Dear Shareholders:

With the New Year upon us, I wish to express my appreciation for your continued trust in OppenheimerFunds.

2015 will go down as a year in which volatility returned to the financial markets following a multi-year hiatus. Global growth struggled to gain traction as many of the world’s largest economies expanded below their long-term trends. China’s industrial production slowed for the fifth consecutive year and weighed on the world’s exporters—especially commodity producers. In the United States, a strong dollar impaired the competitiveness of many American companies and proved to be a drag on corporate earnings.

The generally disappointing performance of global equity markets was marked by pockets of significant weakness in the energy sector and many emerging markets. U.S. equities once again outperformed their counterparts in other regions, though with tempered results and only after a market correction in August that tested investors’ nerves. Interest rates globally remained low, even as investors spent most of the year contemplating the first U.S. interest-rate hike by the Federal Reserve in almost a decade.

The Outlook for 2016

As we embark on 2016, we maintain a promising long-term outlook for investors, but not without more periodic bouts of market volatility. Our Chief Investment Officer, Krishna Memani, points out that we have entered a more mature phase of the business cycle that will likely bring more modest returns, greater volatility and wider return divergences among asset classes and individual securities.

We hold that sticking to a long-term investment plan is paramount—and that investors should not succumb to short-term fears that could result in departing from such a plan. The equity selloff over the summer is a prime example of how investors who rushed for the exits found markets rebounding just months later. The asset management industry saw $36 billion in equity outflows from April through September, but then markets approached their prior highs by the beginning of November. Regrettably, investors have not been successful in trying to time the markets and, in our estimation, have lost more money in response to fear and greed than any other factor. Rather than timing the market, we believe in “time in the market” as a more viable investment strategy.

We Remain Committed—Five Decades On

If there’s one principle we’ve cherished since our founding, it’s that long-term investing is the most effective way to help investors achieve their financial goals. For more than five decades, we’ve been serving clients like you through market cycles and different economic and geopolitical environments—and we remain committed to putting your needs first. This commitment has required us to evolve over the years to offer you attractive investment opportunities.

This year, we’ve evolved on a number of fronts. First, we acquired VTL Associates, an investment firm known for its RevenueShares exchange traded funds (ETFs). ETFs are an efficient and increasingly popular way to gain broad access to the markets, yet many of them simply mirror market-cap-weighted indexes, which often overweight stocks that are overvalued. However, the VTL acquisition will enable us to offer “smart-beta” ETFs that weight stocks according to such fundamental factors as revenues or dividends. These ETFs maintain the diversification of a broad index while seeking to outperform market-cap-weighted strategies over long market cycles.

Second, we partnered with Apollo Credit Management as a sub-sub-advisor for our Global Strategic Income Fund. Apollo complements our strong in-house capabilities in fixed income and enables us to provide even more diverse access to high-yield securities across multiple sectors.

Finally, we launched a series of new products. Our Global Multi Asset Group (GMAG) now offers objective-driven funds, which are oriented to help investors achieve specific goals, such as capital growth, income, real return and diversification. And we debuted the SteelPath Panoramic Fund, which focuses on opportunities created by the rapid changes in the North American energy landscape.

While stewardship of capital remains our core focus, we also see ourselves as stewards of investment education; of mathematical literacy among younger generations comprising the investors of the future; and of community development. Toward that end, we’ve enhanced our investor website (oppenheimerfunds.com), which now features a breadth of insights by our investment professionals—as well as product information—in a fresh and accessible way to help you make informed decisions. We’ve maintained our sponsorship of the National Museum of Mathematics (MoMath) in an effort to improve numeracy among children. We continue to support volunteerism among our employees by giving them time off to help worthy causes, matching their donations to charities, and even sending them abroad to assist communities and promote financial literacy around the world. Lastly, as investors in emerging markets, we partnered this year with the Financial Times to launch our annual Emerging Voices Awards program, which honors and rewards exceptionally creative individuals in the developing world. For more information, visit ft.com/emerging-voices.

On behalf of OppenheimerFunds, I thank you again for your confidence in us and look forward to serving you next year and beyond.

Sincerely,
Art Steinmetz

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