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President's Letter to Shareholders

Highlights

• Global growth will likely be strong but slow, favoring active management.
• OppenheimerFunds recommends a global focus and some alternative strategies.
• Leadership changes at OppenheimerFunds build upon product innovations designed to help investors succeed.

In his annual shareholder letter, OppenheimerFunds President Art Steinmetz discusses key trends and events affecting both the company and the market.

The investment landscape will likely remain challenging. Steinmetz believes global growth will be strong enough to support corporate earnings, but not fast enough to foster inflation concerns or alter central bank policies in a meaningful way.  While many asset classes are no longer trading at the bargain levels of early 2013, stocks and corporate bonds continue to appear attractive compared to government bonds and related assets.

In that environment, active management and innovative multi-asset products stand to become even more important as investors struggle to make meaningful gains in their portfolios. That’s why we hired industry veteran Mark Hamilton as Chief Investment Officer of Asset Allocation in 2013 and acquired SteelPath in late 2012. Through the SteelPath suite of funds, we aim to provide investors with greater access to the ongoing revolution in U.S. oil and gas production via master limited partnerships (MLPs).

We also made some significant changes to our organizational structure in order to build upon the success we’ve enjoyed over the past few years under Bill Glavin, who is stepping down as CEO in July but is staying on as Chairman. Steinmetz, previously President and CIO, will take over as CEO at that time, while CIO of Fixed Income Krishna Memani has been named OppenheimerFunds’ new Chief Investment Officer.

Access Steinmetz’s full annual shareholder letter and the press release announcing our organizational changes.
 

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Foreign investments may be volatile and involve additional expenses and special risks, including currency fluctuations, foreign taxes and geopolitical risks. Emerging and developing market investments may be especially volatile. Fixed income investing entails credit risks and interest rate risks. When interest rates rise, bond prices generally fall, and a Fund’s share prices can fall. Investing in MLPs involves additional risks as compared to the risks of investing in common stock, including risks related to cash flow, dilution and voting rights. Each Fund’s investments are concentrated in the energy infrastructure industry with an emphasis on securities issued by MLPs, which may increase volatility. Energy infrastructure companies are subject to risks specific to the industry such as fluctuations in commodity prices, reduced volumes of natural gas or other energy commodities, environmental hazards, changes in the macroeconomic or the regulatory environment or extreme weather. MLPs may trade less frequently than larger companies due to their smaller capitalizations which may result in erratic price movement or difficulty in buying or selling. Additional management fees and other expenses are associated with investing in MLP funds. The Oppenheimer SteelPath MLP Funds are subject to certain MLP tax risks. An investment in an Oppenheimer SteelPath MLP Fund does not offer the same tax benefits of a direct investment in an MLP. The Funds are organized as Subchapter “C” Corporations and are subject to U.S. federal income tax on taxable income at the corporate tax rate (currently as high as 35%) as well as state and local income taxes. The potential tax benefit of investing in MLPs depend on them being treated as partnerships for federal income tax purposes. If the MLP is deemed to be a corporation, its income would be subject to federal taxation at the entity level, reducing the amount of cash available for distribution which could result in a reduction of the fund’s value. MLP funds accrue deferred income taxes for future tax liabilities associated with the portion of MLP distributions considered to be a tax-deferred return of capital and for any net operating gains as well as capital appreciation of its investments. This deferred tax liability is reflected in the daily NAV and as a result a MLP fund's after-tax performance could differ significantly from the underlying assets even if the pre-tax performance is closely tracked.

Diversification does not guarantee profit or protect against loss.

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.

Before investing in any of the Oppenheimer funds, investors should carefully consider a fund's investment objectives, risks, charges and expenses. 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 and summary prospectuses carefully before investing.

Oppenheimer funds are distributed by OppenheimerFunds Distributor, Inc.
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