Corp., 8.25% Sr. Unsec. Sub. Nts., 8/1/08                                     400,000          422,000
-------------------------------------------------------------------------------------------------------------
 Crown Euro Holdings SA:
 9.50% Sr. Sec. Nts., 3/1/11 4                                                    2,800,000        3,038,000
 10.875% Sr. Sec. Nts., 3/1/13 4                                                  1,400,000        1,533,000
-------------------------------------------------------------------------------------------------------------
 Graphic Packaging Corp., 8.625% Sub. Nts., 2/15/12                               2,500,000        2,562,500
-------------------------------------------------------------------------------------------------------------
 Jefferson Smurfit Corp., 8.25% Sr. Unsec. Nts., 10/1/12                          2,200,000        2,370,500
-------------------------------------------------------------------------------------------------------------
 MDP Acquisitions plc, 9.625% Sr. Nts., 10/1/12                                   2,500,000        2,775,000
-------------------------------------------------------------------------------------------------------------
 Owens-Brockway Glass Container, Inc.:
 7.75% Sr. Sec. Nts., 5/15/11 4                                                   2,700,000        2,868,750
 8.25% Sr. Unsec. Nts., 5/15/13 4                                                 1,200,000        1,260,000
 8.75% Sr. Sec. Nts., 11/15/12                                                    5,400,000        5,886,000
 8.875% Sr. Sec. Nts., 2/15/09                                                    6,000,000        6,540,000
-------------------------------------------------------------------------------------------------------------
 Riverwood International Corp.:
 10.625% Sr. Unsec. Nts., 8/1/07                                                  4,500,000        4,691,250
 10.875% Sr. Sub. Nts., 4/1/08                                                    3,900,000        4,017,000
-------------------------------------------------------------------------------------------------------------
 Stone Container Corp.:
 8.375% Sr. Nts., 7/1/12                                                          3,950,000        4,256,125
 9.25% Sr. Unsec. Nts., 2/1/08                                                    3,000,000        3,285,000
 9.75% Sr. Unsec. Nts., 2/1/11                                                    4,000,000        4,400,000
-------------------------------------------------------------------------------------------------------------
 TriMas Corp., 9.875% Sr. Unsec. Sub. Nts., 6/15/12                               4,200,000        4,326,000
                                                                                                 ------------
                                                                                                  54,231,125

-------------------------------------------------------------------------------------------------------------
 Metals & Mining--2.6%
 AK Steel Corp.:
 7.75% Sr. Unsec. Nts., 6/15/12                                                   5,800,000        4,843,000
 7.875% Sr. Unsec. Nts., 2/15/09                                                    900,000          769,500
-------------------------------------------------------------------------------------------------------------
 Arch Western Finance LLC, 6.75% Sr. Nts., 7/1/13 4                               2,650,000        2,729,500
-------------------------------------------------------------------------------------------------------------
 Better Minerals & Aggregates Co., 13% Sr. Unsec. Sub. Nts., 9/15/09                700,000          469,000
-------------------------------------------------------------------------------------------------------------
 California Steel Industries Corp., 8.50% Sr. Unsec. Nts., Series B, 4/1/09       2,300,000        2,346,000
-------------------------------------------------------------------------------------------------------------
 Centaur Mining & Exploration Ltd., 11% Sr. Nts., 12/1/07 1,5                     4,740,789           71,112

                        24 | OPPENHEIMER HIGH YIELD FUND




                                                                              Principal     Market Value
                                                                                 Amount       See Note 1
---------------------------------------------------------------------------------------------------------

 Metals & Mining Continued
 Century Aluminum Co., 11.75% Sr. Sec. Nts., 4/15/08                        $ 4,660,000      $ 4,776,500
---------------------------------------------------------------------------------------------------------
 Great Lakes Carbon Corp., 10.25% Sr. Sub. Nts., Series B, 5/15/08            1,873,000        1,601,415
---------------------------------------------------------------------------------------------------------
 International Utility Structures, Inc., 13% Unsec. Sub. Nts., 2/1/08 1         814,000           40,700
---------------------------------------------------------------------------------------------------------
 IPSCO, Inc., 8.75% Sr. Nts., 6/1/13 4                                          850,000          871,250
---------------------------------------------------------------------------------------------------------
 Jorgensen (Earle M.) Co., 9.75% Sr. Sec. Nts., 6/1/12 1                      2,500,000        2,662,500
---------------------------------------------------------------------------------------------------------
 Kaiser Aluminum & Chemical Corp.:
 10.875% Sr. Nts., Series B, 10/15/06 1,5,6                                   2,000,000        1,570,000
 12.75% Sr. Sub. Nts., 2/1/04 1,5,6                                           7,850,000          490,625
---------------------------------------------------------------------------------------------------------
 Metallurg, Inc., 11% Sr. Nts., 12/1/07                                       6,320,000        3,444,400
---------------------------------------------------------------------------------------------------------
 National Steel Corp., 9.875% First Mtg. Bonds, Series D, 3/1/09 5,6          3,428,307          205,699
---------------------------------------------------------------------------------------------------------
 Northwest Pipeline Corp., 8.125% Sr. Nts., 3/1/10                              850,000          918,000
---------------------------------------------------------------------------------------------------------
 Oregon Steel Mills, Inc., 10% Sr. Nts., 7/15/09                              2,950,000        2,669,750
---------------------------------------------------------------------------------------------------------
 Peabody Energy Corp., 6.875% Sr. Nts., 3/15/13 4                             2,500,000        2,631,250
---------------------------------------------------------------------------------------------------------
 Steel Dynamics, Inc., 9.50% Sr. Nts., 3/15/09                                1,500,000        1,578,750
---------------------------------------------------------------------------------------------------------
 UCAR Finance, Inc., 10.25% Sr. Nts., 2/15/12                                   700,000          689,500
---------------------------------------------------------------------------------------------------------
 United States Steel Corp.:
 9.75% Sr. Nts., 5/15/10                                                      2,800,000        2,856,000
 10.75% Sr. Nts., 8/1/08                                                      2,300,000        2,426,500
---------------------------------------------------------------------------------------------------------
 WHX Corp., 10.50% Sr. Unsec. Nts., 4/15/05                                   5,000,000        4,325,000
                                                                                             ------------
                                                                                              44,985,951

---------------------------------------------------------------------------------------------------------
 Paper & Forest Products--1.3%
 Abitibi-Consolidated, Inc., 8.55% Nts., 8/1/10                               1,250,000        1,402,461
---------------------------------------------------------------------------------------------------------
 Ainsworth Lumber Co. Ltd.:
 12.50% Sr. Nts., 7/15/07 8                                                   1,600,000        1,816,000
 13.875% Sr. Sec. Nts., 7/15/07 1                                               300,000          342,000
---------------------------------------------------------------------------------------------------------
 Doman Industries Ltd., 8.75% Sr. Nts., 3/15/04 1,5                          11,000,000        2,420,000
---------------------------------------------------------------------------------------------------------
 Georgia-Pacific Corp.:
 8.125% Sr. Unsec. Nts., 5/15/11                                              5,600,000        5,782,000
 9.375% Sr. Nts., 2/1/13 4                                                    5,000,000        5,537,500
---------------------------------------------------------------------------------------------------------
 Louisiana-Pacific Corp., 10.875% Sr. Sub. Nts., 11/15/08 1                   1,000,000        1,145,000
---------------------------------------------------------------------------------------------------------
 Tembec Industries, Inc., 7.75% Sr. Nts., 3/15/12                             2,800,000        2,730,000
---------------------------------------------------------------------------------------------------------
 U.S. Timberlands Co. LP, 9.625% Sr. Nts., 11/15/07                           4,000,000        2,330,000
                                                                                             ------------
                                                                                              23,504,961

---------------------------------------------------------------------------------------------------------
 Telecommunication Services--9.2%
---------------------------------------------------------------------------------------------------------
 Diversified Telecommunication Services--3.5%
 360networks, Inc.:
 13% Sr. Unsec. Nts., 5/1/08 1,5,6                                            3,500,000              350
 13% Sr. Unsec. Nts., 5/1/08 1,5,6 [EUR]                                      1,000,000              115
---------------------------------------------------------------------------------------------------------
 Adelphia Business Solutions, Inc., 12% Sr. Sub. Nts., 11/1/07 1,5,6          1,600,000           24,000
---------------------------------------------------------------------------------------------------------
 American Tower Corp., 9.375% Sr. Nts., 2/1/09                                3,100,000        3,131,000
---------------------------------------------------------------------------------------------------------
 COLO.com, Inc., 13.875% Sr. Nts., 3/15/10 1,5,6                              1,723,624           17,236
---------------------------------------------------------------------------------------------------------
 Comcast UK Cable Partner Ltd., 11.20% Sr. Unsec. Disc. Debs., 11/15/07       5,570,000        5,465,562
---------------------------------------------------------------------------------------------------------
 Concentric Network Corp., Escrow Shares, 12/15/07 5,6                        3,065,000               --




                        25 | OPPENHEIMER HIGH YIELD FUND


STATEMENT OF INVESTMENTS  Continued



                                                                                         Principal     Market Value
                                                                                            Amount       See Note 1
--------------------------------------------------------------------------------------------------------------------

 Diversified Telecommunication Services Continued
 Dex Media East LLC/Dex Media East Finance Co., 9.875% Sr. Unsec. Nts.,
 11/15/09                                                                              $ 3,000,000      $ 3,360,000
--------------------------------------------------------------------------------------------------------------------
 Diamond Holdings plc, 9.125% Sr. Nts., 2/1/08                                           1,400,000        1,303,750
--------------------------------------------------------------------------------------------------------------------
 Focal Communications Corp.:
 11.875% Sr. Unsec. Nts., Series B, 1/15/10 1,5                                             75,000            4,500
 12.125% Sr. Unsec. Disc. Nts., 2/15/08 1,5,6                                            2,200,000          132,000
--------------------------------------------------------------------------------------------------------------------
 ICG Services, Inc., Escrow Shares, 2/15/08                                              1,485,000               --
--------------------------------------------------------------------------------------------------------------------
 Intermedia Communications, Inc., 0%/12.25% Sr. Disc. Nts., Series B, 3/1/09 5,6,7       3,000,000          960,000
--------------------------------------------------------------------------------------------------------------------
 IPC Acquisition Corp., 11.50% Sr. Sub. Nts., 12/15/09                                     550,000          585,750
--------------------------------------------------------------------------------------------------------------------
 Level 3 Communications, Inc.:
 0%/10.50% Sr. Disc. Nts., 12/1/08 7                                                     1,850,000        1,604,875
 9.125% Sr. Unsec. Nts., 5/1/08                                                          4,900,000        4,410,000
--------------------------------------------------------------------------------------------------------------------
 Metromedia Fiber Network, Inc.:
 10% Sr. Nts., 12/15/09 5,6 [EUR]                                                        2,000,000              230
 10% Sr. Unsec. Nts., Series B, 11/15/08 5,6                                             4,300,000          274,125
--------------------------------------------------------------------------------------------------------------------
 Nextlink Communications, Inc.:
 Escrow Shares, 10/1/07 5,6                                                              5,000,000               --
 Escrow Shares, 4/15/08 5,6                                                              2,250,000               --
 Escrow Shares, 11/15/08 5,6                                                             5,500,000               --
 Escrow Shares, 6/1/09 5,6                                                               2,000,000               --
--------------------------------------------------------------------------------------------------------------------
 NorthPoint Communications Group, Inc., 12.875% Nts., 2/15/10 5,6                        1,300,000          227,500
--------------------------------------------------------------------------------------------------------------------
 Pratama Datakom Asia BV, 12.75% Gtd. Nts., 7/15/05 1,5,6                                4,000,000          130,000
--------------------------------------------------------------------------------------------------------------------
 Qwest Capital Funding, Inc.:
 5.875% Nts., 8/3/04                                                                     5,700,000        5,486,250
 7.75% Nts., 8/15/06                                                                     2,400,000        2,244,000
--------------------------------------------------------------------------------------------------------------------
 Qwest Communications International, Inc., 7.50% Sr. Unsec. Nts., Series B,
 11/1/08                                                                                 3,100,000        2,883,000
--------------------------------------------------------------------------------------------------------------------
 Qwest Corp., 8.875% Nts., 3/15/12 4                                                     9,400,000       10,551,500
--------------------------------------------------------------------------------------------------------------------
 Qwest Services Corp., 13.50% Nts., 12/15/10 4                                           3,200,000        3,632,000
--------------------------------------------------------------------------------------------------------------------
 Sprint Capital Corp., 8.375% Nts., 3/15/12                                              1,800,000        2,159,314
--------------------------------------------------------------------------------------------------------------------
 Telewest Communications plc:
 0%/9.25% Sr. Disc. Nts., 4/15/09 5,6,7                                                  7,300,000        2,317,750
 0%/9.875% Sr. Disc. Nts., 4/15/09 1,5,7 [GBP]                                           4,000,000        2,029,685
 11.25% Sr. Nts., 11/1/08 5,6                                                            3,700,000        1,359,750
--------------------------------------------------------------------------------------------------------------------
 Teligent, Inc., 11.50% Sr. Nts., 12/1/07 1,5,6                                          2,300,000               --
--------------------------------------------------------------------------------------------------------------------
 Time Warner Telecom LLC/Time Warner Telecom, Inc., 9.75% Sr. Nts., 7/15/08              5,100,000        4,947,000
--------------------------------------------------------------------------------------------------------------------
 Time Warner Telecom, Inc., 10.125% Sr. Unsec. Sub. Nts., 2/1/11                           800,000          776,000
--------------------------------------------------------------------------------------------------------------------
 Viatel, Inc., 11.25% Sr. Sec. Nts., 4/15/08 1,5,6                                       2,925,000               --
                                                                                                        ------------
                                                                                                         60,017,242

--------------------------------------------------------------------------------------------------------------------
 Wireless Telecommunication Services--5.7%
 Alamosa Delaware, Inc., 12.50% Sr. Unsec. Nts., 2/1/11                                  3,800,000        3,135,000
--------------------------------------------------------------------------------------------------------------------
 American Cellular Corp., 9.50% Sr. Sub. Nts., 10/15/09 5                                2,800,000        1,414,000
--------------------------------------------------------------------------------------------------------------------
 American Tower Escrow Corp., Zero Coupon Sr. Sub. Disc. Nts.,
 12.25%, 8/1/08 10                                                                       4,300,000        2,795,000
--------------------------------------------------------------------------------------------------------------------
 CellNet Data Systems, Inc., 14% Sr. Unsec. Disc. Nts., 10/1/07 1,5,6                    9,220,000               --



                        26 | OPPENHEIMER HIGH YIELD FUND




                                                                                      Principal      Market Value
                                                                                         Amount        See Note 1
------------------------------------------------------------------------------------------------------------------

 Wireless Telecommunication Services Continued
 Centennial Cellular Operating Co./Centennial Communications Corp.,
 10.125% Sr. Nts., 6/15/13 4                                                       $  3,600,000      $  3,582,000
------------------------------------------------------------------------------------------------------------------
 Crown Castle International Corp.:
 0%/10.375% Sr. Disc. Nts., 5/15/11 7                                                 4,150,000         3,984,000
 10.625% Sr. Unsec. Disc. Nts., 11/15/07                                              8,790,000         9,295,425
 10.75% Sr. Nts., 8/1/11                                                              3,600,000         3,942,000
------------------------------------------------------------------------------------------------------------------
 CTI Holdings SA, 0%/11.50% Sr. Deferred Coupon Nts., 4/15/08 1,5,6,7                 4,650,000           534,750
------------------------------------------------------------------------------------------------------------------
 Dobson Communications Corp., 10.875% Sr. Unsec. Nts., 7/1/10                         3,700,000         4,014,500
------------------------------------------------------------------------------------------------------------------
 IPCS, Inc., 0%/14% Sr. Unsec. Disc. Nts., 7/15/10 1,5,6,7                            1,350,000            74,250
------------------------------------------------------------------------------------------------------------------
 Leap Wireless International, Inc.:
 0%/14.50% Sr. Unsec. Disc. Nts., 4/15/10 1,5,6,7                                     4,500,000           427,500
 12.50% Sr. Nts., 4/15/10 1,5                                                         2,900,000           391,500
------------------------------------------------------------------------------------------------------------------
 Nextel Communications, Inc.:
 9.375% Sr. Unsec. Nts., 11/15/09                                                    11,200,000        12,082,000
 9.95% Sr. Disc. Nts., 2/15/08                                                        5,600,000         5,880,000
------------------------------------------------------------------------------------------------------------------
 Nextel Partners, Inc.:
 8.125% Sr. Nts., 7/1/11 4                                                            3,300,000         3,308,250
 11% Sr. Unsec. Nts., 3/15/10                                                           900,000           976,500
 12.50% Sr. Nts., 11/15/09                                                            4,500,000         5,085,000
------------------------------------------------------------------------------------------------------------------
 Omnipoint Corp., 11.50% Sr. Nts., 9/15/09 4                                          8,865,000        10,405,294
------------------------------------------------------------------------------------------------------------------
 Orbcomm Global LP, Escrow Shares, 8/15/04 5,6                                        3,775,000                --
------------------------------------------------------------------------------------------------------------------
 Rogers Wireless Communications, Inc., 8.80% Sr. Sub. Nts., 10/1/07                   5,000,000         5,131,250
------------------------------------------------------------------------------------------------------------------
 Rural Cellular Corp.:
 9.625% Sr. Sub. Nts., Series B, 5/15/08                                              3,000,000         2,670,000
 9.75% Sr. Sub. Nts., 1/15/10                                                         2,900,000         2,581,000
------------------------------------------------------------------------------------------------------------------
 SBA Communications Corp.:
 10.25% Sr. Unsec. Nts., 2/1/09                                                         200,000           185,000
 12% Sr. Unsec. Disc. Nts., 3/1/08                                                    8,720,000         8,959,800
------------------------------------------------------------------------------------------------------------------
 SpectraSite, Inc., 8.25% Sr. Nts., 5/15/10 4                                         1,200,000         1,254,000
------------------------------------------------------------------------------------------------------------------
 Triton PCS, Inc.:
 8.50% Sr. Nts., 6/1/13 4                                                             2,600,000         2,808,000
 8.75% Sr. Unsec. Sub. Nts., 11/15/11                                                   350,000           350,875
 9.375% Sr. Unsec. Sub. Nts., 2/1/11                                                  2,400,000         2,466,000
------------------------------------------------------------------------------------------------------------------
 US Unwired, Inc., 0%/13.375% Sr. Unsec. Sub. Disc. Nts., Series B, 11/1/09 7         5,850,000         2,427,750
                                                                                                     -------------
                                                                                                      100,160,644

------------------------------------------------------------------------------------------------------------------
 Utilities--8.9%
------------------------------------------------------------------------------------------------------------------
 Electric Utilities--3.8%
 AES Corp. (The):
 8.375% Sr. Unsec. Unsub. Nts., 3/1/11 1 [GBP]                                        2,500,000         3,723,151
 8.75% Sr. Sec. Nts., 5/15/13 4                                                       6,900,000         7,210,500
 8.75% Sr. Unsec. Unsub. Nts., 6/15/08                                                1,115,000         1,109,425
 8.875% Sr. Unsec. Nts., 2/15/11                                                        773,000           759,473
 9.375% Sr. Unsec. Nts., 9/15/10                                                      1,028,000         1,038,280
 9.50% Sr. Unsec. Nts., 6/1/09                                                          299,000           303,485
 10% Sec. Nts., 7/15/05 4                                                             2,900,000         3,023,250
 10.25% Sr. Unsec. Sub. Nts., 7/15/06                                                 2,450,000         2,437,750
------------------------------------------------------------------------------------------------------------------
 AES Drax Holdings Ltd., 10.41% Sr. Sec. Sub. Nts., Series B, 12/31/20 1              1,300,000           845,000


                        27 | OPPENHEIMER HIGH YIELD FUND


STATEMENT OF INVESTMENTS Continued



                                                                                  Principal     Market Value
                                                                                     Amount       See Note 1
-------------------------------------------------------------------------------------------------------------

 Electric Utilities Continued
 Allegheny Energy, Inc., 7.75% Nts., 8/1/05                                     $ 1,350,000      $ 1,356,750
-------------------------------------------------------------------------------------------------------------
 Caithness Coso Funding Corp., 9.05% Sr. Sec. Nts., Series B, 12/15/09              891,584          953,995
-------------------------------------------------------------------------------------------------------------
 Calpine Corp.:
 7.625% Sr. Nts., 4/15/06                                                           500,000          436,250
 8.25% Sr. Unsec. Nts., 8/15/05                                                   2,500,000        2,337,500
 8.50% Sr. Unsec. Nts., 2/15/11                                                  13,850,000       10,456,750
 8.625% Sr. Nts., 8/15/10                                                           600,000          453,000
 8.75% Sr. Nts., 7/15/07                                                          1,400,000        1,151,500
-------------------------------------------------------------------------------------------------------------
 CMS Energy Corp.:
 7.50% Sr. Nts., 1/15/09                                                          1,000,000          993,750
 9.875% Sr. Unsec. Nts., 10/15/07                                                 6,000,000        6,427,500
-------------------------------------------------------------------------------------------------------------
 CMS Energy X-TRAS Pass-Through Trust I, 7% Sr. Unsec. Pass-Through
 Certificates, 1/15/05                                                            1,300,000        1,285,375
-------------------------------------------------------------------------------------------------------------
 CMS Panhandle Holding Co., 6.125% Sr. Nts., 3/15/04                              2,900,000        2,976,125
-------------------------------------------------------------------------------------------------------------
 Edison Mission Energy, 10% Sr. Unsec. Nts., 8/15/08                                275,000          261,250
-------------------------------------------------------------------------------------------------------------
 FirstEnergy Corp., 7.375% Sr. Unsub. Nts., Series C, 11/15/31                    1,508,000        1,695,435
-------------------------------------------------------------------------------------------------------------
 Messer Griesheim Holding AG, 10.375% Sr. Nts., 6/1/11 [EUR]                      2,500,000        3,244,089
-------------------------------------------------------------------------------------------------------------
 Mirant Americas Generation LLC, 8.30% Sr. Unsec. Nts., 5/1/11 5                  1,300,000          812,500
-------------------------------------------------------------------------------------------------------------
 MSW Energy Holdings LLC/MSW Energy Finance Co., Inc., 8.50% Sr. Sec
 Nts., 9/1/10 4                                                                   1,300,000        1,342,250
-------------------------------------------------------------------------------------------------------------
 Panhandle Eastern Pipe Line Co., 8.25% Sr. Nts., Series B, 4/1/10                  900,000        1,075,500
-------------------------------------------------------------------------------------------------------------
 PG&E Corp., 6.875% Sr. Sec. Nts., 7/15/08 4                                      2,800,000        2,912,000
-------------------------------------------------------------------------------------------------------------
 Reliant Resources, Inc.:
 9.25% Sr. Sec. Nts., 7/15/10 4                                                   2,200,000        2,213,750
 9.50% Sr. Sec. Nts., 7/15/13 4                                                   2,200,000        2,222,000
-------------------------------------------------------------------------------------------------------------
 Westar Energy, Inc., 9.75% Sr. Unsec. Nts., 5/15/07                                750,000          843,750
                                                                                                 ------------
                                                                                                  65,901,333

-------------------------------------------------------------------------------------------------------------
 Gas Utilities--2.8%
 AmeriGas Partners LP/AmeriGas Eagle Finance Corp., 8.875% Sr. Unsec. Nts.
 Series B, 5/20/11                                                                3,750,000        4,106,250
-------------------------------------------------------------------------------------------------------------
 ANR Pipeline, Inc., 8.875% Sr. Nts., 3/15/10 4                                   1,400,000        1,536,500
-------------------------------------------------------------------------------------------------------------
 El Paso Corp., 7.875% Nts., 6/15/12 4                                            5,500,000        5,121,875
-------------------------------------------------------------------------------------------------------------
 El Paso Energy Corp., 7.625% Nts., 7/15/11                                       3,500,000        3,202,500
-------------------------------------------------------------------------------------------------------------
 SEMCO Energy, Inc.:
 7.125% Sr. Nts., 5/15/08 4                                                       1,100,000        1,155,000
 7.75% Sr. Nts., 5/15/13 4                                                        1,100,000        1,177,000
-------------------------------------------------------------------------------------------------------------
 Southern Natural Gas Co.:
 7.35% Nts., 2/15/31                                                              2,800,000        2,863,000
 8% Sr. Unsub. Nts., 3/1/32                                                       4,800,000        5,214,000
 8.875% Sr. Nts., 3/15/10 4                                                       1,800,000        1,971,000
-------------------------------------------------------------------------------------------------------------
 Tennessee Gas Pipeline Co., 7.50% Bonds, 4/1/17                                 11,550,000       11,925,375
-------------------------------------------------------------------------------------------------------------
 Williams Cos., Inc. (The), 7.125% Nts., 9/1/11                                  11,900,000       11,662,000
                                                                                                 ------------
                                                                                                  49,934,500



                        28 | OPPENHEIMER HIGH YIELD FUND





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

 Multi-Utilities & Unregulated Power--2.2%
 AES Red Oak LLC, 8.54% Sr. Sec. Bonds, Series A, 11/30/19                         $    3,447,625      $    3,611,387
----------------------------------------------------------------------------------------------------------------------
 Aquila, Inc., 7% Sr. Unsec. Nts., 7/15/04                                                850,000             808,562
----------------------------------------------------------------------------------------------------------------------
 Consumers Energy Co.:
 6.25% Nts., 9/15/06                                                                    1,100,000           1,222,163
 6.375% Sr. Sec. Nts., 2/1/08                                                             800,000             894,508
 7.375% Nts., 9/15/23                                                                   1,600,000           1,671,706
----------------------------------------------------------------------------------------------------------------------
 Dynegy Holdings, Inc.:
 6.875% Sr. Unsec. Unsub. Nts., 4/1/11                                                 13,750,000          11,618,750
 8.125% Sr. Unsec. Unsub. Nts., 3/15/05                                                   900,000             879,750
 8.75% Sr. Nts., 2/15/12                                                                3,200,000           2,992,000
----------------------------------------------------------------------------------------------------------------------
 El Paso Production Holding Co., 7.75% Sr. Nts., 6/1/13 4                               4,100,000           4,110,250
----------------------------------------------------------------------------------------------------------------------
 Mirant Mid-Atlantic LLC, 8.625% Sec. Pass-Through Certificates, Series A,
 6/30/12                                                                                2,639,972           2,539,896
----------------------------------------------------------------------------------------------------------------------
 Transcontinental Gas Pipe Line Corp.:
 6.125% Nts., 1/15/05                                                                   1,000,000           1,005,000
 8.875% Sr. Unsub. Nts., Series B, 7/15/12                                              1,200,000           1,362,000
----------------------------------------------------------------------------------------------------------------------
 Williams Cos., Inc. (The):
 8.625% Sr. Nts., 6/1/10                                                                2,600,000           2,730,000
 9.25% Sr. Unsec. Unsub. Nts., 3/15/04                                                  2,200,000           2,266,000
----------------------------------------------------------------------------------------------------------------------
 Williams Holdings of Delaware, Inc., 6.50% Nts., 12/1/08                                 800,000             784,000
                                                                                                       ---------------
                                                                                                           38,495,972

----------------------------------------------------------------------------------------------------------------------
 Water Utilities--0.1%
 National Waterworks, Inc., 10.50% Sr. Unsec. Sub. Nts., Series B, 12/1/12 1            1,400,000           1,555,750
                                                                                                       ---------------
 Total Corporate Bonds and Notes (Cost $1,425,147,777)                                                  1,383,245,303

                                                                                           Shares
----------------------------------------------------------------------------------------------------------------------
 Preferred Stocks--1.3%
 AmeriKing, Inc., 13% Cum. Sr. Exchangeable, Non-Vtg. 1,8                                 110,146               1,101
----------------------------------------------------------------------------------------------------------------------
 Digital Globe, Inc., 8.50% Cv., Series C, Non-Vtg. 1                                     244,655             244,655
----------------------------------------------------------------------------------------------------------------------
 Doane Pet Care Co., 14.25% Jr. Sub. Debs., Non-Vtg. 1,6                                  140,000           5,635,000
----------------------------------------------------------------------------------------------------------------------
 e.spire Communications, Inc., 12.75% Jr. Redeemable, Non-Vtg. 1,6,8                        3,738                 374
----------------------------------------------------------------------------------------------------------------------
 Eagle-Picher Holdings, Inc., 11.75% Cum. Exchangeable, Series B, Non-Vtg. 1,6             28,000           1,239,000
----------------------------------------------------------------------------------------------------------------------
 Global Crossing Holdings Ltd., 10.50% Sr. Exchangeable, Non-Vtg. 1,6,8                    28,943                  --
----------------------------------------------------------------------------------------------------------------------
 ICG Holdings, Inc., 14.25% Exchangeable, Non-Vtg. 1,6,8                                        1                  --
----------------------------------------------------------------------------------------------------------------------
 Intermedia Communications, Inc., 13.50% Exchangeable, Series B 1,6,8                           2                  65
----------------------------------------------------------------------------------------------------------------------
 McLeodUSA, Inc., 2.50% Cv., Series A 6                                                     6,516              47,176
----------------------------------------------------------------------------------------------------------------------
 Nebco Evans Holdings, Inc., 11.25% Sr. Redeemable Exchangeable, Non-Vtg. 1,8              96,993                  --
----------------------------------------------------------------------------------------------------------------------
 Nextel Communications, Inc., 13% Cum., Series D, Non-Vtg. 8                                    1                 106
----------------------------------------------------------------------------------------------------------------------
 NTL Europe, Inc., 10% Nts., Series A, Non-Vtg. 1,6                                           209                 418
----------------------------------------------------------------------------------------------------------------------
 Pacific & Atlantic Holdings, Inc., 7.50% Cum. Cv., Series A 1,8                          111,929             223,858
----------------------------------------------------------------------------------------------------------------------
 Paxson Communications Corp., 13.25% Cum. Jr. Exchangeable, Non-Vtg. 8                        753           7,435,875
----------------------------------------------------------------------------------------------------------------------
 Rural Cellular Corp., 11.375% Cum., Series B, Non-Vtg. 8                                   7,236           4,576,770
----------------------------------------------------------------------------------------------------------------------
 Sovereign Real Estate Investment Trust, 12% Non-Cum., Series A 1                          26,250           3,812,813




                        29 | OPPENHEIMER HIGH YIELD FUND


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



                                                                                      Market Value
                                                                             Units      See Note 1
---------------------------------------------------------------------------------------------------

 Preferred Stocks Continued
 Ziff Davis Holdings, Inc., 10% Nts., Series E-1 1,6                           168    $        420
                                                                                      -------------
 Total Preferred Stocks (Cost $44,430,378)                                              23,217,631

---------------------------------------------------------------------------------------------------
 Common Stocks--0.8%

 Adelphia Business Solutions, Inc. 6                                         6,605             139
---------------------------------------------------------------------------------------------------
 Charles River Laboratories International, Inc. 6                           22,800         733,704
---------------------------------------------------------------------------------------------------
 Chesapeake Energy Corp.                                                   400,000       4,040,000
---------------------------------------------------------------------------------------------------
 Covad Communications Group, Inc. 6                                        132,227         133,549
---------------------------------------------------------------------------------------------------
 Equinix, Inc. 6                                                            86,263         677,164
---------------------------------------------------------------------------------------------------
 Globix Corp. 1,6                                                           80,275         220,756
---------------------------------------------------------------------------------------------------
 ICG Communications, Inc. 6                                                  2,979          24,428
---------------------------------------------------------------------------------------------------
 ICO Global Communication Holdings Ltd. 1,6                                168,429         143,165
---------------------------------------------------------------------------------------------------
 Manitowoc Co., Inc. (The)                                                   3,772          84,116
---------------------------------------------------------------------------------------------------
 Microcell Telecommunications, Inc. 6                                       23,343         199,715
---------------------------------------------------------------------------------------------------
 Microcell Telecommunications, Inc., Cl. A 6                                   194           1,678
---------------------------------------------------------------------------------------------------
 Microcell Telecommunications, Inc., Cl. B 6                                23,204         181,448
---------------------------------------------------------------------------------------------------
 NTL, Inc. 6                                                               173,408       5,916,681
---------------------------------------------------------------------------------------------------
 Orbital Sciences Corp. 6                                                    8,618          62,911
---------------------------------------------------------------------------------------------------
 Pioneer Cos., Inc. 6                                                       63,991         233,567
---------------------------------------------------------------------------------------------------
 Polymer Group, Inc., Cl. A 1,6                                              6,989          46,302
---------------------------------------------------------------------------------------------------
 Pope, Evans & Robbins, Inc. 1,6                                         1,688,400              --
---------------------------------------------------------------------------------------------------
 Prandium, Inc. 6,12                                                       459,132         257,114
---------------------------------------------------------------------------------------------------
 Siena Holdings, Inc. 1,6                                                  250,240         315,302
---------------------------------------------------------------------------------------------------
 Sterling Chemicals, Inc. 6                                                  3,761          63,937
---------------------------------------------------------------------------------------------------
 TVMAX Holdings, Inc. 1,6                                                   30,000          63,750
---------------------------------------------------------------------------------------------------
 Viatel Holding Ltd. (Bermuda) 1,6                                          11,456           5,728
---------------------------------------------------------------------------------------------------
 WRC Media Corp. 1,6                                                         9,471             189
---------------------------------------------------------------------------------------------------
 XO Communications, Inc. 6                                                  16,729         121,285
                                                                                      -------------
 Total Common Stocks (Cost $26,975,529)                                                 13,526,628

                                                                             Units
---------------------------------------------------------------------------------------------------
 Rights, Warrants and Certificates--0.1%

 American Tower Corp. Wts., Exp. 8/1/08 1,6                                  4,300         442,900
---------------------------------------------------------------------------------------------------
 Chesapeake Energy Corp. Wts.:
 Exp. 5/1/05 6                                                              22,514              --
 Exp. 9/1/04 6                                                              32,054           7,227
---------------------------------------------------------------------------------------------------
 Citigroup, Inc. Wts., Exp. 12/31/50 (Litigation Wts.) 6                   107,699         109,853
---------------------------------------------------------------------------------------------------
 COLO.com, Inc. Wts., Exp. 3/15/10 1,6                                       2,000              20
---------------------------------------------------------------------------------------------------
 Concentric Network Corp. Wts., Exp. 12/15/07 1,6                            3,330              33
---------------------------------------------------------------------------------------------------
 Covergent Communications, Inc. Wts., Exp. 4/1/08 1,6                        8,200              82
---------------------------------------------------------------------------------------------------
 Decrane Aircraft Holdings, Inc. Wts., Exp. 9/30/08 1,6                      4,000              --
---------------------------------------------------------------------------------------------------
 Diva Systems Corp. Wts., Exp. 3/1/08 1,6                                    7,500              75




                        30 | OPPENHEIMER HIGH YIELD FUND




                                                                                          Market Value
                                                                               Units        See Note 1
-------------------------------------------------------------------------------------------------------

 Rights, Warrants and Certificates Continued
 e.spire Communications, Inc. Wts., Exp. 11/1/05 1,6                           2,575      $         26
-------------------------------------------------------------------------------------------------------
 HF Holdings, Inc. Wts., Exp. 9/27/09 1,6                                      1,445               325
-------------------------------------------------------------------------------------------------------
 Horizon PCS, Inc. Wts., Exp. 10/1/10 1,6                                      6,300               315
-------------------------------------------------------------------------------------------------------
 ICG Communications, Inc. Wts., Exp. 9/15/05 1,6                              50,820               508
-------------------------------------------------------------------------------------------------------
 ICO Global Communication Holdings Ltd. Wts.:
 Exp. 5/16/06 1,6                                                             42,243               211
 Exp. 5/16/06 1,6                                                                 63                --
-------------------------------------------------------------------------------------------------------
 Insilco Corp. Wts., Exp. 8/15/07 1,6                                          7,055                --
-------------------------------------------------------------------------------------------------------
 Internet Commerce & Communications, Inc. Wts., Exp. 7/3/03 1,6               24,520                --
-------------------------------------------------------------------------------------------------------
 IPCS, Inc. Wts., Exp. 6/15/10 1,6                                             3,750                37
-------------------------------------------------------------------------------------------------------
 Leap Wireless International, Inc. Wts., Exp. 4/15/10 1,6                      3,500                --
-------------------------------------------------------------------------------------------------------
 Long Distance International, Inc. Wts., Exp. 4/13/08 1,6                      2,800                --
-------------------------------------------------------------------------------------------------------
 Loral Space & Communications Ltd. Wts., Exp. 1/15/07 1,6                      3,910                39
-------------------------------------------------------------------------------------------------------
 McLeodUSA, Inc. Wts., Exp. 4/16/07 1,6                                       14,440             6,065
-------------------------------------------------------------------------------------------------------
 Microcell Telecommunications, Inc.:
 Cl. A Wts., Exp. 5/1/05 6                                                     8,619             2,918
 Cl. B Wts., Exp. 5/1/08 6                                                    14,365             8,458
-------------------------------------------------------------------------------------------------------
 Millenium Seacarriers, Inc. Wts., Exp. 7/15/05 1,6                            6,400                64
-------------------------------------------------------------------------------------------------------
 Ntelos, Inc. Wts., Exp. 8/15/10 1,6                                           5,000             7,500
-------------------------------------------------------------------------------------------------------
 Pathmark Stores, Inc. Wts., Exp. 9/19/10 6                                  100,000           138,000
-------------------------------------------------------------------------------------------------------
 Protection One, Inc. Wts.:
 Exp. 11/1/03 1,6                                                            182,000                --
 Exp. 6/30/05 1,6                                                             49,120                --
-------------------------------------------------------------------------------------------------------
 Republic Technologies International LLC Wts., Exp. 7/15/09 1,6                1,200                12
-------------------------------------------------------------------------------------------------------
 Sterling Chemicals, Inc. Wts., Exp. 12/19/08 6                                6,106                --
-------------------------------------------------------------------------------------------------------
 Telergy, Inc. Wts., Exp. 9/25/10 1,6                                          8,078                --
-------------------------------------------------------------------------------------------------------
 XO Communications, Inc.:
 Cl. A Wts., Exp. 1/16/10 6                                                   33,465           110,435
 Cl. B Wts., Exp. 1/16/10 6                                                   25,098            40,157
 Cl. C Wts., Exp. 1/16/10 6                                                   25,098            13,804
-------------------------------------------------------------------------------------------------------
 Ziff Davis Holdings, Inc. Wts., Exp. 8/12/12 1,6                             30,800               308
                                                                                          -------------
 Total Rights, Warrants and Certificates (Cost $2,259,118)                                     889,372

                                                                           Principal
                                                                              Amount
-------------------------------------------------------------------------------------------------------
 Structured Notes--11.2%

 Bear Stearns Cos., Inc. (The), High Yield Index Linked Nts.:
 5%, 6/30/03                                                            $ 10,000,000        10,962,000
 5%, 9/30/03                                                              10,000,000        10,950,000
 5%, 3/31/04                                                              10,000,000        10,930,000
-------------------------------------------------------------------------------------------------------
 JPMorgan Chase Bank:
 High Beta High Yield Index Nts., 10%, 6/20/08                             8,500,000         8,606,250
 High Yield Index-B Nts., 9%, 6/20/08                                    146,200,000       153,144,500
-------------------------------------------------------------------------------------------------------
 Parametric RE Ltd. Nts., 5.54%, 11/19/07 2,4                              1,000,000         1,021,690
                                                                                          -------------
 Total Structured Notes (Cost $191,682,053)                                                195,614,440


                        31 | OPPENHEIMER HIGH YIELD FUND




STATEMENT OF INVESTMENTS Continued



                                                                                   Principal            Market Value
                                                                                     Amount               See Note 1
----------------------------------------------------------------------------------------------------------------------

 Joint Repurchase Agreements--6.5%
 Undivided interest of 17.18% in joint repurchase agreement (Principal
 Amount/Market Value $657,477,000, with a maturity value of $657,496,907) with
 PaineWebber, Inc., 1.09%, dated 6/30/03, to be repurchased at $112,963,420
 on 7/1/03, collateralized by Federal Home Loan Mortgage Corp., 5%,
 5/1/18--5/5/18, with a value of $671,305,296 (Cost $112,960,000)                $ 112,960,000       $    112,960,000

----------------------------------------------------------------------------------------------------------------------
 Total Investments, at Value (Cost $1,833,216,869)                                       100.4%         1,753,079,376
----------------------------------------------------------------------------------------------------------------------
 Liabilities in Excess of Other Assets                                                    (0.4)            (6,937,005)
                                                                                 ------------------------------------
 Net Assets                                                                              100.0%      $  1,746,142,371
                                                                                 ====================================


 Footnotes to Statement of Investments

 Principal amount is reported in U.S. Dollars, except for those denoted in the
 following currencies:
 CAD        Canadian Dollar
 EUR        Euro
 GBP        British Pound Sterling
 MXN        Mexican Nuevo Peso

 1. Identifies issues considered to be illiquid or restricted--See Note 7 of
 Notes to Financial Statements. 2. Represents the current interest rate for a
 variable or increasing rate security.
 3. Interest-Only Strips represent the right to receive the monthly interest
 payments on an underlying pool of mortgage loans. These securities typically
 decline in price as interest rates decline. Most other fixed income securities
 increase in price when interest rates decline. The principal amount of the
 underlying pool represents the notional amount on which current interest is
 calculated. The price of these securities is typically more sensitive to
 changes in prepayment rates than traditional mortgage-backed securities (for
 example, GNMA pass-throughs). Interest rates disclosed represent current yields
 based upon the current cost basis and estimated timing and amount of future
 cash flows. These securities amount to $3,430,616 or 0.20% of the Fund's net
 assets as of June 30, 2003.
 4. 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 $237,508,637 or 13.60% of the Fund's net
 assets as of June 30, 2003.
 5. Issuer is in default. See Note 1 of Notes to Financial Statements. 6.
 Non-income producing security. 7. Denotes a step bond: a zero coupon bond that
 converts to a fixed or variable interest rate at a designated future date.
 8. Interest or dividend is paid-in-kind.
 9. Units may be comprised of several components, such as debt and equity and/or
 warrants to purchase equity at some point in the future. For units, which
 represent debt securities, principal amount disclosed represents total
 underlying principal.
 10. Zero coupon bond reflects effective yield on the date of purchase. 11.
 When-issued security to be delivered and settled after June 30, 2003. See Note
 1 of Notes to Financial Statements.
 12. Affiliated company. Represents ownership of at least 5% of the voting
 securities of the issuer, and is or was an affiliate, as defined in the
 Investment Company Act of 1940, at or during the period ended June 30, 2003.
 The aggregate fair value of securities of affiliated companies held by the Fund
 as of June 30, 2003 amounts to $257,114. Transactions during the period in
 which the issuer was an affiliate are as follows:



                                 Shares        Gross        Gross           Shares       Unrealized
                          June 30, 2002    Additions   Reductions    June 30, 2003     Depreciation
----------------------------------------------------------------------------------------------------

 Stocks and/or Warrants
 Prandium, Inc.                      --      459,132*          --          459,132       $5,142,886



 *Result of a reorganization of Family Restaurants, Inc.
 See accompanying Notes to Financial Statements.

                        32 | OPPENHEIMER HIGH YIELD FUND


STATEMENT OF ASSETS AND LIABILITIES  June 30, 2003




----------------------------------------------------------------------------------------------
 Assets

 Investments, at value--see accompanying statement:
 Unaffiliated companies (cost $1,827,816,869)                               $  1,752,822,262
 Affiliated companies (cost $5,400,000)                                              257,114
                                                                            ------------------
                                                                               1,753,079,376
----------------------------------------------------------------------------------------------
 Receivables and other assets:
 Interest, dividends and principal paydowns                                       30,984,377
 Shares of beneficial interest sold                                                3,483,599
 Investments sold (including $1,377,000 sold on a when-issued basis)               1,912,313
 Other                                                                                 5,275
                                                                            ------------------
 Total assets                                                                  1,789,464,940

----------------------------------------------------------------------------------------------
 Liabilities

 Bank overdraft                                                                    9,038,144
----------------------------------------------------------------------------------------------
 Payables and other liabilities:
 Investments purchased (including $5,500,000 purchased on a when-issued basis)    16,902,324
 Shares of beneficial interest redeemed                                           12,110,648
 Dividends                                                                         3,772,600
 Distribution and service plan fees                                                  984,719
 Transfer and shareholder servicing agent fees                                       230,327
 Shareholder reports                                                                 177,643
 Trustees' compensation                                                                4,838
 Other                                                                               101,326
                                                                            ------------------
 Total liabilities                                                                43,322,569

----------------------------------------------------------------------------------------------
 Net Assets                                                                   $1,746,142,371
                                                                            ==================

----------------------------------------------------------------------------------------------
 Composition of Net Assets
 Par value of shares of beneficial interest                                   $      191,406
----------------------------------------------------------------------------------------------
 Additional paid-in capital                                                    2,440,354,273
----------------------------------------------------------------------------------------------
 Overdistributed net investment income                                            (8,198,469)
----------------------------------------------------------------------------------------------
 Accumulated net realized loss on investments and foreign currency
 transactions                                                                   (606,075,090)
----------------------------------------------------------------------------------------------
 Net unrealized depreciation on investments and translation of assets
 and liabilities denominated in foreign currencies                               (80,129,749)
                                                                            ------------------
 Net Assets                                                                   $1,746,142,371
                                                                            ==================


                        33 | OPPENHEIMER HIGH YIELD FUND


STATEMENT OF ASSETS AND LIABILITIES  Continued




---------------------------------------------------------------------------------------------
 Net Asset Value Per Share
  Class A Shares: Net asset value and redemption price per share (based on
 net assets of $1,150,055,200 and 125,625,434 shares of beneficial interest
 outstanding) $9.15 Maximum offering price per share (net asset value plus sales
 charge of 4.75% of offering price) $9.61
---------------------------------------------------------------------------------------------
 Class B Shares:
 Net asset value, redemption price (excludes applicable contingent deferred
 sales charge) and offering price per share (based on net assets of $372,947,364
 and 41,321,335 shares of beneficial interest outstanding) $9.03
---------------------------------------------------------------------------------------------
 Class C Shares:
 Net asset value, redemption price (excludes applicable contingent deferred
 sales charge) and offering price per share (based on net assets of $160,713,170
 and 17,598,145 shares of beneficial interest outstanding) $9.13
---------------------------------------------------------------------------------------------
 Class N Shares:
 Net asset value, redemption price (excludes applicable contingent deferred
 sales charge) and offering price per share (based on net assets of $8,324,284
 and 907,598 shares of beneficial interest outstanding) $9.17
---------------------------------------------------------------------------------------------
 Class Y Shares:
 Net asset value, redemption price and offering price per share (based on net
 assets of $54,102,353 and 5,953,659 shares of beneficial interest outstanding)
 $9.09



 See accompanying Notes to Financial Statements.




                        34 | OPPENHEIMER HIGH YIELD FUND


STATEMENT OF OPERATIONS  For the Year Ended June 30, 2003




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

 Investment Income
------------------------------------------------------------------------------------------------------------
 Interest (net of foreign withholding taxes of $264)                                          $ 149,500,433
------------------------------------------------------------------------------------------------------------
 Dividends                                                                                        1,779,283
                                                                                              --------------
 Total investment income                                                                        151,279,716

------------------------------------------------------------------------------------------------------------
 Expenses

 Management fees                                                                                  8,956,614
------------------------------------------------------------------------------------------------------------
 Distribution and service plan fees:
 Class A                                                                                          2,236,804
 Class B                                                                                          3,211,081
 Class C                                                                                          1,208,519
 Class N                                                                                             24,053
------------------------------------------------------------------------------------------------------------
 Transfer and shareholder servicing agent fees:
 Class A                                                                                          1,515,662
 Class B                                                                                            558,140
 Class C                                                                                            197,909
 Class N                                                                                             11,578
 Class Y                                                                                            290,409
------------------------------------------------------------------------------------------------------------
 Shareholder reports                                                                                290,642
------------------------------------------------------------------------------------------------------------
 Trustees' compensation                                                                              45,172
------------------------------------------------------------------------------------------------------------
 Custodian fees and expenses                                                                         43,403
------------------------------------------------------------------------------------------------------------
 Other                                                                                              181,607
                                                                                              --------------
 Total expenses                                                                                  18,771,593
 Less reduction to custodian expenses                                                                (9,512)
 Less voluntary waiver of transfer and shareholder servicing agent fees--Class Y                   (154,286)
                                                                                              --------------
 Net expenses                                                                                    18,607,795

------------------------------------------------------------------------------------------------------------
 Net Investment Income                                                                          132,671,921

------------------------------------------------------------------------------------------------------------
 Realized and Unrealized Gain (Loss)

 Net realized gain (loss) on:
 Investments                                                                                   (165,770,147)
 Closing of futures contracts                                                                       304,710
 Foreign currency transactions                                                                    2,210,336
                                                                                              --------------
 Net realized loss                                                                             (163,255,101)
------------------------------------------------------------------------------------------------------------
 Net change in unrealized appreciation (depreciation) on:
 Investments                                                                                    263,552,154
 Translation of assets and liabilities denominated in foreign currencies                          5,333,609
 Futures contracts                                                                                  (84,922)
                                                                                              --------------
 Net change in unrealized appreciation                                                          268,800,841

------------------------------------------------------------------------------------------------------------
 Net Increase in Net Assets Resulting from Operations                                         $ 238,217,661
                                                                                              ==============



 See accompanying Notes to Financial Statements.


                        35 | OPPENHEIMER HIGH YIELD FUND




STATEMENTS OF CHANGES IN NET ASSETS




 Year Ended June 30,                                                                    2003                       2002
------------------------------------------------------------------------------------------------------------------------
 Operations

 Net investment income                                                         $  132,671,921           $   138,204,319
------------------------------------------------------------------------------------------------------------------------
 Net realized loss                                                               (163,255,101)             (239,628,214)
------------------------------------------------------------------------------------------------------------------------
 Net change in unrealized appreciation                                            268,800,841                16,166,281
                                                                               -----------------------------------------
 Net increase (decrease) in net assets resulting from operations                  238,217,661               (85,257,614)

------------------------------------------------------------------------------------------------------------------------
 Dividends and/or Distributions to Shareholders

 Dividends from net investment income:
 Class A                                                                          (75,259,993)             (101,394,648)
 Class B                                                                          (24,005,931)              (36,957,099)
 Class C                                                                           (8,842,615)              (10,335,220)
 Class N                                                                             (354,824)                  (76,799)
 Class Y                                                                           (3,503,240)               (4,883,736)
------------------------------------------------------------------------------------------------------------------------
 Tax return of capital distribution:
 Class A                                                                          (10,312,510)               (4,577,105)
 Class B                                                                           (3,545,582)               (1,771,144)
 Class C                                                                           (1,335,631)                 (506,445)
 Class N                                                                              (53,283)                   (3,537)
 Class Y                                                                             (476,622)                 (215,027)

------------------------------------------------------------------------------------------------------------------------
 Beneficial Interest Transactions

 Net increase (decrease) in net assets resulting from beneficial interest
 transactions:
 Class A                                                                          215,493,585                54,738,010
 Class B                                                                           13,616,121                14,521,674
 Class C                                                                           44,034,511                34,190,823
 Class N                                                                            5,191,070                 2,454,211
 Class Y                                                                           12,011,100               (13,978,113)

------------------------------------------------------------------------------------------------------------------------
 Net Assets

 Total increase (decrease)                                                        400,873,817              (154,051,769)
------------------------------------------------------------------------------------------------------------------------
 Beginning of period                                                            1,345,268,554             1,499,320,323
                                                                               -----------------------------------------
 End of period [including overdistributed net investment
 income of $8,198,469 and $24,147,884, respectively]                           $1,746,142,371            $1,345,268,554
                                                                               =========================================


 See accompanying Notes to Financial Statements.


                        36 | OPPENHEIMER HIGH YIELD FUND


FINANCIAL HIGHLIGHTS




Class  A            Year Ended June 30,            2003          2002         2001          2000           1999
-----------------------------------------------------------------------------------------------------------------

 Per Share Operating Data
 Net asset value, beginning of period            $ 8.62        $10.20      $ 11.89       $ 13.06         $ 14.44
-----------------------------------------------------------------------------------------------------------------
 Income (loss) from investment operations:
 Net investment income                              .84           .92         1.18          1.26            1.26
 Net realized and unrealized gain (loss)            .47         (1.44)       (1.59)        (1.18)          (1.39)
                                                 ----------------------------------------------------------------
 Total from investment operations                  1.31          (.52)        (.41)          .08            (.13)
-----------------------------------------------------------------------------------------------------------------
 Dividends and/or distributions to shareholders:
 Dividends from net investment income              (.69)        (1.01)       (1.28)        (1.25)          (1.25)
 Tax return of capital distribution                (.09)         (.05)          --            --              --
                                                 ----------------------------------------------------------------
 Total dividends and/or distributions
 to shareholders                                   (.78)        (1.06)       (1.28)        (1.25)          (1.25)
-----------------------------------------------------------------------------------------------------------------
 Net asset value, end of period                   $9.15         $8.62       $10.20        $11.89          $13.06
                                                 ================================================================

-----------------------------------------------------------------------------------------------------------------
 Total Return, at Net Asset Value 1               16.38%        (5.47)%      (3.69)%        0.71%          (0.71)%

-----------------------------------------------------------------------------------------------------------------
 Ratios/Supplemental Data

 Net assets, end of period (in thousands)    $1,150,055      $858,834   $  962,017    $1,065,220      $1,027,730
-----------------------------------------------------------------------------------------------------------------
 Average net assets (in thousands)           $  934,227      $948,097   $1,038,442    $1,125,834      $1,198,756
-----------------------------------------------------------------------------------------------------------------
 Ratios to average net assets: 2
 Net investment income                             9.54%         9.68%       10.66%        10.12%           9.40%
 Expenses, gross                                   1.07%         1.10%        1.00%         1.02%           0.99%
 Expenses, net                                     1.07% 3       1.10% 3      1.00% 3       1.02% 3         0.99% 3
-----------------------------------------------------------------------------------------------------------------
 Portfolio turnover rate                             68%           47%          33%           24%             43%



1. Assumes an investment on the business day before the first day of the fiscal
period, with all dividends and distributions reinvested in additional shares on
the reinvestment date, and redemption at the net asset value calculated on the
last business day of the fiscal period. Sales charges are not reflected in the
total returns. Total returns are not annualized for periods less than one year.
Returns do not reflect the deduction of taxes that a shareholder would pay on
Fund distributions or the redemption of Fund shares.
2. Annualized for periods of less than one full year. 3. Reduction to custodian
expenses less than 0.01%.

See accompanying Notes to Financial Statements.

                        37 | OPPENHEIMER HIGH YIELD FUND



FINANCIAL HIGHLIGHTS  Continued



 Class  B            Year Ended June 30,                   2003           2002          2001           2000          1999
-----------------------------------------------------------------------------------------------------------------------------

 Per Share Operating Data
 Net asset value, beginning of period                     $8.51         $10.09        $11.77         $12.95        $14.33
-----------------------------------------------------------------------------------------------------------------------------
 Income (loss) from investment operations:
 Net investment income                                      .74            .84          1.10           1.15          1.14
 Net realized and unrealized gain (loss)                    .49          (1.43)        (1.58)         (1.18)        (1.38)
                                                     ------------------------------------------------------------------------
 Total from investment operations                          1.23           (.59)         (.48)          (.03)         (.24)
-----------------------------------------------------------------------------------------------------------------------------
 Dividends and/or distributions to shareholders:
 Dividends from net investment income                      (.62)          (.94)        (1.20)         (1.15)        (1.14)
 Tax return of capital distribution                        (.09)          (.05)           --             --            --
                                                     ------------------------------------------------------------------------
 Total dividends and/or distributions
 to shareholders                                           (.71)          (.99)        (1.20)         (1.15)        (1.14)
-----------------------------------------------------------------------------------------------------------------------------
 Net asset value, end of period                           $9.03          $8.51        $10.09         $11.77        $12.95
                                                     ========================================================================

-----------------------------------------------------------------------------------------------------------------------------
 Total Return, at Net Asset Value 1                       15.60%         (6.23)%       (4.37)%        (0.13)%       (1.48)%

-----------------------------------------------------------------------------------------------------------------------------
 Ratios/Supplemental Data

 Net assets, end of period (in thousands)              $372,947       $338,654      $386,309       $453,375      $580,468
-----------------------------------------------------------------------------------------------------------------------------
 Average net assets (in thousands)                     $321,200       $366,869      $414,648       $509,815      $544,925
-----------------------------------------------------------------------------------------------------------------------------
 Ratios to average net assets: 2
 Net investment income                                     8.81%          8.93%         9.91%          9.35%         8.61%
 Expenses, gross                                           1.84%          1.86%         1.76%          1.79%         1.78%
 Expenses, net                                             1.84% 3        1.86% 3       1.76% 3        1.79% 3       1.78% 3
-----------------------------------------------------------------------------------------------------------------------------
 Portfolio turnover rate                                     68%            47%           33%            24%           43%



1. Assumes an investment on the business day before the first day of the fiscal
period, with all dividends and distributions reinvested in additional shares on
the reinvestment date, and redemption at the net asset value calculated on the
last business day of the fiscal period. Sales charges are not reflected in the
total returns. Total returns are not annualized for periods less than one year.
Returns do not reflect the deduction of taxes that a shareholder would pay on
Fund distributions or the redemption of Fund shares.
2. Annualized for periods of less than one full year. 3. Reduction to custodian
expenses less than 0.01%.

See accompanying Notes to Financial Statements.

                        38 | OPPENHEIMER HIGH YIELD FUND





 Class C          Year Ended June 30,                      2003            2002           2001           2000           1999
-------------------------------------------------------------------------------------------------------------------------------
 Per Share Operating Data

 Net asset value, beginning of period                $     8.60     $     10.18     $    11.87     $    13.04     $    14.42
-------------------------------------------------------------------------------------------------------------------------------
 Income (loss) from investment operations:
 Net investment income                                      .78             .86           1.11           1.16           1.15
 Net realized and unrealized gain (loss)                    .46           (1.45)         (1.60)         (1.18)         (1.39)
                                                     --------------------------------------------------------------------------
 Total from investment operations                          1.24            (.59)          (.49)          (.02)          (.24)
-------------------------------------------------------------------------------------------------------------------------------
 Dividends and/or distributions to shareholders:
 Dividends from net investment income                      (.62)           (.94)         (1.20)         (1.15)         (1.14)
 Tax return of capital distribution                        (.09)           (.05)            --             --             --
                                                     --------------------------------------------------------------------------
 Total dividends and/or distributions
 to shareholders                                           (.71)           (.99)         (1.20)         (1.15)         (1.14)
-------------------------------------------------------------------------------------------------------------------------------
 Net asset value, end of period                      $     9.13     $      8.60     $    10.18     $    11.87     $    13.04
                                                     ==========================================================================

-------------------------------------------------------------------------------------------------------------------------------
 Total Return, at Net Asset Value 1                       15.55%          (6.08)%        (4.43)%        (0.06)%        (1.49)%

-------------------------------------------------------------------------------------------------------------------------------
 Ratios/Supplemental Data

 Net assets, end of period (in thousands)            $  160,713     $   106,884     $   90,603     $   82,204     $   93,607
-------------------------------------------------------------------------------------------------------------------------------
 Average net assets (in thousands)                   $  120,997     $   104,882     $   83,776     $   87,141     $   79,889
-------------------------------------------------------------------------------------------------------------------------------
 Ratios to average net assets: 2
 Net investment income                                     8.78%           8.75%          9.90%          9.35%          8.60%
 Expenses, gross                                           1.83%           1.86%          1.76%          1.79%          1.78%
 Expenese, net                                             1.83% 3         1.86% 3        1.76% 3        1.79% 3        1.78% 3
-------------------------------------------------------------------------------------------------------------------------------
 Portfolio turnover rate                                     68%             47%            33%            24%            43%



1. Assumes an investment on the business day before the first day of the fiscal
period, with all dividends and distributions reinvested in additional shares on
the reinvestment date, and redemption at the net asset value calculated on the
last business day of the fiscal period. Sales charges are not reflected in the
total returns. Total returns are not annualized for periods less than one year.
Returns do not reflect the deduction of taxes that a shareholder would pay on
Fund distributions or the redemption of Fund shares.
2. Annualized for periods of less than one full year. 3. Reduction to custodian
expenses less than 0.01%.

See accompanying Notes to Financial Statements.

                        39 | OPPENHEIMER HIGH YIELD FUND


FINANCIAL HIGHLIGHTS  Continued




 Class N     Year Ended June 30,                            2003      2002      2001 1
---------------------------------------------------------------------------------------
 Per Share Operating Data

 Net asset value, beginning of period                      $8.63    $10.20   $ 11.33
---------------------------------------------------------------------------------------
 Income (loss) from investment operations:
 Net investment income                                       .80       .96       .41
 Net realized and unrealized gain (loss)                     .49     (1.48)    (1.13)
                                                           ----------------------------
 Total from investment operations                           1.29      (.52)     (.72)
---------------------------------------------------------------------------------------
 Dividends and/or distributions to shareholders:
 Dividends from net investment income                       (.66)    (1.00)     (.41)
 Tax return of capital distribution                         (.09)     (.05)       --
                                                           ----------------------------
 Total dividends and/or distributions to shareholders       (.75)    (1.05)     (.41)
---------------------------------------------------------------------------------------
 Net asset value, end of period                            $9.17     $8.63    $10.20
                                                           ============================

---------------------------------------------------------------------------------------
 Total Return, at Net Asset Value 2                        16.08%    (5.53)%   (6.43)%

---------------------------------------------------------------------------------------
 Ratios/Supplemental Data

 Net assets, end of period (in thousands)                 $8,324    $2,396      $146
---------------------------------------------------------------------------------------
 Average net assets (in thousands)                        $4,827    $  799      $ 46
---------------------------------------------------------------------------------------
 Ratios to average net assets: 3
 Net investment income                                      9.14%     8.41%    11.47%
 Expenses, gross                                            1.41%     1.35%     1.04%
 Expenses, net                                              1.41% 4   1.35% 4   1.04% 4
---------------------------------------------------------------------------------------
 Portfolio turnover rate                                      68%       47%       33%


1. For the period from March 1, 2001 (inception of offering) to June 30, 2001.
2. Assumes an investment on the business day before the first day of the fiscal
period (or inception of offering), with all dividends and distributions
reinvested in additional shares on the reinvestment date, and redemption at the
net asset value calculated on the last business day of the fiscal period. Sales
charges are not reflected in the total returns. Total returns are not annualized
for periods of less than one full year. Returns do not reflect the deduction of
taxes that a shareholder would pay on Fund distributions or the redemption of
Fund shares.
3. Annualized for periods of less than one full year. 4. Reduction to custodian
expenses less than 0.01%.

See accompanying Notes to Financial Statements.

                        40 | OPPENHEIMER HIGH YIELD FUND






 Class Y    Year Ended June 30,                            2003         2002         2001           2000            1999
--------------------------------------------------------------------------------------------------------------------------

 Per Share Operating Data
 Net asset value, beginning of period                $     8.56     $  10.14     $  11.82     $    13.02     $     14.42
--------------------------------------------------------------------------------------------------------------------------
 Income (loss) from investment operations:
 Net investment income                                      .86          .90         1.20           1.27            1.28
 Net realized and unrealized gain (loss)                    .45        (1.41)       (1.59)         (1.18)          (1.39)
                                                     ---------------------------------------------------------------------
 Total from investment operations                          1.31         (.51)        (.39)           .09            (.11)
--------------------------------------------------------------------------------------------------------------------------
 Dividends and/or distributions to shareholders:
 Dividends from net investment income                      (.69)       (1.02)       (1.29)         (1.29)          (1.29)
 Tax return of capital distribution                        (.09)        (.05)          --             --              --
                                                     ---------------------------------------------------------------------
 Total dividends and/or distributions
 to shareholders                                           (.78)       (1.07)       (1.29)         (1.29)          (1.29)
--------------------------------------------------------------------------------------------------------------------------
 Net asset value, end of period                      $     9.09     $   8.56     $  10.14     $    11.82     $     13.02
                                                     =====================================================================

--------------------------------------------------------------------------------------------------------------------------
 Total Return, at Net Asset Value 1                       16.51%       (5.37)%      (3.57)%         0.85%          (0.54)%


--------------------------------------------------------------------------------------------------------------------------
 Ratios/Supplemental Data

 Net assets, end of period (in thousands)            $   54,102     $ 38,500     $ 60,244     $   54,117     $    52,993
--------------------------------------------------------------------------------------------------------------------------
 Average net assets (in thousands)                   $   43,178     $ 44,583     $ 56,669     $   54,022     $    34,043
--------------------------------------------------------------------------------------------------------------------------
 Ratios to average net assets: 2
 Net investment income                                     9.63%        9.88%       10.72%         10.30%           9.73%
 Expenses, gross                                           1.34%        1.01%        0.94%          0.86%           0.76%
 Expenses, net                                             0.98% 3,4    0.98% 3,4    0.94% 3        0.86% 3         0.76% 3
--------------------------------------------------------------------------------------------------------------------------
 Portfolio turnover rate                                     68%          47%          33%            24%             43%



1. Assumes an investment on the business day before the first day of the fiscal
period, with all dividends and distributions reinvested in additional shares on
the reinvestment date, and redemption at the net asset value calculated on the
last business day of the fiscal period. Sales charges are not reflected in the
total returns. Total returns are not annualized for periods of 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. 2. Annualized
for periods of less than one full year.
3. Reduction to custodian expenses less than 0.01%. 4. Net of voluntary waiver
of transfer agent fees.

See accompanying Notes to Financial Statements.

                        41 | OPPENHEIMER HIGH YIELD FUND


NOTES TO FINANCIAL STATEMENTS

--------------------------------------------------------------------------------
 1. Significant Accounting Policies
 Oppenheimer High Yield Fund (the Fund) is registered under the Investment
 Company Act of 1940, as amended, as an open-end management investment company.
 The Fund's primary investment objective is to seek a high level of current
 income by investing in a diversified portfolio of high-yield, lower-rated
 fixed-income securities the Fund's investment Manager, OppenheimerFunds, Inc.
 (the Manager), believes do not involve undue risk.
    The Fund offers Class A, Class B, Class C, Class N and Class Y shares. Class
 A shares are sold at their offering price, which is normally net asset value
 plus a front-end sales charge. Class B, Class C and Class N shares are sold
 without a front-end sales charge but may be subject to a contingent deferred
 sales charge (CDSC). Class N shares are sold only through retirement plans.
 Retirement plans that offer Class N shares may impose charges on those
 accounts. Class Y shares are sold to certain institutional investors without
 either a front-end sales charge or a CDSC. All classes of shares have identical
 rights and voting privileges. Earnings, net assets and net asset value per
 share may differ by minor amounts due to each class having its own expenses
 directly attributable to that class. Classes A, B, C and N have separate
 distribution and/or service plans. No such plan has been adopted for Class Y
 shares. Class B shares will automatically convert to Class A shares six years
 after the date of purchase.
    The following is a summary of significant accounting policies consistently
 followed by the Fund.

--------------------------------------------------------------------------------
 Securities Valuation. Securities listed or traded on National Stock Exchanges
 or other domestic or foreign exchanges are valued based on the last sale price
 of the security traded on that exchange prior to the time when the Fund's
 assets are valued. Securities traded on NASDAQ are valued based on the closing
 price provided 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 (including restricted
 securities) for which quotations are not readily available are valued primarily
 using dealer-supplied valuations, a portfolio pricing service authorized by the
 Board of Trustees, or at their fair value. Fair value is determined in good
 faith using consistently applied procedures under the supervision of the Board
 of Trustees. Short-term "money market type" debt securities with remaining
 maturities of sixty days or less are valued at amortized cost (which
 approximates market value).

--------------------------------------------------------------------------------
 Structured Notes. The Fund invests in index-linked structured notes whose
 principal and/or interest depend on the performance of an underlying index. The
 structured notes are leveraged, which increases the volatility of each note's
 market value relative to the change in the underlying index. Fluctuations in
 value of these securities are recorded as unrealized gains and losses in the
 accompanying financial statements. The Fund records a realized gain or loss
 when a structured note is sold or matures. As of June 30, 2003,

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

                        42 | OPPENHEIMER HIGH YIELD FUND



 the market value of these securities comprised 11.2% of the Fund's net assets,
 and resulted in unrealized gains in the current period of $3,932,387.
--------------------------------------------------------------------------------
 Securities on a When-Issued Basis. Delivery and payment for securities that
 have been purchased by the Fund on a when-issued basis can take place a month
 or more after the trade date. Normally the settlement date occurs within six
 months after the trade date; however, the Fund may, from time to time, purchase
 securities whose settlement date extends six months or more beyond trade date.
 During this period, such securities do not earn interest, are subject to market
 fluctuation and may increase or decrease in value prior to their delivery. The
 Fund maintains segregated assets with a market value equal to or greater than
 the amount of its purchase commitments. The purchase of securities on a
 when-issued basis may increase the volatility of the Fund's net asset value to
 the extent the Fund makes such purchases while remaining substantially fully
 invested. As of June 30, 2003, the Fund had entered into when-issued purchase
 commitments of $5,500,000. Additionally, the Fund had when-issued sale
 commitments of $1,377,000.

--------------------------------------------------------------------------------
 Security Credit Risk. The Fund invests in high-yield securities, which may be
 subject to a greater degree of credit risk, market fluctuations and loss of
 income and principal, and may be more sensitive to economic conditions than
 lower-yielding, higher-rated fixed-income securities. The Fund may acquire
 securities in default, and is not obligated to dispose of securities whose
 issuers subsequently default. As of June 30, 2003, securities with an aggregate
 market value of $44,575,996, representing 2.55% of the Fund's net assets, were
 in default.

--------------------------------------------------------------------------------
 Foreign Currency Translation. The Fund's accounting records are maintained in
 U.S. dollars. Prices of securities denominated in foreign currencies are
 translated into U.S. dollars at the closing rates of exchange. Amounts related
 to the purchase and sale of foreign securities and investment income are
 translated at the rates of exchange prevailing on the respective dates of such
 transactions.

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

--------------------------------------------------------------------------------
 Joint Repurchase Agreements. Pursuant to an Exemptive Order issued by the
 Securities and Exchange Commission, the Fund, along with other affiliated funds
 advised by the Manager, may transfer uninvested cash balances into joint
 trading accounts on a daily basis. Secured by U.S. government securities, these
 balances are invested in one or more repurchase agreements. Securities pledged
 as collateral for repurchase agreements are held by a custodian bank until the
 agreements mature. Each agreement requires that the market value of the
 collateral be sufficient to cover payments of interest and principal. In the
 event of default by the other party to the agreement, retention of the
 collateral may be subject to legal proceedings.


                        43 | OPPENHEIMER HIGH YIELD FUND


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



--------------------------------------------------------------------------------
 1. Significant Accounting Policies Continued
 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, 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 tax components of capital shown in the table below 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 investment for federal income
 tax purposes.
                                                                  Net Unrealized
                                                                    Depreciation
 Undistributed     Undistributed    Accumulated             Based on Cost of
 Net Investment        Long-Term           Loss       Securities for Federal
 Income                    Gains   Carryforward 1,2      Income Tax Purposes
----------------------------------------------------------------------------
 $--                         $--   $592,483,525                  $93,721,305

 1. Accumulated losses noted above primarily represent net capital loss
 carryforwards as of June 30, 2003 that may be available to offset future
 realized capital gains and thereby reduce future taxable gain distributions.
 These carryforwards expire between 2004 and 2011. During the fiscal year the
 Fund did not utilize any capital loss carryforwards. During the fiscal year
 $14,430,060 of unused capital loss carryforwards expired. 2. As of June 30,
 2003, the Fund had approximately $57,354,000 of post-October losses available
 to offset future capital gains, if any. Such losses, if unutilized, will expire
 in 2012. Additionally, the Fund had approximately $67,000 of post-October
 foreign currency losses which were deferred.

 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.

           To                          To                            Net
           Ordinary          Capital Gain     Tax Return      Investment
           Income (Loss)           (Loss)     of Capital            Loss
--------------------------------------------------------------------------------
           $10,967,725        $19,185,963    $15,723,628             $--



                        44 | OPPENHEIMER HIGH YIELD FUND



 The tax character of distributions paid during the years ended June 30, 2003
 and June 30, 2002 were as follows:

                                     Year Ended        Year Ended
                                  June 30, 2003     June 30, 2002
          -------------------------------------------------------
           Distributions paid from:
           Ordinary income         $111,966,603      $153,647,502
           Return of capital         15,723,628         7,073,258
                                 --------------------------------
           Total                   $127,690,231      $160,720,760
                                 ================================

 The aggregate cost of investments and the composition of unrealized
 appreciation and depreciation of investments for federal income tax purposes as
 of June 30, 2003 are noted below. The primary difference between book and tax
 appreciation or depreciation of investments, if applicable, is attributable to
 the tax deferral of losses or tax realization of financial statement unrealized
 gain or loss.

                 Federal Tax Cost               $1,846,808,425
                                                ==============

                 Gross unrealized appreciation  $  120,725,078
                 Gross unrealized depreciation    (214,446,383)
                                                --------------
                 Net unrealized depreciation    $  (93,721,305)
                                                ==============

--------------------------------------------------------------------------------
 Dividends and Distributions to Shareholders. Dividends and distributions to
 shareholders, which are determined in accordance with income tax regulations,
 are recorded on the ex-dividend date. Income distributions, if any, are
 declared daily and paid monthly. Capital gain distributions, if any, are
 declared and paid annually.
--------------------------------------------------------------------------------
 Investment Income. Dividend income is recorded on the ex-dividend date or upon
 ex-dividend notification in the case of certain foreign dividends where the
 ex-dividend date may have passed. Non-cash dividends included in dividend
 income, if any, are recorded at the fair market value of the securities
 received. Interest income, which includes accretion of discount and
 amortization of premium, is accrued as earned.
--------------------------------------------------------------------------------
 Expense Offset Arrangement. The reduction of custodian fees represents earnings
 on cash balances maintained by the Fund.
--------------------------------------------------------------------------------
 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.
--------------------------------------------------------------------------------
 Other. The preparation of financial statements in conformity with accounting
 principles generally accepted in the United States of America requires
 management to make estimates and assumptions that affect the reported amounts
 of assets and liabilities and disclosure of contingent assets and liabilities
 at the date of the financial statements and the reported amounts of income and
 expenses during the reporting period. Actual results could differ from those
 estimates.

                        45 | OPPENHEIMER HIGH YIELD FUND


NOTES TO FINANCIAL STATEMENTS  Continued





------------------------------------------------------------------------------------
 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 June 30, 2003         Year Ended June 30, 2002
                                Shares            Amount         Shares            Amount
-------------------------------------------------------------------------------------------

 Class A
 Sold                       87,336,667     $ 736,289,514     42,526,196     $ 406,250,339
 Dividends and/or
 distributions reinvested    6,545,577        55,293,487      6,951,479        65,557,494
 Redeemed                  (67,886,608)     (576,089,416)   (44,134,903)     (417,069,823)
                           ----------------------------------------------------------------
 Net increase               25,995,636     $ 215,493,585      5,342,772     $  54,738,010
                           ================================================================

-------------------------------------------------------------------------------------------
 Class B
 Sold                       15,654,941     $ 130,451,578     15,236,234     $ 143,002,651
 Dividends and/or
 distributions reinvested    1,761,918        14,661,070      2,013,383        18,759,803
 Redeemed                  (15,888,264)     (131,496,527)   (15,749,942)     (147,240,780)
                           ----------------------------------------------------------------
 Net increase                1,528,595     $  13,616,121      1,499,675     $  14,521,674
                           ================================================================

-------------------------------------------------------------------------------------------
 Class C
 Sold                        9,967,771     $  84,476,514      7,010,586     $  66,575,193
 Dividends and/or
 distributions reinvested      746,825         6,304,053        654,757         6,145,793
 Redeemed                   (5,541,975)      (46,746,056)    (4,136,144)      (38,530,163)
                           ----------------------------------------------------------------
 Net increase                5,172,621     $  44,034,511      3,529,199     $  34,190,823
                           ================================================================

-------------------------------------------------------------------------------------------
 Class N
 Sold                          779,085     $   6,484,742        280,479     $   2,616,742
 Dividends and/or
 distributions reinvested       45,571           390,759          8,704            77,683
 Redeemed                     (194,820)       (1,684,431)       (25,777)         (240,214)
                           ----------------------------------------------------------------
 Net increase                  629,836     $   5,191,070        263,406     $   2,454,211
                           ================================================================

-------------------------------------------------------------------------------------------
 Class Y
 Sold                        4,098,729     $  34,534,730      2,239,510     $  21,062,673
 Dividends and/or
 distributions reinvested      474,376         3,979,861        528,642         4,975,877
 Redeemed                   (3,119,654)      (26,503,491)    (4,211,682)      (40,016,663)
                           ----------------------------------------------------------------
 Net increase (decrease)     1,453,451     $  12,011,100     (1,443,530)    $ (13,978,113)
                           ================================================================



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

 3. Purchases and Sales of Securities
 The aggregate cost of purchases and proceeds from sales of securities, other
 than short-term obligations, for the year ended June 30, 2003, were
 $1,173,834,386 and $892,597,812, respectively.


                        46 | OPPENHEIMER HIGH YIELD FUND


--------------------------------------------------------------------------------
 4. Fees and Other Transactions with Affiliates
 Management Fees. Management fees paid to the Manager were in accordance with
 the investment advisory agreement with the Fund which provides for a fee at an
 annual rate of 0.75% of the first $200 million of average annual net assets,
 0.72% of the next $200 million, 0.69% of the next $200 million, 0.66% of the
 next $200 million, 0.60% of the next $200 million and 0.50% of average annual
 net assets over $1 billion.
--------------------------------------------------------------------------------
 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 $22.50 per account fee.
    Additionally, Class Y shares are subject to minimum fees of $5,000 for
 assets of less than $10 million and $10,000 for assets of $10 million or more.
 The Class Y shares are subject to the minimum fees in the event that the per
 account fee does not equal or exceed the applicable minimum fees. OFS may
 voluntarily waive the minimum fees.
    OFS has voluntarily agreed to limit transfer and shareholder servicing agent
 fees up to an annual rate of 0.35% of average annual net assets for all
 classes. This undertaking may be amended or withdrawn at any time.
--------------------------------------------------------------------------------
 Distribution and Service Plan (12b-1) Fees. Under its General Distributor's
 Agreement with the Manager, OppenheimerFunds Distributor, Inc. (the
 Distributor) acts as the Fund's principal underwriter in the continuous public
 offering of the different classes of shares of the Fund.

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



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

 June 30, 2003  $2,298,314            $365,916            $871,461           $1,777,505          $340,624             $31,482


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

                            Class A       Class B        Class C        Class N
                         Contingent    Contingent     Contingent     Contingent
                           Deferred      Deferred       Deferred       Deferred
                      Sales Charges Sales Charges  Sales Charges  Sales Charges
                        Retained by   Retained by    Retained by    Retained by
 Year Ended             Distributor   Distributor    Distributor    Distributor
--------------------------------------------------------------------------------
 June 30, 2003              $76,355    $1,319,090        $32,756         $5,858

                        47 | OPPENHEIMER HIGH YIELD FUND


NOTES TO FINANCIAL STATEMENTS  Continued


--------------------------------------------------------------------------------
 4. Fees and Other Transactions with Affiliates Continued
 Service Plan for Class A Shares. The Fund has adopted a Service Plan for Class
 A Shares. It reimburses the Distributor for a portion of its costs incurred for
 services provided to accounts that hold Class A shares. Reimbursement is made
 quarterly at an annual rate of up to 0.25% of the average annual net assets of
 Class A shares of the Fund. For the year ended June 30, 2003, expense under the
 Class A Plan totaled $2,236,804, all of which were paid by the Distributor to
 recipients, which included $925 retained by the Distributor and $71,456 which
 was paid to an affiliate of the Manager. Any unreimbursed expenses the
 Distributor incurs with respect to Class A shares in any fiscal year cannot be
 recovered in subsequent years.

--------------------------------------------------------------------------------
 Distribution and Service Plans for Class B, Class C and Class N Shares. The
 Fund has adopted Distribution and Service Plans for Class B, Class C and Class
 N shares. Under the plans, the Fund pays the Distributor an annual asset-based
 sales charge of 0.75% per year on Class B shares and on Class C shares and the
 Fund pays the Distributor an annual asset-based sales charge of 0.25% per year
 on Class N shares. The Distributor also receives a service fee of 0.25% per
 year under each plan.

 Distribution fees paid to the Distributor for the year ended June 30, 2003,
 were as follows:



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

 Class B Plan        $3,211,081         $2,535,307      $15,822,557              4.24%
 Class C Plan         1,208,519            336,830        3,125,542              1.94
 Class N Plan            24,053             22,307          107,631              1.29


--------------------------------------------------------------------------------
 5. Foreign Currency Contracts
 A foreign currency contract is a commitment to purchase or sell a foreign
 currency at a future date, at a negotiated rate. The Fund may enter into
 foreign currency contracts to settle specific purchases or sales of securities
 denominated in a foreign currency and for protection from adverse exchange rate
 fluctuation. Risks to the Fund include the potential inability of the
 counterparty to meet the terms of the contract.
    The net U.S. dollar value of foreign currency underlying all contractual
 commitments held by the Fund and the resulting unrealized appreciation or
 depreciation are determined using prevailing foreign currency exchange rates.
 Unrealized appreciation and depreciation on foreign currency contracts are
 reported in the Statement of Assets and Liabilities as a receivable or payable
 and in the Statement of Operations with the change in unrealized appreciation
 or depreciation.

                        48 | OPPENHEIMER HIGH YIELD FUND


    The Fund may realize a gain or loss upon the closing or settlement of the
 foreign transaction. Contracts closed or settled with the same broker are
 recorded as net realized gain or loss. Such realized gains and losses are
 reported with all other foreign currency gains and losses in the Statement of
 Operations.
    As of June 30, 2003, the Fund had no outstanding foreign currency contracts.

--------------------------------------------------------------------------------
 6. Futures Contracts
 A futures contract is a commitment to buy or sell a specific amount of a
 commodity or financial instrument at a negotiated price on a stipulated future
 date. Futures contracts are traded on a commodity exchange. The Fund may buy
 and sell futures contracts that relate to broadly based securities indices
 "financial futures" or debt securities "interest rate futures" in order to gain
 exposure to or protection from changes in market value of stock and bonds or
 interest rates. The Fund may also buy or write put or call options on these
 futures contracts.
    The Fund generally sells futures contracts as a hedge against increases in
 interest rates and decreases in market value of portfolio securities. The Fund
 may also purchase futures contracts to gain exposure to market changes as it
 may be more efficient or cost effective than actually buying fixed income
 securities.
    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. The Fund recognizes a realized gain or loss when the contract is
 closed or has expired.
    Cash held by the broker to cover initial margin requirements on open futures
 contracts is noted in the Statement of Assets and Liabilities. Securities held
 in collateralized accounts to cover initial margin requirements on open futures
 contracts are noted in the Statement of Investments. The Statement of Assets
 and Liabilities reflects a receivable and/or payable for the daily mark to
 market for variation margin. Realized gains and losses are reported on the
 Statement of Operations as closing and expiration of futures contracts. The net
 change in unrealized appreciation and depreciation is reported on the Statement
 of Operations.
    Risks of entering into futures contracts (and related options) include the
 possibility that there may be an illiquid market and that a change in the value
 of the contract or option may not correlate with changes in the value of the
 underlying securities.
    As of June 30, 2003, the Fund had no outstanding futures contracts.

                        49 | OPPENHEIMER HIGH YIELD FUND


NOTES TO FINANCIAL STATEMENTS  Continued



--------------------------------------------------------------------------------
 7. Illiquid or Restricted Securities
 As of June 30, 2003, investments in securities included issues that are
 illiquid or restricted. Restricted securities are purchased in private
 placement transactions, are not registered under the Securities Act of 1933,
 may have contractual restrictions on resale, and are valued under methods
 approved by the Board of Trustees as reflecting fair value. A security may also
 be considered illiquid if it lacks a readily available market or if its
 valuation has not changed for a certain period of time. The Fund intends to
 invest no more than 10% of its net assets (determined at the time of purchase
 and reviewed periodically) in illiquid or restricted securities. Certain
 restricted securities, eligible for resale to qualified institutional
 investors, are not subject to that limitation. The aggregate value of illiquid
 or restricted securities subject to this limitation as of June 30, 2003 was
 $128,418,612, which represents 7.35% of the Fund's net assets, of which zero is
 considered restricted. Information concerning restricted securities is as
 follows:



                                                                                         Unrealized
                                 Acquisition                     Valuation as of       Appreciation
 Security                              Dates          Cost         June 30, 2003      (Depreciation)
----------------------------------------------------------------------------------------------------

 Stocks and/or Warrants
 Internet Commerce &
 Communications, Inc. Wts.,
 Exp. 7/3/03                         9/29/98           $--                   $--                $--



--------------------------------------------------------------------------------
 8. Borrowing and Lending Arrangements
 The Fund entered into an "interfund borrowing and lending arrangement" with
 other funds in the Oppenheimer funds complex, to allow funds to borrow for
 liquidity purposes. The arrangement was initiated pursuant to exemptive relief
 granted by the Securities and Exchange Commission to allow these affiliated
 funds to lend money to, and borrow money from, each other, in an attempt to
 reduce borrowing costs below those of bank loan facilities. Under the
 arrangement the Fund may lend money to other Oppenheimer funds and may borrow
 from other Oppenheimer funds at a rate set by the Fund's Board of Trustees,
 based upon a recommendation by the Manager. The Fund's borrowings, if any, are
 subject to asset coverage requirements under the Investment Company Act and the
 provisions of the SEC order and other applicable regulations. If the Fund
 borrows money, there is a risk that the loan could be called on one day's
 notice, in which case the Fund might have to borrow from a bank at higher rates
 if a loan were not available from another Oppenheimer fund. If the Fund lends
 money to another fund, it will be subject to the risk that the other fund might
 not repay the loan in a timely manner, or at all.
    The Fund had no interfund borrowings or loans outstanding during the year
 ended or at June 30, 2003.

                        50 | OPPENHEIMER HIGH YIELD 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 (TAXABLE) BOND RATINGS


Aaa: Bonds 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 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 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 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 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 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 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 rated "Ca" represent obligations which are speculative in a high
degree. Such issues are often in default or have other marked shortcomings.

C: Bonds 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 apply to
the ability of issuers to honor senior debt obligations having an original
maturity not exceeding one year:


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


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

A: Bonds 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: Bonds 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:
Obligations 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: Bonds 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: Bonds
rated "B" are more vulnerable to nonpayment than bonds 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: Bonds 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: Bonds 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: Bonds 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. The
"r" symbol is attached to the ratings of instruments with significant noncredit
risks.


SHORT-TERM ISSUE CREDIT RATINGS


A-1: A short-term bond 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 bond 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 bond 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 bond 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 bond 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 bond 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.


Fitch, Inc.

INTERNATIONAL LONG-TERM CREDIT 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

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

                            Industry Classifications


Aerospace & Defense                    Household Products
Air Freight & Couriers                 Industrial Conglomerates
Airlines                               Insurance
Auto Components                        Internet & Catalog Retail
Automobiles                            Internet Software & Services
Beverages                              IT Services
Biotechnology                          Leisure Equipment & Products
Building Products                      Machinery
Chemicals                              Marine
Consumer Finance                       Media
Commercial Banks                       Metals & Mining
Commercial Services & Supplies         Multiline Retail
Communications Equipment               Multi-Utilities
Computers & Peripherals                Office Electronics
Construction & Engineering             Oil & Gas
Construction Materials                 Paper & Forest Products
Containers & Packaging                 Personal Products
Distributors                           Pharmaceuticals
Diversified Financial Services         Real Estate
Diversified Telecommunication Services Road & Rail
Electric Utilities                     Semiconductors and Semiconductor

                                       Equipment

Electrical Equipment                   Software
Electronic Equipment & Instruments     Specialty Retail
Energy Equipment & Services            Textiles, Apparel & Luxury Goods
Food & Staples Retailing               Thrifts & Mortgage Finance
Food Products                          Tobacco
Gas Utilities                          Trading Companies & Distributors
Health Care Equipment & Supplies       Transportation Infrastructure
Health Care Providers & Services       Water Utilities

Hotels Restaurants & Leisure           Wireless Telecommunication Services
Household Durables





                                   Appendix C

        OppenheimerFunds Special Sales Charge Arrangements and Waivers

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

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

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

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

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

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

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

There is no initial sales charge on purchases of Class A shares of any of the
Oppenheimer funds in the cases listed below. However, these purchases may be
subject to the Class A contingent deferred sales charge if redeemed within 18
months (24 months in the case of Oppenheimer Rochester National Municipals and
Rochester Fund Municipals) of the beginning of the calendar month of their
purchase, as described in the Prospectus (unless a waiver described elsewhere in
this Appendix applies to the redemption). Additionally, on shares purchased
under these waivers that are subject to the Class A contingent deferred sales
charge, the Distributor will pay the applicable concession described in the
Prospectus under "Class A Contingent Deferred Sales Charge."5 This waiver
provision applies to:
|_| Purchases of Class A shares aggregating $1 million or more. |_| Purchases of
Class A shares by a Retirement Plan that was permitted to
      purchase such shares at net asset value but subject to a contingent
      deferred sales charge prior to March 1, 2001. That included plans (other
      than IRA or 403(b)(7) Custodial Plans) that: 1) bought shares costing
      $500,000 or more, 2) had at the time of purchase 100 or more eligible
      employees or total plan assets of $500,000 or more, or 3) certified to the
      Distributor that it projects to have annual plan purchases of $200,000 or
      more.

|_|   Purchases by an OppenheimerFunds-sponsored Rollover IRA, if the
      purchases are made:
      1) through a broker, dealer, bank or registered investment 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 $3 million or more of its assets
         (excluding assets invested in money market funds) invested in
         Applicable Investments.
      3) The record keeping for a Retirement Plan is handled under a service
         agreement with Merrill Lynch and on the date the plan sponsor signs
         that agreement, the Plan has 500 or more eligible employees (as
         determined by the Merrill Lynch plan conversion manager).

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

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

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

|_|   Dealers, brokers, banks, or registered investment 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.

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

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

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

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

III. Waivers of Class B, Class C and Class N Sales Charges of Oppenheimer Funds
--------------------------------------------------------------------------------

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

A. Waivers for Redemptions in Certain Cases.

The Class B, Class C and Class N contingent deferred sales charges will be
waived for redemptions of shares in the following cases: |_| Shares redeemed
involuntarily, as described in "Shareholder Account
      Rules and Policies," in the applicable Prospectus.
|_|   Redemptions from accounts other than Retirement Plans following the

      death or disability of the last surviving shareholder. 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 by the Social Security Administration.

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

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

The contingent deferred sales charge is also waived on Class B 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 advisor to those former Quest
for Value Funds. Those funds include:
   Oppenheimer Quest Value Fund, Inc.           Oppenheimer Small Cap Value
   Fund
   Oppenheimer Quest Balanced Value Fund        Oppenheimer Quest Global
   Value Fund, Inc.
   Oppenheimer Quest Opportunity Value Fund

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

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

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

A. Reductions or Waivers of Class A Sales Charges.

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

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

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

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

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

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

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

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

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

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

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

      A shareholder's account will be credited with the amount of any contingent
deferred sales charge paid on the redemption of any Class A, Class B or Class C
shares of the Oppenheimer fund described in this section if the proceeds are
invested in the same Class of shares in that fund or another Oppenheimer fund
within 90 days after redemption.

       V. Special Sales Charge Arrangements for Shareholders of Certain
          Oppenheimer Funds Who Were Shareholders of Connecticut Mutual
                            Investment Accounts, Inc.
---------------------------------------------------------------------------

The initial and contingent deferred sale charge rates and waivers for Class A
and Class B shares described in the respective Prospectus (or this Appendix) of
the following Oppenheimer funds (each is referred to as a "Fund" in this
section):
   Oppenheimer U. S. Government Trust,
   Oppenheimer Bond Fund,
   Oppenheimer Value Fund and
   Oppenheimer Disciplined Allocation Fund

are modified as described below for those Fund shareholders who were
shareholders of the following funds (referred to as the "Former Connecticut
Mutual Funds") on March 1, 1996, when OppenheimerFunds, Inc. became the
investment adviser to the Former Connecticut Mutual Funds:

   Connecticut Mutual Liquid Account Connecticut Mutual Total Return Account
   Connecticut Mutual Government Securities Account CMIA LifeSpan Capital
   Appreciation Account Connecticut Mutual Income Account CMIA LifeSpan Balanced
   Account Connecticut Mutual Growth Account CMIA Diversified Income Account

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

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

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

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

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

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

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

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

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


    VI. Special Reduced Sales Charge for Former Shareholders of Advance
                               America Funds, Inc.
---------------------------------------------------------------------------

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

   VII. Sales Charge Waivers on Purchases of Class M Shares of Oppenheimer
                           Convertible Securities Fund
------------------------------------------------------------------------------

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

|_|   dealers, brokers or registered investment advisors that had entered into
      an agreement with the Distributor or prior distributor of the Fund's
      shares to sell shares to defined contribution employee retirement plans
      for which the dealer, broker, or investment advisor provides
      administrative services.






Oppenheimer High Yield Fund


Internet Web Site:
      WWW.OPPENHEIMERFUNDS.COM

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

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

Transfer Agent
      OppenheimerFunds Services

      P.O. Box 5270 Denver, Colorado 80217 1.800 CALL OPP (225.5677)


Custodian Bank

      JP Morgan Chase Bank
      4 Chase Metro Tech Center
      Brooklyn, New York 11245


Independent Auditors
      Deloitte & Touche LLP
      555 Seventeenth Street
      Denver, Colorado 80202

Counsel to the Fund
      Myer, Swanson, Adams & Wolf, P.C.
      1600 Broadway
      Denver, Colorado 80202

Counsel to the Independent Trustees

      Mayer, Brown, Rowe & Maw, LLP
      1675 Broadway
      New York, New York 10019

PX280.001.0803


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



                         OPPENHEIMER HIGH YIELD FUND

                                  FORM N-1A

                                    PART C

                              OTHER INFORMATION

Item 23. Exhibits


(a) (i) Amended and Restated Declaration of Trust dated 10/31/00: Previously
filed with Registrant's Post-Effective Amendment No. 45, 10/26/01, and
incorporated herein by reference.

      (ii) Amendment No. 1 dated 1/25/02 to Amended and Restated Declaration of
Trust dated 10/31/00: Previously filed with Registrant's Post-Effective
Amendment No. 46, 8/23/02, and incorporated herein by reference.

      (iii) Amendment No. 2 dated 9/15/02 to Amended and Restated Declaration of
Trust dated 10/31/00: Filed herewith.


(b) Amended and Restated By-Laws dated 10/24/00: Previously filed with
Registrant's Post-Effective Amendment No. 45, 10/26/01, and incorporated herein
by reference.

(c) (i) Specimen Class A Share Certificate: Previously filed with Registrant's
Post-Effective Amendment No. 45, 10/26/01, and incorporated herein by reference.

      (ii) Specimen Class B Share Certificate: Previously filed with
Registrant's Post-Effective Amendment No. 45, 10/26/01, and incorporated herein
by reference.

      (iii) Specimen Class C Share Certificate: Previously filed with
Registrant's Post-Effective Amendment No. 45, 10/26/01, and incorporated herein
by reference.

      (iv) Specimen Class N Share Certificate: Previously filed with
Registrant's Post-Effective Amendment No. 45, 10/26/01, and incorporated herein
by reference.

      (v) Specimen Class Y Share Certificate: Previously filed with Registrant's
Post-Effective Amendment No. 45, 10/26/01, and incorporated herein by reference.


(d) Investment Advisory Agreement dated 10/10/90: Previously filed with
Registrant's Post-Effective Amendment No. 23, 10/31/90, refiled with
Registrant's Post-Effective Amendment No. 30, 8/25/94 pursuant to Item 102 of
Regulation S-T and incorporated herein by reference.


(e) (i) General Distributor's Agreement dated 10/13/92: Previously filed with
Registrant's Post-Effective Amendment No. 29, 10/4/93, and incorporated herein
by reference.

      (ii) Form of Dealer Agreement of OppenheimerFunds Distributor, Inc.: Filed
with Registrant's Post-Effective Amendment No. 45, 10/26/01, and incorporated
herein by reference.

      (iii) Form of Broker Agreement of OppenheimerFunds Distributor, Inc.:
Previously filed with Registrant's Post-Effective Amendment No. 45, 10/26/01,
and incorporated herein by reference.

      (iv) Form of Agency Agreement of OppenheimerFunds Distributor, Inc.:
Previously filed with Registrant's Post-Effective Amendment No. 45, 10/26/01,
and incorporated herein by reference.

      (v) Form of Trust Company Fund/SERV Purchase Agreement of OppenheimerFunds
Distributor, Inc.: Previously filed with Registrant's Post-Effective Amendment
No. 45, 10/26/01, and incorporated herein by reference.

      (vi) Form of Trust Company Agency Agreement of OppenheimerFunds
Distributor, Inc.: Previously filed with Registrant's Post-Effective Amendment
No. 45, 10/26/01, and incorporated herein by reference.

(f) Form of Deferred Compensation Plan for Disinterested Trustees/Directors:
Previously filed with Registrant's Post-Effective Amendment No. 40, 10/27/98,
and incorporated herein by reference.


(g) Global Custody Agreement dated August 16, 2002 between Registrant and JP
Morgan Chase Bank: Previously filed with Pre-Effective Amendment No. 2 to the
Registration Statement of Oppenheimer Principal Protected Trust (Reg. No.
333-102588), 5/2/03, and incorporated herein by reference.


(h) Not applicable.

(i) Opinion and Consent of Counsel dated 8/3/78: Previously filed with
Registrant's Post-Effective Amendment No. 1 to Registrant's Registration
Statement, 9/27/78, refiled with Registrant's Post-Effective Amendment No. 30,
8/25/94 pursuant to Item 102 of Regulation S-T and incorporated herein by
reference.

(j) Independent Auditors' Consent: Filed herewith.

(k) Not applicable.

(l) Not applicable.


(m) (i) Amended and Restated Service Plan and Agreement for Class A shares dated
6/14/02: Previously filed with Registrant's Post-Effective Amendment No. 45,
8/23/02, and incorporated herein by reference.


      (ii) Distribution and Service Plan and Agreement for Class B shares dated
10/31/00: Previously filed with Registrant's Post-Effective Amendment No. 45,
10/26/01, and incorporated herein by reference.

      (iii) Distribution and Service Plan and Agreement for Class C shares dated
11/1/95: Previously filed with Registrant's Post-Effective Amendment No. 33,
8/30/95, and incorporated herein by reference.


      (iv) Distribution and Service Plan and Agreement for Class N shares dated
10/24/00: Filed herewith.

(n) Oppenheimer Funds Multiple Class Plan under Rule 18f-3 updated through
10/22/02: Previously filed with Post-Effective Amendment No. 22 to the
Registration Statement of Oppenheimer Global Growth & Income Fund (Reg. No.
33-33799), 11/20/02, and incorporated herein by reference.

(o) (i) Powers of Attorney for all Trustees/Directors and Officers except for
Beverly L. Hamilton, Robert J. Malone, Edward Cameron, F. William Marshall, Jr.,
and John Murphy (including Certified Board Resolutions): Previously filed with
Pre-Effective Amendment No. 2 to the Registration Statement of Oppenheimer
Select Managers (Reg. No. 333-49774), 2/8/01, and incorporated herein by
reference.

       (ii) Powers of Attorney for Edward Cameron, F. William Marshall Jr. and
John Murphy: Previously filed with Registrant's Post-Effective Amendment No. 45,
10/26/01, and incorporated herein by reference.

       (iii) Powers of Attorney for Beverly L. Hamilton and Robert J. Malone:
Previously filed with Registrant's Post-Effective Amendment No. 46, 8/23/02, and
incorporated herein by reference.

(p) Amended and Restated Code of Ethics of the Oppenheimer Funds dated May 15,
2002 under Rule 17j-1 of the Investment Company Act of 1940: Previously filed
with Post-Effective Amendment No. 29 to the Registration Statement of
Oppenheimer Discovery Fund (Reg. No. 33-371), 11/21/02, and incorporated herein
by reference.


Item 24. Persons Controlled by or Under Common Control with the Fund

None.


Item 25. - Indemnification


Reference is made to the provisions of Article Seven of Registrant's Amended and
Restated Declaration of Trust filed as Exhibit 23(a) to this Registration
Statement, and incorporated herein by reference.

Insofar as indemnification for liabilities arising under the Securities Act of
1933 may be permitted to trustees, officers and controlling persons of
Registrant pursuant to the foregoing provisions or otherwise, Registrant has
been advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act of
1933 and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by Registrant
of expenses incurred or paid by a trustee, officer or controlling person of
Registrant in the successful defense of any action, suit or proceeding) is
asserted by such trustee, officer or controlling person, Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act of 1933 and will be governed by the final adjudication of such
issue.

Item 26. - Business and Other Connections of the Investment Adviser

(a) OppenheimerFunds, Inc. is the investment adviser of the Registrant; it and
certain subsidiaries and affiliates act in the same capacity to other investment
companies, including without limitation those described in Parts A and B hereof
and listed in Item 26(b) below.


 (b) There is set forth below information as to any other business, profession,
vocation or employment of a substantial nature in which each officer and
director of OppenheimerFunds, Inc. is, or at any time during the past two fiscal
years has been, engaged for his/her own account or in the capacity of director,
officer, employee, partner or trustee.


Name and Current Position
with OppenheimerFunds, Inc.    Other Business and Connections During the Past
                               Two Years

Timothy L. Abbuhl,             None
Assistant Vice President

Charles E. Albers,             None
Senior Vice President

Erik Anderson,                 None
Assistant Vice President
Janette Aprilante,             As of January 2002: Secretary of
Vice President & Secretary OppenheimerFunds, Distributor, Inc., Centennial

                               Asset Management Corporation, Oppenheimer
                               Partnership Holdings, Inc., Oppenheimer Real
                               Asset Management, Inc., Shareholder Financial
                               Services, Inc., Shareholder Services, Inc.;
                               HarbourView Asset Management Corporation, OFI
                               Private Investments, Inc., OFI Institutional
                               Asset Management, Inc. and OppenheimerFunds
                               Legacy Program; Assistant Secretary of OFI Trust
                               Company.

Hany S. Ayad,                  None
Assistant Vice President



John Michael Banta,            None
Assistant Vice President
Joanne Bardell,                None
Assistant Vice President
Lerae A. Barela,               None
Assistant Vice President
Bruce L. Bartlett,             None
Senior Vice President
Mark Bartling,                 None
Assistant Vice President
Kevin Baum,                    None
Vice President
Jeff Baumgartner,              None
Assistant Vice President
Connie Bechtolt,               None
Assistant Vice President
Robert Behal                   Assistant Vice President of HarbourView Asset
Assistant Vice President       Management Corporation. Formerly.
Kathleen Beichert,             Vice President of OppenheimerFunds Distributor,
Vice President                 Inc.
Gerald Bellamy,                None
Assistant Vice President
Erik S. Berg,                  None
Assistant Vice President
Victoria Best,                 None
Vice President
Rajeev Bhaman,                 None
Vice President
Craig Billings,                Formerly President of Lorac Technologies, Inc.
Assistant Vice President       (June 1997-July 2001).
Mark Binning,                  None
Assistant Vice President
Robert J. Bishop,              None
Vice President
Tracey Blinzer,                Assistant Vice President of OppenheimerFunds
Vice President                 Distributor, Inc.
John R. Blomfield,             None
Vice President
Chad Boll,                     None
Assistant Vice President
Robert Bonomo,                 None
Senior Vice President
Jennifer Bosco,                None
Assistant Vice President
Lowell Scott Brooks,           Vice President of OppenheimerFunds Distributor,
Vice President                 Inc.
Joan Brunelle,                 None
Vice President
Richard Buckmaster,            None
Vice President
Paul Burke,                    None
Assistant Vice President
Mark Burns,                    Formerly a Marketing Manager with Alliance
Assistant Vice President       Capital Management (October 1999-April 2001).
Bruce Burroughs                None
Vice President
Claudia Calich,                None
Assistant Vice President
Michael A. Carbuto,            None
Vice President
Debra Casey,                   None
Assistant Vice President
Ronald G. Chibnik,             Formerly Director of technology for Sapient
Assistant Vice President       Corporation (July, 2000-August 2001); software
                               architect for Sapient Corporation (March
                               1997-July 2000).
Brett Clark,                   None
Assistant Vice President
H.C. Digby Clements,           None
Vice   President:    Rochester
Division
Peter V. Cocuzza,              None
Vice President
Scott Cottier,                 None
Vice   President:    Rochester
Division
Laura Coulston,                None
Assistant Vice President
Julie C. Cusker,               None
Assistant Vice President:
Rochester Division
George Curry,                  None.
Vice President

John Damian,                   Formerly senior analyst/director for Citigroup
Vice President                 Asset Management (November 1999-September 2001).


John M. Davis,                 Assistant Vice President of OppenheimerFunds
Assistant Vice President       Distributor, Inc.
Ruggero de'Rossi,              Vice President of HarbourView Asset Management
Senior Vice President          Corporation.


Craig P. Dinsell,              None
Executive Vice President
Randall C. Dishmon,            Formerly an Associate with Booz Allen & Hamilton
Assistant Vice President       (1998-June 2001).
Rebecca K. Dolan               None
Vice President
Steven D. Dombrower,           Vice President of OppenheimerFunds Distributor,

Vice President                 Inc.
Thomas Doyle,                  None
Assistant Vice President
Bruce C. Dunbar,               None
Senior Vice President
Richard Edmiston,              None
Assistant Vice President
Daniel R. Engstrom,            None
Assistant Vice President


James Robert Erven             Formerly an Assistant Vice President/Senior
Assistant Vice President       Trader with Morgan Stanley Investment Management
                               (1999-April 2002).

George R. Evans,               None
Vice President
Edward N. Everett,             None
Vice President
Kathy Faber,                   None
Assistant Vice President
David Falicia,                 None
Assistant Vice President
Scott T. Farrar,               Vice President of OFI Private Investments, Inc.
Vice President
Katherine P. Feld,             Vice President of OppenheimerFunds, Distributor,
Vice President, Senior Counsel Inc. and of Oppenheimer Real Asset Management,
                               Inc.; Vice President, Assistant Secretary and
                               Director of Centennial Asset Management
                               Corporation.
Emmanuel Ferreira,             Formerly a portfolio manager with Lashire
Vice President                 Investments (July 1999-December 2002).
Ronald H. Fielding,            Vice President of OppenheimerFunds Distributor,
Senior Vice President;         Inc.; Director of ICI Mutual Insurance Company;
Chairman: Rochester Division   Governor of St. John's College; Chairman of the

                               Board of Directors of International Museum of
                               Photography at George Eastman House.

John E. Forrest,               Senior Vice President of OppenheimerFunds
Senior Vice President          Distributor, Inc.
J. Hayes Foster,               None
Vice President
P. Lyman Foster,               Senior Vice President of OppenheimerFunds

Senior Vice President          Distributor, Inc.

David Foxhoven,                Assistant Vice President of OppenheimerFunds
Assistant Vice President       Legacy Program.
Colleen M. Franca,             None
Assistant Vice President
Richard Frank,                 None
Vice   President:    Rochester
Division
Dominic Freud,                 Formerly, a Partner and European Equity
Vice President                 Portfolio manager at SLS Management (January
                               2002-February 2003) prior to which he was head of
                               the European equities desk and managing director
                               at SG Cowen (May 1994-January 2002).
Dan Gagliardo,                 Formerly an Assistant Vice President with
Assistant Vice President       Mitchell Hutchins (January 2000-October 2000).
Hazem Gamal,                   None
Assistant Vice President
Dan P. Gangemi,                None
Vice President
Subrata Ghose,                 None
Assistant Vice President
Charles W. Gilbert,            None
Assistant Vice President
Alan C. Gilston,               None
Vice President
Sharon M. Giordano-Auleta,     None
Assistant Vice President
Jill E. Glazerman,             None
Vice President


Mike Goldverg,                 None
Assistant Vice President

Benjamin J. Gord,              Vice President of HarbourView Asset Management
Vice President                 Corporation and of OFI Institutional Asset
                               Management, Inc. Formerly Executive Director
                               with Miller Anderson Sherrerd, a division of
                               Morgan Stanley Investment Management. (April
                               1992-March 2002).
Laura Granger,                 None
Vice President
Michael Graves,                None
Assistant Vice President
Robert G. Grill,               None
Senior Vice President
Robert Guy,                    None
Senior Vice President
Robert Gwynn,                  None
Vice   President:    Rochester
                                    Division
David Hager,                   None
Vice President
Robert Haley,                  None
Assistant Vice President
Marilyn Hall,                  None
Vice President
Ping Han,                      None
Assistant Vice President
Kelly Haney,                   None
Assistant Vice President
Shari Harley,                  None
Assistant Vice President
Steve Hauenstein,              None
Assistant Vice President
Thomas B. Hayes,               None
Vice President
Michael Henry,                 None
Assistant Vice President
Catherine Heron,               None
Assistant Vice President
Dennis Hess,                   None
Assistant Vice President
Dorothy F. Hirshman,           None
Vice President
Daniel Hoelscher,              None
Assistant Vice President
Edward Hrybenko,               Vice President of OppenheimerFunds Distributor,
Vice President                 Inc.
Scott T. Huebl,                Assistant Vice President of OppenheimerFunds

Vice President                 Legacy Program.
Margaret Hui,                  None
Assistant Vice President
John Huttlin,                  Vice President (Director of the International
Vice President                 Division) of OFI Institutional Asset Management,
                                      Inc.

James G. Hyland,               None
Assistant Vice President
Steve P. Ilnitzki,             None
Senior Vice President

Kathleen T. Ives,              Vice President of OppenheimerFunds Distributor,
Vice   President  &  Assistant Inc.; Vice President and Assistant Secretary of
Counsel                        Shareholder Services, Inc.; Assistant Secretary
                               of OppenheimerFunds Legacy Program and
                               Shareholder Financial Services, Inc.
William Jaume,                 Senior Vice President and Chief Compliance
Vice President                 Officer (since April 2000) of HarbourView Asset

                               Management Corporation; Senior Vice President of
                               OFI Institutional Asset Management, Inc. (since
                               February 2001); Director of OFI Trust Company.

Frank V. Jennings,             None
Vice President
John Jennings,                 None
Vice President
John Michael Johnson,          Formerly Vice President, Senior
Assistant Vice President       Analyst/Portfolio Manager at Aladdin Capital
                               Holdings Inc. (February 2001-May 2002) prior to
                               which he was Vice President and Senior Analyst at
                               Merrill Lynch Investment Managers (October
                               1996-February 2001).

Charles Kandilis,              Formerly managing director of Kandilis Capital
Assistant Vice President       Management (September 1993-August 2002); CFO of
                               Kandi Corp. (October 1989-August 1993).
Jennifer E. Kane,              Treasurer and Secretary of OppenheimerFunds
Assistant Vice President       Legacy Program.
Lynn O. Keeshan,               Assistant Treasurer of OppenheimerFunds Legacy
Senior Vice President          Program.
Thomas W. Keffer,              None
Senior Vice President
Cristina J. Keller,            Vice President of OppenheimerFunds Distributor,
Vice President                 Inc.
Michael Keogh,                 Vice President of OppenheimerFunds Distributor,
Vice President                 Inc.
Garrett K. Kolb,               None
Assistant Vice President
Walter G. Konops,              None
Assistant Vice President

James Kourkoulakos,            None
Vice President
Brian Kramer,                  None
Assistant Vice President
Tracey Lange,                  Vice President of OppenheimerFunds Distributor,
Vice President                 Inc.
John Latino,                   Formerly (until September 2002) a senior trader
Assistant Vice President       at Jacobs Levy Equity Management.
Guy E. Leaf,                   Formerly a Vice President of Merrill Lynch
Vice President                 (January 2000-September 2001).
Christopher M. Leavy,          None
Senior Vice President
Dina C. Lee,                   Assistant Secretary of OppenheimerFunds Legacy
Assistant   Vice  President  & Program.
Assistant Counsel
Dana Lehrer,                   None
Assistant Vice President
Laura Leitzinger,              Vice President of Shareholder Financial
Vice President                 Services, Inc. and Senior Vice President of
                               Shareholder Services, Inc.

Michael S. Levine,             None
Vice President
Gang Li,                       None
Assistant Vice President
Shanquan Li,                   None
Vice President
Mitchell J. Lindauer,          None
Vice   President  &  Assistant
General Counsel
Bill Linden,                   None
Assistant Vice President

Malissa B. Lischin,            Assistant Vice President of OppenheimerFunds
Assistant Vice President       Distributor, Inc.
Reed Litcher,                  Vice President of Shareholder Financial
Vice President                 Services, Inc.
David P. Lolli,                None
Assistant Vice President
Daniel G. Loughran             None
Vice   President:    Rochester
Division

Patricia Lovett,               Vice President of Shareholder Financial
Vice President                 Services, Inc. and Senior Vice President of
                               Shareholder Services, Inc.

Steve Macchia,                 None
Vice President
Michael Magee,                 None
Vice President
Jerry Madzij,                  None
Assistant Vice President
Angelo G. Manioudakis          Senior Vice President of HarbourView Asset
Senior Vice President          Management Corporation and of OFI Institutional
                               Asset Management, Inc. Formerly Executive
                               Director and portfolio manager for Miller,
                               Anderson & Sherrerd, a division of Morgan
                               Stanley Investment Management (August 1993-April
                               2002).
LuAnn Mascia,                  Vice President of OppenheimerFunds Distributor,
Vice President                 Inc.
Philip T. Masterson,           None
Vice   President  &  Assistant
Counsel
Elizabeth McCormack,           Assistant Secretary of HarbourView Asset
Assistant Vice President       Management Corporation.
Joseph McGovern,               None
Assistant Vice President
Charles L. McKenzie,           Chief Executive Officer, President, Senior
Senior Vice President          Managing Director and Director  of HarbourView
                               Asset Management Corporation and OFI
                               Institutional Asset Management Corporation;
                               Director (Class A) and Chairman of Trinity
                               Investment Management Corporation.
Lisa Migan,                    None
Vice President
Andrew J. Mika,                None
Senior Vice President
Joy Milan,                     None
Vice President
Denis R. Molleur,              None
Vice    President   &   Senior
Counsel
Nikolaos D. Monoyios,          None
Vice President
Charles Moon,                  Vice President of HarbourView Asset Management
Vice President                 Corporation and of OFI Institutional Asset
                               Management, Inc. Formerly an Executive Director
                               and Portfolio Manager with Miller Anderson &
                               Sherrerd, a division of Morgan Stanley
                               Investment Management (June 1999-March 2002).
Stacey Morrell,                None
Vice President
John Murphy,                   Director of OppenheimerFunds Distributor, Inc.,
Chairman,   President,   Chief Centennial Asset Management Corporation,
Executive Officer & Director   HarbourView Asset Management Corporation, OFI
                               Private Investments, Inc., OFI Institutional
                               Asset Management, Inc. and Tremont Advisers,
                               Inc.; Director (Class A) of Trinity Investments
                               Management Corporation; President and Management
                               Director of Oppenheimer Acquisition Corp.;
                               President and Director of Oppenheimer
                               Partnership Holdings, Inc., Oppenheimer Real
                               Asset Management, Inc.; Chairman and Director of
                               Shareholder Financial Services, Inc. and
                               Shareholder Services, Inc.; Executive Vice
                               President of MassMutual Life Insurance Company;
                               director of DLB Acquisition Corp.
Kevin Murray,                  None
Assistant Vice President
Thomas J. Murray,              None
Vice President
Kenneth Nadler,                None
Vice President
Christina Nasta,               Vice President of OppenheimerFunds Distributor,
Vice President                 Inc.
Richard Nichols,               None
Vice President
Barbara Niederbrach,           None
Assistant Vice President
William Norman,                None
Assistant Vice President
Raymond C. Olson,              Assistant Vice President and Treasurer of
Assistant Vice President       OppenheimerFunds Distributor, Inc.; Treasurer of

                               Centennial Asset Management Corporation.

Frank J. Pavlak,               None
Vice President
David P. Pellegrino,           None
Vice President
Allison C. Pells,              None
Assistant Vice President
Susan Pergament,               None
Assistant Vice President
Brian Petersen,                None
Assistant Vice President
James F. Phillips,             None
Vice President
Gary Pilc,
Assistant Vice President
Peter Pisapia,                 Formerly, Associate Counsel and Secretary at
Assistant   Vice  President  & SunAmerica Asset Management Corp. (December
Assistant Counsel              2000-December 2002).
Jeaneen Pisarra,               None
Assistant Vice President
Raghaw Prasad,                 Formerly Associate Vice President with
Assistant Vice President       Prudential Securities New York (January
                               2001-November 2001) prior to which he was a
                               Director/Analytics with Prudential Investments
                               New Jersey (April 1997-November 2001).

Jane C. Putnam,                None
Vice President
Michael E. Quinn,              None
Vice President
Julie S. Radtke,               None
Vice President
Norma J. Rapini,               None
Assistant Vice President:
Rochester Division


Brian N. Reid,                 Formerly an Assistant Vice President with Eaton
Assistant Vice President       Vance Management (January 2000-January 2002).
Marc Reinganum,                Formerly (until August 2002) Vaughn Rauscher
Vice President                 Chair in Financial Investments and Director,
                               Finance Institute of Southern Methodist
                               University, Texas.
Jill Reiter,                   None
Vice President
Kristina Richardson,           None
Assistant Vice President
Claire Ring,                   None
Assistant Vice President
David Robertson,               Senior Vice President of OppenheimerFunds
Senior Vice President          Distributor, Inc.
Rob Robis,                     None
Assistant Vice President
Antoinette Rodriguez,          None
Assistant Vice President
Stacey Roode,                  Formerly, Assistant Vice President of Human
Vice President                 Resources of OFI (200-July 2002)
Jeffrey S. Rosen,              None
Vice President
James H. Ruff,                 President and Director of OppenheimerFunds
Executive Vice President       Distributor, Inc. and Centennial Asset
                               Management Corporation; Executive Vice President
                               of OFI Private Investments, Inc.
Andrew Ruotolo                 Vice Chairman, Treasurer, Chief Financial
Executive Vice President and   Officer and Management Director of Oppenheimer
Director                       Acquisition Corp.; President and director of
                               Shareholder Services, Inc. and Shareholder
                               Financial Services, Inc.; Director (Class A) of
                               Trinity Investment Management Corporation;
                               Chairman of the Board, Chief Executive Officer,
                               President and Director of OFI Trust Company.

Rohit Sah,                     None
Assistant Vice President
Valerie Sanders,               None
Vice President
Karen Sandler,                 None
Assistant Vice President
Tricia Scarlata,               Formerly, Marketing Manager of OppenheimerFunds,
Assistant Vice President       Inc. (April 2001-August 2002); Client Service
                               Support Manager for Sanford C. Bernstein
                               (December 1999-April 2001)
Rudi Schadt,                   Formerly a consultant for Arthur Andersen
Vice President                 (August 2001-February 2002); director, senior
                               quantitative analyst at Brinson Partners
                               (September 2000,April 2001).
Ellen P. Schoenfeld,           None
Vice President
Maria Schulte,                 None
Assistant Vice President
Scott A. Schwegel,             None
Assistant Vice President
Allan P. Sedmak                None
Assistant Vice President

Jennifer L. Sexton,            Vice President of OFI Private Investments, Inc.
Vice President
Martha A. Shapiro,             None
Vice President
Navin Sharma,                  Formerly, Manager at BNP Paribas Cooper Neff
Vice President                 Advisors (May 2001-April 2002) prior to which he
                               was Development Manager at Reality
                               Online/Reuters America Inc. (June 2000-May 2001).
Steven J. Sheerin,             Formerly consultant with Pricewaterhouse Coopers
Vice President                 (November 2000-May 2001).
Bonnie Sherman,                None
Assistant Vice President
David C. Sitgreaves,           None
Assistant Vice President
Edward James Sivigny           Formerly a Director for ABN Amro Securities
Assistant Vice President       (July 2001-July 2002) prior to which he was
                               Associate Director for Barclays Capital
                               (1998-July 2001).
Enrique H. Smith,              Formerly a business analyst with Goldman Sachs
Assistant Vice President       (August 1999-August 2001).


Louis Sortino,                 None
Assistant Vice President:
Rochester Division
Keith J. Spencer,              None
Senior Vice President

Marco Antonio Spinar,          Formerly, Director of Business Operations at AOL
Assistant Vice President       Time Warner, AOL Time Warner Book Group (June
                               2000-December 2001).
Richard A. Stein,              None
Vice   President:    Rochester
Division

Arthur P. Steinmetz,           Senior Vice President of HarbourView Asset
Senior Vice President          Management Corporation.
Jennifer Stevens,              None
Assistant Vice President
Gregory J. Stitt,              None
Vice President
John P. Stoma,                 Senior Vice President of OppenheimerFunds

Senior Vice President          Distributor, Inc.
Wayne Strauss,                 None
Assistant Vice President:
Rochester Division

Michael Stricker,              Vice President of Shareholder Services, Inc.
Vice President
Deborah A. Sullivan,           Since December 2001, Secretary of OFI Trust
Assistant Vice President,      Company.

Assistant Counsel
Mary Sullivan,                 None
Assistant Vice President

Michael Sussman,               Vice President of OppenheimerFunds Distributor,
Vice President                 Inc.
Susan B. Switzer,              None
Vice President
Martin Telles,                 Senior Vice President of OppenheimerFunds
Senior Vice President          Distributor, Inc.

Paul Temple,                   Formerly a Vice President of Merrill Lynch
Vice President                 (October 2001-January 2002) prior to which he
                               was a Vice President with OppenheimerFunds, Inc.
                               (May 2000-October 5, 2001).

Vincent Toner,                 None
Assistant Vice President
Eamon Tubridy,                 None
Assistant Vice President
Keith Tucker,                  None
Assistant Vice President
James F. Turner,               Formerly portfolio manager for Technology
Vice President                 Crossover Ventures (May 2000-March 2001).
Cameron Ullyat,                None
Assistant Vice President
Angela Utaro,                  None
Assistant Vice President:
Rochester Division

Mark S. Vandehey,              Vice President of OppenheimerFunds Distributor,
Vice President                 Inc., Centennial Asset Management Corporation
                               and Shareholder Services, Inc.
Maureen Van Norstrand,         None
Assistant Vice President
Vincent Vermette,              Assistant Vice President of OppenheimerFunds
Assistant Vice President       Distributor, Inc.
Phillip F. Vottiero,           None
Vice President
Samuel Sloan Walker,           Vice President of HarbourView Asset Management
Vice President                 Corporation.
Teresa M. Ward,                Vice President of OppenheimerFunds Distributor,
Vice President                 Inc.

Jerry A. Webman,               Senior Vice President of HarbourView Asset
Senior Vice President          Management Corporation.
Christopher D. Weiler,         None
Assistant Vice President:
Rochester Division

Barry D. Weiss,                Vice President of HarbourView Asset Management
Vice President                 Corporation.
Melissa Lynn Weiss,            Formerly an Associate at Hoguet Newman & Regal,
Vice President                 LLP (January 1998-May 2002).
Christine Wells,               None
Vice President
Joseph J. Welsh,               Vice President of HarbourView Asset Management
Vice President                 Corporation.

Diederick Wermolder,           Director of OppenheimerFunds International Ltd.;
Vice President                 Senior Vice President (Managing Director of the
                               International Division) of OFI Institutional
                               Asset Management, Inc.
Catherine M. White,            Assistant Vice President of OppenheimerFunds
Assistant Vice President       Distributor, Inc. Formerly, Assistant Vice
                               President with Gruntal & Co. LLC (September 1998
                               - October 2000); member of the American Society
                               of Pension Actuaries (ASPA) since 1995.
William L. Wilby,              Formerly Senior Vice President of HarbourView
Senior Vice President          Asset Management Corporation (May 1999-July
                               2002).
Donna M. Winn,                 President, Chief Executive Officer and Director
Senior Vice President          of OFI Private Investments, Inc.; Director and
                               President of OppenheimerFunds Legacy Program;
                               Senior Vice President of OppenheimerFunds
                               Distributor, Inc.

Kenneth Winston,               Formerly, principal at Richards & Tierney, Inc.
Senior Vice President          (March 1994-May 2001).
Philip Witkower,               Senior Vice President of OppenheimerFunds
Senior Vice President          Distributor, Inc.
Brian W. Wixted,               Treasurer of HarbourView Asset Management
Senior Vice President and      Corporation; OppenheimerFunds International
Treasurer                      Ltd., Oppenheimer Partnership Holdings, Inc.,
                               Oppenheimer Real Asset Management, Inc. ,
                               Shareholder Services, Inc., Shareholder
                               Financial Services, Inc., OFI Private
                               Investments, Inc., OFI Institutional Asset
                               Management, Inc. and OppenheimerFunds Legacy
                               Program; Treasurer and Chief Financial Officer
                               of OFI Trust Company; Assistant Treasurer of
                               Oppenheimer Acquisition Corp.
Carol Wolf,                    Senior Vice President of HarbourView Asset
Senior Vice President          Management Corporation; Serves on the Board of
                               the Colorado Ballet.
Kurt Wolfgruber,               Director of Tremont Advisers, Inc., HarbourView
Executive   Vice  President  & Asset Management Corporation and OFI
Chief  Investment  Officer and Institutional Asset Management, Inc.
Director
Caleb C. Wong,                 None
Vice President
Edward C. Yoensky,             None
Assistant Vice President

Jill Zachman,                  None
Vice   President:    Rochester
Division
Lucy Zachman,                  None
Assistant Vice President
Robert G. Zack                 General Counsel and Director of OppenheimerFunds
Senior Vice President and      Distributor, Inc.; General Counsel of Centennial
General Counsel                Asset Management Corporation; Senior Vice
                               President and General Counsel of HarbourView
                               Asset Management Corporation and OFI
                               Institutional Asset Management, Inc.; Senior
                               Vice President, General Counsel and Director of
                               Shareholder Financial Services, Inc.,
                               Shareholder Services, Inc., OFI Private
                               Investments, Inc. and OFI Trust Company; Vice
                               President and Director of Oppenheimer
                               Partnership Holdings, Inc.; Secretary and
                               General Counsel of Oppenheimer Acquisition
                               Corp.; Director and Assistant Secretary of
                               OppenheimerFunds International Ltd.; Director of
                               Oppenheimer Real Asset Management, Inc.; Vice
                               President of OppenheimerFunds Legacy Program.

Neal A. Zamore,                None
Vice President
Mark D. Zavanelli,             None
Vice President
Alex Zhou,                     None
Assistant Vice President
Arthur J. Zimmer,              Senior Vice President (since April 1999) of
Senior Vice President          HarbourView Asset Management Corporation.

The Oppenheimer Funds include the following:

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

Limited Term New York Municipal Fund (Rochester Portfolio Series) Oppenheimer
AMT-Free New York Municipals Oppenheimer Bond Fund (a series of Oppenheimer
Integrity Funds) Oppenheimer California Municipal Fund Oppenheimer Capital
Appreciation Fund Oppenheimer Capital Income Fund Oppenheimer Capital
Preservation Fund Oppenheimer Cash Reserves Oppenheimer Champion Income Fund
Oppenheimer Concentrated Growth Fund Oppenheimer Convertible Securities Fund
(Bond Fund Series) Oppenheimer Developing Markets Fund Oppenheimer Discovery
Fund Oppenheimer Emerging Growth Fund Oppenheimer Emerging Technologies Fund
Oppenheimer Enterprise Fund Oppenheimer Europe Fund Oppenheimer Global Fund
Oppenheimer Global Opportunities Fund Oppenheimer Gold & Special Minerals Fund
Oppenheimer Growth Fund Oppenheimer High Yield Fund Oppenheimer International
Bond Fund Oppenheimer International Growth Fund Oppenheimer International
Large-Cap Core Fund Oppenheimer International Small Company Fund Oppenheimer
International Value Fund Oppenheimer Limited-Term Government Fund Oppenheimer
Limited Term Municipal Fund (a series of Oppenheimer Municipal Fund) Oppenheimer
Main Street Fund(R) (a series of Oppenheimer Main Street Funds, Inc.(R))
Oppenheimer Main Street Opportunity Fund(R) Oppenheimer Main Street Small Cap
Fund(R) Oppenheimer MidCap Fund Oppenheimer Money Market Fund, Inc. Oppenheimer
Multi Cap Value Fund Oppenheimer Multiple Strategies Fund Oppenheimer
Multi-Sector Income Trust Oppenheimer Multi-State Municipal Trust (3 series):

     Oppenheimer New Jersey Municipal Fund
     Oppenheimer Pennsylvania Municipal Fund
     Oppenheimer Rochester National Municipals

Oppenheimer Municipal Bond Fund
Oppenheimer Principal Protected Trust (1 series):
     Oppenheimer Principal Protected Main Street Fund(R)
Oppenheimer Quest Capital Value Fund, Inc.
Oppenheimer Quest For Value Funds (3 series)

     Oppenheimer Quest Balanced Value Fund
     Oppenheimer Quest Opportunity Value Fund
     Oppenheimer Small Cap Value Fund
Oppenheimer Quest Global Value Fund, Inc.
Oppenheimer Quest Value Fund, Inc.
Oppenheimer Real Asset Fund
Oppenheimer Real Estate Fund
Oppenheimer Select Managers (6 series):

     Gartmore Millennium Growth Fund II
     Jennison Growth Fund
     Mercury Advisors Focus Growth Fund
     Mercury Advisors S&P 500 Index Fund
     QM Active Balanced Fund
     Salomon Brothers All Cap Fund

Oppenheimer Senior Floating Rate Fund
Oppenheimer Series Fund, Inc. (2 series):
     Oppenheimer Disciplined Allocation Fund
     Oppenheimer Value Fund

Oppenheimer Special Value Fund Oppenheimer Strategic Income Fund Oppenheimer
Total Return Bond Fund Oppenheimer Total Return Fund, Inc.
Oppenheimer Tremont Market Neutral Fund LLC Oppenheimer Tremont Opportunity Fund
LLC Oppenheimer Trinity Core Fund Oppenheimer Trinity Large Cap Growth Fund
Oppenheimer Trinity Value Fund Oppenheimer U.S. Government Trust Oppenheimer
Variable Account Funds (11 series):
     Oppenheimer Aggressive Growth Fund/VA Oppenheimer Bond Fund/VA Oppenheimer
     Capital Appreciation Fund/VA Oppenheimer Global Securities Fund/VA
     Oppenheimer High Income Fund/VA Oppenheimer Main Street Fund/VA Oppenheimer
     Main Street Small Cap Fund/VA Oppenheimer Money Fund/VA Oppenheimer
     Multiple Strategies Fund/VA Oppenheimer Strategic Bond Fund/VA Oppenheimer
     Value Fund/VA
Panorama Series Fund, Inc. (4 series):
     Growth Portfolio
     Government Securities Portfolio
     Oppenheimer International Growth Fund/VA
     Total Return Portfolio

Rochester Fund Municipals


The address of the Oppenheimer funds listed above, Shareholder Financial
Services, Inc., Shareholder Services, Inc., OppenheimerFunds Services,
Centennial Asset Management Corporation, Centennial Capital Corp.,
Oppenheimer Real Asset Management, Inc. and OppenheimerFunds Legacy Program
is 6803 South Tucson Way, Centennial, Colorado 80112-3924.

The address of OppenheimerFunds, Inc., OppenheimerFunds Distributor, Inc.,
HarbourView Asset Management Corporation, Oppenheimer Partnership Holdings,
Inc., Oppenheimer Acquisition Corp., OFI Private Investments, Inc., OFI
Institutional Asset Management, Inc. and OFI Trust Company is 498 Seventh
Avenue, New York, New York 10018.


The address of Tremont Advisers, Inc. is 555 Theodore Fremd Avenue, Suite
206-C, Rye, New York 10580.

The address of OppenheimerFunds International Ltd. is Bloc C, Irish Life
Center, Lower Abbey Street, Dublin 1, Ireland.

The address of Trinity Investment Management Corporation is 301 North Spring
Street, Bellefonte, Pennsylvania 16823.

Item 27. Principal Underwriter

(a) OppenheimerFunds Distributor, Inc. is the Distributor of the Registrant's
shares. It is also the Distributor of each of the other registered open-end
investment companies for which OppenheimerFunds, Inc. is the investment adviser,
as described in Part A and B of this Registration Statement and listed in Item
26(b) above (except Oppenheimer Multi-Sector Income Trust and Panorama Series
Fund, Inc.) and for MassMutual Institutional Funds.

(b) The directors and officers of the Registrant's principal underwriter are:

Name & Principal            Position & Office     Position and Office
Business Address                with Underwriter          with Registrant

Robert Agan(1)                  Vice President            None
Janette Aprilante(1)            Secretary                 None
Jason R. Bach                   Vice President            None
3264 Winthrop Cricle
Marietta, GA 30067

James Barker                    Vice President            None
Kathleen Beichert(1)            Vice President            None
Gabriella Bercze(2)             Vice President            None
Douglas S. Blankenship          Vice President            None
17011 Woodbark

Spring, TX 77379

Tracey Blinzler(1)              Assistant Vice President  None
David A. Borrelli               Vice President            None
Michelle Brennan                Assistant Vice President  None
L. Scott Brooks(2)              Vice President            None
Kevin E. Brosmith               Senior Vice President     None
170 Phillip Court

Lake Bluff, IL 60044
Jeffrey W. Bryan(2)             Vice President            None
Susan Burton                    Vice President            None
412 Towne Green Circle
Addison, TX 75001
Kathleen Mary Byron             Vice President            None
6 Dahlia Drive
Irvine, CA 92618

Andrew Chonofsky                Vice President            None
Robert A. Coli                  Vice President            None
12 White Tail Lane

Bedminster, NJ 07921
Jill E. Crockett(2)             Assistant Vice President  None
Jeffrey D. Damia(2)             Vice President            None
John Davis(2)                   Assistant Vice President  None
Stephen J. Demetrovits(2)       Vice President            None

Joseph A. DiMauro               Vice President            None
244 McKinley Avenue
Grosse Pointe Farms, MI 48236

Steven Dombrower(2)             Vice President            None
George P. Dougherty             Vice President            None
4090 Redbud Circle

Doylestown, PA 18901
Cliff H. Dunteman               Vice President            None
1196 Fieldstone Dr.
Crystal Lake, IL 60014-1642
John Eiler(2)                   Vice President            None
Kent M. Elwell                  Vice President            None
35 Crown Terrace
Yardley, PA 19067
Gregg A. Everett                Vice President            None
7124 Trysail Circle
Tampa, FL 33607

George R. Fahey                 Senior Vice President     None
9 Townview Court

Flemington, NJ 08822
Eric C. Fallon                  Vice President            None
10 Worth Circle
Newton, MA 02458

Katherine P. Feld(2)            Vice President            Assistant Secretary
Mark J. Ferro(2)                Senior Vice President     None
Ronald H. Fielding(3)           Vice President            None
Patrick W. Flynn (1)            Senior Vice President     None
John E. Forrest(2)              Senior Vice President     None
John ("J) Fortuna(2)            Vice President            None
P. Lyman Foster(2)              Senior Vice President     None
Luiggino J. Galleto             Vice President            None
10302 Riesling Court

Charlotte, NC 28277

Lucio Giliberti                 Vice President            None
6 Cyndi Court
Flemington, NJ 08822
Raquel Granahan(2)              Vice President            None
Ralph Grant(2)                  Senior Vice President     None
Michael D. Guman                Vice President            None
3913 Pleasant Avenue
Allentown, PA 18103

Clifford W. Heidinger           Vice President            None
90 Gates Street
Portsmouth, NH 03801
Phillipe D. Hemery              Vice President            None
184 Park Avenue
Rochester, NY 14607
Elyse R. Jurman Herman          Vice President            None
1194 Hillsboro Mile, Villa 51
Hillsboro Beach, FL  33062
Wendy G. Hetson                 Vice President            None
4 Craig Street
Jericho, NY 11753

William E. Hortz(2)             Vice President            None
Edward Hrybenko(2)              Vice President            None
Brian F. Husch(2)               Vice President            None

Kathleen T. Ives(1)             Vice President            Assistant Secretary
Eric K. Johnson                 Vice President            None
28 Oxford Avenue
Mill Valley, CA 94941
Mark D. Johnson                 Vice President            None
15792 Scenic Green Court
Chesterfield, MO 63017
John S. Kavanaugh               Vice President            None
2 Cervantes, Apt. #301
San Francisco, CA 94123
Christina J. Keller(2)          Vice President            None
Brian G. Kelly                  Vice President            None
60 Larkspur Road
Fairfield, CT 06430
Michael Keogh(2)                Vice President            None
Lisa Klassen(1)                 Assistant Vice President  None
Richard Klein                   Senior Vice President     None
4820 Fremont Avenue So.
Minneapolis, MN 55409

Richard Knott(2)                Senior Vice President     None
Dean Kopperud(2)                Senior Vice President     None
Brent A. Krantz                 Senior Vice President     None

P. O. Box 1313 Seahurst, WA 98062
David T. Kuzia                  Vice President            None
9697 S. Golden Eagle Dr.
Highlands, CO 80126

Tracey Lange(2)                 Vice President            None
Paul R. LeMire                  Vice President            None
Evan M. Lereah                  Vice President            None
Dawn Lind                       Vice President            None
21 Meadow Lane

Rockville Centre, NY 11570
Malissa Lischin(2)              Assistant Vice President  None
James V. Loehle                 Vice President            None
30 Wesley Hill Lane
Warwick, NY 10990

Montana Low                     Vice President            None
Craig Lyman                     Vice President            None
John J. Lynch                   Vice President            None
5341 Ellsworth

Dallas, TX 75206
Mark Macken                     Vice President            None
462 Lincoln Avenue
Sayville, NY 11782
Michael Magee(2)                Vice President            None
Steven C. Manns                 Vice President            None
1941 W. Wolfram
Chicago, IL 60657
Todd A. Marion                  Vice President            None
3 St. Marks Place
Cold Spring Harbor, NY 11724

LuAnn Mascia(2)                 Vice President            None


Theresa-Marie Maynier           Vice President            None
2421 Charlotte Drive
Charlotte, NC 28203
Anthony P. Mazzariello          Vice President            None
704 Beaver Road
Leetsdale, PA 15056
John C. McDonough               Vice President            None
3812 Leland Street
Chevy Chase, MD 20815
Kent C. McGowan                 Vice President            None
18424 12th Avenue West
Lynnwood, WA 98037

Daniel Melehan                  Vice President            None
Mark Mezzanotte                 Vice President            None
Robert Moser                    Vice President            None
John V. Murphy(2)               Director                  President, Principal
                                                          Executive Officer,
                                                          Chairman & Manager

Wendy Jean Murray               Vice President            None
32 Carolin Road
Upper Montclair, NJ 07043
Christina Nasta(2)              Vice President            None
Kevin P. Neznek(2)              Vice President            None
Chad V. Noel                    Vice President            None
2408 Eagleridge Drive
Henderson, NV 89014

Bradford Norford                Vice President            None
Raymond C. Olson(1)             Assistant Vice President  None

                                & Treasurer

Alan Panzer                     Vice President            None
Brian C. Perkes                 Vice President            None
8734 Shady Shore Drive

Frisco, TX 75034
Charles K. Pettit               Vice President            None
22 Fall Meadow Drive
Pittsford, NY 14534

Gazell Pettway                  Vice President            None
William Presutti                Vice President            None
Elaine Puleo-Carter(2)          Senior Vice President     None
Christopher L. Quinson          Vice President            None
19 Cayuga Street

Rye, NY 10580
Minnie Ra                       Vice President            None
100 Dolores Street, #203
Carmel, CA 93923

Gary D. Rakan                   Vice President            None
25031 Woodridge Triangle
Farmington, MI 48335

Dusting Raring                  Vice President            None
Michael A. Raso                 Vice President            None

16 N. Chatsworth Ave., Apt. 301
Larchmont, NY 10538
Douglas Rentschler              Vice President            None
677 Middlesex Road
Grosse Pointe Park, MI 48230


Ruxandra Risko(2)               Vice President            None
David R. Robertson(2)           Senior Vice President     None
Kenneth A. Rosenson             Vice President            None
24753 Bantage Point Terr.
Malibu, CA 90265
James H. Ruff(2)                President & Director      None
William R. Rylander             Vice President            None
85 Evergreen Road
Vernon, CT 06066

Thomas Sabow(2)                 Vice President            None
John Saunders                   Vice President            None
Tonya Sax                       Vice President            None
Alfredo Scalzo                  Vice President            None
9616 Lake Chase Island Way

Tampa, FL 33626

Thomas Schmitt                  Vice President            None
Eric Sharp                      Vice President            None
862 McNeill Circle

Woodland, CA 95695
Debbie Simon(2)                 Vice President            None
Douglas Bruce Smith             Vice President            None
808 South 194th Street
Seattle,WA 98148

Bryan Stein(2)                  Vice President            None
John Stoma(2)                   Senior Vice President     None
Brian C. Summe                  Vice President            None
239 N. Colony Drive
Edgewood, KY 41017
Michael Sussman(2)              Vice President            None
George T. Sweeney               Senior Vice President     None
5 Smoke House Lane
Hummelstown, PA 17036

James Taylor(2)                 Assistant Vice President  None
Martin Telles(2)                Senior Vice President     None
David G. Thomas                 Vice President            None
1328 N. Cleveland Street
Arlington, VA 22201
Bryan K.Toma                    Vice President            None
14575 S. Gallery
Olathe, KS 66062
Floyd A. Tucker                 Vice President            None
1930 W. Barry Ave., #2
Chicago, IL 60657


Mark Vandehey(1)                Vice President            None
Vincent Vermete                 Assistant Vice President  None
Kenneth Ward                    Vice President            None
Teresa Ward(1)                  Vice President            None
Michael J. Weigner              Vice President            None
4905 W. San Nicholas Street

Tampa, FL 33629
Donn Weise                      Vice President            None
3249 Earlmar Drive
Los Angeles, CA 90064
Catherine White(2)              Assistant Vice President  None
Thomas Wilson(2)                Vice President            None
Donna Winn(2)                   Senior Vice President     None
Philip Witkower(2)              Senior Vice President     None
Cary Patrick Wozniak            Vice President            None
18808 Bravata Court
San Diego, CA 92128

John Young                      Vice President            None
Gregor D. Yuska                 Vice President            None
16035 Canterbury Estates Dr.

Ellisville, MO 63021
Robert G. Zack(2)               General Counsel &         Secretary
                                Director


(1)6803 South Tucson Way, Centennial, CO 80112-3924
(2)498 Seventh Avenue, New York, NY 10018
(3)350 Linden Oaks, Rochester, NY 14623


(c) Not applicable.

Item 28. Location of Accounts and Records


The accounts, books and other documents required to be maintained by Registrant
pursuant to Section 31(a) of the Investment Company Act of 1940 and rules
promulgated thereunder are in the possession of OppenheimerFunds, Inc. at its
offices at 6803 South Tucson Way, Centennial, Colorado 80112-3924.


Item 29. Management Services

Not applicable

Item 30. Undertakings

Not applicable.



                                  SIGNATURES


Pursuant to the requirements of the Securities Act of 1933 and/or the Investment
Company Act of 1940, the Registrant certifies that it meets all the requirements
for effectiveness of this Registration Statement pursuant to Rule 485(b) under
the Securities Act of 1933 and has duly caused this Registration Statement to be
signed on its behalf by the undersigned, thereunto duly authorized, in the City
of New York and State of New York on the 21st day of August, 2003.


                              OPPENHEIMER HIGH YIELD FUND

                              By:  /s/ John V. Murphy*
                              ------------------------------------------
                              John V. Murphy, President,
                              Principal Executive Officer & Trustee

Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed below by the following persons in the capacities on
the dates indicated:

Signatures                   Title                           Date

/s/ James C. Swain*

-----------------------      Chairman & Trustee          August 21, 2003
James C. Swain

/s/ William L. Armstrong*    Vice Chairman & Trustee     August 21, 2003
-------------------------
William L. Armstrong

/s/ John V. Murphy*          President, Principal        August 21, 2003
------------------------     Executive Officer
John V. Murphy               and Trustee

/s/ Brian W. Wixted*         Treasurer and Principal     August 21, 2003
-------------------------    Financial and
Brian W. Wixted              Accounting Officer

/s/ Robert G. Avis*          Trustee                     August 21, 2003

----------------------
Robert G. Avis


/s/ George Bowen*            Trustee                     August 21, 2003

----------------------
George Bowen


/s/ Edward Cameron*          Trustee                     August 21, 2003

------------------------
Edward Cameron


/s/ Jon S. Fossel*           Trustee                     August 21, 2003

--------------------
Jon S. Fossel


/s/ Sam Freedman*            Trustee                     August 21, 2003

----------------------
Sam Freedman

/s/ Beverly L. Hamilton*

------------------------     Trustee                     August 21, 2003

Beverly L. Hamilton

/s/ Robert J. Malone*

--------------------------   Trustee                     August 21, 2003
Robert J. Malone

/s/ F. William Marshall, Jr.*    Trustee                 August 21, 2003

-----------------------------
F. William Marshall, Jr.


*By: /s/ Robert G. Zack
--------------------------------
Robert G. Zack, Attorney-in-Fact





                         OPPENHEIMER HIGH YIELD FUND

                           Registration No. 2-62076


                       Post-Effective Amendment No. 47


                                EXHIBIT INDEX

Exhibit No.   Description
-----------   -----------


23(a)(iii)    Amendment No. 2 to Amended and Restated Declaration of Trust


23(j)         Independent Auditors' Consent


23(m)(iv)     Amended and Restated Service Plan and Agreement for Class N shares