Oppenheimer International Small Company Fund - SEC.gov … · Performance data quoted represents...

0001193125-15-161034.txt : 201504300001193125-15-161034.hdr.sgml : 2015043020150430141605ACCESSION NUMBER:0001193125-15-161034CONFORMED SUBMISSION TYPE:N-CSRSPUBLIC DOCUMENT COUNT:7CONFORMED PERIOD OF REPORT:20150227FILED AS OF DATE:20150430DATE AS OF CHANGE:20150430EFFECTIVENESS DATE:20150430

FILER:

COMPANY DATA:COMPANY CONFORMED NAME:OPPENHEIMER INTERNATIONAL SMALL CO FUNDCENTRAL INDEX KEY:0001041102IRS NUMBER:133955887STATE OF INCORPORATION:DEFISCAL YEAR END:0831

FILING VALUES:FORM TYPE:N-CSRSSEC ACT:1940 ActSEC FILE NUMBER:811-08299FILM NUMBER:15817329

BUSINESS ADDRESS:STREET 1:6803 SOUTH TUCSON WAYSTREET 2:N/ACITY:CENTENNIALSTATE:COZIP:80112-3924BUSINESS PHONE:303-768-3200

MAIL ADDRESS:STREET 1:6803 SOUTH TUCSON WAYSTREET 2:N/ACITY:CENTENNIALSTATE:COZIP:80112-3924

0001041102S000007074OPPENHEIMER INTERNATIONAL SMALL CO FUND

C000019305A

C000019306B

C000019307C

C000019308R

C000019309Y

C000109449I

N-CSRS1d901548dncsrs.htmOPPENHEIMER INTERNATIONAL SMALL COMPANY FUND

Oppenheimer International Small Company Fund

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED

MANAGEMENT INVESTMENT COMPANIES

Investment Company Act file number 811-08299

OppenheimerInternational Small Company Fund

(Exact name of registrant as specified in charter)

6803 South Tucson Way, Centennial, Colorado 80112-3924

(Address of principal executive offices) (Zip code)

Arthur S.Gabinet

OFI Global Asset Management, Inc.

225 Liberty Street, New York, New York 10281-1008

(Name and address of agent for service)

Registrants telephone number, including area code: (303)768-3200

Date of fiscal year end: August 31

Date of reporting period: 2/27/2015

Item1. Reports to Stockholders.

Table of Contents

Fund Performance Discussion3

Top Holdings and Allocations6

Fund Expenses9

Statement of Investments11

Statement of Assets and Liabilities16

Statement of Operations18

Statements of Changes in Net Assets20

Financial Highlights21

Notes to Financial Statements32

Board Approval of the Funds Investment Advisory and Sub-Advisory Agreements44

Portfolio Proxy Voting Policies and Procedures; Updates to Statement of Investments47

Trustees and Officers48

Privacy Policy Notice49

ClassA Shares

AVERAGEANNUAL TOTAL RETURNS AT 2/27/15*

ClassASharesoftheFund

WithoutSalesCharge

WithSalesCharge

MSCIAllCountry

WorldExU.S.Small
Cap Net Index

6-Month

2.32%-3.57%-4.84%

1-Year

1.54-4.30-2.43

5-Year

16.5615.198.36

10-Year

12.4411.776.76

Performance data quoted represents past performance, which does not guarantee future results. The investment return andprincipal value of an investment in the Fund will fluctuate so that an investors shares, when redeemed, may be worth more or less than their original cost. Fund returns include changes in share price, reinvested distributions, and a 5.75%maximum applicable sales charge except where without sales charge is indicated. Current performance may be lower or higher than the performance quoted. Returns do not consider capital gains or income taxes on an individualsinvestment. Returns for periods of less than one year are cumulative and not annualized. For performance data current to the most recent month-end, visit oppenheimerfunds.com or call 1.800.CALL OPP (225.5677).

* February 27, 2015, was the last business day of the Funds semiannual period. See Note 2 of the accompanying Notes to Financial Statements. Index returns arecalculated through February28, 2015.

2OPPENHEIMER INTERNATIONAL SMALL COMPANY FUND

Fund Performance Discussion

The Funds ClassA shares (without sales charge) produced a return of 2.32% during the reporting period, outperforming the MSCI All Country World Ex U.S.Small Cap Net Index (the Index), which returned -4.84%. Our stock selection in information technology and health care was a main driver for the Funds outperformance this reporting period. We were also helped by having limitedexposure to energy stocks. Financials and consumer discretionary were two sectors that underperformed the Index, as a result of stock selection.

It is important tonote that we take a benchmark indifferent approach to managing the Fund. Our investment process is geared towards identifying future leaders and tends to rely heavily on bottom-up fundamental analysis. Geographic and sector weightings are aby-product of stock selection rather than top down decisions.

MARKET OVERVIEW

Outside of the U.S., the positive data points that had emerged in Europe in 2013 and early 2014 largely reversedthemselves later in the reporting period and the European Central Bank (the ECB) came under even greater pressure to provide a credible plan to boost growth and avoid deflation. In response, the ECB adopted a number of policies designedto stimulate growth. In Japan, which has been mired in economic weakness for years, the Abe administration has adopted even more aggressive economic policies with the Bank of Japan (the BoJ) executing a massive quantitative easing(QE) program. However, the results have not been particularly impressive, with that economy slipping back into recession in the third quarter of 2014 following the consumption tax increase before coming out of that recession in thefourth quarter. Emerging markets economic growth was

mixed, as certain regions like Eastern Europe and the Middle East remained burdened by geopolitical turmoil. Manycommodity producing emerging market economies also struggled as prices for most commodities fell. At the end of the reporting period in February, a robust bond-buying program was unveiled by ECB President Mario Draghi, which exceeded marketexpectations. In addition, positive data from the Eurozone has helped to increase investor confidence and European equities are seeing more inflows.

FUND REVIEW

Top performing holdings for the Fund this reporting period included Ocado Group plc, DBV Technologies SA and NICE Systems Ltd.Ocado is an online grocery retailer in the U.K. The company is evolving from food retail into other areas. It also leverages its expertise in technology and logistics by licensing that


technology to other food retailers globally, allowing them to provide online retail services. These structural growthopportunities have allowed Ocado to perform positively despite a challenging industry backdrop where traditional grocery retailers in the U.K. have struggled with competitive and deflationary pressures. DBV Technologies is a French biotechnologycompany with a focus on developing drugs for the treatment of allergies. Because food allergies are on the rise, their treatment presents a large market opportunity. One of the critical areas that does not yet have an effective treatment is peanutallergies in children. DBV has developed a treatment that is delivered through a patch that activates the immune system. The company recently announced encouraging clinical results for the Phase II trial of this treatment in children. DBV is alsodeveloping treatments for allergies to other products, including milk. NICE Systems, based in Israel, is engaged in software solutions and services that help to analyze and manage transactional data (such as web, telephone and radio) along withmultimedia content. NICE has operations in the following market segments: financial crime and compliance solutions; customer interaction solutions and security solutions. We believe NICE is well-positioned to benefit from an increased adoption ofadvanced business applications and a strong pipeline.

Detractors from performance this reporting period included BM&FBovespa S.A., OPAP SA (Greek Organisationof Football Prognostics), and Askul Corp. BM&FBovespa, based in

Brazil, combines the activities of BOVESPA (Brazilian Stock Exchange) and BM&F (the futures and commodities exchange). It also organizes, develops and provides systems for trading a varietyof securities including equities, derivatives, fixed income securities, federal government securities, spot foreign exchange and agricultural commodities. The company has continued to struggle under challenging economic and market conditions. Askulis transitioning from its role as a dominant player in the online office supply market in Japan. It is leveraging its supply chain to expand into the MRO (maintenance, repair and operations) market and a B2C (business to consumer) business.Askuls B2C business, LOHACO, will offer daily consumable products. The company has been experiencing some growing pains on the back of LOHACOs expansion and this has impacted the stocks performance. Market sentiment has shiftedfrom overly enthusiastic to overly pessimistic. We are patient investors and believe that management is making the right investments and profitability will follow as the business gains scale.

STRATEGY& OUTLOOK

While circumstances varydepending on industry, we are generally interested in companies that have meaningful competitive advantages, innovative technology and product offerings, defendable market positions, high quality management teams and the ability to generate returnsin excess of their weighted average cost of capital.


We have a long-term investment horizon and are willing to wait for our ideas to play out. We view entry price as a keycomponent of future returns. Therefore, we embrace volatility and seek to take advantage of attractive prices during times of adversity.


Top Holdings andAllocations*

TOP TEN COMMON STOCK HOLDINGS

Lonza Group AG

2.5%

Ocado Group plc

2.3

Baloise Holding AG

1.6

Hoshizaki Electric Co. Ltd.

1.6

Tech Mahindra Ltd.

1.6

Bank of Ireland

1.5

WuXi PharmaTech Cayman, Inc., ADR

1.5

MonotaRO Co. Ltd.

1.4

Cyient Ltd.

1.3

Britvic plc

1.3

Portfolio holdings and allocations are subject to change. Percentages are as of February27, 2015, and are based on net assets. Formore current Fund holdings, please visit oppenheimerfunds.com.

TOP TEN GEOGRAPHICAL HOLDINGS

United Kingdom

18.4%

Japan

14.9

United States

12.5

Germany

9.9

Switzerland

9.6

India

7.2

France

5.8

Ireland

2.6

China

2.2

Brazil

2.1

Portfolio holdings and allocation are subject to change. Percentages are as of February27, 2015, and are based on total market valueof investments.

REGIONAL ALLOCATION

Portfolio holdings and allocations are subject to change. Percentages are as of February27, 2015, and are based on the totalmarket value of investments.

*February27, 2015, was the last business day of the Funds semiannual period. See Note 2 of the accompanying Notes to Financial Statements.


Share Class Performance

AVERAGE ANNUAL RETURNS WITHOUT SALES CHARGE AS OF 2/27/15

InceptionDate6-Month1-Year5-Year10-Year

Class A (OSMAX)

11/17/972.32%1.54%16.56%12.44%

Class B (OSMBX)

11/17/971.96%0.80%15.56%11.86%

Class C (OSMCX)

11/17/971.96%0.81%15.69%11.57%

Class I (OSCIX)

12/29/112.56%1.99%23.20%*N/A

Class R (OSMNX)

3/1/012.20%1.30%16.20%12.07%

Class Y (OSMYX)

9/7/052.46%1.82%16.99%12.30%*

AVERAGE ANNUAL RETURNS WITH SALES CHARGE AS OF 2/27/15

InceptionDate6-Month1-Year5-Year10-Year

Class A (OSMAX)

11/17/97-3.57%-4.30%15.19%11.77%

Class B (OSMBX)

11/17/97-3.04%-4.20%15.33%11.86%

Class C (OSMCX)

11/17/970.96%-0.19%15.69%11.57%

Class I (OSCIX)

12/29/112.56%1.99%23.20%*N/A

Class R (OSMNX)

3/1/011.20%0.30%16.20%12.07%

Class Y (OSMYX)

9/7/052.46%1.82%16.99%12.30%*

* Shows performance since inception.

Performancedata quoted represents past performance, which does not guarantee future results. The investment return and principal value of an investment in the Fund will fluctuate so that an investors shares, when redeemed, may be worth more orless than their original cost. Current performance may be lower or higher than the performance quoted. Returns do not consider capital gains or income taxes on an individuals investment. For performance data current to the most recentmonth-end, visit oppenheimerfunds.com or call 1.800.CALL OPP (225.5677). Fund returns include changes in share price, reinvested distributions, and the applicable sales charge: for ClassA shares, the current maximum initial sales charge of5.75%; for Class B shares, the contingent deferred sales charge (CDSC) of 5% (1-year) and 2% (5-year); and for Class C shares, the 1% CDSC for the 1-year period. Prior to 7/1/14, Class R shareswere named Class N shares. Beginning 7/1/14, new purchases of Class R shares will no longer be subject to a CDSC upon redemption (any CDSC will remain in effect for purchases prior to 7/1/14). There is no sales charge for Class I and Y shares.Because Class B shares convert to ClassA shares 72 months after purchase, 10-year returns for Class B shares reflect ClassA performance for the period after conversion. Returns for periods of less than one year are cumulative and notannualized.

The Funds performance is compared to the performance of the MSCI All Country World Ex U.S. Small Cap Index, which is designed to measure theequity market performance of small capitalization developed and emerging markets, excluding the United States. The Index is unmanaged and cannot be purchased directly by investors. While index comparisons may be useful to provide a benchmark for theFunds performance, it must be noted that the Funds investments are not limited to the investments comprising the Index. Index performance


includes reinvestment of income, but does not reflect transaction costs, fees, expenses or taxes. Index performance isshown for illustrative purposes only as a benchmark for the Funds performance, and does not predict or depict performance of the Fund. The Funds performance reflects the effects of the Funds business and operating expenses.

The Funds investment strategy and focus can change over time. The mention of specific fund holdings does not constitute a recommendation by OppenheimerFunds, Inc.or its affiliates.

Before investing in any of the Oppenheimer funds, investors should carefully consider a funds investment objectives, risks, charges andexpenses. Fund prospectuses and summary prospectuses contain this and other information about the funds, and may be obtained by asking your financial advisor, visiting oppenheimerfunds.com, or calling 1.800.CALL OPP (225.5677). Read prospectuses andsummary prospectuses carefully before investing.

Shares of Oppenheimer funds are not deposits or obligations of any bank, are not guaranteed by any bank,are not insured by the FDIC or any other agency, and involve investment risks, including the possible loss of the principal amount invested.


Fund Expenses

Fund Expenses. As a shareholder of the Fund, you incur two types of costs: (1)transaction costs, which may include sales charges (loads) on purchasepayments, contingent deferred sales charges on redemptions; and (2)ongoing costs, including management fees; distribution and service fees; and other Fund expenses. These examples are intended to help you understand your ongoing costs (indollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.

The examples are based on an investment of$1,000.00 invested at the beginning of the period and held for the entire

6-month period ended February27, 2015.

Actual Expenses. The first section of the table provides information about actual account values and actual expenses. You may use the information in this sectionfor the class of shares you hold, together with the amount you invested, to estimate the expense that you paid over the period. Simply divide your account value by $1,000.00 (for example, an $8,600.00 account value divided by$1,000.00=8.60), then multiply the result by the number in the first section under the heading entitled Expenses Paid During 6Months Ended February27, 2015 to estimate the expenses you paid on your account duringthis period.

Hypothetical Example for Comparison Purposes. The second section of the table provides information about hypothetical account values andhypothetical expenses based on the Funds actual expense ratio for each class of shares, and an assumed rate of return of 5%per year for each class before expenses, which is not the Funds actual return. The hypothetical accountvalues and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5%hypothetical example for the class of shares you hold with the 5% hypothetical examples that appear in the shareholder reports of the other funds.

Please note thatthe expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as front-end or contingent deferred sales charges (loads). Therefore, the hypothetical section of the tableis useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.


Actual

Beginning
Account

Value
September1,2014

Ending

Account

Value
February27,2015

Expenses

Paid During

6 Months Ended
February27,2015

Class A$1,000.00$1,023.20$5.95

Class B1,000.001,019.609.76

Class C1,000.001,019.609.71

Class I1,000.001,025.603.80

Class R1,000.001,022.007.20

Class Y1,000.001,024.604.75

Hypothetical

(5% return before expenses)

Class A

1,000.001,018.795.94

Class B

1,000.001,015.049.74

Class C

1,000.001,015.099.69

Class I

1,000.001,020.913.79

Class R

1,000.001,017.567.19

Class Y

1,000.001,019.974.74

Expenses are equal to the Funds annualized expense ratio for that class, multiplied by the average account value over the period,multiplied by 180/365 (to reflect the one-half year period). Those annualized expense ratios, excluding indirect expenses from affiliated funds, based on the 6-month period ended February27, 2015 are as follows:

ClassExpenseRatios

Class A

1.19%

Class B

1.95

Class C

1.94

Class I

0.76

Class R

1.44

Class Y

0.95

The expense ratios reflect voluntary and/or contractual waivers and/or reimbursements of expenses by the Funds Manager. Some ofthese undertakings may be modified or terminated at any time, as indicated in the Funds prospectus. The Financial Highlights tables in the Funds financial statements, included in this report, also show the gross expenseratios, without such waivers or reimbursements and reduction to custodian expenses, if applicable.


STATEMENT OF INVESTMENTS February27, 2015* Unaudited

SharesValue

Common Stocks90.1%

Consumer Discretionary16.1%

Distributors0.6%

Inchcape plc

1,700,000$19,307,378

Diversified Consumer Services0.5%

Benesse Holdings, Inc.

326,80010,398,351

Kroton Educacional SA

1,172,5934,291,763

14,690,114

Hotels, Restaurants& Leisure1.6%

J.D. Wetherspoon plc

2,354,63029,789,743

OPAP SA

2,181,36020,112,089

49,901,832

Household Durables1.3%

de Longhi

1,384,69927,071,028

SEB SA

187,77013,933,275

41,004,303

Internet& Catalog Retail4.8%

ASKUL Corp.

1,457,74128,498,323

ASOS plc1

295,69614,742,639

Ocado Group plc1

12,374,83070,250,003

Qliro Group AB1,2

7,836,81916,903,604

Start Today Co. Ltd.

631,45815,391,015

145,785,584

Media2.6%

CTS Eventim AG& Co. KGaA

458,92414,158,819

Daily Mail& General Trust plc, Cl.A

1,265,09016,651,500

GFK SE

257,48410,630,337

Next Co. Ltd.2

1,607,30012,645,230

Smiles SA

562,4009,416,423

Zenrin Co. Ltd.

1,381,70017,364,783

80,867,092

Specialty Retail3.5%

Dufry AG1

58,0598,391,068

Dunelm Group plc

1,577,78022,353,284

Esprit Holdings Ltd.

19,619,51920,291,892

Jin Co. Ltd.

539,90016,353,757

SuperGroup plc1

707,48010,642,459

United Arrows Ltd.

450,70013,903,879

USS Co. Ltd.

847,00014,986,039

106,922,378

Textiles, Apparel& Luxury Goods1.2%

Asics Corp.
770,40020,202,846

SharesValue

Consumer Staples5.2%

Salvatore Ferragamo SpA

547,268$16,581,499

36,784,345

Consumer Staples5.2%

Beverages2.0%

Britvic plc

3,458,73840,782,390

Treasury Wine Estates Ltd.

4,737,30020,115,005

60,897,395

Food Products2.1%

Ariake Japan Co. Ltd.

1,044,50028,574,206

Aryzta AG1

201,79416,111,578

Kaveri Seed Co. Ltd.

1,304,86819,923,545

Pescanova SA1

138,4811,550

64,610,879

Household Products0.6%

Rohto Pharmaceutical Co. Ltd.

1,557,83319,333,504

Personal Products0.5%

Colgate-Palmolive India Ltd.

500,00015,645,118

Financials11.9%

Capital Markets1.1%

CETIP SA-Mercados Organizados

1,904,72023,081,415

EFG International AG1

849,3869,895,198

32,976,613

Commercial Banks1.5%

Bank of Ireland1

123,071,72247,437,037

DiversifiedFinancialServices1.7%

BM&FBovespa SA

3,607,00012,757,122

Coface SA1

2,145,45325,812,620

CRISIL Ltd.

287,6949,650,591

Moscow Exchange (The)

4,612,0645,749,953

53,970,286

Insurance4.6%

Baloise Holding AG

392,76751,037,496

Euler Hermes Group

268,62029,658,706

Grupo Catalana Occidente SA

1,067,35632,715,263

Porto Seguro SA

884,0009,753,194


STATEMENT OF INVESTMENTSUnaudited / Continued

SharesValue

Insurance (Continued)

St Jamess Place plc

1,319,134$ 19,295,345

142,460,004

Real Estate Investment Trusts (REITs)1.4%

Frasers Centrepoint

Trust

7,000,00010,477,164

Hibernia REIT plc

23,473,08331,513,919

41,991,083

Real Estate Management& Development0.9%

DLF Ltd.

5,577,67914,098,066

Oberoi Realty Ltd.

2,539,34113,221,690

27,319,756

Thrifts& Mortgage Finance0.7%

Aareal Bank AG

492,13722,079,736

Health Care22.2%

Biotechnology3.4%

Abcam plc

3,148,61022,941,820

ARIAD Pharmaceuticals, Inc.1

1,852,92015,064,240

Galapagos NV1

192,9424,305,758

Genmab AS1

244,30418,050,332

Medivir AB, Cl. B1

399,9204,448,293

Repligen Corp.1

839,10021,573,261

Swedish Orphan Biovitrum AB1

1,264,46314,173,644

uniQure BV1

158,7203,688,653

104,246,001

Health Care Equipment& Supplies7.1%

Ambu AS, Cl. B

943,40419,271,028

BioMerieux

227,89024,823,539

Carl Zeiss Meditec AG

1,034,84828,443,490

DBV Technologies SA1

754,98933,207,107

Mindray Medical International Ltd., ADR

373,69010,560,480

Ossur HF1

11,918,21937,877,808

Oxford Immunotec Global plc1

516,2277,263,314

Sirona Dental Systems, Inc.1

371,87033,773,233

STRATEC Biomedical AG

425,31121,506,580

216,726,579

SharesValue

Health Care Providers & Services0.2%

Diagnosticos da America SA

1,754,200$ 6,605,865

Health Care Technology0.3%

M3, Inc.

425,0009,457,538

Life Sciences Tools& Services7.2%

Bruker Corp.1

1,323,05025,177,642

Genfit1

190,01612,746,583

Lonza Group AG1

632,87277,886,945

MorphoSys AG1

145,37912,108,702

QIAGEN NV1

672,97016,999,222

Tecan Group AG

257,96430,894,007

WuXi PharmaTech Cayman, Inc.,

ADR1

1,135,65745,369,497

221,182,598

Pharmaceuticals4.0%

Almirall SA1

841,94412,733,640

BTG plc1

1,533,31017,928,983

Hikma Pharmaceuticals plc

307,29011,719,175

Ipsen SA

345,46017,548,049

Nippon Shinyaku Co. Ltd.

731,00024,583,617

Sosei Group Corp.1

185,8005,199,068

Vectura Group plc1

15,227,00134,513,219

124,225,751

Industrials13.7%

Air Freight& Couriers0.6%

Panalpina Welttransport Holding AG

140,67319,525,034

Construction& Engineering0.4%

Balfour Beatty plc

3,433,45713,250,510

Machinery6.4%

Aalberts Industries NV

462,87814,313,912

Burckhardt Compression Holding AG

76,26329,861,884

Hoshizaki Electric Co. Ltd.

834,40049,345,175

Hy-Lok Corp.

218,4315,651,456

Metso OYJ

642,10720,623,065

Norma Group SE

348,75818,623,718

Rotork plc
360,37413,633,797


SharesValue

Machinery (Continued)

Spirax-Sarco

Engineering plc

640,987$31,731,904

Vesuvius plc

1,844,90013,614,509

197,399,420

Road& Rail0.6%

ComfortDelGro Corp. Ltd.

8,543,00018,426,903

Trading Companies& Distributors4.5%

Brammer plc

3,980,49021,787,424

Bunzl plc

915,57926,746,647

Cramo OYJ

1,085,27217,343,527

MonotaRO Co. Ltd.

1,286,10042,589,151

SIG plc

9,645,42029,476,404

137,943,153

Transportation Infrastructure1.2%

Flughafen Zuerich AG

48,86534,968,503

Information Technology15.5%

Electronic Equipment, Instruments,&

Components2.4%

Halma plc

1,520,82716,706,978

Ingenico

188,53020,979,477

Renishaw plc

575,92023,173,005

Yokogawa Electric Corp.

1,306,50013,866,519

74,725,979

Internet Software& Services2.8%

Kakaku.com, Inc.

745,98612,388,271

Moneysupermarket.com Group plc

6,523,39027,500,585

SMS Co. Ltd.

483,0005,478,018

XING AG2

287,62639,829,835

85,196,709

IT Services5.2%

GMO Payment Gateway, Inc.

1,111,20024,499,842

Obic Co. Ltd.

717,50026,689,851

QIWI plc, Sponsored ADR

137,1903,232,196

SCSK Corp.

1,241,70834,136,333

Tech Mahindra Ltd.

1,045,74347,872,792

Wirecard AG

536,47524,755,816

161,186,830

SharesValue

Semiconductors & Semiconductor Equipment1.0%

Dialog Semiconductor plc1

346,109$15,311,096

Disco Corp.

139,90012,853,279

Imagination Technologies Group plc1

896,2903,546,318

31,710,693

Software4.1%

Cyient Ltd.

4,603,55441,338,779

Nemetschek AG

261,05334,306,537

NICE-Systems Ltd., Sponsored ADR

674,03039,343,131

SimCorp AS

324,10611,416,067

126,404,514

Materials4.7%

Chemicals4.7%

Bayer CropScience Ltd.

438,00824,358,211

Borregaard ASA

3,655,61823,112,701

LANXESS AG

180,1949,280,494

PI Industries Ltd.

2,322,72422,319,476

Sika AG

4,96917,543,363

Symrise AG

503,87632,041,191

Victrex plc

535,42015,617,394

144,272,830

Utilities0.8%

Gas Utilities0.8%

ENN Energy Holdings Ltd.

1,946,00010,367,879

Indraprastha Gas Ltd.

1,869,37713,323,023

23,690,902

Total Common Stocks

(Cost $2,161,232,556)

2,775,130,749

Preferred Stock0.8%

Sartorius AG, Preference

(Cost $11,135,136)

168,49823,473,648


STATEMENT OF INVESTMENTS Unaudited / Continued

SharesValue

Investment Company9.2%

Oppenheimer Institutional Money Market Fund, Cl. E,0.11%2,3 (Cost $281,898,766)

281,898,766$ 281,898,766

Total Investments, at Value (Cost $2,454,266,458)

100.1%3,080,503,163

Net Other Assets (Liabilities)

(0.1)(1,820,589)

Net Assets
100.0%$3,078,682,574

Footnotes to Statement of Investments

*February 27, 2015 represents the last business day of the Funds 2015 reporting period. See Note 2 of the accompanying Notes.

1. Non-income producing security.

2. Is or was an affiliate, as definedin the Investment Company Act of 1940, as amended, at or during the period ended February27, 2015, by virtue of the Fund owning at least 5% of the voting securities of the issuer or as a result of the Fund and the issuer having the sameinvestment adviser. Transactions during the period in which the issuer was an affiliate are as follows:

Shares

August29,
2014a

Gross
AdditionsGross
Reductions

Shares

February27,
2015

Next Co. Ltd.b

3,598,100

1,990,8001,607,300

Oppenheimer Institutional Money Market Fund, Cl. E

229,090,309391,828,301339,019,844281,898,766

Qliro Group AB (formerly, CDON Group AB)

5,668,9662,167,853c

7,836,819

XING AG

242,81144,815

287,626

ValueIncome

Next Co. Ltd.b

$ d$

Oppenheimer Institutional Money Market Fund, Cl. E

281,898,766130,475

Qliro Group AB (formerly, CDON Group AB)

16,903,604

XING AG

39,829,835

Total

$338,632,205$130,475

a. August 29, 2014 represents the last business day of the Funds reporting period. See Note 2 of the accompanying Notes.

b. No longer an affiliate as of November28, 2014.

c. All or aportion is the result of a corporate action.

d. The security is no longer an affiliate. Therefore, the value has been excluded from this table.

3. Rate shown is the 7-day yield as of February27, 2015.


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

Geographic Holdings

Value

Percent

United Kingdom

$567,703,41418.4%

Japan

458,738,59314.9

United States

384,750,45512.5

Germany

306,549,9979.9

Switzerland

296,115,0769.6

India

221,751,2937.2

France

178,709,3575.8

Ireland

78,950,9562.6

China

66,297,8552.2

Brazil

65,905,7822.1

Denmark

48,737,4281.6

Spain

45,450,4531.5

Italy

43,652,5271.4

Israel

39,343,1311.3

Finland

37,966,5921.2

Iceland

37,877,8081.2

Sweden

35,525,5421.2

Netherlands

35,001,7871.1

Singapore

28,904,0670.9

Norway

23,112,7010.7

Hong Kong

20,291,8920.7

Australia

20,115,0050.7

Greece

20,112,0890.7

Russia

8,982,1490.3

South Korea

5,651,4560.2

Belgium

4,305,7580.1

Total

$3,080,503,163100.0%

See accompanying Notes to Financial Statements.


STATEMENT OF ASSETS AND LIABILITIES February27, 20151 Unaudited

Assets

Investments, at valuesee accompanying statement of investments:

Unaffiliated companies (cost $2,109,753,939)

$2,741,870,959

Affiliated companies (cost $344,512,519)

338,632,204

3,080,503,163

Cash

2,997,201

Receivables and other assets:

Shares of beneficial interest sold

14,346,932

Dividends

2,616,148

Investments sold

2,343,319

Other

174,868

Total assets

3,102,981,631

Liabilities

Payables and other liabilities:

Investments purchased

18,420,532

Shares of beneficial interest redeemed

3,009,092

Foreign capital gains tax

2,169,013

Distribution and service plan fees

289,445

Trustees compensation

240,225

Shareholder communications

3,059

Other

167,691

Total liabilities

24,299,057

Net Assets

$3,078,682,574

Composition of Net Assets

Paid-in capital

$2,664,560,086

Accumulated net investment loss

(14,045,907)

Accumulated net realized loss on investments and foreign currency transactions

(195,645,573)

Net unrealized appreciation on investments and translation of assets and liabilities denominated in foreign currencies

623,813,968

Net Assets

$3,078,682,574

1.February27, 2015 represents the last business day of the Funds reporting period. See Note 2 of the accompanyingNotes.


Net Asset Value Per Share

ClassA Shares:

Net asset value and redemption price per share (based on net assets of $1,274,394,655 and 36,881,794 shares of beneficial interest outstanding)$34.55

Maximum offering price per share (net asset value plus sales charge of 5.75% of offering price)

$36.66

Class B Shares:

Net asset value, redemption price (excludes applicable contingent deferred sales charge) and offering price per share (based on net assets of $9,572,750 and 292,320 shares of beneficialinterest outstanding)$32.75

Class C Shares:

Net asset value, redemption price (excludes applicable contingent deferred sales charge) and offering price per share (based on net assets of $197,745,163 and 6,115,579 shares of beneficialinterest outstanding)$32.33

Class I Shares:

Net asset value, redemption price and offering price per share (based on net assets of $873,737,768 and 25,449,775 shares of beneficial interest outstanding)$34.33

Class R Shares:

Net asset value, redemption price (excludes applicable contingent deferred sales charge) and offering price per share (based on net assets of $39,931,657 and 1,202,698 shares of beneficialinterest outstanding)$33.20

Class Y Shares:

Net asset value, redemption price and offering price per share (based on net assets of $683,300,581 and 19,923,853 shares of beneficial interest outstanding)$34.30



STATEMENT OF OPERATIONS For the Six Months Ended February27, 20151

Investment Income

Dividends:

Unaffiliated companies (net of foreign withholding taxes of $484,927)

$9,637,797

Affiliated companies

130,475

Interest

80

Total investment income

9,768,352

Expenses

Management fees

9,906,546

Distribution and service plan fees:

ClassA

1,361,849

Class B

51,417

Class C

910,640

Class R

94,664

Transfer and shareholder servicing agent fees:

ClassA

1,229,472

Class B

11,358

Class C

201,200

Class I

126,481

Class R

42,065

Class Y

649,949

Shareholder communications:

ClassA

12,017

Class B

341

Class C

1,276

Class I

227

Class R

151

Class Y

2,955

Custodian fees and expenses

240,879

Trustees compensation

22,148

Other

86,649

Total expenses

14,952,284

Less reduction to custodian expenses

(455)

Less waivers and reimbursements of expenses

(134,491)

Net expenses

14,817,338

Net Investment Loss

(5,048,986)

1.February27, 2015 represents the last business day of the Funds reporting period. See Note 2 of the accompanyingNotes.


Realized and Unrealized Gain (Loss)

Net realized gain (loss) on:

Investments from unaffiliated companies (net of foreign capital gains tax of $ 372,615)

$57,918,795

Foreign currency transactions

(563,377)

Net realized gain

57,355,418

Net change in unrealized appreciation/depreciation on:

Investments

206,953,048

Translation of assets and liabilities denominated in foreign currencies

(182,889,040)

Net change in unrealized appreciation/depreciation

24,064,008

Net Increase in Net Assets Resulting from Operations

$76,370,440



STATEMENTS OF CHANGES IN NET ASSETS Unaudited

Six Months Ended
February27,20151
(Unaudited)Year Ended
August29, 20141

Operations

Net investment income (loss)

$(5,048,986)$12,548,661

Net realized gain

57,355,418

121,830,778

Net change in unrealized appreciation/depreciation

24,064,008

269,793,467

Net increase in net assets resulting from operations

76,370,440

404,172,906

Dividends and/or Distributions to Shareholders

Dividends from net investment income:

ClassA

(5,430,295)

(5,642,189)

Class B

Class C

(371,694)

Class I

(7,446,914)

(7,722,817)

Class R2

(86,899)

(160,920)

Class Y

(4,127,214)

(2,098,089)

(17,091,322)

(15,995,709)

Beneficial Interest Transactions

Net increase (decrease) in net assets resulting from beneficial interest transactions:

ClassA

166,656,348

322,222,833

Class B

(3,025,941)

(2,616,513)

Class C

776,366

61,214,573

Class I

(30,766,170)

174,456,675

Class R2

77,118

4,522,854

Class Y

48,881,111

472,918,651

182,598,832

1,032,719,073

Net Assets

Total increase

241,877,950

1,420,896,270

Beginning of period

2,836,804,624

1,415,908,354

End of period (including accumulated net investment income (loss) of $(14,045,907) and $8,084,401, respectively)$3,078,682,574

$2,836,804,624

1.February27, 2015 and August29, 2014 represent the last business days of the Funds respective reportingperiods. See Note 2 of the accompanying Notes.

2. Effective July1, 2014, Class N shares were renamed Class R. See Note 1 of the accompanying Notes.



FINANCIAL HIGHLIGHTS

ClassA

Six Months
Ended
February27,
20151
(Unaudited)

YearEnded
August 29,
2014 1

YearEnded
August 30,
2013

1

YearEnded
August 31,
2012

YearEnded
August 31,
2011

YearEnded
August 31,
2010

Per Share Operating Data

Net asset value, beginning of period

$33.92$27.32$20.56$21.90$19.70$17.57

Income (loss) from investment operations:

Net investment income (loss)2

(0.08)0.140.200.12(0.01)(0.03)

Net realized and unrealized gain (loss)

0.866.696.81(0.55)4.372.86

Total from investment operations

0.786.837.01(0.43)4.362.83

Dividends and/or distributions to shareholders:

Dividends from net investment income

(0.15)(0.23)(0.25)(0.91)(2.16)(0.70)

Net asset value, end of period

$34.55$33.92$27.32$20.56$21.90$19.70

Total Return, at Net Asset Value3

2.32%25.06%34.40%(1.39)%21.27%16.28%

Ratios/Supplemental Data

Net assets, end of period (in thousands)

$1,274,395$1,076,376$593,624$454,037$552,604$566,559

Average net assets (in thousands)

$1,127,198$922,903$517,067$476,217$658,653$616,135

Ratios to average net assets:4


(0.50)%0.42%0.83%0.61%(0.03)%(0.13)%

Total expenses5

1.20%1.20%1.24%1.29%1.23%1.28%

Expenses after payments, waivers and/or reimbursements and reduction to custodian expenses1.19%1.19%1.24%1.29%1.22%1.28%

Portfolio turnover rate

12%18%25%46%122%107%


FINANCIAL HIGHLIGHTS Continued

1.February27, 2015, August29, 2014 and August30, 2013 represent the last business days ofthe Funds respective reporting periods. See Note 2 of the accompanying Notes.

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

3. Assumes an initial investment on the business day before the first day of the fiscal period, with all dividends and distributionsreinvested 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 forperiods 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. The returns do not include adjustments in accordance with generally acceptedaccounting principles required at the period end for financial reporting purposes.

4. Annualized for periods less than one full year.

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

Six Months Ended February27, 2015

1.21%

Year Ended August29, 2014

1.21%


1.24%


1.29%


1.24%


1.28%




Class B

SixMonths

Ended

February27,

20151
(Unaudited)

YearEnded
August 29,
2014 1

YearEnded
August 30,
2013 1

YearEnded

August31,

2012

YearEnded
August 31,
2011

YearEnded
August 31,
2010


Net asset value, beginning of period$32.11$25.87$19.47$20.59$18.63$16.68


Net investment loss2(0.19)(0.13)(0.03)(0.08)(0.23)(0.20)

Net realized and unrealized gain (loss)0.836.376.45(0.43)4.142.72

Total from investment operations0.646.246.42(0.51)3.912.52


Dividends from net investment income0.000.00(0.02)(0.61)(1.95)(0.57)

Net asset value, end of period$32.75$32.11$25.87$19.47$20.59$18.63

Total Return, at Net Asset Value31.96%24.12%33.01%(2.10)%20.07%15.24%


Net assets, end of period (in thousands)$9,573$12,523$12,246$13,160$29,111$39,428

Average net assets (in thousands)$10,413$13,627$12,556$18,009$40,509$46,429


Net investment loss(1.23)%(0.43)%(0.13)%(0.40)%(1.03)%(1.08)%

Total expenses51.96%1.96%2.29%2.40%2.20%2.27%


Portfolio turnover rate12%18%25%46%122%107%









1.97%


1.97%


2.29%


2.40%


2.21%


2.27%



Class C

SixMonths

Ended

February27,

20151

(Unaudited)

YearEnded

August29,

2014 1

YearEnded
August30,

2013 1

YearEnded

August31,

2012

YearEnded

August 31,

2011

YearEnded

August 31,

2010




Net investment income (loss)2(0.19)(0.10)0.02(0.03)(0.17)(0.17)




Dividends from net investment income0.00(0.08)(0.10)(0.74)(2.00)(0.58)

Net asset value, end of period

$32.33$31.71$25.61$19.30$20.56$18.61







(1.24)%(0.34)%0.07%(0.14)%(0.79)%(0.91)%

Total expenses5

1.95%1.96%2.02%2.04%1.99%2.07%



12%18%25%46%122%107%



1. February27, 2015, August29, 2014 and August30, 2013 represent the last business days of theFunds respective reporting periods. See Note 2 of the accompanying Notes.

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

3. Assumes an initial investment on the business day before the first day of the fiscal period, with all dividends and distributions reinvested inadditional 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 thanone full year. Returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. The returns do not include adjustments in accordance with generally accepted accounting principlesrequired at the period end for financial reporting purposes.




1.96%


1.97%


2.02%


2.04%


2.00%


2.07%




Class I

Six Months
Ended
February27,
20151
(Unaudited)

YearEnded
August29,
2014 1

YearEnded
August30,
2013

1

PeriodEnded
August31,
2012

2


Net asset value, beginning of period$33.76$27.17$20.40$18.38


Net investment income (loss)3(0.01)0.260.300.15

Net realized and unrealized gain0.866.666.831.87

Total from investment operations0.856.927.132.02


Dividends from net investment income(0.28)(0.33)(0.36)0.00

Net asset value, end of period$34.33$33.76$27.17$20.40

Total Return, at Net Asset Value42.56%25.59%35.34%10.99%


Net assets, end of period (in thousands)$873,738$893,125$571,154$1,093

Average net assets (in thousands)$850,178$787,902$114,975$293


Net investment income (loss)(0.05)%0.81%1.15%1.20%

Total expenses60.77%0.77%0.83%0.83%

Expenses after payments, waivers and/or reimbursements and reduction to custodian expenses0.76%0.76%0.83%0.83%

Portfolio turnover rate12%18%25%46%

1.February27, 2015, August29, 2014 and August30, 2013 represent the last business days of the Fundsrespective reporting periods. See Note 2 of the accompanying Notes.

2. For the period from December29, 2011 (inception of offering) to August31,2012.

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

4. Assumes an initial investment on the business day before the first day of the fiscal period, with all dividends and distributions reinvested in additionalshares 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 fullyear. Returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. The returns do not include adjustments in accordance with generally accepted accounting principles required atthe period end for financial reporting purposes.



Six Months Ended February27, 20150.78%

Year Ended August29, 20140.78%


Period Ended August31, 20120.83%




Class R

SixMonths

Ended

February27,

20151
(Unaudited)

YearEnded
August29,
2014 1

YearEnded
August30,
2013 1

YearEnded
August31,
2012

YearEnded
August 31,
2011

YearEnded
August 31,
2010




Net investment income (loss)2(0.11)0.040.120.05(0.09)(0.09)




Dividends from net investment income(0.07)(0.15)(0.18)(0.82)(2.09)(0.66)

Net asset value, end of period$33.20$32.55$26.22$19.75$21.03$18.98






Net investment income (loss)(0.74)%0.13%0.50%0.28%(0.39)%(0.48)%

Total expenses51.45%1.46%1.57%1.62%1.56%1.63%



12%18%25%46%122%107%









1.46%


1.47%


1.57%


1.62%


1.57%


1.63%



Class YSix Months
Ended
February27,
20151
(Unaudited)YearEnded
August 29,
20141YearEnded
August 30,
20131YearEnded
August 31,
2012YearEnded
August 31,
2011YearEnded
August 31,
2010




Net investment income (loss)2(0.04)0.260.320.220.090.07




Dividends from net investment income(0.23)(0.30)(0.36)(1.01)(2.26)(0.77)

Net asset value, end of period $34.30$33.71$27.14$20.45$21.81$19.62







(0.25)%0.79%1.35%1.12%0.39%0.36%

Total expenses5

0.96%0.96%0.83%0.82%0.83%0.86%



12%18%25%46%122%107%








Six Months Ended February27, 20150.97%








NOTES TO FINANCIAL STATEMENTS February27,2015 Unaudited

1. Organization

Oppenheimer International Small Company Fund (the Fund) is registered under the Investment Company Act of 1940 (1940 Act), as amended, as adiversified open-end management investment company. The Funds investment objective is to seek capital appreciation. The Funds investment adviser is OFI Global Asset Management, Inc. (OFI Global or the Manager), awholly-owned subsidiary of OppenheimerFunds, Inc. (OFI or the Sub-Adviser). The Manager has entered into a sub-advisory agreement with OFI.

The Fund offers ClassA, Class C, Class I, Class R and Class Y shares, and previously offered Class B shares for new purchase through June29,2012. Subsequent to that date, no new purchases of Class B shares are permitted, however reinvestment of dividend and/or capital gain distributions and exchanges of Class B shares into and from other Oppenheimer funds will be allowed. As ofJuly1, 2014, Class N shares were renamed Class R shares. Class N shares subject to a contingent deferred sales charge (CDSC) on July1, 2014, will continue to be subject to a CDSC after the shares are renamed. Purchases ofClass R shares occurring on or after July1, 2014, will not be subject to a CDSC upon redemption. ClassA shares are sold at their offering price, which is normally net asset value plus a front-end sales charge. Class C and Class R sharesare sold, and Class B shares were sold, without a front-end sales charge but may be subject to a contingent deferred sales charge (CDSC). Class R shares are sold only through retirement plans. Retirement plans that offer Class R sharesmay impose charges on those accounts. Class I and Class Y shares are sold to certain institutional investors or intermediaries without either a front-end sales charge or a CDSC, however, the intermediaries may impose charges on their accountholderswho beneficially own Class I and Class Y shares. All classes of shares have identical rights and voting privileges with respect to the Fund in general and exclusive voting rights on matters that affect that class alone. Earnings, net assets and netasset value per share may differ due to each class having its own expenses, such as transfer and shareholder servicing agent fees and shareholder communications, directly attributable to that class. ClassA, B, C and R shares have separatedistribution and/or service plans under which they pay fees. Class I and Class Y shares do not pay such fees. Class B shares will automatically convert to ClassA shares 72 months after the date of purchase.

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

2. Significant Accounting Policies

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

Semiannual and Annual Periods. The last day of the Funds semiannualand annual periods was the last day the NewYork Stock Exchange was open for trading. The Funds financial statements have been presented through that date to maintain consistency with the Funds net asset value calculations used forshareholder transactions.


2. Significant Accounting Policies (Continued)

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

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

The effect of changesin 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 Funds Statement ofOperations.

Allocation of Income, Expenses, Gains and Losses. Income, expenses (other than those attributable to a specific class), gains and losses areallocated 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.

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

The tax character of distributions is determined as of the Funds fiscal year end. Therefore, a portion of the Funds distributions made toshareholders prior to the Funds fiscal year end may ultimately be categorized as a tax return of capital.

Investment Income. Dividend income isrecorded 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 ofthe securities received. Interest income is recognized on an accrual basis. Discount and premium, which are included in interest income on the Statement of Operations, are amortized or accreted daily.


NOTES TO FINANCIAL STATEMENTS Unaudited / Continued


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

Security Transactions. Security transactions are recorded on the trade date. Realized gains and losses on securities sold are determined on the basis ofidentified cost.

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

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

During the fiscal yearended August29, 2014, the Fund utilized $111,033,724 of capital loss carryforward to offset capital gains realized in that fiscal year. Details of the fiscal year ended August29, 2014 capital loss carryforwards are included in the tablebelow. Capital loss carryforwards with no expiration, if any, must be utilized prior to those with expiration dates. Capital losses with no expiration will be carried forward to future years if not offset by gains.

Expiring

2017

$78,067,994

2018

168,642,989

2019

7,946,140

Total

$254,657,123

As of February27, 2015, it is estimated that the capital loss carryforwards would be $197,301,705 expiring by 2019. The estimatedcapital loss carryforward represents the carryforward as of the end of the last fiscal year, increased or decreased by capital losses or gains realized in the first six months of the current fiscal year. During the six months ended



February27, 2015, it is estimated that the Fund will utilize $57,355,418 of capital loss carryforward to offsetrealized capital gains.

Net investment income (loss) and net realized gain (loss) may differ for financial statement and tax purposes. The characterof 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, thefiscal 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.

Theaggregate cost of securities and other investments and the composition of unrealized appreciation and depreciation of securities and other investments for federal income tax purposes as of February27, 2015 are noted in the following table. Theprimary difference between book and tax appreciation or depreciation of securities and other investments, if applicable, is attributable to the tax deferral of losses or tax realization of financial statement unrealized gain or loss.

Federal tax cost of securities

$2,454,266,458

Gross unrealized appreciation

$902,826,796

Gross unrealized depreciation

(276,590,091)

Net unrealized appreciation

$626,236,705

Certain foreign countries impose a tax on capital gains which is accrued by the Fund based on unrealized appreciation, if any, onaffected securities. The tax is paid when the gain is realized.

Use of Estimates. The preparation of financial statements in conformity with accountingprinciples 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 thefinancial statements and the reported amounts of increases and decreases in net assets from operations during the reporting period. Actual results could differ from those estimates.

3. Securities Valuation

The Fund calculates the net asset value of its sharesas of the close of the New York Stock Exchange (the Exchange), normally 4:00 P.M. Eastern time, on each day the Exchange is open for trading.

The Funds Board has adopted procedures for the valuation of the Funds securities and has delegated the day-to-day responsibility forvaluation determinations under those procedures to the Manager. The Manager has established a Valuation Committee which is responsible for determining a fair valuation for any security for which market quotations are not readilyavailable. The Valuation Committees fair valuation determinations are

subject to review, approval and ratification by the Funds Board at its nextregularly scheduled meeting covering the calendar quarter in which the fair valuation was determined.



3. Securities Valuation (Continued)

Valuation Methods and Inputs

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

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

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

Shares of a registered investment company that are not traded on an exchange are valued at that investment companysnet asset value per share.

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

Short-term money market type debt securities with aremaining maturity of sixty days or less are valued at cost adjusted by the amortization of discount or premium to maturity (amortized cost), which approximates market value. Short-term debt securities with a remaining maturity in excess of sixtydays are valued at the mean between the bid and asked prices utilizing evaluated prices obtained from third party pricing services or broker-dealers.

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



Security Type

Standard inputs generally considered by third-party

pricing vendors

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

Loans

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

Event-linked bonds

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

If a market value or price cannot be determined for a security using the methodologies described above, or if, in the goodfaith opinion of the Manager, the market value or price obtained does not constitute a readily available market quotation, or a significant event has occurred that would materially affect the value of the security, the security isfair valued either (i)by a standardized fair valuation methodology applicable to the security type or the significant event as previously approved by the Valuation Committee and the Funds Board or (ii)as determined in good faith bythe Managers Valuation Committee. The Valuation Committee considers all relevant facts that are reasonably available, through either public information or information available to the Manager, when determining the fair value of a security.Fair value determinations by the Manager are subject to review, approval and ratification by the Funds Board at its next regularly scheduled meeting covering the calendar quarter in which the fair valuation was determined. Those fair valuationstandardized methodologies include, but are not limited to, valuing securities at the last sale price or initially at cost and subsequently adjusting the value based on: changes in company specific fundamentals, changes in an appropriate securitiesindex, or changes in the value of similar securities which may be further adjusted for any discounts related to security-specific resale restrictions. When possible, such methodologies use observable market inputs such as unadjusted quoted prices ofsimilar securities, observable interest rates, currency rates and yield curves. The methodologies used for valuing securities are not necessarily an indication of the risks associated with investing in those securities nor can it be assured that theFund can obtain the fair value assigned to a security if it were to sell the security.

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

Classifications

Each investment asset or liability of the Fund is assigned alevel at measurement date based on the significance and source of the inputs to its valuation. Various data inputs are used in determining the value of each of the Funds investments as of the reporting period end. These




data inputs are categorized in the following hierarchy under applicable financial accounting standards:

1) Level 1-unadjusted quoted prices in active markets for identical assets or liabilities (including securities actively traded on a securities exchange)

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

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

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

The table below categorizes amounts that are included inthe Funds Statement of Assets and Liabilities as of February27, 2015 based on valuation input level:

Level 1
Unadjusted
Quoted Prices

Level 2

Other Significant
ObservableInputs

Level 3
Significant
Unobservable
Inputs

Value

Assets Table

Investments, at Value:

Common Stocks

Consumer Discretionary

$

$495,263,026$

$495,263,026

Consumer Staples

160,485,3461,550160,486,896

Financials

368,234,515

368,234,515

Health Care

179,469,542502,974,790

682,444,332

Industrials

421,513,523

421,513,523

Information Technology

42,575,327436,649,398

479,224,725

Materials

144,272,830

144,272,830

Utilities

23,690,902

23,690,902

Preferred Stock

23,473,648

23,473,648

Investment Company

281,898,766

281,898,766

Total Assets

$503,943,635$2,576,557,978$1,550$3,080,503,163

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

4. Investments and Risks

Investment in Oppenheimer Institutional MoneyMarket Fund. The Fund is permitted to invest daily available cash balances in an affiliated money market fund. The Fund may invest the available cash in Class E shares of Oppenheimer Institutional Money Market Fund (IMMF) to seekcurrent income while preserving liquidity or for defensive purposes. IMMF is a registered open-end management investment company, regulated as a money market fund under the 1940 Act. The Manager is the investment adviser of IMMF, and the Sub-Adviserprovides investment and related advisory services to IMMF. When applicable, the Funds


4.Investments and Risks (Continued)

investment in IMMF is included in the Statement of Investments. Shares of IMMF are valued at their net asset value per share.As a shareholder, the Fund is subject to its proportional share of IMMFs Class E expenses, including its management fee. The Manager will waive fees and/or reimburse Fund expenses in an amount equal to the indirect management fees incurredthrough the Funds investment in IMMF.

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

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

5. Shares of Beneficial Interest

The Fund has authorized an unlimited number of no par value shares of beneficial interest of each class. Transactions in shares of beneficial interest were as follows:

SixMonthsEndedFebruary27,2015YearEndedAugust29,2014

SharesAmountSharesAmount

Class A

Sold

10,799,468$350,645,64919,514,128$635,879,037

Dividends and/or distributions reinvested

159,4985,142,214169,5075,293,705

Redeemed

(5,810,485)(189,131,515)(9,680,229)(318,949,909)

Net increase

5,148,481$166,656,34810,003,406$322,222,833

Class B

Sold

14,651$452,231101,876$3,100,050


Redeemed

(112,306)(3,478,172)(185,260)(5,716,563)

Net decrease

(97,655)$(3,025,941)(83,384)$(2,616,513)



5. Shares of Beneficial Interest (Continued)

SixMonthsEndedFebruary27,2015YearEndedAugust29,2014

SharesAmountSharesAmount

Class C

Sold

843,496$25,980,8142,856,469$86,687,134


11,173327,926

Redeemed

(831,511)(25,204,448)(846,475)(25,800,487)

Net increase

11,985$ 776,3662,021,167$61,214,573

Class I

Sold

2,531,191$83,008,2847,476,386$241,546,782


227,6847,285,880249,1987,722,635

Redeemed

(3,760,380)(121,060,334)(2,296,069)(74,812,742)

Net increase (decrease)

(1,001,505)$(30,766,170)5,429,515$174,456,675

Class R1

Sold

289,780$9,120,837481,572$15,067,721


2,72684,5095,250157,591

Redeemed

(290,431)(9,128,228)(340,457)(10,702,458)

Net increase

2,075$77,118146,365$4,522,854

Class Y

Sold

7,974,019$259,208,46718,225,483$595,053,057


112,4963,597,62860,8211,884,243

Redeemed

(6,620,386)(213,924,984)(3,759,203)(124,018,649)

Net increase

1,466,129$48,881,11114,527,101$472,918,651

1. Effective July1, 2014, Class N shares were renamed Class R.

6. Purchases and Sales of Securities

The aggregate cost of purchases andproceeds from sales of securities, other than short-term obligations and investments in IMMF, for the six months ended February 27, 2015 were as follows:

Pu

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