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® OppenheimerFunds A Brief Primer on Customer Behavior Kurt J. Wolfgruber Chief Investment Officer OppenheimerFunds, Inc. Kurt J. Wolfgruber Chief Investment.

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Presentation on theme: "® OppenheimerFunds A Brief Primer on Customer Behavior Kurt J. Wolfgruber Chief Investment Officer OppenheimerFunds, Inc. Kurt J. Wolfgruber Chief Investment."— Presentation transcript:

1 ® OppenheimerFunds A Brief Primer on Customer Behavior Kurt J. Wolfgruber Chief Investment Officer OppenheimerFunds, Inc. Kurt J. Wolfgruber Chief Investment Officer OppenheimerFunds, Inc. Shares of Oppenheimer funds are not deposits or obligations of any bank, are not guaranteed by any bank and are not insured by the FDIC or any other agency, and involve investment risks, including the possible loss of the principal amount invested. For Institutional Use Only. This material has been prepared by OppenheimerFunds Distributor, Inc. for institutional investors only. It has not been filed with NASD and may not be reproduced, shown or quoted to, or used with, members of the public. Oppenheimer funds are distributed by OppenheimerFunds Distributor, Inc. Two World Financial Center, 225 Liberty Street, New York, NY 10281-1008

2 ® Recent Past: Exaggerated Cycle Average Annual Total Returns Recent Past: Exaggerated Cycle Average Annual Total ReturnsLong-Term1976–2003Bull1995–99Bear2000–02Recovery 2003 1 S&P 500 Index 12.92%28.54%–14.54%28.67% Nasdaq Composite Index 14.3240.62–30.4550.77 Goldman Sachs Commodities Index 8.814.6310.4120.72 Lehman Aggregate Bond Index 9.137.7310.104.10 1. Through 12/31/03. Source of data: Standard & Poor’s Micropal, Inc. The indices shown include reinvested income, are unmanaged and cannot be purchased directly by investors. For illustrative purposes only, not intended to predict or depict the performance of any investment. Past performance does not guarantee future results.

3 ® Impact on Client Portfolios American Association of Individual Investors Allocation Survey Impact on Client Portfolios American Association of Individual Investors Allocation Survey January 1995 January 2000 January 2003 Source of chart data: Ned Davis Research.

4 ® Timing: Impact on Performance Annualized Returns, 1984–2002 Timing: Impact on Performance Annualized Returns, 1984–2002 Source of chart data: Dalbar, 2003.

5 ® Negatives Post-bubble Hangover Iraq SARS Jobless Recovery Deflation Scare Continued Corporate Scandals Mutual Fund Scandal Post-bubble Hangover Iraq SARS Jobless Recovery Deflation Scare Continued Corporate Scandals Mutual Fund Scandal 2003 1 : Poor Setup 1. Through 12/31/03. Past performance does not guarantee future results. The indices shown include reinvested income, are unmanaged and cannot be purchased directly by investors. For illustrative purposes only, not intended to predict or depict the performance of any investment.

6 ® Negatives Post-bubble Hangover Iraq SARS Jobless Recovery Deflation Scare Continued Corporate Scandals Mutual Fund Scandal Post-bubble Hangover Iraq SARS Jobless Recovery Deflation Scare Continued Corporate Scandals Mutual Fund Scandal Results Economic Expansion Gains Momentum Profits Recovery S&P 500 Index +26.4% Nasdaq Index +50.0% Russell 2000 Index +45.4% Economic Expansion Gains Momentum Profits Recovery S&P 500 Index +26.4% Nasdaq Index +50.0% Russell 2000 Index +45.4% 2003 1 : Poor Setup, Great Results 1. Through 12/31/03. Past performance does not guarantee future results. The indices shown include reinvested income, are unmanaged and cannot be purchased directly by investors. For illustrative purposes only, not intended to predict or depict the performance of any investment.

7 ® Diversification Counts Source of data: Strategic Inisght. Includes mutual fund assets for all distribution channels, excluding money market products. Shares of Oppenheimer funds are not deposits or obligations of any bank, are not guaranteed by any bank and are not insured by the FDIC or any other agency, and involve investment risks, including the possible loss of the principal amount invested. 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 Total 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 Total Bonds Stocks Bonds Stocks 60/40 1.7 24.6 7.5 9.9 - 0.4 29.9 15.2 23.9 20.6 12.3 -0.8 -3.8 -8.9 18.8 286% 60/40 1.7 24.6 7.5 9.9 - 0.4 29.9 15.2 23.9 20.6 12.3 -0.8 -3.8 -8.9 18.8 286% 50/50 2.9 23.2 7.5 9.9 -0.8 28.0 13.3 21.5 18.6 10.1 1.3 -1.7 -6.3 16.4 273% 50/50 2.9 23.2 7.5 9.9 -0.8 28.0 13.3 21.5 18.6 10.1 1.3 -1.7 -6.3 16.4 273% 40/60 4.1 21.8 7.5 9.9 -1.2 26.1 11.4 19.1 16.6 7.9 3.3 0.3 -3.7 13.9 258% 40/60 4.1 21.8 7.5 9.9 -1.2 26.1 11.4 19.1 16.6 7.9 3.3 0.3 -3.7 13.9 258% LB Agg 9.0 16.0 7.4 9.8 -2.9 18.5 3.6 9.7 8.7 -0.8 11.6 8.4 6.8 4.1 196% LB Agg 9.0 16.0 7.4 9.8 -2.9 18.5 3.6 9.7 8.7 -0.8 11.6 8.4 6.8 4.1 196% S&P -3.1 30.4 7.6 10.1 1.3 37.5 23.0 33.4 28.6 21.0 -9.1 -11.9 -19.4 28.7 327% S&P -3.1 30.4 7.6 10.1 1.3 37.5 23.0 33.4 28.6 21.0 -9.1 -11.9 -19.4 28.7 327%

8 ® “All Weather Portfolio” Portfolio vs. Index Results as of 3/31/04 1/3 Bond Opp Strategic Income Opp Main Street Opp Global Lehman Aggregate S&P 500 MSCI World 37.9% 28.1 18.9% 10.1 34.6% 10.6 152.6% 137.3 Portfolios Equally Weighted1 Yr 5 Yr10 Yr Cumulative Total Returns Difference (OFI +/– Index) +8.9+ 24.0+ 15.3 Past performance does not guarantee future results. This material must be preceded or accompanied by the current prospectus of each fund. Fund performance shown without considering sales charges. The average annual total returns after deducting the current maximum sales charge of 5.75% for Class A shares for the 1, 5 and 10 year periods ending 3/31/04 were (Strategic Income) 12.29%, 6.40% and 6.85%, (Main Street) 26.23%, -1.56% and 8.43%, (Global) 52.71%, 8.87% and 11.49% respectively. The S&P 500 index is a broad-based stock index. The Lehman Aggregate Bond Index includes a broad range of investment-grade U.S. Government and corporate bonds. The MSCI World Index is a broad-based index, widely used as a measure of global stock market performance. Indices are unmanaged, include reinvested income and cannot be purchased directly by investors. Sample portfolio is not intended as investment advice, and each investor should consider his investment goals, risk tolerance and tax strategy, among other factors. 1/3 Global 1/3 Dom Eq 3 Yr +9.8 10 YR Return/ Unit Risk 12.4 11.2 + 1.2

9 ® OppenheimerFunds Our Investment Organization Kurt J. Wolfgruber Chief Investment Officer OppenheimerFunds, Inc. Kurt J. Wolfgruber Chief Investment Officer OppenheimerFunds, Inc. Shares of Oppenheimer funds are not deposits or obligations of any bank, are not guaranteed by any bank and are not insured by the FDIC or any other agency, and involve investment risks, including the possible loss of the principal amount invested. For Institutional Use Only. This material has been prepared by OppenheimerFunds Distributor, Inc. for institutional investors only. It has not been filed with NASD and may not be reproduced, shown or quoted to, or used with, members of the public. Oppenheimer funds are distributed by OppenheimerFunds Distributor, Inc. Two World Financial Center, 225 Liberty Street, New York, NY 10281-1008

10 ® Founded in 1960 Headquarters: New York City Owned by: MassMutual Financial Group and OFI Management Over $155 billion in assets under management 65+ funds 7.4 million shareholder accounts through 200,000 financial advisors Approximately 2,200 employees Over 350 investment staff/professionals Founded in 1960 Headquarters: New York City Owned by: MassMutual Financial Group and OFI Management Over $155 billion in assets under management 65+ funds 7.4 million shareholder accounts through 200,000 financial advisors Approximately 2,200 employees Over 350 investment staff/professionals OppenheimerFunds, Inc. Company Overview OppenheimerFunds, Inc. Company Overview

11 OppenheimerFunds Corporate Strategy OppenheimerFunds Corporate Strategy ® Grow Assets and Profits Faster than the Asset Management Industry Expand Beyond Mutual Funds Embrace Customer Centricity Drive Profitable Growth Through Investment Excellence Grow Assets and Profits Faster than the Asset Management Industry Expand Beyond Mutual Funds Embrace Customer Centricity Drive Profitable Growth Through Investment Excellence

12 ® Asset Growth Assets Under Management vs. S&P 500 Index Asset Growth Assets Under Management vs. S&P 500 Index Source: Bloomberg.

13 ® Total Assets Under Management ~ $155 Billion OppenheimerFunds ~ $137 B OppenheimerFunds ~ $137 B Tremont $8.9 B OFI Institutional $6.8 B High Net Worth $2.2 B High Net Worth $2.2 B

14 ® Top investment talent Five portfolio managers in Barron’s annual Top 100 ranking, more than any other company Top investment talent Five portfolio managers in Barron’s annual Top 100 ranking, more than any other company OppenheimerFunds, Inc. Key Strengths/Points of Differentiation OppenheimerFunds, Inc. Key Strengths/Points of Differentiation

15 ® Investment Goals & Results Long-Term Assets, 5 Years Through 3/31/04 Investment Goals & Results Long-Term Assets, 5 Years Through 3/31/04 Top Investment Talent Source: Lipper

16 ® Top investment talent Five portfolio managers in Barron’s annual Top 100 ranking, more than any other company Entrepreneurial Organizational Structure Top investment talent Five portfolio managers in Barron’s annual Top 100 ranking, more than any other company Entrepreneurial Organizational Structure OppenheimerFunds, Inc. Key Strengths/Points of Differentiation OppenheimerFunds, Inc. Key Strengths/Points of Differentiation

17 Investment Department Organizational Structure Investment Department Organizational Structure 1. Retail Assets Only; Excluding OFI Institutional and Tremont Total 1 Investment Staff: 114 Ken Winston Risk Mgmt Ken Winston Risk Mgmt AndyMikaOperationsAndyMikaOperations Jerry Webman Fixed Income Jerry Webman Fixed Income Kurt Wolfgruber Domestic Equities Kurt Wolfgruber Domestic Equities Bill Wilby Global Equities Bill Wilby Global Equities Keith Spencer Equity Trading John Murphy Chairman Chief Executive Officer John Murphy Chairman Chief Executive Officer Tremont Sandra Manzke Robert Schulman OppenheimerFunds Kurt Wolfgruber Chief Investment Officer OppenheimerFunds Kurt Wolfgruber Chief Investment Officer OFI Institutional Chuck McKenzie

18 ® Oppenheimer’s Team Approach GlobalGrowth Core (Main St) Value Other Equity TaxableMuni Global Stock U.S. Stock Bonds “Global investing is a strong point at Oppenheimer” (Global Fund) Morningstar, 9/03 “A worthwhile option” (on Capital Appreciation Fund) Morningstar, 6/03 “Solid pick” (Main Street) Morningstar, 9/03 “An experienced manager with a good track record” Morningstar, on Chris Leavy, Value Fund, 6/03 “Good option” (Capital Income) Morningstar, 10/03 “Top-notch management” (High Grade Bond Team) Morningstar, 12/03 “Reputation for thorough research & high-income performance”Morningstar, on Ron Fielding, Rochester Team leader, 4/03 16% of Assets 13% of Assets 17% of Assets 12% of Assets 9% of Assets 18% of Assets 15% of Assets Source of data: Strategic Insight as of 2/28/04. Past performance does not guarantee future results. Shares of Oppenheimer funds are not deposits or obligations of any bank, are not guaranteed by any bank and are not insured by the FDIC or any other agency, and involve investment risks, including the possible loss of the principal amount invested. Entrepreneurial Organizational Structure

19 ® Top investment talent Five portfolio managers in Barron’s annual Top 100 ranking, more than any other company Entrepreneurial Organizational Structure Broad Spectrum of Products Top investment talent Five portfolio managers in Barron’s annual Top 100 ranking, more than any other company Entrepreneurial Organizational Structure Broad Spectrum of Products OppenheimerFunds, Inc. Key Strengths/Points of Differentiation OppenheimerFunds, Inc. Key Strengths/Points of Differentiation

20 GlobalGrowthCoreValueTaxableMunicipal Hybrid & Specialty Independent Teams Global Stock U.S. Equity BondsDiversification For more complete information about any of the Oppenheimer funds, including charges, expenses and risk or to obtain a prospectus, contact your sales representative today at 1.800.255.2750. Or log on to our website at www.oppenheimerfunds.com. Read the prospectus carefully before you invest or send money. Broad Spectrum of Products Main Street Quest Balanced Limited- Term Gov’t Rochester National Municipals Value Strategic Income Capital Appreciation Global Main Street Opportunity Quest Value Growth Main Street Small Cap Special Value MidCap Equity Fund Quest Capital Value Enterprise Small Cap Value Discovery Emerging Growth International Growth International Value Global Opportunities Quest International Value Developing Markets International Small Company Oppenheimer Balanced Real Asset Real Estate Convertible Securities Bond Fund Total Return Bond U.S. Government Trust High Yield/ Champion Senior Floating Rate International Bond Limited Term Municipal AMT-Free Municipals Rochester Fund Municipals Limited Term NY AMT-Free NY Municipals CA, NJ, PA Municipals Limited Term California Mutual Funds

21 ® 10 Best Sellers–OppenheimerFunds Lipper Quartile Rankings based on total return as of 3/31/04 % Top Half100%70%100%86% Global Main Street Fund Capital Appreciation Strategic Income Quest Balanced Developing Mkts Rochester Fund Munis Limited Term NY Muni Main Street Opportunity International Bond 1 2 1 1 1 1 1 1 1 1 1 1 3 2 3 3 1 1 1 1 1 1 1 1 1 1 2 1 1 1 1 3 1 1 1 - 1 1 - - 1 YR3 YR5 YR10 YR 1 2 3 4 5 6 7 8 9 10 Average % Rank10261519 Past performance does not guarantee future results. Best selling funds are determined by 12-month sales as of 2/28/04, the most current sales data available from Strategic Insight. Lipper quartile rankings are based on category peer groups and are for the primary share class as identified by Strategic Insight. Lipper rankings are based on total returns but do not consider sales charge and are subject to change monthly. If sales charges were considered rankings may change substantially. Rankings are relative peer group ratings and do not necessarily mean that the fund had high total returns. Funds are grouped by investment objective into Lipper categories and attempt to achieve the stated objective, however may or may not.

22 ® Top investment talent Five portfolio managers in Barron’s annual Top 100 ranking, more than any other company Entrepreneurial Organizational Structure Broad Spectrum of Products Powerful brand image 5 th most recognized brand within the U.S. mutual fund industry (Nationwide Surveys, 2003) Rated 9 th in overall reputation in entire U.S. financial services industry (American Banker, 2001) Top investment talent Five portfolio managers in Barron’s annual Top 100 ranking, more than any other company Entrepreneurial Organizational Structure Broad Spectrum of Products Powerful brand image 5 th most recognized brand within the U.S. mutual fund industry (Nationwide Surveys, 2003) Rated 9 th in overall reputation in entire U.S. financial services industry (American Banker, 2001) OppenheimerFunds, Inc. Key Strengths/Points of Differentiation OppenheimerFunds, Inc. Key Strengths/Points of Differentiation

23 ® Powerful Brand Image

24 ® Top investment talent Five portfolio managers in Barron’s annual Top 100 ranking, more than any other company Entrepreneurial Organizational Structure Broad Spectrum of Products Powerful brand image 5 th most recognized brand within the U.S. mutual fund industry (Nationwide Surveys, 2003) Rated 9 th in overall reputation in entire U.S. financial services industry (American Banker, 2001) Strong intermediary partnerships Top investment talent Five portfolio managers in Barron’s annual Top 100 ranking, more than any other company Entrepreneurial Organizational Structure Broad Spectrum of Products Powerful brand image 5 th most recognized brand within the U.S. mutual fund industry (Nationwide Surveys, 2003) Rated 9 th in overall reputation in entire U.S. financial services industry (American Banker, 2001) Strong intermediary partnerships OppenheimerFunds, Inc. Key Strengths/Points of Differentiation OppenheimerFunds, Inc. Key Strengths/Points of Differentiation

25 ® Business Environment Short-term… Short-term… Short-term Benchmark “Float” Product/fund Proliferation Regulatory Environment Market Timing Transaction Costs Shelf Space Cost Soft Dollars Wall Street Research Alignment of Interests Business Environment Short-term… Short-term… Short-term Benchmark “Float” Product/fund Proliferation Regulatory Environment Market Timing Transaction Costs Shelf Space Cost Soft Dollars Wall Street Research Alignment of Interests Near-term Challenges


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