PANORAMA SERIES FUND INC, 497, 1998-04-28

PANORAMA SERIES FUND INC
497, 1998-04-28

Previous: PANORAMA SERIES FUND INC, 485BPOS, 1998-04-28

Next: FEDERATED GOVERNMENT INCOME SECURITIES INC, 485BPOS, 1998-04-28

Panorama Series Fund, Inc.

Prospectus Dated May 1, 1998

Panorama Series Fund, Inc. (referred to in this Prospectus as the "Company") is
an open-end investment company consisting of seven separate series, four of
which are discussed in this Prospectus. Each series is referred to as a
"Portfolio" and collectively, as the "Portfolios". Shares of the Portfolios are
offered through certain variable annuity or variable life insurance contracts by
insurance companies.

Total Return Portfolio seeks to maximize total investment return (including both
capital appreciation and income) principally by allocating its assets among
stocks, corporate bonds, U.S. Government securities and money market instruments
according to changing market conditions.

Growth Portfolio seeks long term growth of capital by investing primarily in
common stocks with low price-earnings ratios and better-than-anticipated
earnings. Realization of current income is a secondary consideration.

International Equity Portfolio seeks long-term growth of capital by investing
primarily in equity securities of companies wherever located, the primary stock
market of which is outside the United States.

Government Securities Portfolio seeks a high level of current income with a high
degree of safety of principal by investing primarily in U.S. Government
securities and U.S. Government related securities.

Shares of the Company's Portfolios are offered as investment vehicles for
the variable annuity or variable life insurance contracts offered through
separate accounts of insurance companies (these are referred to as "Accounts").
Shares of the Portfolios cannot be purchased directly by investors. The term
"shareholder" in this Prospectus refers only to the insurance companies issuing
the variable contracts. The interests of contract owners with respect to shares
of a Portfolio held for their contracts are subject to the terms of the contract
and the prospectus for your insurance company's separate accounts, which you as
a contract holder or prospective contract holder should read carefully.

This Prospectus explains concisely what you should know before investing
in the Portfolios. Please read this Prospectus carefully and keep it for future
reference. You can find more detailed information about each Portfolio in the
May 1, 1998 Statement of Additional Information. For a free copy, call
OppenheimerFunds Services, the Portfolios' Transfer Agent, at 1-800-525-7048, or
write to the Transfer Agent at the address on the back cover. The Statement of
Additional Information has been filed with the Securities and Exchange
Commission ("SEC") and is incorporated into this Prospectus by reference (which
means that it is legally part of this Prospectus).

<PAGE>

Shares of the Portfolios are not deposits or obligations of any bank, are not
guaranteed by any bank, are not insured by the F.D.I.C. or any other agency, and
involve investment risks, including the possible loss of the principal amount
invested.

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION NOR HAS THE COMMISSION
PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

<PAGE>

Contents

ABOUT THE PORTFOLIOS
Overview of the Portfolios....................................3
Financial Highlights..........................................4
Investment Objectives and Policies............................9
Total Return Portfolio........................................9
Growth Portfolio..............................................9
International Equity Portfolio................................9
Government Securities Portfolio...............................10
Investment Risks..............................................11
Investment Techniques and Strategies..........................13
How the Portfolios Are Managed................................18
Performance of the Portfolios.................................20
ABOUT YOUR ACCOUNT
How to Buy Shares.............................................24
How to Sell Shares............................................24
Dividends, Capital Gains and Taxes............................24
Appendix A: Description of Ratings Categories of Ratings ServiA-1

<PAGE>

ABOUT THE PORTFOLIOS

Overview of the Portfolios

Some of the important facts about the Portfolios are summarized below, with
references to the section of this Prospectus where more complete information can
be found. You should carefully read the entire Prospectus before making a
decision about investing. Keep the Prospectus for reference after you invest.

o What Do the Portfolios Invest In? To seek their respective investment
objectives, the Portfolios invest as follows: Total Return Portfolio invests by
principally allocating its assets among stocks, corporate bonds, U.S. Government
securities and money market instruments according to changing market conditions.
Growth Portfolio primarily invests in common stocks with low price-earnings
ratios and better-than-anticipated earnings. International Equity Portfolio
primarily invests in equity securities of companies wherever located, the
primary stock market of which is outside the United States. Government
Securities Portfolio invests primarily in U.S. Government securities and U.S.
Government related securities. These investments are more fully explained for
each Fund in "Investment Objectives and Policies," starting on page 9.

o Who Manages the Portfolios? The Portfolios'investment
adviser is OppenheimerFunds,
Inc. (the "Manager"), which (including a subsidiary) advises
investment company portfolios having
over $75 billion in assets. Each Portfolio's portfolio manager is
primarily responsible for the selection
of securities of that Portfolio. The portfolio managers are as
follows: for Total Return Portfolio,
Peter M. Antos, CFA, Michael C. Strathearn, CFA, Stephen F.
Libera, CFA, Kenneth B. White, CFA
and Arthur Zimmer; for Growth Portfolio, Peter M. Antos, CFA,
Michael C. Strathearn, CFA, and
Kenneth B. White, CFA; for International Equity Portfolio,
Babson-Stewart Ivory International
(Babson-Stewart) James W. Burns and John G.L. Wright; and for
Government Securities Portfolio,
Jerry Webman and David P. Negri. The Manager is paid an advisory
fee by each Portfolio, based on
its assets. The Company's Board of Directors, elected by
shareholders, oversees the investment
adviser and the portfolio manager and subadviser. Please refer to
"How The Portfolios Are
Managed," starting on page 18 for more information about the
Manager and the Subadviser and their
fees.

<PAGE>

o How Risky Are The Portfolios? While different types of investments have
risks that differ in type and magnitude, all investments carry risk to some
degree. Changes in overall market movements or interest rates, or factors
affecting a particular industry or issuer, can affect the value of the
Portfolios' investments and their price per share. Equity investments are
generally subject to a number of risks including the risk that values will
fluctuate as a result of changing expectations for the economy and individual
issuers, and stocks which are small to medium size in capitalization may
fluctuate more than large capitalization stocks. For both equity and income
investments, foreign investments are subject to the risk of adverse currency
fluctuation and additional risks and expenses in comparison to domestic
investments. In comparing levels of risk among the Portfolios that invest to
some degree in equities, International Equity Portfolio is the most volatile
with its exposure to international markets, followed by Growth Portfolio, and
Total Return Portfolio. Government Securities Portfolio invests in fixed-income
securities which are generally subject to the risk that values will fluctuate
with interest rates and inflation, with lower-rated fixed-income investments
being subject to a greater risk that the issuer will default in its interest or
principal payment obligations.

While the Manager and Subadviser try to reduce risks by diversifying
investments, by carefully researching securities before they are purchased and
in some cases, the use of hedging techniques, there is no guarantee of success
in achieving a Portfolio's objective. Please refer to "Investment Risks"
starting on page 11 for a more complete discussion of the types of securities
the Portfolios purchase.

o How Can I Buy or Sell Shares? Shares of each Portfolio are offered for
purchase by Accounts as an investment medium for variable life insurance
policies and variable annuity contracts. Account owners should refer to the
accompanying Account Prospectus on how to buy or sell shares of the Portfolios.

o How Have the Portfolios Performed? Government Securities Portfolio
measures its performance by quoting its yield. All of the Portfolios may measure
their performance by quoting average annual total return and cumulative total
return, which measure historical performance. Those returns can be compared to
the returns (over similar periods) of other funds. Of course, other funds may
have different objectives, investments, and levels of risk. The performance of
all the Portfolios can also be compared to broad market indices, which we have
done starting on page 22. Please remember that past performance does not
guarantee future results.

Financial Highlights

The tables on the following pages present selected financial information about
the Portfolios, including per share data and expense ratios and other data based
on each Portfolio's respective average net assets. The information for the
Portfolios has been audited by Deloitte & Touche LLP, the Company's independent
auditors, whose report for the Company's fiscal year ended December 31, 1997 is
included in the Statement of Additional Information. Prior to and including the
year ended December 31, 1995, the financial statements of the Portfolios were
audited by other auditors. Additional information about the performance of the
Portfolios is contained in the Company's 1997

<PAGE>

Annual Report which may be obtained without charge by calling or writing the
Company at the telephone or address on the back cover.

<PAGE>

FINANCIAL HIGHLIGHTS
PANORAMA SERIES FUND, INC.--TOTAL RETURN PORTFOLIO

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
1997 1996(1) 1995 1994
=========================================================================================================
<S> <C> <C> <C> <C>
PER SHARE OPERATING DATA
Net asset value, beginning of period $1.91 $1.75 $1.51 $1.65
- ---------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .07 .07 .07 .06
Net realized and unrealized gain (loss) .25 .11 .30 (.09)
----- ----- ----- ------
Total income (loss) from investment
operations .32 .18 .37 (.03)
- ---------------------------------------------------------------------------------------------------------
Dividends and distributions to
shareholders:
Dividends from net investment income (.07) (.01) (.07) (.06)
Distributions from net realized gain (.16) (.01) (.06) (.05)
----- ----- ----- ------
Total dividends and distributions to
shareholders (.23) (.02) (.13) (.11)
- ---------------------------------------------------------------------------------------------------------
Net asset value, end of period $2.00 $1.91 $1.75 $1.51
===== ===== ===== ======
=========================================================================================================
TOTAL RETURN, AT NET ASSET VALUE(2) 18.81% 10.14% 24.66% (1.97)%
=========================================================================================================
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in millions) $1,279 $1,122 $994 $742
- ---------------------------------------------------------------------------------------------------------
Average net assets (in millions) $1,208 $1,058 $864(3) $687(3)
- ---------------------------------------------------------------------------------------------------------
Ratios to average net assets:
Net investment income 3.57% 4.12% 4.48% 4.21%
Expenses 0.55% 0.55% 0.59% 0.56%
- ---------------------------------------------------------------------------------------------------------
Portfolio turnover rate(4) 103.5% 104.3% 62.3% 88.3%
Average brokerage commission rate(5) $0.0699 $0.0641 -- --
</TABLE>

1. On March 1, 1996, OppenheimerFunds, Inc. became the investment advisor to the
Fund. 2. Assumes a hypothetical initial investment on the business day before
the first day of the fiscal period, with all dividends and distributions
reinvested in additional shares on the reinvestment date, and redemption at the
net asset value calculated on the last business day of the fiscal period. Total
returns are not annualized for periods of less than one full year. Total return
information does not reflect expenses that apply at the separate account level
or to related insurance products. Inclusion of these charges would reduce the
total return figures for all periods shown. 3. This information is not covered
by the auditors' opinion.

<PAGE>

4. The lesser of purchases or sales of portfolio securities for a period,
divided by the monthly average of the market value of portfolio securities owned
during the period. Securities with a maturity or expiration date at the time of
acquisition of one year or less are excluded from the calculation. Purchases and
sales of investment securities (excluding short-term securities) for the period
ended December 31, 1997 were $1,162,940,441 and $1,139,011,104, respectively. 5.
Total brokerage commissions paid on applicable purchases and sales of portfolio
securities for the period, divided by the total number of related shares
purchased and sold.

<PAGE>

FINANCIAL HIGHLIGHTS
PANORAMA SERIES FUND, INC.--GROWTH PORTFOLIO

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
1997 1996(1) 1995 1994
=========================================================================================================
<S> <C> <C> <C> <C>
PER SHARE OPERATING DATA
Net asset value, beginning of period $2.98 $2.53 $1.97 $2.08
- ---------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .04 .04 .04 .03
Net realized and unrealized gain (loss) .69 .43 .71 (.04)
----- ----- ----- -----
Total income (loss) from investment
operations .73 .47 .75 (.01)
- ---------------------------------------------------------------------------------------------------------
Dividends and distributions to
shareholders:
Dividends from net investment income (.03) (.01) (.04) (.03)
Distributions from net realized gain (.23) (.01) (.15) (.07)
----- ----- ----- -----
Total dividends and distributions to
shareholders (.26) (.02) (.19) (.10)
- ---------------------------------------------------------------------------------------------------------
Net asset value, end of period $3.45 $2.98 $2.53 $1.97
===== ===== ===== =====
=========================================================================================================
TOTAL RETURN, AT NET ASSET VALUE(2) 26.37% 18.87% 38.06% (0.51)%
=========================================================================================================
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in thousands) $831,371 $586,222 $405,935 $230,195
- ---------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $721,555 $494,281 $303,193(3) $198,879(3)
- ---------------------------------------------------------------------------------------------------------
Ratios to average net assets:
Net investment income 1.38% 1.63% 2.01% 1.87%
Expenses 0.54% 0.58% 0.66% 0.67%
- ---------------------------------------------------------------------------------------------------------
Portfolio turnover rate(4) 91.8% 82.5% 69.3% 97.3%
Average brokerage commission rate(5) $0.0699 $0.0697 -- --
</TABLE>

<PAGE>

4. The lesser of purchases or sales of portfolio securities for a period,
divided by the monthly average of the market value of portfolio securities owned
during the period. Securities with a maturity or expiration date at the time of
acquisition of one year or less are excluded from the calculation. Purchases and
sales of investment securities (excluding short-term securities) for the period
ended December 31, 1997 were $637,953,389 and $589,720,974, respectively. 5.
Total brokerage commissions paid on applicable purchases and sales of portfolio
securities for the period, divided by the total number of related shares
purchased and sold.

<PAGE>

FINANCIAL HIGHLIGHTS
PANORAMA SERIES FUND, INC.--INTERNATIONAL EQUITY PORTFOLIO

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
1997 1996(2) 1995 1994 1993 1992(1)
================================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING DATA
Net asset value, beginning of period $1.29 $1.15 $1.09 $1.09 $0.92 $1.00
- --------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss) .01 .02 .03 (.01) .00 .01
Net realized and unrealized gain (loss) .09 .13 .08 .03 .20 (.06)
----- ----- ----- ----- ----- -----
Total income (loss) from investment
operations .10 .15 .11 .02 .20 (.05)
- --------------------------------------------------------------------------------------------------------------------------------
Dividends and distributions to
shareholders:
Dividends from net investment income (.01) (.01) (.04) -- (.02) (.02)
Distributions from net realized gain (.02) -- (.01) (.02) (.01) (.01)
----- ----- ----- ----- ----- -----
Total dividends and distributions to
shareholders (.03) (.01) (.05) (.02) (.03) (.03)
- --------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $1.36 $1.29 $1.15 $1.09 $1.09 $0.92
===== ===== ===== ===== ===== =====
================================================================================================================================
TOTAL RETURN, AT NET ASSET VALUE(3) 8.11% 13.26% 10.30% 1.44% 21.80% (4.32)%
================================================================================================================================
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in thousands) $82,257 $62,585 $45,775 $31,603 $18,315 $10,493
- --------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $73,318 $56,893 $37,474(4) $29,133(4) $13,328(4) $ 9,973(4)
- --------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets:
Net investment income 0.72% 0.76% 1.61% (1.85)% (0.31)% 1.63%(5)
Expenses 1.12% 1.21% 1.26% 1.28% 1.50% 1.50%(5)
- --------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate(6) 48.6% 53.7% 85.1% 76.5% 57.4% 206.7%(5)
Average brokerage commission rate(7) $0.0232 $0.0019 -- -- -- --

</TABLE>

1. For the period from May 13, 1992 (commencement of operations) to December 31,
1992. 2. On March 1, 1996, OppenheimerFunds, Inc. became the investment advisor
to the Fund. 3. Assumes a hypothetical initial investment on the business day
before the first day of the fiscal period, with all dividends and distributions
reinvested in additional shares on the reinvestment date, and redemption at the
net asset value calculated on the last business day of the fiscal period. Total
returns are not annualized for periods of less than one full year. Total return
information does not reflect expenses that apply at the separate account level
or to related insurance products. Inclusion of these charges would reduce the
total return figures for all periods. 4. This information is not covered by the
auditors' opinion. 5. Annualized. 6. The lesser of purchases or sales of
portfolio securities for a period, divided by the monthly average of the market
value of portfolio securities owned during the period. Securities with a
maturity or expiration date at the time of acquisition of one year or less are
excluded from the calculation. Purchases and sales of investment securities
(excluding short-term securities) for the period ended December 31, 1997 were
$47,527,468 and $34,015,226, respectively. 7. Total brokerage commissions paid
on applicable purchases and sales or portfolios for the period, divided by the
total number of related shares purchased and sold. Generally, non-U.S.
commissions are lower than U.S. commissions when expressed as cents per share
but higher when expressed as a percentage of transactions because of the lower
per-share prices of many non-U.S. securities.

<PAGE>

FINANCIAL HIGHLIGHTS
PANORAMA SERIES FUND, INC.--GOVERNMENT SECURITIES PORTFOLIO

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
1997 1996(2) 1995 1994 1993 1992(1)
===================================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING DATA
Net asset value, beginning of period $1.09 $1.07 $0.95 $1.06 $1.01 $1.00
- -----------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .07 .07 .06 .06 .04 .02
Net realized and unrealized gain (loss) .02 (.05) .12 (.11) .07 .04
----- ----- ----- ----- ----- -----
Total income (loss) from investment
operations .09 .02 .18 (.05) .11 .06
- -----------------------------------------------------------------------------------------------------------------------------------
Dividends and distributions to
shareholders:
Dividends from net investment income (.07) --(3) (.06) (.06) (.04) (.02)
Distributions from net realized gain -- -- -- -- (.02) (.03)
----- ----- ----- ----- ----- -----
Total dividends and distributions to
shareholders (.07) -- (.06) (.06) (.06) (.05)
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $1.11 $1.09 $1.07 $0.95 $1.06 $1.01
===== ===== ===== ===== ===== =====
===================================================================================================================================
TOTAL RETURN, AT NET ASSET VALUE(4) 8.82% 1.93% 18.91% (4.89)% 10.98% 6.61%
===================================================================================================================================
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in thousands) $23,719 $23,236 $24,309 $18,784 $15,687 $7,634
- -----------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $23,034 $23,880 $23,157(5) $17,589(5) $11,421(5) $3,780(5)
- -----------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets:
Net investment income 5.96% 6.11% 6.08% 6.04% 5.13% 4.64%(6)
Expenses 0.67%(7) 0.62% 0.71% 0.85% 0.93% 1.20%(6)
- -----------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate(8) 0.0% 6.0% 54.7% 102.3% 178.2% 458.6%(6)

</TABLE>

1. For the period from May 13, 1992 (commencement of operations) to December 31,
1992. 2. On March 1, 1996, OppenheimerFunds, Inc. became the investment advisor
to the Fund. 3. Less than $0.005 per share. 4. Assumes a hypothetical initial
investment on the business day before the first day of the fiscal period, with
all dividends and distributions reinvested in additional shares on the
reinvestment date, and redemption at the net asset value calculated on the last
business day of the fiscal period. Total returns are not annualized for periods
of less than one full year. Total return information does not reflect expenses
that apply at the separate account level or to related insurance products.
Inclusion of these charges would reduce the total return figures for all periods
shown. 5. This information is not covered by the auditors' opinion. 6.
Annualized. 7. The expense ratio reflects the effect of expenses paid indirectly
by the Fund. 8. The lesser of purchases or sales of portfolio securities for a
period, divided by the monthly average of the market value of portfolio
securities owned during the period. Securities with a maturity or expiration
date at the time of acquisition of one year or less are excluded from the
calculation. Purchases and sales of investment securities (excluding short-term
securities) for the period ended December 31, 1997 were $0 and $2,350,000,
respectively.

<PAGE>

Investment Objectives and Policies

The investment objective and the principal types of securities each Portfolio
invests in are described in this section. The investment risks of these types of
investments are discussed in the next section, entitled "Investment Risks,"
followed by an explanation of the characteristics of the types of securities and
strategies each Portfolio uses, in "Investment Techniques and Strategies."
Appendix A contains a description of the ratings categories of certain national
ratings organizations that relate to debt securities that certain Portfolios
invest in.

Total Return Portfolio. The Total Return Portfolio seeks to maximize total
investment return (including both capital appreciation and income) by allocating
its assets among stocks, bonds (including corporate debt securities, U.S.
Government and U.S. Government-related securities) and money market instruments
according to changing market conditions.

In allocating the Portfolio's assets for investment, the Manager uses
quantitative asset allocation tools, which measure the relative characteristics
of these asset categories, in combination with the judgment of the Manager
concerning current market dynamics. Allocating assets among different types of
investments allows the Portfolio to take advantage of opportunities in different
segments of the securities markets, but also subjects the Portfolio to the risks
of those market segments. In selecting stocks, the Manager searches for stocks
with low price-earnings ratios (for example, generally below the price-earnings
ratio of the S&P 500 Index). If the company then demonstrates better earnings
than market analysts expected (this is referred to as a favorable "earnings
surprise"), the company's earnings expectations and price earnings multiple may
be re-evaluated, which may cause the stock to increase in value.

The Portfolio's debt securities are expected to have a weighted average
from current date to maturity of six to twelve years. At least 25% of the
Portfolio's total assets will be invested in fixed income senior securities.
Otherwise, the Manager may allocate the Portfolio's assets to one or more of
these asset classes in amounts that may vary from time to time, without the
requirement to allocate a fixed percentage in any particular category.

The Portfolio may invest up to 20% of its total assets in the aggregate in
debt securities and preferred stocks rated below investment grade (commonly
called "junk bonds") and unrated securities determined by the Manager to be of
comparable credit quality. However, the Manager presently does not intend to
invest more than 5% of the Portfolio's assets in below investment grade
securities in the current year. The Portfolio will not invest in securities
rated below "B" at the time of purchase. Unrated debt securities will not exceed
10% of the Portfolio's total assets.

<PAGE>

The Portfolio may invest up to 20% of its total assets in mortgage dollar
rolls. The Portfolio may also invest up to 5% of its total assets in inverse
floating
rate instruments, which are a type of
derivative security. The Portfolio may also invest to a limited
degree in securities of foreign issuers.

<PAGE>

Growth Portfolio. The Growth Portfolio seeks long term growth of capital by
investing primarily in common stocks with low price-earnings ratios and
better-than-anticipated earnings. Realization of current income is a secondary
consideration.

The Manager chooses investments for the Portfolio using a quantitative
investment discipline in combination with fundamental securities analysis. A low
price-earnings ratio (for example, generally below the price-earnings ratio of
the S&P 500 Index) is often a characteristic of a stock which is out-of-favor in
the market. When an out-of-favor company demonstrates better earnings than what
most analysts were expecting, this is referred to as a favorable earnings
surprise. An upward revaluation of both earnings expectations and the
price-earnings multiple may result, which may cause the company's stock price to
increase in value. As stocks with low price-earnings ratios and the potential
for favorable earnings surprises are identified, the Manager uses fundamental
securities analysis to select individual stocks for the Portfolio. When the
price-earnings ratio of a stock held by the Portfolio moves significantly above
the multiple of the overall stock market, or the company reports a material
earnings disappointment, the Portfolio will normally sell the stock.

The Portfolio may invest the remainder of its assets (up to 10% under
normal circumstances) in U.S. Government and corporate debt obligations,
including convertible bonds which may be rated as low as "B" by Moody's
Investors Service, Inc. ("Moody's") or Standard and Poor's Ratings Group
("Standard & Poor's") or other rating services. See Special Risks of Investing
in Lower Grade securities regarding risks of investing in lower-rated
Securities.
Consistent with the foregoing
policies, the Portfolio may invest to a limited degree in securities of foreign
issuers, including issuers in developing countries, which involve special risks
(described below).

International Equity Portfolio. The International Equity Portfolio seeks to
provide long-term growth of capital by investing, under normal circumstances, at
least 90% of its assets in equity securities of companies wherever located, the
primary stock market of which is outside the United States.

The Manager employs a subadviser, Babson-Stewart Ivory International
("Babson-Stewart" or the "Subadviser"), to invest the Portfolio's assets. The
Subadviser pursues the Portfolio's objective by investing in equity securities
of seasoned companies which are listed on foreign stock exchanges and which the
subadviser considers to have attractive characteristics in terms of
profitability, growth and financial resources. "Seasoned" companies are those
which in the Subadviser's opinion are known for the quality and acceptance of
their products or services and for their ability to generate profits.

The Portfolio will invest in large, intermediate and small capitalization
stocks, with no emphasis on any particular category. As a result, investments
within the Portfolio may include stocks categorized in the lower 25%
capitalization levels of a particular market's publicly-traded securities.
Stocks will be purchased on the basis of a number of criteria, including
fundamental and valuation analysis, but investment decisions are not based on
the integration of any particular analytical disciplines. Capitalization levels
are measured relative to specific markets; thus large and intermediate
capitalization ranges vary country by country.

<PAGE>

The Portfolio may invest up to 25% of its total assets in securities of
companies based in "emerging" countries, as defined by the International Bank
for Reconstruction and Development, the International Finance Committee, the
United Nations or its authorities or the MSCI Emerging Markets Index. An issuer
is considered by the Portfolio to be located in an emerging country if the
issuer is organized under the laws of an emerging country; the issuer's
principal securities trading market is in an emerging market; or at least 50% of
the issuer's noncurrent assets, capitalization, gross revenue or profit is
derived (directly or indirectly through subsidiaries) from assets or activities
located in emerging markets. The special risks of investing in securities of
issuers located in emerging countries are discussed in "Investment Risks,"
below.

When the Subadviser believes that it is appropriate to do so in order to
seek the Portfolio's investment objective, the Portfolio may invest up to 20% of
its total assets in debt securities. Those debt securities include debt
securities of foreign governments, supranational organizations and private
issuers, including bonds denominated in the European Currency Unit. Debt
investments will be selected on the basis of, among other things, yield, credit
quality, and the fundamental outlook for currency and interest rate trends in
different parts of the globe.
The Portfolio may purchase
investment grade bonds, which are those rated "Baa" or higher by Moody's or
"BBB" or higher by Standard & Poor's and unrated securities judged by the
Subadviser to be of equivalent quality. The Portfolio may also invest up to 15%
of its total assets in debt securities which are rated below investment grade.
The Portfolio currently does not intend to invest more than 5% of its assets in
debt securities rated below investment grade. These lower quality securities are
commonly called "junk bonds." For a description of the risks associated with
lower quality debt securities, see "Investment Risks," below. Changes in
interest rates will affect the market value of fixed-income investments made by
the Portfolio, as discussed in "Investment Risks," below.

The Portfolio may enter into forward contracts, which are foreign currency
exchange contracts, to manage the Portfolio's exposure to variations in foreign
exchange rates. The Portfolio may also buy or sell futures and options contracts
relating to foreign currencies or purchase securities indexed to foreign
currencies. See "Investment Techniques and Strategies," below for additional
information.

In appropriate circumstances, such as when a direct investment cannot be
made by the Portfolio in the securities of a particular country or when the
securities of an investment company are more liquid than the underlying
portfolio securities, the Portfolio may, consistent with the provisions of the
Investment Company Act of 1940, as amended (the "Investment Company Act"),
invest in the securities of closed-end investment companies that invest in
foreign securities. Since the Portfolio's shareholders would be subject to
additional fees, including management fees, for any Portfolio assets invested in
closed-end funds, the Subadviser will make such investments only if, in its
opinion, the potential returns justify incurring the additional expense.

<PAGE>

international investments, particularly investments in developing countries, are
subject to special risks. For a description of these risks, see "Investment
Risks," below.

Government Securities Portfolio. The Government Securities Portfolio seeks a
high level of current income with a high degree of safety of principal by
investing primarily (at least 65% of its total assets under normal market
conditions) in U.S. Government securities and U.S. Government-related
securities.

The Portfolio can also invest in securities issued by foreign governments
as long as the security is not traded primarily in foreign markets and is not
payable in foreign currencies.

U.S. Government securities are high quality instruments issued or
guaranteed as to principal and interest by the U.S. Treasury or by an agency or
instrumentality of the U.S. Government. These may include bills, notes and bonds
of the U.S. Treasury, mortgage participation certificates guaranteed by the
Government National Mortgage Association (Ginnie Mae Certificates), or
obligations of the Federal Home Loan Mortgage Corporation or the Federal
National Mortgage Association. U.S. Government-related securities are
obligations that are fully collateralized or otherwise secured by U.S.
Government securities. U.S. Government securities and U.S. Government-related
securities may include pools of consumer loans or mortgages, such as
collateralized mortgage obligations (CMOs). The Portfolio's investments in
privately issued CMOs will be limited to those rated within the two highest
rating categories by a nationally recognized rating agency. CMOs are derivative
securities; for a discussion of derivative securities, see "Investment
Techniques and Strategies." The U.S. Government and U.S. Government-related
securities in which the Portfolio will invest may have fixed or floating rates
of interest.

U.S. Government and U.S. Government-related securities do not generally
involve the credit risks associated with corporate debt securities. As a result,
the Portfolio's yield is generally lower than the yield of most general purpose
fixed-income funds, which assume certain credit risks in exchange for higher
potential yield. Like corporate debt securities, however, the value of U.S.
Government and U.S. Government-related securities, and thus the Portfolio's net
asset value, generally fluctuates inversely with changes in interest rates. The
Manager may seek to take advantage of market developments and yield disparities
by shortening average maturity in anticipation of rising interest rates and by
lengthening average maturity in anticipation of declining interest rates. The
Portfolio may also invest up to 20% of its total assets in mortgage dollar
rolls. The Portfolio may invest up to 5% of its total assets in inverse floating
rate instruments. For additional information, see "Investment Techniques and
Strategies," below. Under normal circumstances, the Portfolio may invest the
remainder of its assets (up to 35%) in investment grade debt obligations of
private issuers.

Although the Government Securities Portfolio invests primarily in U.S.
Government and U.S. Government related securities which generally have less
credit risk than other securities, an investment in the Government Securities
Portfolio is not insured or guaranteed.

<PAGE>

Can a Portfolio's Investment Objective and Policies Change? Each Portfolio has
an investment objective, described above, as well as investment policies it
follows to try to achieve its objective. Additionally, a Portfolio uses certain
investment techniques and strategies in carrying out those investment policies.
A Portfolio's investment policies and practices are not "fundamental" unless
this Prospectus or the Statement of Additional Information says that a
particular policy is "fundamental." Each Portfolio's investment objective is not
a fundamental policy. Portfolio shareholders will be given 30 days' advance
written notice of a change to a Portfolio's investment objective.

Fundamental policies are those that cannot be changed without the approval
of a "majority" of a Portfolio's outstanding voting shares. The term "majority"
is defined in the Investment Company Act to be a particular percentage of
outstanding voting shares
(and this term is explained in the
Statement of Additional Information). The Company's Board of Directors may
change a Portfolio's non-fundamental policies without shareholder approval,
although significant changes will be described in amendments to this Prospectus.

Portfolio Turnover. "Portfolio Turnover" describes the rate at
which the Portfolio traded its
portfolio securities during its last fiscal year. For example, if
a Portfolio sold all of its securities
during the year, its portfolio turnover rate would have been 100%.
Portfolio turnover affects
brokerage costs the Portfolio pays. Government Securities Portfolio may take
advantage of short-term differentials in yields when short-term trading is
consistent with its objective of seeking income. While short-term trading
increases portfolio turnover and may increase the Portfolios' transaction costs,
the Portfolios incur little or no brokerage costs for U.S. Government and most
fixed income securities. The Financial Highlights tables above shows each
Portfolio's turnover rates during prior fiscal years.

Investment Risks

All investments carry risks to some degree, whether they are risks that market
prices of the investment will fluctuate (this is known as "market risk"), or
that the underlying issuer will experience financial difficulties and may
default on its obligation under a fixed income investment to pay interest and
repay principal (this is referred to as "credit risk."). These general
investment risks, and the special risks of certain types of investments that
some of the Portfolios may hold are described below. They affect the value of a
Portfolio's investments, its investment performance, and the price of its
shares. These risks collectively form the risk profile of a particular
Portfolio. Certain of the Portfolios are more aggressive than others, and
therefore entail more risk.

While the Manager (and the Subadviser, for the International Equity
Portfolio only) tries to reduce risks by diversifying investments, by carefully
researching securities before they are purchased for a Portfolio, and in some
cases by using hedging techniques, there is no assurance that the Portfolios
will achieve their investment objectives, and when shares of a Portfolio are
redeemed, they may be worth more or less than their original cost.

<PAGE>

o Stock Investment Risks. At times, the stock markets can be volatile, and
stock prices can change substantially. This market risk will affect a
Portfolio's net asset values per share, which will fluctuate as the values of
the portfolio securities change. Not all stock prices change uniformly or at the
same time, not all stock markets move in the same direction at the same time,
and other factors can affect a particular stock's prices (for example, poor
earnings reports by an issuer, loss of major customers, major litigation against
an issuer, or changes in government regulations affecting an industry). Not all
of these factors can be predicted. Each Portfolio attempts to limit market risks
by diversifying its investments, that is, by not holding a substantial amount of
stock of any one company and by not investing too great a percentage of a
Portfolio's assets in any one company. Small cap stocks may be more volatile
than those of more highly capitalized issuers.

o Risks of Debt Securities. Debt securities are subject to changes in
their value due to changes in prevailing interest rates. When prevailing
interest rates fall, the values of already-issued debt securities generally
rise. When interest rates rise, the values of already-issued debt securities
generally decline. The magnitude of these fluctuations will often be greater for
longer-term debt securities than shorter-term debt securities. Changes in the
value of securities held by a Portfolio mean that the Portfolio's share prices
can go up or down when interest rates change, because of the effect of the
change on the value of the Portfolio's investments in debt securities. Debt
securities are also subject to credit risks. Credit risk relates to the ability
of the issuer of a debt security to make interest or principal payments on the
security as they become due. Generally, higher-yielding, lower-rated bonds are
subject to greater credit risk than higher-rated bonds. See "Special Risks of
Investing in Lower-Grade Securities," below.

o Special Risks of Investing in Lower-Grade Securities. Each Portfolio
except Government Securities Portfolio can invest in high-yield, below
investment grade debt securities (including both rated and unrated securities).
These "lower-grade" securities are commonly known as "junk bonds." They
generally offer higher income potential than investment grade securities.
Lower-grade securities have a rating below "BBB" by Standard & Poor's or "Baa"
by Moody's or similar ratings by other domestic or foreign rating organizations,
or they are not rated by a nationally-recognized rating organization, but the
Manager judges them to be comparable to lower-rated securities. Total Return
Portfolio and Growth Portfolio may not invest in lower-rated securities rated
below "B" by Moody's or Standard & Poor's or other rating services. Each of
those Portfolios may retain securities whose ratings fall below "B" after
purchase unless and until the Manager determines that disposing of the
securities is in the best interests of the respective Portfolio. Appendix A to
this Prospectus describes the rating categories of Moody's and Standard &
Poor's.

<PAGE>

low creditworthiness may increase the potential for its insolvency. For foreign
lower-grade debt securities, these risks are in addition to the risks of
investing in foreign securities, described below. Further, a decline in the
high-yield bond market is likely during an economic downturn. An economic
downturn or an increase in interest rates could severely disrupt the market for
high-yield securities and adversely affect the value of outstanding securities
and the ability of issuers to repay principal and interest. These risks mean
that a Portfolio may not achieve the expected income from lower-grade
securities, and that a Portfolio's net asset value per share may be affected by
declines in value of these securities.

o Foreign Securities Have Special Risks. There are special risks in
investing in foreign securities and in securities issued by companies and
governments located in emerging market countries. Because each Portfolio (other
than Government Securities Portfolio) may purchase securities denominated in
foreign currencies or traded primarily in foreign markets, a change in the value
of a foreign currency against the U.S. dollar will result in a change in the
U.S. dollar value of those foreign securities. Foreign issuers are not required
to use generally-accepted accounting principles that apply to U.S. issuers. If
foreign securities are not registered for sale in the U.S. under U.S. securities
laws, the issuer does not have to comply with the disclosure requirements that
U.S. companies are subject to. The value of foreign investments may be affected
by other factors, including exchange control regulations, expropriation or
nationalization of a company's assets, foreign taxes, delays in settlement of
transactions, changes in governmental, economic or monetary policy in the U.S.
or abroad, or other political and economic factors.

In addition, it is generally more difficult to obtain court judgements
outside the U.S. if a Portfolio were to sue a foreign issuer or broker.
Additional costs may be incurred because foreign brokerage commissions are
generally higher than U.S. rates, and there are additional custodial costs
associated with holding securities abroad.

o Special Risks of Investing in Emerging Market Countries. The Portfolios'
definition of "emerging countries" includes any country that is defined as an
emerging or developing economy by the International Bank for Reconstruction and
Development, the International Finance Committee, the United Nations or its
authorities, or the MSCI Emerging Markets Index. Investments in emerging market
countries may involve risks in addition to those that generally apply to
investments in foreign securities. Securities issued by emerging market
countries and by companies located in those countries may be subject to extended
settlement periods, so that a Portfolio might not receive principal and/or
income on a timely basis and its net asset values could be affected. Emerging
market countries may have smaller, less well-developed markets and exchanges;
there may be a lack of liquidity for emerging market securities. Interest rates
and foreign currency exchange rates may be more volatile than in more developed
markets. Sovereign limitations on foreign investments may be more likely to be
imposed. There may be significant balance of payment deficits; and their
economies and markets may respond in a more volatile manner to economic changes
than those of developed countries. More information about the risks and
potential rewards of investing in foreign securities is contained in the
Statement of Additional Information.

<PAGE>

o Hedging Instruments can be volatile investments and may involve special
risks. The use of hedging instruments requires special skills and knowledge of
investment techniques that are different from what is required for normal
portfolio management. If the Manager or Subadviser uses a hedging instrument at
the wrong time or judges market conditions incorrectly, hedging strategies may
reduce a Portfolio's return. A Portfolio could also experience losses if the
prices of its futures and options positions were not correlated with its other
investments or if it could not close out a position because of an illiquid
market for the future or option.

Options trading involves the payment of premiums, and options, futures and
forward contracts are subject to special tax rules that may affect the amount,
timing and character of a Portfolio's income and distributions. There are also
special risks in particular hedging strategies. For example, if a covered call
written by a Portfolio is exercised on an investment that has increased in
value, the Portfolio will be required to sell the investment at the call price
and will not be able to realize any profit if the investment has increased in
value above the call price. In writing puts, there is a risk that a Portfolio
may be required to buy the underlying security at a disadvantageous price. The
use of Forward Contracts may reduce the gain that would otherwise result from a
change in the relationship between the U.S. dollar and a foreign currency.
Interest rate swaps are subject to the risk that the other party will fail to
meet its obligations (or that the underlying issuer will fail to pay on time),
as well as interest rate risks. A Portfolio could be obligated to pay more under
its swap agreements than it receives under them, as a result of interest rate
changes. These risks are described in greater detail in the Statement of
Additional Information.

o There are special risks in investing in derivative
investments. The Portfolios may invest
in different types of derivatives. In general, a derivative
investment is a specially designed investment
whose performance is linked to the performance of another
investment or security, such as an option,
future, index, currency or commodity. The company issuing the instrument may
fail to pay the amount due on the maturity of the instrument. Also, the
underlying investment or security on which the derivative is based, and the
derivative itself, might not perform the way the Manager or Subadviser expected
it to perform. Markets, underlying securities and indices may move in a
direction not anticipated by the Manager or Subadviser. Performance of
derivative investments may also be influenced by interest rate and stock market
changes in the U.S. and abroad. All of this can mean that a Portfolio will
realize less principal or income from the investment than expected. Certain
derivative investments held by a Portfolio may be illiquid. Please refer to
"Illiquid and Restricted Securities."

Investment Techniques and Strategies

The Portfolios may use the investment techniques and strategies described below,
each of which involves certain risks. Not all of the Portfolios use all of these
techniques and strategies, and each section indicates which Portfolios use a
particular technique or strategy. The Statement of Additional Information
contains more detailed information about these practices, including limitations
on their use that may help to reduce some of the risks.

<PAGE>

o Foreign Securities. (All Portfolios). Foreign securities offer special
investment opportunities but also entail special risks, described above. Neither
the Growth Portfolio nor the Total Return Portfolio may invest more than 10% of
its total assets in foreign securities, except the following securities, in
which such Portfolios may invest up to 25% of their total assets: foreign equity
and debt securities (i) issued, assumed or guaranteed by foreign governments or
their political subdivisions or instrumentalities, (ii) assumed or guaranteed by
domestic issuers, including Eurodollar securities, and (iii) issued, assumed or
guaranteed by foreign issuers having a class of securities listed for trading on
The New York Stock Exchange.

o ADRs, EDRs and GDRs. (All Portfolios except Government Securities
Portfolio). ADRs are receipts issued by a U.S. bank or trust company which
evidence ownership of underlying securities of foreign corporations. ADRs are
traded on domestic exchanges or in the U.S. over-the-counter market and,
generally, are in registered form. To the extent a Portfolio acquires ADRs
through banks which do not have a contractual relationship with the foreign
issuer of the security underlying the ADR to issue and service such ADRs, there
may be an increased possibility that the Portfolio would not become aware of and
be able to respond in a timely manner to corporate actions such as stock splits
or rights offerings involving the foreign issuer. In addition, the lack of
information may result in inefficiencies in the valuation of such instruments.
EDRs and GDRs are receipts evidencing an arrangement with a non-U.S. bank
similar to that for ADRs and are designed for use in non-U.S. securities
markets. EDRs and GDRs are not necessarily quoted in the same currency as the
underlying security.

o Convertible Securities (All Portfolios Except Government
Securities Portfolio ).
Convertible securities are bonds, preferred stocks and other
securities that normally pay a fixed rate
of interest or dividend and give the owner the option to convert the security
into common stock. While the value of convertible securities depends in part on
interest rate changes and the credit quality of the issuer, the price will also
change based on the price of the underlying stock. While convertible securities
generally have less potential for gain than common stock, their income provides
a cushion against the stock price's declines. They generally pay less income
than non-convertible bonds. The Manager generally analyzes these investments
from the perspective of the growth potential of the underlying stock and treats
them as "equity substitutes."

o Debt Securities. Each Portfolio may purchase a variety of debt
securities. Debt securities include corporate debt obligations, U.S. Government
securities, mortgage-backed and asset-backed securities, adjustable rate
securities, "stripped" securities, custodial receipts for Treasury certificates,
zero coupon bonds, equipment trust certificates, loan participation notes,
structured notes and money market instruments. The issuer of a debt security
normally pays the investor a fixed or variable rate of interest and must repay
the amount borrowed at maturity. Debt securities have varying degrees of credit
quality and respond differently to changes in interest rates.

Some debt securities, such as zero coupon bonds, do not pay interest but
are purchased at a discount from their face value. However, they accrue income
for tax and accounting purposes, which

<PAGE>

must be distributed to shareholders. Because no cash is received by a Portfolio
at such accrual periods, the Portfolio may be required to liquidate other
securities to meet distribution requirements.

o U.S. Government Securities. (All Portfolios). U.S.
Government Securities include debt
securities issued by the U.S. Government, or its agencies and
instrumentalities. Certain U.S.
Government Securities, including U.S. Treasury bills, notes and bonds, and
mortgage participation certificates guaranteed by the Government National
Mortgage Association ("GNMA") are supported by the full faith and credit of the
U.S. Government, which in general terms means that the U.S. Treasury stands
behind the obligation to pay principal and interest.

GNMA certificates are one type of mortgage-related U.S. Government
Securities in which a Portfolio may invest. Other mortgage-related U.S.
Government Securities the Portfolios invest in that are issued or guaranteed by
federal agencies or government-sponsored entities are not supported by the full
faith and credit of the U.S. Government. Those securities include obligations
supported by the right of the issuer to borrow from the U.S. Treasury, such as
obligations of Federal Home Loan Mortgage Corporation ("FHLMC"), obligations
supported only by the credit of the instrumentality, such as Federal National
Mortgage Association ("FNMA") or the Student Loan Marketing Association and
obligations supported by the discretionary authority of the U.S. Government to
repurchase certain obligations of U.S. Government agencies or instrumentalities
such as the Federal Land Banks and the Federal Home Loan Banks. Certain
mortgage-backed securities, whether issued by the U.S. Government or by private
issuers, "pass-through" to investors the interest and principal payments
generated by a pool of mortgages assembled for sale by government agencies.
Pass-through mortgage-backed securities entail the risk that principal may be
repaid at any time because of prepayments on the underlying mortgages. That may
result in greater price and yield volatility than traditional fixed-income
securities that have a fixed maturity and interest rate. The Growth Portfolio
and International Equity Portfolio may not purchase mortgage-backed securities.

The value of U.S. Government Securities will fluctuate until they mature
depending on prevailing interest rates. Because the yields on U.S. Government
Securities are generally lower than on corporate debt securities, when a
Portfolio holds U.S. Government Securities it may attempt to increase the income
it can earn from them by writing covered call options against them, when market
conditions are appropriate. Writing covered calls is explained below, under
"Hedging."

o Collateralized Mortgage Obligations. (Government Securities Portfolio
and Total Return Portfolio only). Collateralized mortgage obligations ("CMOs")
generally are obligations fully collateralized by a portfolio of mortgages or
mortgage-related securities. Payments of the interest and principal generated by
the pool of mortgages relating to the CMOs are passed through to the holders as
the payments are received. CMOs are issued with a variety of classes or series
which have different maturities. Certain CMOs may be more volatile and less
liquid than other types of mortgage-related securities, because of the
possibility of the prepayment of principal due to prepayments on the underlying
mortgage loans.

<PAGE>

Certain CMOs are "stripped." That means that the security is divided into
two parts, one of which receives some or all of the principal payments (and is
known as a "principal-only" or "P/O" security) and the other which receives some
or all of the interest (and is known as an "interest-only" or "I/O" security).
P/Os and I/Os are generally referred to as "derivative investments," discussed
further below. The yield to maturity on the class that receives only interest is
extremely sensitive to the rate of payment of the principal on the underlying
mortgages. Principal prepayments increase that sensitivity. Stripped securities
that pay "interest only" are therefore subject to greater price volatility when
interest rates change, and they have the additional risk that if the underlying
mortgages are prepaid, a Portfolio will lose the anticipated cash flow from the
interest on the prepaid mortgages. That risk is increased when general interest
rates fall, and in times of rapidly falling interest rates, a Portfolio might
receive back less than its investment. The value of "principal only" securities
generally increases as interest rates decline and prepayment rates rise. The
price of these securities is typically more volatile than that of coupon-bearing
bonds of the same maturity.

Private-issuer stripped securities are generally purchased and sold by
institutional investors through investment banking firms. At present,
established trading markets have not yet developed for these securities.
Therefore, most private-issuer stripped securities may be deemed "illiquid." If
a Portfolio holds illiquid stripped securities, the amount it can hold will be
subject to the Portfolio's investment policy limiting investments in illiquid
securities to 15% of the Portfolio's net assets.

o Asset-backed Securities. (Government Securities Portfolio and Total
Return Portfolio only). Asset-backed securities represent interests in pools of
consumer loans and other trade receivables, similar to mortgage-backed
securities. They are issued by trusts and special purpose corporations. They are
backed by a pool of assets, such as credit card or auto loan receivables, which
are the obligations of a number of different parties. The income from the
underlying pool is passed through to holders, such as one of the Portfolios.
These securities may be supported by a credit enhancement, such as a letter of
credit, a guarantee or a preference right. However, the extent of the credit
enhancement may be different for different securities and generally applies to
only a fraction of the security's value. These securities present special risks.
For example, in the case of credit card receivables, the issuer of the security
may have no security interest in the related collateral.

o Inverse Floating Rate Instruments. (Government Securities Portfolio and
Total Return Portfolio). Inverse floating rate debt instruments ("inverse
floaters") include leveraged inverse floaters and inverse floating rate
mortgage-backed securities, such as inverse floating rate "interest only"
stripped mortgage-backed securities. The interest rate on inverse floaters
resets in the opposite direction from the market rate of interest to which the
inverse floater is indexed. An inverse floater may be considered to be leveraged
to the extent that its interest rate varies by a magnitude that exceeds the
magnitude of the change in the index rate of interest. The higher degree of
leverage inherent in inverse floaters is associated with greater volatility in
their market values.

o Mortgage Dollar Rolls. (Government Securities Portfolio
and Total Return Portfolio
only). Certain Portfolios may invest up to 20% of their total
assets in mortgage dollar rolls. In a
mortgage dollar roll the Portfolio sells mortgage-backed
securities for delivery in the current month

<PAGE>

and simultaneously contracts to repurchase substantially similar (same type,
coupon and maturity) securities on a specified future date. During the roll
period, the Portfolio forgoes principal and interest paid on the mortgage-backed
securities. The Portfolio is compensated by the difference between the current
sales price and the lower forward price for the future purchase (often referred
to as the "drop") as well as by the interest earned on the cash proceeds of the
initial sale. A "covered roll" is a specific type of dollar roll for which there
is an offsetting cash position or a cash equivalent security position which
matures on or before the forward settlement date of the dollar roll transaction.
All rolls entered into by a Portfolio will be covered rolls. Covered rolls are
not treated as a borrowing or other senior security and are excluded from the
calculation of a Portfolio's borrowings and other senior securities. A Portfolio
is also permitted to purchase mortgage-backed securities and to sell such
securities without regard to the length of time held in separate transactions
that do not constitute dollar rolls. For financial reporting and tax purposes,
the Portfolios treat mortgage rolls as two separate transactions: one involving
the purchase of securities and a separate transaction involving a sale. The
Portfolios do not currently intend to enter into mortgage dollar roll
transactions that are accounted for as a financing.

o Structured Notes (Government Securities Portfolio and Total Return
Portfolio only). A structured note is a debt security having an interest rate or
principal repayment requirement based on the performance of a benchmark asset or
market, such as stock prices, currency exchange rates and commodity prices. They
provide exposure to the benchmark market while fixing the maximum loss if the
market does not perform as expected. Depending on the terms of the note, a
Portfolio could forego all or part of the interest and principal that would be
payable on a comparable conventional note, and the Portfolio's loss could not
exceed that amount.

o Eurodollar and Yankee Dollar Bank Obligations. (All
Portfolios except Government
Securities Portfolio). Certain Portfolios may also invest in
obligations of foreign branches of U.S.
banks referred to as Eurodollar obligations and U.S. branches of
foreign banks (Yankee dollars) as
well as foreign branches of foreign banks. These investments
involve risks that are different from
investment in securities of U.S. banks.

o Short-term Debt Securities. (All Portfolios). Each Portfolio may invest
in high quality, short-term money market instruments such as U.S. Treasury and
agency obligations; commercial paper (short-term, unsecured, negotiable
promissory notes of a domestic or foreign company); short-term debt obligations
of corporate issuers; bank participation certificates; and certificates of
deposit and bankers' acceptances (time drafts drawn on commercial banks usually
in connection with international transactions) of banks and savings and loan
associations. When the Manager believes it appropriate for temporary defensive
purposes or for liquidity purposes, a Portfolio may hold cash or invest without
limit in money market instruments.

o Warrants and Rights. (All Portfolios except Government
Securities Portfolio). Warrants
are options to purchase stock at set prices that are valid for a
limited period of time. Rights are similar
to warrants but normally have a short duration and are distributed
directly by the issuer to its
shareholders. A Portfolio may invest up to 5% of its total assets
in warrants or rights. That 5%

<PAGE>

limitation does not apply to warrants a Portfolio has acquired as part of units
with other securities or that are attached to other securities. No more than 2%
of a Portfolio's total assets may be invested in warrants that are not listed on
either The New York Stock Exchange or The American Stock Exchange.

o Loans of Portfolio Securities. (All Portfolios). To attempt to increase
its income or raise cash for liquidity purposes, each Portfolio may lend its
portfolio securities, in transactions other than repurchase agreements, to
brokers, dealers and other financial institutions. A Portfolio must receive
collateral for a loan. As a matter of non-fundamental operating policy, the
Manager limits such loans to 10% of the Portfolio's total assets, and such loans
are subject to other conditions described in the Statement of Additional
Information.

o "When-Issued" and Delayed Delivery Transactions. (All Portfolios). Each
Portfolio may purchase securities on a "when-issued" basis and may purchase or
sell securities on a "delayed delivery" basis. These terms refer to securities
that have been created and for which a market exists, but which are not
available for immediate delivery. There may be a risk of loss to a Portfolio if
the value of the security declines prior to the settlement date.

o Repurchase Agreements. (All Portfolios). Each Portfolio
may enter into repurchase
agreements. In a repurchase transaction, a Portfolio buys a
security and simultaneously sells it to the
vendor for delivery at a future date. Repurchase agreements must be fully
collateralized. However, if the vendor fails to pay the resale price on the
delivery date, a Portfolio may experience costs in disposing of the collateral
and may experience losses if there is any delay in doing so.

o Illiquid and Restricted Securities. (All Portfolios). Under the policies
established by the Company's Board of Directors, the Manager determines the
liquidity of certain of the Portfolios' investments. Investments may be illiquid
because of the absence of an active trading market, making it difficult to value
them or dispose of them promptly at an acceptable price. A restricted security
is one that has a contractual restriction on its resale or which cannot be sold
publicly until it is registered under the Securities Act of 1933. The Portfolios
will not invest more than 15% of their net assets in illiquid or restricted
securities (excluding restricted securities eligible for resale to qualified
institutional investors). The Manager monitors holdings of illiquid securities
on an ongoing basis and at times the Portfolio may be required to sell some
holdings to maintain adequate liquidity. Illiquid securities include repurchase
agreements maturing in more than seven days, or certain participation interests
other than those with puts exercisable within seven days.

o Hedging. (All Portfolios). All Portfolios may write (sell) and
Government Securities Portfolio and International Equity Portfolio may also
purchase, exchange traded covered call options on securities, securities indices
and foreign currencies, in each case as a hedge against decreases in prices of
existing portfolio securities or increases in prices of securities whose
purchase is anticipated. The International Equity Portfolio may purchase options
on currency in the over-the-counter ("OTC") markets. The Portfolios may use
covered call options for non-hedging purposes as described below.

<PAGE>

A Portfolio may, subject to its investment policies, sell or purchase
covered call options and buy and sell futures and forward contracts for a number
of purposes. It may do so to try to manage its exposure to the possibility that
the prices of its portfolio securities may decline, or to establish a position
in the securities market as a temporary substitute for purchasing individual
securities. It may do so to try to manage its exposure to changing interest
rates. Some of these strategies, such as selling futures and writing covered
calls, hedge a Portfolio's portfolio against price fluctuations.

Other hedging strategies, such as buying futures, tend to increase a
Portfolio's exposure to the securities market. Forward contracts are used to try
to manage foreign currency risks on a Portfolio's foreign investments. Foreign
currency options are used to try to protect against declines in the dollar value
of foreign securities a Portfolio owns, or to protect against an increase in the
dollar cost of buying foreign securities. Writing covered call options may also
provide income to a Portfolio for liquidity purposes or may be for defensive
reasons, or to raise cash to distribute to shareholders. Hedging strategies
entail special risks, described in "Investment Risks," above.

o Futures. To hedge against changes in interest rates, securities prices
or currency exchange rates, each Portfolio may, subject to its investment
objectives and policies, purchase and sell various kinds of futures contracts
and International Equity Portfolio may purchase and write call and put options
on any futures contracts. A Portfolio may also enter into closing purchase and
sale transactions with respect to these contracts and options. Futures contracts
may be based on various securities (such as U.S. Government securities),
securities indices, foreign currencies and other financial instruments and
indices.

Each Portfolio may purchase and sell futures contracts on stock indices
and sell options on such futures. The Total Return Portfolio may purchase and
sell interest rate futures and sell options on such futures. In addition, each
Portfolio that may invest in securities that are denominated in foreign currency
may purchase and sell futures on currencies. The International Equity Portfolio
may purchase and sell options on such futures. A Portfolio will engage in
futures and related options transactions only for bona fide hedging and
non-hedging purposes as permitted in regulations of the Commodity Futures
Trading Commission. No Portfolio will enter into futures contracts or options
thereon for non-hedging purposes if, immediately thereafter, the aggregate
initial margin and premiums required to establish non-hedging positions in
futures contracts and options on futures will exceed 5% of the net asset value
of the Portfolio's portfolio, after taking into account unrealized profits and
losses on any such positions and excluding the amount by which such options were
in-the-money at the time of purchase.

<PAGE>

which the call may be exercised. If the value of the investment does not rise
above the call price, it is likely that the call will lapse without being
exercised, while the Portfolio keeps the cash premium (and the investment).
After a Portfolio writes a call, not more than 20% of the value of its total
assets may be subject to calls.

A Portfolio may sell covered call options that are traded on U.S. or
foreign securities or commodity exchanges or which are issued by the Options
Clearing Corporation. In the case of foreign currency options, they may be
quoted by major recognized dealers in those options. The International Equity
Portfolio may purchase options on currency in the over-the-counter markets.

o Forward Contracts. (All Portfolios). Forward Contracts are foreign
currency exchange contracts. They are used to buy or sell foreign currency for
future delivery at a fixed price. A Portfolio uses them to try to "lock in" the
U.S. dollar price of a security denominated in a foreign currency that the
Portfolio has purchased or sold, or to protect against possible losses from
changes in the relative value of the U.S. dollar and a foreign currency. A
Portfolio may also use "cross hedging," where the Portfolio hedges against
changes in currencies other than the currency in which a security it holds is
denominated. No Portfolio will speculate in foreign exchange.

o Interest Rate Swaps. (Government Securities Portfolio
only). Government Securities
Portfolio may enter into interest rate swaps both for hedging and
to seek to increase total return. In
an interest rate swap, the Portfolio and another party exchange their right to
receive, or their obligation to pay, interest on a security. For example, they
may swap a right to receive floating rate interest payments for fixed rate
payments. The Portfolio enters into swaps only on a net basis, which means the
two payment streams are netted out, with the Portfolio receiving or paying, as
the case may be, only the net amount of the two payments. The Portfolio will
segregate liquid assets of any kind (such as cash or U.S. Government securities)
to cover any amounts it could owe under swaps that exceed the amounts it is
entitled to receive, and it will adjust that amount daily, as needed. The
Portfolio will not invest more than 25% of its assets in interest rate swap
transactions and only on securities it owns.

o Derivative Investments. (All Portfolios). A Portfolio
may not purchase or sell physical
commodities; however, a Portfolio may purchase and sell foreign
currency in hedging transactions.
The restriction against purchasing commodities shall not prevent a Portfolio
from buying or selling futures contracts or from investing in securities or
other instruments backed by physical commodities.

Derivative investments may be used by a Portfolio in some cases for
hedging purposes and in other cases to seek income. In the broadest sense,
exchange-traded options and futures contracts (discussed in "Hedging," above)
may be considered derivative investments, and other examples of derivatives are
CMOs, stripped securities, asset-backed securities, structured notes and
floating interest rate securities. Some of the special risks of derivatives are
described in "Investment Risks," above.

<PAGE>

Index-linked or commodity-linked notes are debt securities of companies
that call for interest payments and/or payment on the maturity of the note in
different terms than the typical note where the borrower agrees to pay a fixed
sum on the maturity of the note. Principal and/or interest payments on an
index-linked note depend on the performance of one or more market indices, such
as the S&P 500 Index or a weighted index of commodity futures, such as crude
oil, gasoline and natural gas. A Portfolio may invest in debt exchangeable for
common stock of an issuer or equity-linked debt securities of an issuer. At
maturity, the principal amount of the debt security is exchanged for common
stock of the issuer or is payable in an amount based on the issuer's common
stock price at the time of maturity. In either case there is a risk that the
amount payable at maturity will be less than the expected principal amount of
the debt.

o Temporary Defensive Investments. (All Portfolios). When
stock or bond market prices
are falling or in other unusual economic or business
circumstances, each Portfolio may invest
substantially all of its assets in cash equivalents, cash, or
short-term money market instruments for
temporary defensive purposes.

Other Investment Restrictions. The Portfolios have other investment restrictions
which are "fundamental" policies. A Portfolio cannot deviate from its other
fundamental policies described in "Investment Objectives and Policies" and
"Other Investment Techniques and Strategies" in the Statement of Additional
Information.

o Each Portfolio may not:

o Borrow amounts in excess of 10% of the Portfolio's total assets, taken
at market value at the time of the borrowing, and then only from banks as a
temporary measure for extraordinary or emergency purposes, or make investments
in portfolio securities while such outstanding borrowings exceed 5% of the
Portfolio's total assets.

o (a) Invest more than 5% of the Portfolio's total assets (taken at market
value at the time of each investment) in the securities (other than U.S.
Government agency securities) of any one issuer (including repurchase agreements
with any one bank); and (b) purchase more than either (i) 10% of the principal
amount of the outstanding debt securities of an issuer, or (ii) 10% of the
outstanding voting securities of an issuer, except that such restrictions shall
not apply to securities issued or guaranteed by the U.S. Government or its
agencies, bank money instruments or bank repurchase agreements. (This
restriction does not apply to the Government Securities Portfolio.)

o Invest more than 25% of its assets in securities of issuers in any
single industry, provided that this limitation shall not apply to obligations
issued or guaranteed by the U.S. Government, its agencies or instrumentalities.
For the purpose of this restriction, each utility that provides a separate
service (e.g., gas, gas transmission, electric or telephone) shall be considered
a separate industry. This test shall be applied on a pro forma basis using the
market value of all assets immediately prior to making any investment. (This
restriction does not apply to the International Equity Portfolio or

<PAGE>

the Government Securities Portfolio). (Each Portfolio subject to
this restriction has undertaken to
apply it to 25% or more of its assets.)

Unless this Prospectus states that a percentage restriction applies
continuously, it applies only at the time the Portfolio makes an investment, and
the Portfolio need not sell securities to meet the percentage limits if the
value of the investment increases in proportion to the size of the Portfolio.
Other investment restrictions are listed in "Investment Restrictions" in the
Statement of Additional Information.

How the Portfolios Are Managed

Organization and History. The Company was organized in 1981 as a
Maryland corporation. The
Company is an open-end management investment company. Organized
as a series fund, the Company
presently has seven diversified series, four of which are
discussed in this Prospectus.

The Company is governed by a Board of Directors, which is responsible for
protecting the interests of shareholders under Maryland law. The Directors meet
periodically throughout the year to oversee each Portfolio's activities, review
its performance, and review the actions of the Manager and the Subadviser.
"Directors and Officers of the Portfolios" in the Statement of Additional
Information names the Directors and officers of the Portfolios and provides more
information about them. Although the Company will not normally hold annual
meetings of shareholders, the Company may hold shareholder meetings from time to
time on important matters and call a meeting of shareholders upon proper request
of all shareholders of the Company. The Directors may also take other action
described in the Company's Articles of Incorporation. On matters affecting only
one Portfolio, only the shareholders of that Portfolio are entitled to vote.
Separate votes by Portfolio are required for matters relating to all Portfolios
but affecting the Portfolios differently. An insurance company issuing a
variable contract for which shares of a Portfolio are held by the insurance
company's separate account will vote the shares in accordance with applicable
law, which currently requires the insurance company to request voting
instructions from policy owners and to vote the shares in proportion to the
voting instructions received. For more information, please refer to your
insurance company's separate account prospectus.

The Board of Directors has the power, without shareholder approval, to
classify or reclassify unissued shares of the Company into additional series.
Shares of each Portfolio currently consist of a single class and have equal
rights as to voting, redemption, dividends and liquidation with respect to that
Portfolio. Shares are freely transferrable. Please refer to "How the Portfolios
are Managed" in the Statement of Additional Information for further information
on voting of shares.

The Manager, The Subadviser and their Affiliates. The Portfolios are managed by
the Manager, OppenheimerFunds, Inc., which supervises each Portfolio's
investment program and handles its day-to-day business. The Manager carries out
its duties, subject to the policies established by the Board of Directors, under
separate Investment Advisory Agreements for each Portfolio which state

<PAGE>

the Manager's responsibilities. The Agreements set forth the fees paid by a
Portfolio to the Manager, and describe the expenses that a Portfolio is
responsible to pay to conduct its business.

The Manager has operated as an investment adviser since 1959. The Manager
(including subsidiaries) currently manage investment companies, including other
Oppenheimer funds, with assets of more than $75 billion as of December 31, 1997,
and with more than 3.5 million shareholder accounts. The Manager is owned by
Oppenheimer Acquisition Corp., a holding company that is owned in part by senior
officers of the Manager and controlled by Massachusetts Mutual Life Insurance
Company.

The management services provided to the Company by the Manager, and the
services provided by the Transfer Agent to shareholders, depend on the smooth
functioning of their computer systems. Many computer software systems in use
today cannot distinguish the year 2000 from the year 1900 because of the way
dates are encoded and calculated. That failure could have a negative impact on
handling securities trades, pricing and account services. The Manager, the
Distributor and Transfer Agent have been actively working on necessary changes
to their computer systems to deal with the year 2000 and expect that their
systems will be adapted in time for that event, although there cannot be
assurance of success. Furthermore, their services may be impared at that time as
a result of the interaction of their systems with the systems of other service
providers whose systems cannot deal with the year 2000.

o The Subadviser. The Manager has engaged Babson-Stewart to provide
day-to-day portfolio management services to the International Equity Portfolio.
Babson-Stewart, One Memorial Drive, Cambridge, MA 02142, was originally
established in 1987. The general partners of Babson-Stewart are David L. Babson
& Co., which is an indirect subsidiary of Massachusetts Mutual Life Insurance
Company, and Stewart Ivory & Co., Ltd. As of December 31, 1997, Babson-Stewart,
together with its global affiliate, had approximately $4.5 billion in assets
under management.

The Subadviser is responsible for choosing the investments
of the International Equity
Portfolio, and its duties and responsibilities are set forth in
its contract with the Manager. The
Manager, not the International Equity Portfolio, pays the
Subadviser.

o Portfolio Managers. The Manager supervises each
Portfolio's investment program and
regularly reviews the asset allocation among each Portfolio. The
Portfolio Managers of each Portfolio are listed below.

Year
Became
Portfolio/Principal Portfolio Business Experience
Portfolio Manager Manager (last 5 years)
- -------------------------------------------------------------------

Total Return Portfolio
Peter M. Antos,

<PAGE>

C.F.A. 1989 Principal Portfolio Manager
of the Portfolio;
Senior Vice President and
Portfolio Manager
of the Portfolios and of the
Manager (since
March, 1996); Senior Vice
President of
HarbourView Asset Management
Corporation ("HarbourView");
portfolio
manager of other Oppenheimer
funds;
previously Vice President
and Senior
Portfolio Manager,
Equities-G.R. Phelps, a
subsidiary of Connecticut
Mutual Life
Insurance Company
(1989-1996).

Michael C. Strathearn,
C.F.A. 1988 Vice President and Portfolio
Manager of the
Portfolio and of the Manager
(since March,
1996); Vice President of
HarbourView;
Portfolio Manager of other
Oppenheimer
funds; previously a
Portfolio Manager,
Equities-Connecticut Mutual
Life Insurance
Company (1988-1996).

Stephen F. Libera,
C.F.A. 1985 Vice President and Portfolio
Manager of the
Portfolio and of the Manager
(since March
1996); Vice President of
HarbourView;
Portfolio Manager of other
Oppenheimer
funds; previously Vice
President and Senior
Portfolio Manager, Fixed
Income-G.R.
Phelps 1985-1996).

Kenneth B. White,
C.F.A. 1992 Vice President and Portfolio
Manager of the
Portfolio and the Manager
since March,
1996; Vice President of
HarbourView;
Portfolio Manager of other
Oppenheimer
funds; previously a
Portfolio Manager,
Equities-Connecticut Mutual
Life Insurance
Company (1987-1996).

Arthur Zimmer 1996 Vice President and Portfolio
Manager of the
Manager and Centennial Asset
Management
Corporation; an officer of
other
Oppenheimer funds.

<PAGE>

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

Growth Portfolio
Peter M. Antos,
C.F.A. 1989 (see biographical data above)

Michael C. Strathearn,
C.F.A. 1988 (see biographical data above)

Kenneth B. White,
C.F.A. 1992 (see biographical data above)
- -------------------------------------------------------------------

International Equity Portfolio
(Babson-Stewart)
James W. Burns 1996 Managing Director,
Babson-Stewart
(1993-present) and Director,
Stewart Ivory
& Co., Ltd. (since 1990).

John G.L. Wright 1996 Managing Director,
Babson-Stewart
(1987-present); Director,
Stewart Ivory &
Co., Ltd. (since 1971).
- -------------------------------------------------------------------

Government Securities Portfolio
(the Manager)

Jerry A. Webman 1997 Senior Vice President of the
Manager (since
February 1996); an officer
of other
Oppenheimer funds;
previously an officer
and analyst with Prudential
Mutual Fund -
Investment Management, Inc.

David egri 1996 Vice President of the
Manager and an
Officer and Portfolio
Manager of other
Oppenheimer funds.
- -------------------------------------------------------------------

o Fees and Expenses. Under separate Investment Advisory Agreements with
each Portfolio, each Portfolio pays the Manager a monthly fee equal to a
percentage of the Portfolio's average daily net assets as follows: For the Total
Return Portfolio, the annual rates are: 0.625% of the average daily net assets
up to $600 million and 0.45% of the average daily net assets over $600 million.
For the International Equity Portfolio, the annual rates are: 1.00% of the
average daily net assets up to $250 million and 0.90% of average daily net
assets over $250 million. For the Growth Portfolio, the annual rates are: 0.625%
of the average daily net assets up to $300 million, 0.500% of the next $100
million and 0.450% of the average daily net assets over $400 million. For the
Government Securities Portfolio, the annual rates are: 0.525% of the average
daily net assets up to $300 million, 0.500% of the next $100 million and 0.450%
of the average daily net assets over $400 million.

<PAGE>

Under its Investment Subadvisory Agreement with Babson-Stewart, the
Manager pays Babson-Stewart a monthly fee at the following annual rates, which
decline as the average daily net assets of the International Equity Portfolio:
0.75% of the first $10 million of average daily net assets allocated to
Babson-Stewart, 0.625% of the next $15 million, 0.50% of the next $25 million
and 0.375% of such assets in excess of $50 million. The portion of the net
assets of the International Equity Portfolio and other Portfolios for which it
provides subadvisory services will not be aggregated in applying these
breakpoints.

During the fiscal year ended December 31, 1997, the management fees
(computed on an annualized basis as a percentage of the net assets of the
Portfolios as of the close of business each day) paid to the Manager and the
total operating expenses as a percentage of average net assets of each
Portfolio, were as follows:

Portfolio Fees ManagementTotal Operating
Expense(1)
- -------------------------------------------------------------------

Total Return 0.54% 0.55%
- -------------------------------------------------------------------

Growth 0.53% 0.54%
- -------------------------------------------------------------------

International Equity 1.00% 1.12%
- -------------------------------------------------------------------

Government Securities 0.52% 0.67%
- -------------------------------------------------------------------

(1)This table does not reflect expenses that apply at the Account level or to
related insurance products.

Each Portfolio pays expenses related to its daily operations, such as
custodian fees, certain Directors' fees, transfer agency fees, legal and
auditing costs.
Those expenses are paid out of a
Portfolio's assets and are not paid directly by shareholders. However, those
expenses reduce the net asset value of shares, and therefore are indirectly
borne by shareholders through their investment. More information about the
Investment Advisory Agreements and the other expenses paid by the Portfolios is
contained in the Statement of Additional Information.

There is also information about the Portfolios' brokerage policies and
practices in "Brokerage Policies of the Portfolios" in the Statement of
Additional Information. That section discusses how brokers and dealers are
selected for the Portfolios' portfolio transactions. When deciding which brokers
to use, the Manager and the Subadviser are permitted by the Investment Advisory
Agreements to consider whether brokers have sold shares of the Portfolios or any
other funds for which the Manager serves as investment adviser.

o Shareholder Inquiries. Inquiries by policy owners for
Account information are to be
directed to the insurance company issuing the Account at the
address or telephone number shown in
the accompanying Account Prospectus.

Performance of the Portfolios

Explanation of Performance Terminology. Each Portfolio uses the
term "total return" and certain
Portfolios may use the term "yield" to illustrate their
performance. These returns measure the

<PAGE>

performance of a hypothetical account in a Portfolio over various periods, and
do not show the performance of each shareholder's account (which will vary if
shares are sold or purchased). A Portfolio's performance data may help you see
how well your investment has done over time and to compare it to market indices.
However, the performance data published by the Portfolios does not include
expenses that apply at the Account level or to related insurance products which,
if considered, would reduce such performance. Since shares of the Portfolios may
be purchased through a variable contract, you should carefully review the
prospectus of the insurance product you have chosen for information on charges
and expenses.

It is important to understand that a Portfolio's yields and total returns
represent past performance and should not be considered to be predictions of
future returns or performance. This performance data is described below, but
more detailed information about how total returns and yields are calculated is
contained in the Statement of Additional Information, which also contains
information about other ways to measure and compare a Portfolio's performance. A
Portfolio's investment performance will vary over time, depending on market
conditions, the composition of the portfolio and expenses.

o Total Returns. There are different types of "total returns" used to
measure a Portfolio's performance. Total return is the change in value of a
hypothetical investment in a Portfolio over a given period, assuming that all
dividends and capital gains distributions are reinvested in additional shares.
The cumulative total return measures the change in value over the entire period
(for example, ten years). An average annual total return shows the average rate
of return for each year in a period that would produce the cumulative total
return over the entire period. However, average annual total returns do not show
a Portfolio's actual year-by-year performance.

o Yield. Government Securities Portfolio calculates its standardized yield
by dividing the annualized net investment portfolio during a 30-day period by
the maximum offering price on the last day of the period. The yield data
represents a hypothetical investment return on the portfolio, and does not
measure an investment return based on dividends actually paid to shareholders.
To show that return, a dividend yield may be calculated.

Dividend yield is calculated by dividing the dividends paid for a stated
period by the maximum offering price on the last day of the period and
annualizing the result.

How Have the Portfolios Performed? Below is a discussion by the Manager of the
Portfolios' performance during their last fiscal year ended December 31, 1997,
followed by a graphical comparison of each Portfolio's performance to an
appropriate broad-based market index.

Management's Discussion of Performance.

o Total Return Portfolio. During the fiscal year ended
December 31, 1997, both the
stock and bond markets were relatively strong for much of the year
despite recurrent volatility. The

<PAGE>

Portfolio's investments in financial services, technology and retail stocks were
among its most successful investments during the year. The Portfolio experienced
disappointing returns from its investments in electric utilities. The
Portfolio's fixed-income investments performed well despite market volatility,
due primarily to the Manager's decision to shift into some longer-maturity bonds
to take advantage of declining inflation.

o Growth Portfolio. During the fiscal year ended December 31, 1997, the
Portfolio's positive performance was primarily affected by the economic growth
in the stock markets. In particular, the Portfolio realized its greatest gains
in the finance, technology and retail sectors. The Portfolio realized its most
disappointing performance from its investments in utilities.

o Government Securities Portfolio. During the fiscal year ended December
31, 1997, the Portfolio performed well despite significant volatility in the
bond market during the second half of the year. The Portfolio's positive
performance was helped by its investments in government-backed discount mortgage
instruments, short-term Treasury bonds and a relatively small position in
high-grade corporate bonds. The Portfolio's investments in mortgage instruments
performed well during the Asian crisis.

o International Equity Portfolio. During the fiscal year ended December
31, 1997, the performance of the international markets were mixed. While
European markets provided attractive returns, Asian markets faired poorly due in
large part to a prolonged economic recession. The Portfolio's positive
performance was due to the Manager's increasing focus on European companies and
its reduced exposure to the Asian markets.

Each Portfolio's portfolio holdings, allocations and strategies are
subject to change.

o Comparing each Portfolio's Performance to the Market. The charts below
show the performance of hypothetical $10,000 investments in each Portfolio held
until December 31, 1997. Performance information does not reflect charges that
apply to separate accounts investing in the Portfolios. If these charges and
expenses were taken into account, performance would be lower.

<PAGE>

the reinvestment of dividends but does not consider the effect of capital gains
or transaction costs, and none of the data below shows the effect of taxes.
Also, a Portfolio's performance reflects the effect of that Portfolio's business
and operating expenses.

While index comparisons may be useful to provide a benchmark for a
Portfolio's performance, it must be noted that the Portfolio's investments are
not limited to the securities in the one index. Moreover, the index performance
data does not reflect any assessment of the risk of the investments included in
the index.

Comparison of Change in Value of
$10,000 Hypothetical Investments in
Total Return Portfolio
Versus Merrill Lynch Corporate & Government Master Index
and S&P 500 Index

[Graph comparing total return of Total Return Portfolio shares to performance of
Merrill Lynch Corporate & Government Master Index and S&P 500 Index]

Average Annual Total Return at 12/31/97(1)

1 year 5 years 10 years

18.81% 13.21% 13.80%

(1) Total returns and the ending account value in the graph show change in share
value and include reinvestment of all dividends and capital gains distributions.
Past performance is not predictive of future performance.
Graphs are not drawn to same scale.

Comparison of Change in Value of
$10,000 Hypothetical Investments in
Growth Portfolio
Versus S&P 500 Index

[Graph comparing total return of Growth Portfolio shares to
performance of S&P 500 Index]

Average Annual Total Returns at 12/31/97(1)

1 year 5 years 10 years

26.37% 20.12% 18.66%

<PAGE>

Comparison of Change in Value of
$10,000 Hypothetical Investments in
International Equity Portfolio
Versus Morgan Stanley Europe, Australia & Far East Index

[Graph comparing total return of International Equity Portfolio
shares to performance of Morgan
Stanley Europe, Australia & Far East Index]

Average Annual Total Returns at 12/31/97(1)

1 year 5 Year Life of Portfolio

8.11% 10.78% 8.78%

(1) The inception date of the Portfolio was 5/13/92. Total returns and the
ending account value in the graph show change in shares value and include
reinvestment of all dividends and capital gains distributions. Past performance
is not predictive of future performance. Graphs are not drawn to same scale.

Comparison of Change in Value of
$10,000 Hypothetical Investments in
Government Securities Portfolio
Versus Merrill Lynch Government Master Index

[Graph comparing total return of Government Securities Portfolio
to performance of Merrill Lynch
Government Master Index]

Average Annual Total Returns at 12/31/97(1)

1 year 5 Year Life of Portfolio

8.82% 6.84% 7.26%
- --------------
(1) The inception date of the Portfolio was 5/13/92. Total returns and the
ending account value in the graph show change in share value and include
reinvestment of all dividends and capital gains distributions.

<PAGE>

Past performance is not predictive of future performance. Graphs are not drawn
to same scale.

ABOUT YOUR ACCOUNT

How to Buy Shares

Shares of each Portfolio are offered for purchase by insurance company Accounts
as an investment medium for variable life insurance policies and variable
annuity contracts, as described in the accompanying Account Prospectus. Charges
and deductions made from purchase payments for variable contracts are stated in
the current prospectus for those contracts. Shares of each Portfolio are offered
at their respective offering price, which (as used in this Prospectus and the
Statement of Additional Information) is net asset value (without a sales
charge).

All purchase orders are processed at the offering price next determined
after receipt by the Company of a purchase order in proper form from an Account.
The offering price (and net asset value) is determined as of the close of The
New York Stock Exchange, which is normally 4:00 P.M., New York time, but may be
earlier on some days. Net asset value per share of each Portfolio is determined
by dividing the value of that Portfolio's net assets by the number of its shares
outstanding. The sale of shares of a Portfolio will be suspended during any
period when the determination of net asset value is suspended and may be
suspended by the Board of Directors whenever the Board judges it in that
Portfolio's best interest to do so. The Board of Directors has established
procedures for valuing each Portfolio's securities. In general, those valuations
are based on market value. Further details are in "About Your Account-How to Buy
Shares" in the Statement of Additional Information.

How to Sell Shares

Because shares of the Portfolios are held by insurance company Accounts, and not
directly by investors, you should refer to the prospectus of your insurance
company's Account for information on how to redeem shares of a Portfolio held
for your policy or contract. Payment for shares tendered by an Account for
redemption is made ordinarily in cash and forwarded within seven days after
receipt by the Company's transfer agent, OppenheimerFunds Services (the
"Transfer Agent"), of redemption instructions in proper form from an Account,
except under unusual circumstances as determined by the Securities and Exchange
Commission. The redemption price will be the net asset value next determined
after the receipt by the Transfer Agent of a request in proper form. The market
value of the securities in the portfolio of the Portfolios is subject to daily
fluctuations and the net asset value of the Portfolios' shares will fluctuate
accordingly. Therefore, the redemption value may be more or less than the
original cost.

Dividends, Capital Gains and Taxes

o Dividends of the Portfolios.

<PAGE>

Portfolios. Such income and capital gains are reinvested in additional shares of
the Portfolios. Each Portfolio makes dividend and capital gain distributions on
a per-share basis. After every distribution from each of these Portfolios, the
Portfolio's share price drops by the amount of the distribution. Since dividends
and capital gain distributions are reinvested, the total value of an account
will not be affected by such distributions because, although the shares will
have a lower price, there will be correspondingly more of them.

o Tax Treatment to the Account as Shareholder. The portion of distributions
attributable to the excess of a Portfolio's net long-term capital gain over its
net short-term capital loss is generally characterized as long-term capital
gain. The tax treatment of such dividends and distributions to an Account
depends on the tax status of and the tax rules applicable to that Account,
concerning which you should consult the prospectus of your insurance company's
separate account. It is expected that shares of the Portfolios will be held by
life insurance company separate accounts that fund variable contracts. Under
current Federal tax law, dividends and capital gains distributions paid by any
Portfolio to reserves for a variable contract are not currently taxable.

o Tax Status of the Portfolios. If each Portfolio qualifies as a "regulated
investment company" under the Internal Revenue Code, that Portfolio will not be
liable for Federal income taxes on amounts paid as dividends and distributions
in accordance with the Code's requirements. The Portfolios did qualify during
their last fiscal year and the Company intends that they will qualify in current
and future years. Each Portfolio also intends to follow certain portfolio
diversification requirements under the Internal Revenue Code so that Accounts
investing in the Portfolios may satisfy the tax diversification requirements to
which they are subject. The above discussion relates solely to Federal tax laws.
This discussion is not exhaustive and a qualified tax adviser should be
consulted if you have any questions about the tax effects of your investment
through a variable contract.

<PAGE>

APPENDIX A

Description of Ratings Categories of Rating Services

Description of Moody's Investors Service, Inc. Bond Ratings

Aaa: Bonds rated "Aaa" are judged to be the best quality and to carry the
smallest degree of investment risk. Interest payments are protected by a large
or by an exceptionally stable margin and principal is secure. While the various
protective elements are likely to change, the changes that can be expected are
most unlikely to impair the fundamentally strong position of such issues.

Aa: Bonds rated "Aa" are judged to be of high quality by all standards.
Together with the "Aaa" group, they comprise what are generally known as
"high-grade" bonds. They are rated lower than the best bonds because margins of
protection may not be as large as with "Aaa" securities or fluctuation of
protective elements may be of greater amplitude or there may be other elements
present which make the long-term risks appear somewhat larger than those of
"Aaa" securities.

A: Bonds rated "A" possess many favorable investment attributes and are to
be considered as upper-medium grade obligations. Factors giving security to
principal and interest are considered adequate but elements may be present which
suggest a susceptibility to impairment sometime in the future.

Baa: Bonds rated "Baa" are considered medium grade obligations, that is,
they are neither highly protected nor poorly secured. Interest payments and
principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and have
speculative characteristics as well.

Ba: Bonds rated "Ba" are judged to have speculative elements; their future
cannot be considered well-assured. Often the protection of interest and
principal payments may be very moderate and not well safeguarded during both
good and bad times over the future. Uncertainty of position characterizes bonds
in this class.

B: Bonds rated "B" generally lack characteristics of desirable investment.
Assurance of interest and principal payments or of maintenance of other terms of
the contract over any long period of time may be small.

Caa: Bonds rated "Caa" are of poor standing and may be in
default or there may be present
elements of danger with respect to principal or interest.

Ca: Bonds rated "Ca" represent obligations which are
speculative in a high degree and are
often in default or have other marked shortcomings.

A-1

<PAGE>

C: Bonds rated "C" can be regarded as having extremely poor
prospects of ever attaining
any real investment standing.

Description of Standard & Poor's Bond Ratings

AAA: "AAA" is the highest rating assigned to a debt
obligation and indicates an extremely
strong capacity to pay principal and interest. AA: Bonds rated
"AA" also qualify as high quality debt
obligations. Capacity to pay principal and interest is very
strong, and in the majority of instances they
differ from "AAA" issues only in small degree.

A: Bonds rated "A" have a strong capacity to pay principal and interest,
although they are somewhat more susceptible to adverse effects of change in
circumstances and economic conditions.

BBB: Bonds rated "BBB" are regarded as having an adequate capacity to pay
principal and interest. Whereas they normally exhibit protection parameters,
adverse economic conditions or changing circumstances are more likely to lead to
a weakened capacity to pay principal and interest for bonds in this category
than for bonds in the "A" category.

BB, B, CCC, CC: Bonds rated "BB," "B," "CCC" and "CC" are regarded, on
balance, as predominantly speculative with respect to the issuer's capacity to
pay interest and repay principal in accordance with the terms of the obligation.
"BB" indicates the lowest degree of speculation and "CC" the highest degree.
While such bonds will likely have some quality and protective characteristics,
these are outweighed by large uncertainties or major risk exposures to adverse
conditions.

C, D: Bonds on which no interest is being paid are rated "C." Bonds rated
"D" are in default and payment of interest and/or repayment of principal is in
arrears.

A-2

<PAGE>

Panorama Series Fund, Inc.
6803 South Tucson Way
Englewood, Colorado 80112
1-800-525-7048

Investment Advisor
OppenheimerFunds, Inc.
Two World Trade Center
New York, New York 10048-0203

Transfer Agent
OppenheimerFunds Services
P.O. Box 5270
Denver, Colorado 80217
1-800-525-7048

Custodian of Portfolio Securities
Bank of New York
90 Washington Street
New York, NY 10206

Independent Auditors
Deloitte & Touche LLP
555 Seventeenth Street
Denver, Colorado 80202

Legal Counsel
Myer, Swanson, Adams & Wolf, P.C.
1600 Broadway
Denver, Colorado 80202

No dealer, broker, salesperson or any other person has been authorized to give
any information or to make any representations other than those contained in
this Prospectus or the Statement of Additional Information, and if given or
made, such information and representations must not be relied upon as having
been authorized by the Portfolios, OppenheimerFunds, Inc., or any affiliate
thereof. This Prospectus does not constitute an offer to sell or a solicitation
of an offer to buy any of the securities offered hereby in any state to any
person to whom it is unlawful to make such an offer in such state.

<PAGE>

Panorama Series Fund, Inc.

Prospectus Dated May 1, 1998

Panorama Series Fund, Inc. (referred to in this Prospectus as the "Company") is
an open-end investment company consisting of seven separate series, two of which
are discussed in this Prospectus. Each series is referred to as a "Portfolio"
and collectively, as the "Portfolios". Shares of the Portfolios are offered
through certain variable annuity or variable life insurance contracts by
insurance companies.

<PAGE>

Contents

ABOUT THE PORTFOLIOS
Overview of the Portfolios....................................3
Financial Highlights..........................................3
Investment Objectives and Policies............................6
Total Return Portfolio........................................6
Growth Portfolio..............................................6
Investment Risks..............................................7
Investment Techniques and Strategies..........................9
How the Portfolios Are Managed................................13
Performance of the Portfolios.................................15
ABOUT YOUR ACCOUNT
How to Buy Shares.............................................17
How to Sell Shares............................................17
Dividends, Capital Gains and Taxes............................17
Appendix A: Description of Ratings Categories of Ratings ServiA-1

<PAGE>

ABOUT THE PORTFOLIOS

Overview of the Portfolios

o Who Manages the Portfolios? The Portfolios'investment adviser is
OppenheimerFunds, Inc. (the "Manager"), which (including a subsidiary) advises
investment company portfolios having over $75 billion in assets. Each
Portfolio's portfolio manager is primarily responsible for the selection of
securities of that Portfolio. The portfolio managers are as follows: for Total
Return Portfolio, Peter M. Antos, CFA, Michael C. Strathearn, CFA, Stephen F.
Libera, CFA, Kenneth B. White, CFA and Arthur Zimmer; and for Growth Portfolio,
Peter M. Antos, CFA, Michael C. Strathearn, CFA, and Kenneth B. White, CFA. The
Manager is paid an advisory fee by each Portfolio, based on its assets. The
Company's Board of Directors, elected by shareholders, oversees the investment
adviser and the portfolio managers and subadviser. Please refer to "How The
Portfolios Are Managed," starting on page 13 for more information about the
Manager and its fees.

<PAGE>

While the Manager tries to reduce risks by diversifying investments, by
carefully researching securities before they are purchased and in some cases,
the use of hedging techniques, there is no guarantee of success in achieving a
Portfolio's objective. Please refer to "Investment Risks" starting on page 7 for
a more complete discussion of the types of securities the Portfolios purchase.

o How Have the Portfolios Performed? The Portfolios may measure their
performance by quoting average annual total return and cumulative total return,
which measure historical performance. Those returns can be compared to the
returns (over similar periods) of other funds. Of course, other funds may have
different objectives, investments, and levels of risk. The performance of the
Portfolios can also be compared to broad market indices, which we have done
starting on page 15. Please remember that past performance does not guarantee
future results.

Financial Highlights

<PAGE>

FINANCIAL HIGHLIGHTS
PANORAMA SERIES FUND, INC.--TOTAL RETURN PORTFOLIO

<PAGE>

FINANCIAL HIGHLIGHTS
PANORAMA SERIES FUND, INC.--GROWTH PORTFOLIO

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
1997 1996(1) 1995 1994
=========================================================================================================
<S> <C> <C> <C> <C>
PER SHARE OPERATING DATA
Net asset value, beginning of period $2.98 $2.53 $1.97 $2.08
- ---------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .04 .04 .04 .03
Net realized and unrealized gain (loss) .69 .43 .71 (.04)
----- ----- ----- -----
Total income (loss) from investment
operations .73 .47 .75 (.01)
- ---------------------------------------------------------------------------------------------------------
Dividends and distributions to
shareholders:
Dividends from net investment income (.03) (.01) (.04) (.03)
Distributions from net realized gain (.23) (.01) (.15) (.07)
----- ----- ----- -----
Total dividends and distributions to
shareholders (.26) (.02) (.19) (.10)
- ---------------------------------------------------------------------------------------------------------
Net asset value, end of period $3.45 $2.98 $2.53 $1.97
===== ===== ===== =====
=========================================================================================================
TOTAL RETURN, AT NET ASSET VALUE(2) 26.37% 18.87% 38.06% (0.51)%
=========================================================================================================
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in thousands) $831,371 $586,222 $405,935 $230,195
- ---------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $721,555 $494,281 $303,193(3) $198,879(3)
- ---------------------------------------------------------------------------------------------------------
Ratios to average net assets:
Net investment income 1.38% 1.63% 2.01% 1.87%
Expenses 0.54% 0.58% 0.66% 0.67%
- ---------------------------------------------------------------------------------------------------------
Portfolio turnover rate(4) 91.8% 82.5% 69.3% 97.3%
Average brokerage commission rate(5) $0.0699 $0.0697 -- --
</TABLE>

<PAGE>

4. The lesser of purchases or sales of portfolio securities for a period,
divided by the monthly average of the market value of portfolio securities owned
during the period. Securities with a maturity or expiration date at the time of
acquisition of one year or less are excluded from the calculation. Purchases and
sales of investment securities (excluding short-term securities) for the period
ended December 31, 1997 were $637,953,389 and $589,720,974, respectively. 5.
Total brokerage commissions paid on applicable purchases and sales of portfolio
securities for the period, divided by the total number of related shares
purchased and sold.

<PAGE>

Investment Objectives and Policies

<PAGE>

The Portfolio may invest up to 20% of its total assets in the aggregate in
debt securities and preferred stocks rated below investment grade (commonly
called "junk bonds") and unrated securities determined by the Manager to be of
comparable credit quality. However, the Manager presently does not intend to
invest more than 5% of the Portfolio's assets in below investment grade
securities in the current year. The Portfolio will not invest in securities
rated below B at the time of purchase. Unrated debt securities will not exceed
10% of the Portfolio's total assets.

<PAGE>

The Portfolio may invest the remainder of its assets (up to 10% under
normal circumstances) in U.S. Government and corporate debt obligations,
including convertible bonds which may be rated as low as "B" by Moody's
Investors Service, Inc. ("Moody's") or Standard and Poor's Ratings Group
("Standard & Poor's") or other rating services. See Special Risks of Investing
in Lower Grade Securities regarding risks of investing in lower-rated
securities.
Consistent with the foregoing
policies, the Portfolio may invest to a limited degree in securities of foreign
issuers, including issuers in developing countries, which involve special risks
(described below).

Portfolio Turnover. "Portfolio Turnover" describes the rate at
which the Portfolio traded its
portfolio securities during its last fiscal year. For example, if
a Portfolio sold all of its securities
during the year, its portfolio turnover rate would have been 100%.
Portfolio turnover affects
brokerage costs the Portfolio pays. While short-term trading increases portfolio
turnover and may increase the Portfolios' transaction costs, the Portfolios
incur little or no brokerage costs for U.S. Government and most fixed income
securities. The Financial Highlights table above shows the Portfolio's turnover
rates during prior fiscal years.

Investment Risks

While the Manager tries to reduce risks by diversifying investments, by
carefully researching securities before they are purchased for a Portfolio, and
in some cases by using hedging techniques,

<PAGE>

there is no assurance that the Portfolios will achieve their investment
objectives, and when shares of a Portfolio are redeemed, they may be worth more
or less than their original cost.

o Special Risks of Investing in Lower-Grade Securities. Both Portfolios
can invest in high-yield, below investment grade debt securities (including both
rated and unrated securities). These "lower-grade" securities are commonly known
as "junk bonds." They generally offer higher income potential than investment
grade securities. Lower-grade securities have a rating below "BBB" by Standard &
Poor's or "Baa" by Moody's or similar ratings by other domestic or foreign
rating organizations, or they are not rated by a nationally-recognized rating
organization, but the Manager judges them to be comparable to lower-rated
securities. Neither Portfolio may invest in lower-rated securities rated below
"B" by Moody's or Standard & Poor's or other rating services. Both Portfolios
may retain securities whose ratings fall below "B" after purchase unless and
until the Manager determines that disposing of the securities is in the best
interests of the respective Portfolio. Appendix A to this Prospectus describes
the rating categories of Moody's and Standard & Poor's.

<PAGE>

they may be harder to sell at an acceptable price. There is a relatively greater
possibility that the issuer's earnings may be insufficient to make the payments
of interest due on the bonds. The issuer's low creditworthiness may increase the
potential for its insolvency. For foreign lower-grade debt securities, these
risks are in addition to the risks of investing in foreign securities, described
below. Further, a decline in the high-yield bond market is likely during an
economic downturn. An economic downturn or an increase in interest rates could
severely disrupt the market for high-yield securities and adversely affect the
value of outstanding securities and the ability of issuers to repay principal
and interest. These risks mean that a Portfolio may not achieve the expected
income from lower-grade securities, and that a Portfolio's net asset value per
share may be affected by declines in value of these securities.

o Foreign Securities Have Special Risks. There are special
risks in investing in foreign
securities and in securities issued by companies and governments
located in emerging market
countries. Because both Portfolios may purchase securities
denominated in foreign currencies or
traded primarily in foreign markets, a change in the value of a
foreign currency against the U.S. dollar
will result in a change in the U.S. dollar value of those foreign
securities. Foreign issuers are not
required to use generally-accepted accounting principles that
apply to U.S. issuers. If foreign
securities are not registered for sale in the U.S. under U.S.
securities laws, the issuer does not have
to comply with the disclosure requirements that U.S. companies are subject to.
The value of foreign investments may be affected by other factors, including
exchange control regulations, expropriation or nationalization of a company's
assets, foreign taxes, delays in settlement of transactions, changes in
governmental, economic or monetary policy in the U.S. or abroad, or other
political and economic factors.

o Special Risks of Investing in Emerging Market Countries.
The Portfolios' definition
of "emerging countries" includes any country that is defined as an
emerging or developing economy
by the International Bank for Reconstruction and Development, the
International Finance Committee,
the United Nations or its authorities, or the MSCI Emerging Markets Index.
Investments in emerging market countries may involve risks in addition to those
that generally apply to investments in foreign securities. Securities issued by
emerging market countries and by companies located in those countries may be
subject to extended settlement periods, so that a Portfolio might not receive
principal and/or income on a timely basis and its net asset values could be
affected. Emerging market countries may have smaller, less well-developed
markets and exchanges; there may be a lack of liquidity for emerging market
securities. Interest rates and foreign currency exchange rates may be more
volatile than in more developed markets. Sovereign limitations on foreign
investments may be more likely to be imposed. There may be significant balance
of payment deficits; and their economies and markets may respond in a more
volatile manner to economic changes than those of developed

<PAGE>

countries. More information about the risks and potential rewards of investing
in foreign securities is contained in the Statement of Additional Information.

o Hedging Instruments can be volatile investments and may involve special
risks. The use of hedging instruments requires special skills and knowledge of
investment techniques that are different from what is required for normal
portfolio management. If the Manager uses a hedging instrument at the wrong time
or judges market conditions incorrectly, hedging strategies may reduce a
Portfolio's return. A Portfolio could also experience losses if the prices of
its futures and options positions were not correlated with its other investments
or if it could not close out a position because of an illiquid market for the
future or option.

o There are special risks in investing in derivative
investments. The Portfolios may invest
in different types of derivatives. In general, a derivative
investment is a specially designed investment
whose performance is linked to the performance of another
investment or security, such as an option,
future, index, currency or commodity. The company issuing the instrument may
fail to pay the amount due on the maturity of the instrument. Also, the
underlying investment or security on which the derivative is based, and the
derivative itself, might not perform the way the Manager expected it to perform.
Markets, underlying securities and indices may move in a direction not
anticipated by the Manager. Performance of derivative investments may also be
influenced by interest rate and stock market changes in the U.S. and abroad. All
of this can mean that a Portfolio will realize less principal or income from the
investment than expected. Certain derivative investments held by a Portfolio may
be illiquid. Please refer to "Illiquid and Restricted Securities."

Investment Techniques and Strategies

The Portfolios may use the investment techniques and strategies
described below, each of which
involves certain risks. Both Portfolios do not use all of these
techniques and strategies, and each
section indicates which Portfolios use a particular technique or
strategy. The Statement of Additional

<PAGE>

Information contains more detailed information about these practices, including
limitations on their use that may help to reduce some of the risks.

o Foreign Securities. (Both Portfolios). Foreign securities offer special
investment opportunities but also entail special risks, described above. Neither
Portfolio may invest more than 10% of its total assets in foreign securities,
except the following securities, in which such Portfolios may invest up to 25%
of their total assets: foreign equity and debt securities (i) issued, assumed or
guaranteed by foreign governments or their political subdivisions or
instrumentalities, (ii) assumed or guaranteed by domestic issuers, including
Eurodollar securities, and (iii) issued, assumed or guaranteed by foreign
issuers having a class of securities listed for trading on The New York Stock
Exchange.

o ADRs, EDRs and GDRs. (Both Portfolios). ADRs are receipts issued by a
U.S. bank or trust company which evidence ownership of underlying securities of
foreign corporations. ADRs are traded on domestic exchanges or in the U.S.
over-the-counter market and, generally, are in registered form. To the extent a
Portfolio acquires ADRs through banks which do not have a contractual
relationship with the foreign issuer of the security underlying the ADR to issue
and service such ADRs, there may be an increased possibility that the Portfolio
would not become aware of and be able to respond in a timely manner to corporate
actions such as stock splits or rights offerings involving the foreign issuer.
In addition, the lack of information may result in inefficiencies in the
valuation of such instruments. EDRs and GDRs are receipts evidencing an
arrangement with a non-U.S. bank similar to that for ADRs and are designed for
use in non-U.S. securities markets. EDRs and GDRs are not necessarily quoted in
the same currency as the underlying security.

o Convertible Securities (Both Portfolios). Convertible
securities are bonds, preferred
stocks and other securities that normally pay a fixed rate of
interest or dividend and give the owner
the option to convert the security into common stock. While the value of
convertible securities depends in part on interest rate changes and the credit
quality of the issuer, the price will also change based on the price of the
underlying stock. While convertible securities generally have less potential for
gain than common stock, their income provides a cushion against the stock
price's declines. They generally pay less income than non-convertible bonds. The
Manager generally analyzes these investments from the perspective of the growth
potential of the underlying stock and treats them as "equity substitutes."

o Debt Securities. (Both Portfolios). Each Portfolio may
purchase a variety of debt
securities. Debt securities include corporate debt obligations,
U.S. Government securities,
mortgage-backed and asset-backed securities, adjustable rate securities,
"stripped" securities, custodial receipts for Treasury certificates, zero coupon
bonds, equipment trust certificates, loan participation notes, structured notes
and money market instruments. The issuer of a debt security normally pays the
investor a fixed or variable rate of interest and must repay the amount borrowed
at maturity. Debt securities have varying degrees of credit quality and respond
differently to changes in interest rates.

<PAGE>

Some debt securities, such as zero coupon bonds, do not pay interest but
are purchased at a discount from their face value. However, they accrue income
for tax and accounting purposes, which must be distributed to shareholders.
Because no cash is received by a Portfolio at such accrual periods, the
Portfolio may be required to liquidate other securities to meet distribution
requirements.

o U.S. Government Securities. (Both Portfolios). U.S.
Government Securities include debt
securities issued by the U.S. Government, or its agencies and instrumentalities.
Certain U.S. Government Securities, including U.S. Treasury bills, notes and
bonds, and mortgage participation certificates guaranteed by the Government
National Mortgage Association ("GNMA") are supported by the full faith and
credit of the U.S. Government, which in general terms means that the U.S.
Treasury stands behind the obligation to pay principal and interest.

o Collateralized Mortgage Obligations. (Total Return Portfolio only).
Collateralized mortgage obligations ("CMOs") generally are obligations fully
collateralized by a portfolio of mortgages or mortgage-related securities.
Payments of the interest and principal generated by the pool of mortgages
relating to the CMOs are passed through to the holders as the payments are
received. CMOs are issued with a variety of classes or series which have
different maturities. Certain CMOs may be more volatile and less liquid than
other types of mortgage-related securities, because of the possibility of the
prepayment of principal due to prepayments on the underlying mortgage loans.

<PAGE>

Certain CMOs are "stripped." That means that the security is divided into
two parts, one of which receives some or all of the principal payments (and is
known as a "principal-only" or "P/O" security) and the other which receives some
or all of the interest (and is known as an "interest-only" or "I/O" security).
P/Os and I/Os are generally referred to as "derivative investments," discussed
further below. The yield to maturity on the class that receives only interest is
extremely sensitive to the rate of payment of the principal on the underlying
mortgages. Principal prepayments increase that sensitivity. Stripped securities
that pay "interest only" are therefore subject to greater price volatility when
interest rates change, and they have the additional risk that if the underlying
mortgages are prepaid, the Total Return Portfolio will lose the anticipated cash
flow from the interest on the prepaid mortgages. That risk is increased when
general interest rates fall, and in times of rapidly falling interest rates, the
Total Return Portfolio might receive back less than its investment. The value of
"principal only" securities generally increases as interest rates decline and
prepayment rates rise. The price of these securities is typically more volatile
than that of coupon-bearing bonds of the same maturity.

o Asset-backed Securities. (Total Return Portfolio only). Asset-backed
securities represent interests in pools of consumer loans and other trade
receivables, similar to mortgage-backed securities. They are issued by trusts
and special purpose corporations. They are backed by a pool of assets, such as
credit card or auto loan receivables, which are the obligations of a number of
different parties. The income from the underlying pool is passed through to
holders, such as Total Return Portfolio. These securities may be supported by a
credit enhancement, such as a letter of credit, a guarantee or a preference
right. However, the extent of the credit enhancement may be different for
different securities and generally applies to only a fraction of the security's
value. These securities present special risks. For example, in the case of
credit card receivables, the issuer of the security may have no security
interest in the related collateral.

o Inverse Floating Rate Instruments. (Total Return Portfolio only).
Inverse floating rate debt instruments ("inverse floaters") include leveraged
inverse floaters and inverse floating rate mortgage-backed securities, such as
inverse floating rate "interest only" stripped mortgage-backed securities. The
interest rate on inverse floaters resets in the opposite direction from the
market rate of interest to which the inverse floater is indexed. An inverse
floater may be considered to be leveraged to the extent that its interest rate
varies by a magnitude that exceeds the magnitude of the change in the index rate
of interest. The higher degree of leverage inherent in inverse floaters is
associated with greater volatility in their market values.

o Mortgage Dollar Rolls. (Total Return Portfolio only).
Total Return Portfolio may invest
up to 20% of its total assets in mortgage dollar rolls. In a
mortgage dollar roll the Portfolio sells

<PAGE>

mortgage-backed securities for delivery in the current month and simultaneously
contracts to repurchase substantially similar (same type, coupon and maturity)
securities on a specified future date. During the roll period, the Portfolio
forgoes principal and interest paid on the mortgage-backed securities. The
Portfolio is compensated by the difference between the current sales price and
the lower forward price for the future purchase (often referred to as the
"drop") as well as by the interest earned on the cash proceeds of the initial
sale. A "covered roll" is a specific type of dollar roll for which there is an
offsetting cash position or a cash equivalent security position which matures on
or before the forward settlement date of the dollar roll transaction. All rolls
entered into by the Portfolio will be covered rolls. Covered rolls are not
treated as a borrowing or other senior security and are excluded from the
calculation of the Portfolio's borrowings and other senior securities. The Total
Return Portfolio is also permitted to purchase mortgage-backed securities and to
sell such securities without regard to the length of time held in separate
transactions that do not constitute dollar rolls. For financial reporting and
tax purposes, the Portfolio treats mortgage rolls as two separate transactions:
one involving the purchase of securities and a separate transaction involving a
sale. The Portfolio does not currently intend to enter into mortgage dollar roll
transactions that are accounted for as a financing.

o Structured Notes. (Total Return Portfolio only). A structured note is a
debt security having an interest rate or principal repayment requirement based
on the performance of a benchmark asset or market, such as stock prices,
currency exchange rates and commodity prices. They provide exposure to the
benchmark market while fixing the maximum loss if the market does not perform as
expected. Depending on the terms of the note, the Portfolio could forego all or
part of the interest and principal that would be payable on a comparable
conventional note, and the Portfolio's loss could not exceed that amount.

o Eurodollar and Yankee Dollar Bank Obligations. (Both
Portfolios). The Portfolios may
also invest in obligations of foreign branches of U.S. banks
referred to as Eurodollar obligations and
U.S. branches of foreign banks (Yankee dollars) as well as foreign
branches of foreign banks. These
investments involve risks that are different from investment in
securities of U.S. banks.

o Short-term Debt Securities. (Both Portfolios). Each Portfolio may invest
in high quality, short-term money market instruments such as U.S. Treasury and
agency obligations; commercial paper (short-term, unsecured, negotiable
promissory notes of a domestic or foreign company); short-term debt obligations
of corporate issuers; bank participation certificates; and certificates of
deposit and bankers' acceptances (time drafts drawn on commercial banks usually
in connection with international transactions) of banks and savings and loan
associations. When the Manager believes it appropriate for temporary defensive
purposes or for liquidity purposes, each Portfolio may hold cash or invest
without limit in money market instruments.

o Warrants and Rights. (Both Portfolios). Warrants are
options to purchase stock at set
prices that are valid for a limited period of time. Rights are
similar to warrants but normally have a
short duration and are distributed directly by the issuer to its
shareholders. A Portfolio may invest up
to 5% of its total assets in warrants or rights. That 5%
limitation does not apply to warrants a

<PAGE>

Portfolio has acquired as part of units with other securities or that are
attached to other securities. No more than 2% of a Portfolio's total assets may
be invested in warrants that are not listed on either The New York Stock
Exchange or The American Stock Exchange.

o Loans of Portfolio Securities. (Both Portfolios). To attempt to increase
its income or raise cash for liquidity purposes, each Portfolio may lend its
portfolio securities, in transactions other than repurchase agreements, to
brokers, dealers and other financial institutions. A Portfolio must receive
collateral for a loan. As a matter of non-fundamental operating policy, the
Manager limits such loans to 10% of the Portfolio's total assets, and such loans
are subject to other conditions described in the Statement of Additional
Information.

o "When-Issued" and Delayed Delivery Transactions. (Both Portfolios). Each
Portfolio may purchase securities on a "when-issued" basis and may purchase or
sell securities on a "delayed delivery" basis. These terms refer to securities
that have been created and for which a market exists, but which are not
available for immediate delivery. There may be a risk of loss to a Portfolio if
the value of the security declines prior to the settlement date.

o Repurchase Agreements. (Both Portfolios). Each Portfolio
may enter into repurchase
agreements. In a repurchase transaction, a Portfolio buys a
security and simultaneously sells it to the
vendor for delivery at a future date. Repurchase agreements must be fully
collateralized. However, if the vendor fails to pay the resale price on the
delivery date, a Portfolio may experience costs in disposing of the collateral
and may experience losses if there is any delay in doing so.

o Illiquid and Restricted Securities. (Both Portfolios). Under the
policies established by the Company's Board of Directors, the Manager determines
the liquidity of certain of the Portfolios' investments. Investments may be
illiquid because of the absence of an active trading market, making it difficult
to value them or dispose of them promptly at an acceptable price. A restricted
security is one that has a contractual restriction on its resale or which cannot
be sold publicly until it is registered under the Securities Act of 1933. The
Portfolios will not invest more than 15% of their net assets in illiquid or
restricted securities (excluding restricted securities eligible for resale to
qualified institutional investors). The Manager monitors holdings of illiquid
securities on an ongoing basis and at times the Portfolio may be required to
sell some holdings to maintain adequate liquidity. Illiquid securities include
repurchase agreements maturing in more than seven days, or certain participation
interests other than those with puts exercisable within seven days.

o Hedging. (Both Portfolios). Each Portfolio may write
(sell) exchange traded covered call
options on securities, securities indices and foreign currencies,
in each case as a hedge against
decreases in prices of existing portfolio securities or increases in prices of
securities whose purchase is anticipated. The Portfolios may use covered call
options for non-hedging purposes as described below.

A Portfolio may, subject to its investment policies, sell or purchase
covered call options and buy and sell futures and forward contracts for a number
of purposes. It may do so to try to manage

<PAGE>

its exposure to the possibility that the prices of its portfolio securities may
decline, or to establish a position in the securities market as a temporary
substitute for purchasing individual securities. It may do so to try to manage
its exposure to changing interest rates. Some of these strategies, such as
selling futures and writing covered calls, hedge a Portfolio's portfolio against
price fluctuations.

o Futures. To hedge against changes in interest rates, securities prices
or currency exchange rates, each Portfolio may, subject to its investment
objectives and policies, purchase and sell various kinds of futures contracts. A
Portfolio may also enter into closing purchase and sale transactions with
respect to these contracts and options. Futures contracts may be based on
various securities (such as U.S. Government securities), securities indices,
foreign currencies and other financial instruments and indices.

Each Portfolio may purchase and sell futures contracts on stock indices
and sell options on such futures. The Total Return Portfolio may purchase and
sell interest rate futures and sell options on such futures. In addition, each
Portfolio that may invest in securities that are denominated in foreign currency
may purchase and sell futures on currencies. A Portfolio will engage in futures
and related options transactions only for bona fide hedging and non-hedging
purposes as permitted in regulations of the Commodity Futures Trading
Commission. No Portfolio will enter into futures contracts or options thereon
for non-hedging purposes if, immediately thereafter, the aggregate initial
margin and premiums required to establish non-hedging positions in futures
contracts and options on futures will exceed 5% of the net asset value of the
Portfolio's portfolio, after taking into account unrealized profits and losses
on any such positions and excluding the amount by which such options were
in-the-money at the time of purchase.

o Covered Call Options. A Portfolio may write (that is, sell) call options
on securities, indices and foreign currencies for hedging or non-hedging
purposes and write call options on Futures for hedging purposes but only if they
are "covered." This means a Portfolio owns the investment on which the call was
written. Calls on Futures must be covered by securities or other liquid assets a
Portfolio owns and segregates to enable it to satisfy its obligations if the
call is exercised. When a Portfolio writes a call, it receives cash (called a
premium). The call gives the buyer the ability to buy the investment on which
the call was written from a Portfolio at the call price during the period in
which the call may be exercised. If the value of the investment does not rise
above the call price, it is likely that the call will lapse without being
exercised, while the Portfolio keeps the cash premium (and the investment).
After a Portfolio writes a call, not more than 20% of the value of its total
assets may be subject to calls.

<PAGE>

o Forward Contracts. (Both Portfolios). Forward Contracts are foreign
currency exchange contracts. They are used to buy or sell foreign currency for
future delivery at a fixed price. A Portfolio uses them to try to "lock in" the
U.S. dollar price of a security denominated in a foreign currency that the
Portfolio has purchased or sold, or to protect against possible losses from
changes in the relative value of the U.S. dollar and a foreign currency. A
Portfolio may also use "cross hedging," where the Portfolio hedges against
changes in currencies other than the currency in which a security it holds is
denominated. No Portfolio will speculate in foreign exchange.

o Derivative Investments. (Both Portfolios). A Portfolio
may not purchase or sell physical
commodities; however, a Portfolio may purchase and sell foreign
currency in hedging transactions.
The restriction against purchasing commodities shall not prevent a Portfolio
from buying or selling futures contracts or from investing in securities or
other instruments backed by physical commodities.

o Temporary Defensive Investments. (Both Portfolios). When
stock or bond market prices
are falling or in other unusual economic or business
circumstances, each Portfolio may invest
substantially all of its assets in cash equivalents, cash, or
short-term money market instruments for
temporary defensive purposes.

Other Investment Restrictions. The Portfolios have other
investment restrictions which are
"fundamental" policies. A Portfolio cannot deviate from its other
fundamental policies described in

<PAGE>

"Investment Objectives and Policies" and "Other Investment
Techniques and Strategies" in the
Statement of Additional Information.

o Each Portfolio may not:

o Invest more than 25% of its assets in securities of issuers in any
single industry, provided that this limitation shall not apply to obligations
issued or guaranteed by the U.S. Government, its agencies or instrumentalities.
For the purpose of this restriction, each utility that provides a separate
service (e.g., gas, gas transmission, electric or telephone) shall be considered
a separate industry. This test shall be applied on a pro forma basis using the
market value of all assets immediately prior to making any investment. (Each
Portfolio subject to this restriction has undertaken to apply it to 25% or more
of its assets.)

How the Portfolios Are Managed

<PAGE>

Company will not normally hold annual meetings of shareholders, the Company may
hold shareholder meetings from time to time on important matters and call a
meeting of shareholders upon proper request of all shareholders of the Company.
The Directors may also take other action described in the Company's Articles of
Incorporation. On matters affecting only one Portfolio, only the shareholders of
that Portfolio are entitled to vote. Separate votes by Portfolio are required
for matters relating to all Portfolios but affecting the Portfolios differently.
An insurance company issuing a variable contract for which shares of a Portfolio
are held by the insurance company's separate account will vote the shares in
accordance with applicable law, which currently requires the insurance company
to request voting instructions from policy owners and to vote the shares in
proportion to the voting instructions received. For more information, please
refer to your insurance company's separate account prospectus.

The Manager and Its Affiliates. The Portfolios are managed by the Manager,
OppenheimerFunds, Inc., which supervises each Portfolio's investment program and
handles its day-to-day business. The Manager carries out its duties, subject to
the policies established by the Board of Directors, under separate Investment
Advisory Agreements for each Portfolio which state the Manager's
responsibilities. The Agreements set forth the fees paid by a Portfolio to the
Manager, and describe the expenses that a Portfolio is responsible to pay to
conduct its business.

<PAGE>

Year
Became
Portfolio/Principal Portfolio Business Experience
Portfolio Manager Manager (last 5 years)
- -------------------------------------------------------------------

Total Return Portfolio
Peter M. Antos,
C.F.A. 1989 Principal Portfolio Manager
of the Portfolio;
Senior Vice President and
Portfolio Manager
of the Portfolios and of the
Manager (since
March, 1996); Senior Vice
President of
HarbourView Asset Management
Corporation ("HarbourView");
portfolio
manager of other Oppenheimer
funds;
previously Vice President
and Senior
Portfolio Manager,
Equities-G.R. Phelps, a
subsidiary of Connecticut
Mutual Life
Insurance Company
(1989-1996).

<PAGE>

Arthur Zimmer 1996 Vice President and Portfolio
Manager of the
Manager and Centennial Asset
Management
Corporation; an officer of
other
Oppenheimer funds.
- -------------------------------------------------------------------

Growth Portfolio
Peter M. Antos,
C.F.A. 1989 (see biographical data above)

Michael C. Strathearn,
C.F.A. 1988 (see biographical data above)

Kenneth B. White,
C.F.A. 1992 (see biographical data above)
- -------------------------------------------------------------------

Portfolio Fees Management Total Operating
Expenses(1)
- -------------------------------------------------------------------

Total Return 0.54% 0.55%
- -------------------------------------------------------------------

Growth 0.53% 0.54%
- -------------------------------------------------------------------

(1)This table does not reflect expenses that apply at the Account level or to
related insurance products.

Each Portfolio pays expenses related to its daily operations, such as
custodian fees, certain Directors' fees, transfer agency fees, legal and
auditing costs.
Those expenses are paid out of a

<PAGE>

Portfolio's assets and are not paid directly by shareholders. However, those
expenses reduce the net asset value of shares, and therefore are indirectly
borne by shareholders through their investment. More information about the
Investment Advisory Agreements and the other expenses paid by the Portfolios is
contained in the Statement of Additional Information.

There is also information about the Portfolios' brokerage policies and
practices in "Brokerage Policies of the Portfolios" in the Statement of
Additional Information. That section discusses how brokers and dealers are
selected for the Portfolios' portfolio transactions. When deciding which brokers
to use, the Manager is permitted by the Investment Advisory Agreements to
consider whether brokers have sold shares of the Portfolios or any other funds
for which the Manager serves as investment adviser.

Performance of the Portfolios

Explanation of Performance Terminology. Both Portfolios use the term "total
return" to illustrate their performance. These returns measure the performance
of a hypothetical account in a Portfolio over various periods, and do not show
the performance of each shareholder's account (which will vary if shares are
sold or purchased). A Portfolio's performance data may help you see how well
your investment has done over time and to compare it to market indices. However,
the performance data published by the Portfolios does not include expenses that
apply at the Account level or to related insurance products which, if
considered, would reduce such performance. Since shares of the Portfolios may be
purchased through a variable contract, you should carefully review the
prospectus of the insurance product you have chosen for information on charges
and expenses.

It is important to understand that a Portfolio's total returns represent
past performance and should not be considered to be predictions of future
returns or performance. This performance data is described below, but more
detailed information about how total returns are calculated is contained in the
Statement of Additional Information, which also contains information about other
ways to measure and compare a Portfolio's performance. A Portfolio's investment
performance will vary over time, depending on market conditions, the composition
of the portfolio and expenses.

<PAGE>

Management's Discussion of Performance.

o Total Return Portfolio. During the fiscal year ended December 31, 1997,
both the stock and bond markets were relatively strong for much of the year
despite recurrent volatility. The Portfolio's investments in financial services,
technology and retail stocks were among its most successful investments during
the year. The Portfolio experienced disappointing returns from its investments
in electric utilities. The Portfolio's fixed-income investments performed well
despite market volatility, due primarily to the Manager's decision to shift into
some longer-maturity bonds to take advantage of declining inflation.

Each Portfolio's portfolio holdings, allocations and strategies are
subject to change.

<PAGE>

Comparison of Change in Value of
$10,000 Hypothetical Investments in
Total Return Portfolio
Versus Merrill Lynch Corporate & Government Master Index
and S&P 500 Index

[Graph comparing total return of Total Return Portfolio shares to performance of
Merrill Lynch Corporate & Government Master Index and S&P 500 Index]

Average Annual Total Return at 12/31/97(1)

1 year 5 years 10 years

18.81% 13.21% 13.80%

Comparison of Change in Value of
$10,000 Hypothetical Investments in
Growth Portfolio
Versus S&P 500 Index

[Graph comparing total return of Growth Portfolio shares to
performance of S&P 500 Index]

Average Annual Total Returns at 12/31/97(1)

1 year 5 years 10 years

26.37% 20.12% 18.66%

<PAGE>

ABOUT YOUR ACCOUNT

How to Buy Shares

How to Sell Shares

Dividends, Capital Gains and Taxes

o Dividends of the Portfolios.

<PAGE>

APPENDIX A

Description of Ratings Categories of Rating Services

Description of Moody's Investors Service, Inc. Bond Ratings

Caa: Bonds rated "Caa" are of poor standing and may be in
default or there may be present
elements of danger with respect to principal or interest.

Ca: Bonds rated "Ca" represent obligations which are
speculative in a high degree and are often
in default or have other marked shortcomings.

A-1

<PAGE>

C: Bonds rated "C" can be regarded as having extremely poor
prospects of ever attaining
any real investment standing.

Description of Standard & Poor's Bond Ratings

A: Bonds rated "A" have a strong capacity to pay principal and interest,
although they are somewhat more susceptible to adverse effects of change in
circumstances and economic conditions.

C, D: Bonds on which no interest is being paid are rated "C." Bonds rated
"D" are in default and payment of interest and/or repayment of principal is in
arrears.

A-2

<PAGE>

Panorama Series Fund, Inc.
6803 South Tucson Way
Englewood, Colorado 80112
1-800-525-7048

Investment Advisor
OppenheimerFunds, Inc.
Two World Trade Center
New York, New York 10048-0203

Transfer Agent
OppenheimerFunds Services
P.O. Box 5270
Denver, Colorado 80217
1-800-525-7048

Custodian of Portfolio Securities
Bank of New York
90 Washington Street
New York, NY 10206

Independent Auditors
Deloitte & Touche LLP
555 Seventeenth Street
Denver, Colorado 80202

Legal Counsel
Myer, Swanson, Adams & Wolf, P.C.
1600 Broadway
Denver, Colorado 80202

<PAGE>

Panorama Series Fund, Inc.

Prospectus Dated May 1, 1998

Panorama Series Fund, Inc. (referred to in this Prospectus as the "Company") is
an open-end investment company consisting of seven separate series, three of
which are described in this Prospectus. Each series is referred to as a
"Portfolio" or "LifeSpan Portfolio" and collectively, as the "Portfolios" or
"LifeSpan Portfolios". Shares of the Portfolios are offered through certain
variable annuity or variable life insurance contracts by insurance companies.

LifeSpan Capital Appreciation Portfolio ("Capital Appreciation
Portfolio") seeks long-term capital
appreciation by investing in a strategically allocated portfolio
consisting primarily of stocks. Current
income is not a primary consideration.

LifeSpan Balanced Portfolio ("Balanced Portfolio") seeks a blend of capital
appreciation and income by investing in a strategically allocated portfolio of
stocks and bonds with a slightly stronger emphasis on stocks.

LifeSpan Diversified Income Portfolio ("Diversified Income Portfolio") seeks
high current income, with opportunities for capital appreciation by investing in
a strategically allocated portfolio consisting primarily of bonds.

<PAGE>

Contents

ABOUT THE PORTFOLIOS
Overview of the Portfolios....................................3
Financial Highlights..........................................3
Investment Objectives and Policies............................8
LifeSpan Portfolios...........................................8
Investment Risks..............................................11
Investment Techniques and Strategies..........................12
How the Portfolios Are Managed................................17
Performance of the Portfolios.................................19
ABOUT YOUR ACCOUNT
How to Buy Shares.............................................23
How to Sell Shares............................................23
Dividends, Capital Gains and Taxes............................23
Appendix A: Description of Ratings Categories of Ratings ServiA-1

<PAGE>

ABOUT THE PORTFOLIOS

Overview of the Portfolios

o What Are the Portfolios' Investment Objectives? LifeSpan Capital
Appreciation Portfolio ("Capital Appreciation Portfolio") seeks long-term
capital appreciation by investing in a strategically allocated portfolio
consisting primarily of stocks. LifeSpan Balanced Portfolio ("Balanced
Portfolio") seeks a blend of capital appreciation and income by investing in a
strategically allocated portfolio of stocks and bonds with a slightly stronger
emphasis on stocks. LifeSpan Diversified Income Portfolio ("Diversified Income
Portfolio") seeks high current income, with opportunities for capital
appreciation by investing in a strategically allocated portfolio consisting
primarily of bonds.

o What Do the Portfolios Invest In? To seek their
respective investment objectives, the
Portfolios invest as follows. LifeSpan Capital Appreciation Portfolio primarily
invests in stocks. LifeSpan Balanced Portfolio primarily invests in stocks and
bonds with a slightly stronger emphasis on stocks. LifeSpan Diversified Income
Portfolio primarily invests in bonds. These investments are more fully explained
for each Portfolio in "Investment Objectives and Policies," starting on page 8.

o Who Manages the Portfolios? The Portfolios'investment adviser is
OppenheimerFunds, Inc. (the "Manager"), which (including a subsidiary) advises
investment company portfolios having over $75 billion in assets. Each
Portfolio's portfolio manager is primarily responsible for the selection of
securities of that Portfolio. The portfolio managers are as follows: for
LifeSpan Capital Appreciation Portfolio, LifeSpan Balanced Portfolio, and
LifeSpan Diversified Income Portfolio, (the Manager) Peter M. Antos, CFA,
Michael C.
Strathearn, CFA, Stephen F. Libera,
CFA, Kenneth B. White, CFA, (Babson-Stewart) James W. Burns and
John G.L. Wright, (Pilgrim
Baxter) Gary L. Pilgrim, CFA and Michael D. Jones, CFA and (BEA
Associates) Richard J.
Lindquist. The Manager is paid an advisory fee by each Portfolio,
based on its assets. The
Company's Board of Directors, elected by shareholders, oversees
the investment adviser and the
portfolio manager and subadviser. Please refer to "How The
Portfolios Are Managed," starting on
page 17 for more information about the Manager and Subadvisers and
their fees.

<PAGE>

the economy and individual issuers, and stocks which are small to medium size in
capitalization may fluctuate more than large capitalization stocks. For both
equity and income investments, foreign investments are subject to the risk of
adverse currency fluctuation and additional risks and expenses in comparison to
domestic investments. In comparing levels of risk among the Portfolios that
invest to some degree in equities, Capital Appreciation Portfolio is the most
volatile followed by the Balanced Portfolio. The LifeSpan Diversified Income
Portfolio invests in fixed-income investments which are generally subject to the
risk that values will fluctuate with interest rates and inflation, with
lower-rated fixed-income investments being subject to a greater risk that the
issuer will default in its interest or principal payment obligations.

While the Manager and Subadvisers try to reduce risks by diversifying
investments, by carefully researching securities before they are purchased and
in some cases, the use of hedging techniques, there is no guarantee of success
in achieving a Portfolio's objective. Please refer to "Investment Risks"
starting on page 11 for a more complete discussion of the types of securities
the Portfolios purchase.

o How Have the Portfolios Performed? All of the Portfolios may measure
their performance by quoting average annual total return and cumulative total
return, which measure historical performance. Those returns can be compared to
the returns (over similar periods) of other funds. Of course, other funds may
have different objectives, investments, and levels of risk. The performance of
all the Portfolios can also be compared to broad market indices, which we have
done starting on page 21. Please remember that past performance does not
guarantee future results.

Financial Highlights

FINANCIAL HIGHLIGHTS
PANORAMA SERIES FUND, INC.--LIFESPAN DIVERSIFIED INCOME PORTFOLIO

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
1997 1996(2) 1995(1)
==================================================================================================
<S> <C> <C> <C>
PER SHARE OPERATING DATA
Net asset value, beginning of period $1.10 $1.04 $1.00
- --------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income .06 .06 .02
Net realized and unrealized gain .07 .01 .04
----- ----- -----
Total income from investment operations .13 .07 .06
- --------------------------------------------------------------------------------------------------
Dividends and distributions to shareholders:
Dividends from net investment income (.05) (.01) (.02)
Distributions from net realized gain --(3) -- --
----- ----- -----
Total dividends and distributions to shareholders (.05) (.01) (.02)
- --------------------------------------------------------------------------------------------------
Net asset value, end of period $1.18 $1.10 $1.04
===== ===== =====
==================================================================================================
TOTAL RETURN, AT NET ASSET VALUE(4) 12.51% 6.93% 5.69%
==================================================================================================
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in thousands) $34,116 $25,274 $21,176
- --------------------------------------------------------------------------------------------------
Average net assets (in thousands) $28,503 $22,854 $20,364(5)
- --------------------------------------------------------------------------------------------------
Ratios to average net assets:
Net investment income 5.88% 5.84% 5.11%(6)
Expenses 0.86%(7) 1.07% 1.50%(6)
- --------------------------------------------------------------------------------------------------
Portfolio turnover rate(8) 34.0% 80.4% 41.2%(6)
Average brokerage commission rate(9) $0.0690 $0.0678 --
</TABLE>

1. For the period from September 1, 1995 (commencement of operations) to
December 31, 1995. 2. On March 1, 1996, OppenheimerFunds, Inc. became the
investment advisor to the Fund. 3. Less than $0.005 per share. 4. Assumes a
hypothetical initial investment on the business day before the first day of the
fiscal period, with all dividends and distributions reinvested in additional
shares on the reinvestment date, and redemption at the net asset value
calculated on the last business day of the fiscal period. Total returns are not
annualized for periods of less than one full year. Total return information does
not reflect expenses that apply at the separate account level or to related
insurance products. Inclusion of these charges would reduce the total return
figures for all periods shown. 5. This information is not covered by the
auditors' opinion. 6. Annualized. 7. The expense ratio reflects the effect of
expenses paid indirectly by the Fund. 8. The lesser of purchases or sales of
portfolio securities for a period, divided by the monthly average of the market
value of portfolio securities owned during the period. Securities with a
maturity or expiration date at the time of acquisition of one year or less are
excluded from the calculation. Purchases and sales of investment securities
(excluding short-term securities) for the period ended December 31, 1997 were
$13,442,623 and $8,641,643, respectively. 9. Total brokerage commissions paid on
applicable purchases and sales of portfolio securities for the period, divided
by the total number of related shares purchased and sold.

<PAGE>

FINANCIAL HIGHLIGHTS
PANORAMA SERIES FUND, INC.--LIFESPAN BALANCED PORTFOLIO

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
1997 1996(2) 1995(1)
=============================================================================================
<S> <C> <C> <C>
PER SHARE OPERATING DATA
Net asset value, beginning of period $1.18 $1.05 $1.00
- ---------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income .04 .03 .01
Net realized and unrealized gain .10 .11 .05
----- ----- -----
Total income from investment operations .14 .14 .06
- ---------------------------------------------------------------------------------------------
Dividends and distributions to shareholders:
Dividends from net investment income (.03) (.01) (.01)
Distributions from net realized gain (.01) -- --
----- ----- -----
Total dividends and distributions to shareholders (.04) (.01) (.01)
- ---------------------------------------------------------------------------------------------
Net asset value, end of period $1.28 $1.18 $1.05
===== ===== =====
=============================================================================================
TOTAL RETURN, AT NET ASSET VALUE(3) 12.20% 13.38% 6.08%
=============================================================================================
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in thousands) $68,693 $51,336 $35,467
- ---------------------------------------------------------------------------------------------
Average net assets (in thousands) $59,388 $41,847 $33,925(4)
- ---------------------------------------------------------------------------------------------
Ratios to average net assets:
Net investment income 3.44% 3.34% 3.08%(5)
Expenses 0.97% 1.17% 1.50%(5)
- ---------------------------------------------------------------------------------------------
Portfolio turnover rate(6) 57.3% 69.7% 39.7%(5)
Average brokerage commission rate(7) $0.0367 $0.0025 --
</TABLE>

1. For the period from September 1, 1995 (commencement of operations) to
December 31, 1995. 2. On March 1, 1996, OppenheimerFunds, Inc. became the
investment advisor to the Fund. 3. Assumes a hypothetical initial investment on
the business day before the first day of the fiscal period, with all dividends
and distributions reinvested in additional shares on the reinvestment date, and
redemption at the net asset value calculated on the last business day of the
fiscal period. Total returns are not annualized for periods of less than one
full year. Total return information does not reflect expenses that apply at the
separate account level or to related insurance products. Inclusion of these
charges would reduce the total return figures for all periods shown. 4. This
information is not covered by the auditors' opinion. 5. Annualized. 6. The
lesser of purchases or sales of portfolio securities for a period, divided by
the monthly average of the market value of portfolio securities owned during the
period. Securities with a maturity or expiration date at the time of acquisition
of one year or less are excluded from the calculation. Purchases and sales of
investment securities (excluding short-term securities) for the period ended
December 31, 1997 were $42,727,285 and $30,915,461, respectively. 7. Total
brokerage commissions paid on applicable purchases and sales of portfolio
securities for the period, divided by the total number of related shares
purchased and sold. Generally, non-U.S. commissions are lower than U.S.
commissions when expressed as cents per share but higher when expressed as a
percentage of transactions because of the per-share prices of many non-U.S.
securities.

<PAGE>

FINANCIAL HIGHLIGHTS
PANORAMA SERIES FUND, INC.--LIFESPAN CAPITAL APPRECIATION PORTFOLIO

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
1997 1996(2) 1995(1)
=============================================================================================
<S> <C> <C> <C>
PER SHARE OPERATING DATA
Net asset value, beginning of period $1.24 $1.06 $1.00
- ---------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income .03 .02 .01
Net realized and unrealized gain .12 .17 .06
----- ----- -----
Total income from investment operations .15 .19 .07
- ---------------------------------------------------------------------------------------------
Dividends and distributions to shareholders:
Dividends from net investment income (.01) (.01) (.01)
Distributions from net realized gain (.03) -- --
----- ----- -----
Total dividends and distributions to shareholders (.04) (.01) (.01)
- ---------------------------------------------------------------------------------------------
Net asset value, end of period $1.35 $1.24 $1.06
===== ===== =====
=============================================================================================
TOTAL RETURN, AT NET ASSET VALUE(3) 12.53% 17.97% 6.65%
=============================================================================================
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in thousands) $61,379 $41,994 $26,768
- ---------------------------------------------------------------------------------------------
Average net assets (in thousands) $51,473 $33,109 $25,460(4)
- ---------------------------------------------------------------------------------------------
Ratios to average net assets:
Net investment income 2.36% 1.92% 1.73%(5)
Expenses 0.99% 1.30% 1.50%(5)
- ---------------------------------------------------------------------------------------------
Portfolio turnover rate(6) 65.8% 70.7% 38.7%(5)
Average brokerage commission rate(7) $0.0372 $0.0028 --
</TABLE>

1. For the period from September 1, 1995 (commencement of operations) to
December 31, 1995. 2. On March 1, 1996, OppenheimerFunds, Inc. became the
investment advisor to the Fund. 3. Assumes a hypothetical initial investment on
the business day before the first day of the fiscal period, with all dividends
and distributions reinvested in additional shares on the reinvestment date, and
redemption at the net asset value calculated on the last business day of the
fiscal period. Total returns are not annualized for periods of less than one
full year. Total return information does not reflect expenses that apply at the
separate account level or to related insurance products. Inclusion of these
charges would reduce the total return figures for all periods shown. 4. This
information is not covered by the auditors' opinion. 5. Annualized. 6. The
lesser of purchases or sales of portfolio securities for a period, divided by
the monthly average of the market value of portfolio securities owned during the
period. Securities with a maturity or expiration date at the time of acquisition
of one year or less are excluded from the calculation. Purchases and sales of
investment securities (excluding short-term securities) for the period ended
December 31, 1997 were $42,328,007 and $30,095,785, respectively. 7. Total
brokerage commissions paid on applicable purchases and sales of portfolio
securities for the period, divided by the total number of related shares
purchased and sold. Generally, non-U.S. commissions are lower than U.S.
commissions when expressed as cents per share but higher when expressed as a
percentage of transactions because of the per-share prices of many non-U.S.
securities.

Investment Objectives and Policies

The LifeSpan Portfolios. The Portfolios are asset allocation funds that seek to
achieve their objectives by allocating their assets between two broad classes of
investments-stocks and bonds. The stock class includes equity securities of all
types and the bond class includes a variety of fixed income investments. Within
those broad classes are investment components among which the Portfolio's assets
are further allocated. The three LifeSpan Portfolios are:

LifeSpan Capital Appreciation Portfolio which seeks long-term capital
appreciation (current income is not a primary consideration);

LifeSpan Balanced Portfolio which seeks a blend of capital
appreciation and income; and

LifeSpan Diversified Income Portfolio which seeks high current income with
opportunities for capital appreciation.

Allocating assets among different types of investments allows each
Portfolio to take advantage of a greater variety of opportunities than funds
that invest in only one investment class, but also subjects the Portfolio to the
risks of those types of investments.
The general risks of stock and fixed
income investments are discussed in "Investment Risks," below.

The Manager has the ability to allocate a Portfolio's assets within
specified ranges. A Portfolio's normal allocation indicates the benchmark for
its combination of investments in each asset class over time. As market and
economic conditions change, however, the Manager may adjust the asset mix
between the stock and bond classes within a normal asset allocation range as
long as the relative risk and return characteristics of the respective
Portfolios remain distinct and each Portfolio's investment objective is
preserved. The Manager will review normal allocations between the stock and bond
classes quarterly and, if necessary, will rebalance the investment allocation at
that time. Additional adjustments may be made at any time if in the judgment of
the Manager an asset allocation shift of 5% or more appears warranted.

<PAGE>

appreciation or income. The Manager will diversify a Portfolio's bond
investments among three bond components: government and corporate bonds, high
yield/high risk bonds (also called "junk bonds") and short-term bonds. There is
no requirement that the Manager allocate a Portfolio's assets among all stock or
bond components at all times. These stock and bond components have been selected
because the Manager believes that this additional level of asset diversification
will provide each Portfolio with the potential for higher returns with lower
overall volatility. Each Portfolio's normal allocation and potential range of
allocations are shown in the chart below.

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

Capital Diversified
Appreciation Balanced Income
Portfolio Portfolio Portfolio
- -------------------------------------------------------------------
- -------------------------------------------------------------------
- -------------------------------------------------------------------
- -------------------------------------------------------------------

Asset Classes and Normal Normal Normal
Components AllocationRangeAllocationRange AllocationRange
- -------------------------------------------------------------------

Stocks 80%70-90% 60%50-70% 25%15-35%
- -------------------------------------------------------------------

International 20%15-25% 15% 5-20% 0% 0%
- -------------------------------------------------------------------

Value/Growth 20%15-30% 15%10-25% 0% 0%
- -------------------------------------------------------------------

Growth/Income 20%15-30% 15%10-25% 25%15-35%
- -------------------------------------------------------------------

Small Cap 20%15-25% 15% 5-20% 0% 0%
- -------------------------------------------------------------------

Bonds 20%10-30% 40%30-50% 75%65-85%
- -------------------------------------------------------------------

Government/Corporate10% 5-15% 15%10-25% 35%30-45%
- -------------------------------------------------------------------

High Yield/High Risk Bonds 10% 5-15% 15%5-20% 15% 5-20%
- -------------------------------------------------------------------

Short Term Bonds 0% 0% 10% 5-20% 25%15-30%
- -------------------------------------------------------------------

All percentage limitations are applied at the time of purchase of a
security. The Manager may rebalance the asset allocations quarterly to realign
them in response to market conditions. Once the Manager has determined the
weighting of the stock and bond asset classes and the components of each
LifeSpan Portfolio, the Manager or the relevant subadviser will then select the
individual securities to be included in each component.

o Subadvisers. The Manager has engaged three subadvisers (each is referred
to as a "Subadviser" and together they are referred to as the "Subadvisers") to
manage a portion of the assets of the LifeSpan Portfolios. Each Subadviser
manages the portion of a Portfolio's assets invested in the particular component
assigned to it by the Manager. The Manager has assigned the management of the
components as follows:

Subadviser Portfolio Component
Babson-Stewart International Stocks
Pilgrim Baxter & Associates, Ltd. Small Cap Stocks
BEA Associates High Yield/High Risk Bonds

The Manager manages the remaining components using its own investment
management personnel. See "How the Portfolios are Managed" below for additional
information.

<PAGE>

o Stock Investments. Each LifeSpan Portfolio will invest the portion of
its assets which are allocated to stock investments among four components each
of which invests principally in equity securities. Each component differs with
respect to investment criteria and characteristics as described below.

o International Component. This component seeks long-term growth of
capital primarily through a diversified portfolio of marketable international
equity securities. The investments in the international component normally will
be allocated among several countries. In addition, up to 25% of the assets in
this component may be invested in stocks and bonds of companies based in
emerging countries. The component's assets generally will be invested in equity
securities of seasoned companies that are listed on foreign stock exchanges and
which are considered to have attractive characteristics as to profitability,
growth and financial resources. "Seasoned" companies are those known for the
quality and acceptance of their products or services and for their ability to
generate profits. There are no issuer capitalization limits on investments.
Stocks will be selected based on a
number of criteria, including fundamental and valuation analysis, but
investments are not based on the integration of any particular analytical
disciplines. Consistent with the provisions of the Investment Company Act, the
component's assets may be invested in the securities of closed-end investment
companies that invest in foreign securities. A portion of the international
component's investments may be held in corporate bonds and government securities
of foreign issuers and cash and short-term instruments. The special risks of
investing in foreign securities and in emerging markets are described in
"Investment Risks," below.

o Value/Growth Component. This component seeks to achieve long-term growth
of capital primarily through investments in common stocks with both low
price-earnings ratios and better than anticipated earnings. Realization of
current income is not a primary consideration. Stocks with low price-earnings
ratios and the potential for favorable earnings surprises are identified by the
Manager, which then uses fundamental securities analysis to select individual
stocks for purchase. When the price earnings ratio of a stock held by the
value/growth component moves significantly above the multiple of the overall
stock market, or the company reports a material earnings disappointment, the
Manager may consider selling the stock. Up to 15% of the component's assets may
be invested in stocks of foreign issuers that generally have a substantial
portion of their business in the United States, and in American Depository
Receipts (ADRs) for foreign stocks. A portion of the component's assets may be
held in cash and in short-term investments.

o Growth/Income Component. This component seeks to enhance the Portfolio's
total return through capital appreciation and dividend income primarily from
investments in common stocks with low price-earnings ratios,
better-than-anticipated earnings and better-than-market-average dividend yields.
Stocks with low price-earnings ratios (for example, below the price-earnings
ratio of the S&P 500 Index), the potential for favorable earnings surprises and
above-average yields are identified by the Manager, which then uses fundamental
securities analysis to select individual stocks for this component. When the
price-earnings ratio of a stock held by the component moves significantly above
the multiple of the overall stock market, or the company reports a material
earnings disappointment, or when the yield drops significantly below the market
yield, normally that stock will

<PAGE>

be sold. Up to 15% of the component's assets may be invested in stocks of
foreign issuers that generally have a substantial portion of their business in
the United States, and in ADRs. A portion of the component's investments may be
held in investment grade or below investment grade convertible securities,
corporate bonds and U.S. Government securities, cash and short-term instruments.

o Small Cap Component. This component seeks long-term growth of capital
primarily through investments in stocks of companies with relatively small
market capitalization, typically between $250 million to $1.5 billion.
Capitalization is the aggregate value of a company's stock, or its price per
share times the number of shares outstanding. Current income is a secondary
consideration. When selecting individual securities for the component's
portfolio, the Subadviser seeks companies that have an outlook for strong growth
in earnings and the potential for significant capital appreciation, particularly
in industry segments that are experiencing rapid growth. Securities will be sold
when the Subadviser believes that anticipated appreciation is no longer probable
and that alternative investments offer superior appreciation prospects, or the
risk of a decline in market price is too great. A portion of the component's
investments may also be held in cash and short-term instruments.

o Bond Investments. Each LifeSpan Portfolio will invest those assets which
are allocated to the bond class among three components, each of which invests in
an array of fixed-income securities as described below:

o Government/Corporate Component. This component seeks current income and
the potential for capital appreciation primarily through investments in
fixed-income debt securities, including investment grade corporate debt
obligations of U.S. and foreign issuers and securities issued by the U.S.
Government and its agencies and instrumentalities or by foreign governments.
Although the component may invest in securities with maturities across the
entire slope of the yield curve, including long bonds (having maturities of 10
or more years), intermediate notes (with maturities of 3 to 10 years) and short
term notes (with maturities of 1 to 3 years), the Manager expects that normally
the component will have an intermediate average maturity and duration. The
Manager may take into account prepayment features when determining the maturity
of an investment. The Manager's investment strategy includes the purchase of
bonds that are underpriced relative to other debt securities having similar risk
profiles. The Manager evaluates a broad array of factors, including maturity,
creditworthiness, cash flow certainty and interest rate volatility, and compares
yields in relation to trends in the economy, the financial and commodity markets
and prevailing interest rates. The component may also invest a portion of its
assets in cash and short-term instruments.

<PAGE>

are commonly referred to as "junk bonds." This component may invest in bonds
that are in default. Bonds in default are not making interest or principal
payments on the date due. The Subadviser employs an active sector rotational
style utilizing all sectors of the high yield market, with an emphasis on
diversification to control risk. The Subadviser typically favors higher quality
companies in the non-investment grade market, senior debt over junior debt, and
secured over unsecured investments. The Subadviser screens individual securities
for such characteristics as minimum yield and issue size, issue liquidity and
financial and operational strength. In-depth credit research is then conducted
to arrive at a core group of securities within the high yield universe for the
component. Continuous credit monitoring and adherence to sell disciplines
associated with both price appreciation and depreciation are utilized to seek
the overall yield and price objectives of the component. The component may also
invest a portion of its assets in cash and short-term instruments. The special
risks of investing in below investment grade securities are described in
"Investment Risks," below.

o Short-Term Bond Component. (All Portfolios except Capital Appreciation
Portfolio) This component seeks a high level of current income consistent with
prudent investment risk and preservation of capital by investing primarily in
debt obligations of U.S. and foreign issuers and securities issued by the U.S.
Government and its agencies and instrumentalities and by foreign governments.
This component invests primarily in fixed-income securities generally maturing
within five years of the date of purchase, or in securities having prepayment or
similar features which, in the view of the Manager, give the instrument a
remaining effective maturity of up to five years. It is anticipated that the
average dollar weighted maturity of the component will generally range between
two and three years. The Manager's investment management process incorporates
analysis of an issuer's debt service capability, financial flexibility and
liquidity, as well as the fundamental trends and the outlook for an issuer and
its industry. Credit risk management is also an important factor. The Manager
conducts credit research, and carefully selects individual issues. The Manager
attempts to broadly diversify portfolio holdings by industry sector and issuer.
The Manager believes that determination of an issuer's attractiveness relative
to alternative issues and valuations within the marketplace are important
considerations in its investment decision-making. The component may also invest
a portion of its assets in cash and money market securities.

<PAGE>

non-fundamental policies without shareholder approval, although significant
changes will be described in amendments to this Prospectus.

Portfolio Turnover. "Portfolio Turnover" describes the rate at
which the Portfolio traded its
portfolio securities during its last fiscal year. For example, if
a Portfolio sold all of its securities
during the year, its portfolio turnover rate would have been 100%.
Portfolio turnover affects
brokerage costs the Portfolio pays. While short-term trading increases portfolio
turnover and may increase the Portfolios' transaction costs, the Portfolios
incur little or no brokerage costs for U.S. Government and most fixed income
securities. The Financial Highlights tables above show each Portfolio's turnover
rates during prior fiscal years.

Investment Risks

While the Manager (and Subadvisers in the applicable Portfolios) try to
reduce risks by diversifying investments, by carefully researching securities
before they are purchased for a Portfolio, and in some cases by using hedging
techniques, there is no assurance that the Portfolios will achieve their
investment objectives, and when shares of a Portfolio are redeemed, they may be
worth more or less than their original cost.

<PAGE>

securities than shorter-term debt securities. Changes in the value of securities
held by a Portfolio mean that the Portfolio's share prices can go up or down
when interest rates change, because of the effect of the change on the value of
the Portfolio's investments in debt securities. Debt securities are also subject
to credit risks. Credit risk relates to the ability of the issuer of a debt
security to make interest or principal payments on the security as they become
due. Generally, higher-yielding, lower-rated bonds are subject to greater credit
risk than higher-rated bonds. See "Special Risks of Investing in Lower-Grade
Securities," below.

All corporate debt securities (whether foreign or domestic) are subject to
some degree of credit risk. High yield, lower-grade securities, whether rated or
unrated, often have speculative characteristics and have special risks that make
them riskier investments than investment grade securities. They may be subject
to greater market fluctuations and risk of loss of income and principal than
lower yielding, investment grade securities. There may be less of a market for
them and therefore they may be harder to sell at an acceptable price. There is a
relatively greater possibility that the issuer's earnings may be insufficient to
make the payments of interest due on the bonds. The issuer's low
creditworthiness may increase the potential for its insolvency. For foreign
lower-grade debt securities, these risks are in addition to the risks of
investing in foreign securities, described below. Further, a decline in the
high-yield bond market is likely during an economic downturn. An economic
downturn or an increase in interest rates could severely disrupt the market for
high-yield securities and adversely affect the value of outstanding securities
and the ability of issuers to repay principal and interest. These risks mean
that a Portfolio may not achieve the expected income from lower-grade
securities, and that a Portfolio's net asset value per share may be affected by
declines in value of these securities.

o Foreign Securities Have Special Risks. There are special
risks in investing in foreign
securities and in securities issued by companies and governments
located in emerging market
countries. Because each Portfolio may purchase securities
denominated in foreign currencies or
traded primarily in foreign markets, a change in the value of a
foreign currency against the U.S. dollar
will result in a change in the U.S. dollar value of those foreign
securities. Foreign issuers are not
required to use generally-accepted accounting principles that
apply to U.S. issuers. If foreign
securities are not registered for sale in the U.S. under U.S.
securities laws, the issuer does not have
to comply with the disclosure requirements that U.S. companies are
subject to. The value of foreign
investments may be affected by other factors, including exchange
control regulations, expropriation

<PAGE>

or nationalization of a company's assets, foreign taxes, delays in
settlement of transactions, changes
in governmental, economic or monetary policy in the U.S. or
abroad, or other political and economic
factors.

o Special Risks of Investing in Emerging Market Countries.
The Portfolios' definition
of "emerging countries" includes any country that is defined as an
emerging or developing economy
by the International Bank for Reconstruction and Development, the
International Finance Committee,
the United Nations or its authorities, or the MSCI Emerging Markets Index.
Investments in emerging market countries may involve risks in addition to those
that generally apply to investments in foreign securities. Securities issued by
emerging market countries and by companies located in those countries may be
subject to extended settlement periods, so that a Portfolio might not receive
principal and/or income on a timely basis and its net asset values could be
affected. Emerging market countries may have smaller, less well-developed
markets and exchanges; there may be a lack of liquidity for emerging market
securities. Interest rates and foreign currency exchange rates may be more
volatile than in more developed markets. Sovereign limitations on foreign
investments may be more likely to be imposed. There may be significant balance
of payment deficits; and their economies and markets may respond in a more
volatile manner to economic changes than those of developed countries. More
information about the risks and potential rewards of investing in foreign
securities is contained in the Statement of Additional Information.

o Hedging Instruments can be volatile investments and may involve special
risks. The use of hedging instruments requires special skills and knowledge of
investment techniques that are different from what is required for normal
portfolio management.
If the Manager or a Subadviser uses
a hedging instrument at the wrong time or judges market conditions incorrectly,
hedging strategies may reduce a Portfolio's return. A Portfolio could also
experience losses if the prices of its futures and options positions were not
correlated with its other investments or if it could not close out a position
because of an illiquid market for the future or option.

<PAGE>

well as interest rate risks. A Portfolio could be obligated to pay more under
its swap agreements than it receives under them, as a result of interest rate
changes.
These risks are described in greater detail in the Statement of Additional
Information.

o There are special risks in investing in derivative
investments. The Portfolios may invest
in different types of derivatives. In general, a derivative
investment is a specially designed investment
whose performance is linked to the performance of another
investment or security, such as an option,
future, index, currency or commodity. The company issuing the instrument may
fail to pay the amount due on the maturity of the instrument. Also, the
underlying investment or security on which the derivative is based, and the
derivative itself, might not perform the way the Manager or relevant Subadviser
expected it to perform. Markets, underlying securities and indices may move in a
direction not anticipated by the Manager or relevant Subadviser. Performance of
derivative investments may also be influenced by interest rate and stock market
changes in the U.S. and abroad. All of this can mean that a Portfolio will
realize less principal or income from the investment than expected. Certain
derivative investments held by a Portfolio may be illiquid. Please refer to
"Illiquid and Restricted Securities."

Investment Techniques and Strategies

The Portfolios may use the investment techniques and strategies described below,
each of which involves certain risks. The Statement of Additional Information
contains more detailed information about these practices, including limitations
on their use that may help to reduce some of the risks.

o Foreign Securities. (All Portfolios). The Portfolios
may purchase securities issued or
guaranteed by foreign companies or foreign governments, including
government agencies. The
Portfolios may purchase securities of companies in any country,
developed or under-developed.

o ADRs, EDRs and GDRs. (All Portfolios). ADRs are receipts issued by a
U.S. bank or trust company which evidence ownership of underlying securities of
foreign corporations. ADRs are traded on domestic exchanges or in the U.S.
over-the-counter market and, generally, are in registered form. To the extent a
Portfolio acquires ADRs through banks which do not have a contractual
relationship with the foreign issuer of the security underlying the ADR to issue
and service such ADRs, there may be an increased possibility that the Portfolio
would not become aware of and be able to respond in a timely manner to corporate
actions such as stock splits or rights offerings involving the foreign issuer.
In addition, the lack of information may result in inefficiencies in the
valuation of such instruments. EDRs and GDRs are receipts evidencing an
arrangement with a non-U.S. bank similar to that for ADRs and are designed for
use in non-U.S. securities markets. EDRs and GDRs are not necessarily quoted in
the same currency as the underlying security.

<PAGE>

on the price of the underlying stock. While convertible securities generally
have less potential for gain than common stock, their income provides a cushion
against the stock price's declines. They generally pay less income than
non-convertible bonds. The Manager generally analyzes these investments from the
perspective of the growth potential of the underlying stock and treats them as
"equity substitutes."

o Debt Securities. (All Portfolios). Each Portfolio may
purchase a variety of debt
securities. Debt securities include corporate debt obligations,
U.S. Government securities,
mortgage-backed and asset-backed securities, adjustable rate securities,
"stripped" securities, custodial receipts for Treasury certificates, zero coupon
bonds, equipment trust certificates, loan participation notes, structured notes
and money market instruments. The issuer of a debt security normally pays the
investor a fixed or variable rate of interest and must repay the amount borrowed
at maturity. Debt securities have varying degrees of credit quality and respond
differently to changes in interest rates.

o U.S. Government Securities. (All Portfolios). U.S.
Government Securities include debt
securities issued by the U.S. Government, or its agencies and instrumentalities.
Certain U.S. Government Securities, including U.S. Treasury bills, notes and
bonds, and mortgage participation certificates guaranteed by the Government
National Mortgage Association ("GNMA") are supported by the full faith and
credit of the U.S. Government, which in general terms means that the U.S.
Treasury stands behind the obligation to pay principal and interest.

<PAGE>

o Collateralized Mortgage Obligations. (All Portfolios).
Collateralized mortgage
obligations ("CMOs") generally are obligations fully collateralized by a
portfolio of mortgages or mortgage-related securities. Payments of the interest
and principal generated by the pool of mortgages relating to the CMOs are passed
through to the holders as the payments are received. CMOs are issued with a
variety of classes or series which have different maturities. Certain CMOs may
be more volatile and less liquid than other types of mortgage-related
securities, because of the possibility of the prepayment of principal due to
prepayments on the underlying mortgage loans.

o Asset-backed Securities. (All Portfolios). Asset-backed
securities represent interests in
pools of consumer loans and other trade receivables, similar to
mortgage-backed securities. They are
issued by trusts and special purpose corporations. They are backed
by a pool of assets, such as credit
card or auto loan receivables, which are the obligations of a
number of different parties. The income
from the underlying pool is passed through to holders, such as one
of the Portfolios. These securities
may be supported by a credit enhancement, such as a letter of
credit, a guarantee or a preference
right. However, the extent of the credit enhancement may be
different for different securities and
generally applies to only a fraction of the security's value.
These securities present special risks. For

<PAGE>

example, in the case of credit card receivables, the issuer of the security may
have no security interest in the related collateral.

o Inverse Floating Rate Instruments. (All Portfolios). Inverse floating
rate debt instruments ("inverse floaters") include leveraged inverse floaters
and inverse floating rate mortgage-backed securities, such as inverse floating
rate "interest only" stripped mortgage-backed securities. The interest rate on
inverse floaters resets in the opposite direction from the market rate of
interest to which the inverse floater is indexed. An inverse floater may be
considered to be leveraged to the extent that its interest rate varies by a
magnitude that exceeds the magnitude of the change in the index rate of
interest. The higher degree of leverage inherent in inverse floaters is
associated with greater volatility in their market values.

o Structured Notes (All Portfolios). A structured note is a
debt security having an interest
rate or principal repayment requirement based on the performance
of a benchmark asset or market,
such as stock prices, currency exchange rates and commodity prices. They provide
exposure to the benchmark market while fixing the maximum loss if the market
does not perform as expected. Depending on the terms of the note, a Portfolio
could forego all or part of the interest and principal that would be payable on
a comparable conventional note, and the Portfolio's loss could not exceed that
amount.

o Eurodollar and Yankee Dollar Bank Obligations. (All
Portfolios). The Portfolios may
also invest in obligations of foreign branches of U.S. banks
referred to as Eurodollar obligations and
U.S. branches of foreign banks (Yankee dollars) as well as foreign
branches of foreign banks. These
investments involve risks that are different from investment in
securities of U.S. banks.

o Short-term Debt Securities. (All Portfolios). Each Portfolio may invest
in high quality, short-term money market instruments such as U.S. Treasury and
agency obligations; commercial paper (short-term, unsecured, negotiable
promissory notes of a domestic or foreign company); short-term debt obligations
of corporate issuers; bank participation certificates; and certificates of
deposit and bankers' acceptances (time drafts drawn on commercial banks usually
in connection with international transactions) of banks and savings and loan
associations. When the Manager believes it appropriate for temporary defensive
purposes or for liquidity purposes, each Portfolio may hold cash or invest
without limit in money market instruments.

o Warrants and Rights. (All Portfolios). Warrants are
options to purchase stock at set
prices that are valid for a limited period of time. Rights are
similar to warrants but normally have a
short duration and are distributed directly by the issuer to its shareholders. A
Portfolio may invest up to 5% of its total assets in warrants or rights. That 5%
limitation does not apply to warrants a Portfolio has acquired as part of units
with other securities or that are attached to other securities. No more than 2%
of a Portfolio's total assets may be invested in warrants that are not listed on
either The New York Stock Exchange or The American Stock Exchange.

<PAGE>

o Small, Unseasoned Companies. (All Portfolios). Each
LifeSpan Portfolio may invest no
more than 5% of its total assets in securities of small,
unseasoned companies. These are companies
that have been in operation less than three years, including the
operations of any predecessors.
Securities of these companies may have limited liquidity (which means that a
Portfolio may have difficulty selling them at an acceptable price when it wants
to) and the price of these securities may be volatile.

o Illiquid and Restricted Securities. (All Portfolios). Under the policies
established by the Company's Board of Directors, the Manager determines the
liquidity of certain of the Portfolios' investments. Investments may be illiquid
because of the absence of an active trading market, making it difficult to value
them or dispose of them promptly at an acceptable price. A restricted security
is one that has a contractual restriction on its resale or which cannot be sold
publicly until it is registered under the Securities Act of 1933. The Portfolios
will not invest more than 15% of their net assets in illiquid or restricted
securities (excluding restricted securities eligible for resale to qualified
institutional investors). The Manager monitors holdings of illiquid securities
on an ongoing basis and at times a Portfolio may be required to sell some
holdings to maintain adequate liquidity. Illiquid securities include repurchase
agreements maturing in more than seven days, or certain participation interests
other than those with puts exercisable within seven days.

o Hedging. (All Portfolios). All Portfolios may write
(sell) exchange traded covered call
options (the Portfolios are not limited to purchasing exchange
traded options) on securities, securities
indices and foreign currencies, in each case as a hedge against
decreases in prices of existing portfolio
securities or increases in prices of securities whose purchase is
anticipated. The international

<PAGE>

component of the Portfolios may purchase options on currency in the
over-the-counter ("OTC") markets. The Portfolios may use covered call options
for non-hedging purposes as described below.

Each Portfolio may not, as a non-fundamental policy, write covered call or
put options with respect to more than 25% of the value of its total assets,
invest more than 25% of its total assets in protective put options or invest
more than 5% of its total assets in puts, calls, spreads or straddles, or any
combination thereof, other than protective put options. The aggregate value of
premiums paid on all options, other than protective put options, held by a
Portfolio at any time will not exceed 20% of that Portfolio's total assets.

o Futures. To hedge against changes in interest rates, securities prices
or currency exchange rates, each Portfolio may, subject to its investment
objectives and policies, purchase and sell various kinds of futures contracts
and the international portions of the Portfolios may purchase and write call and
put options on any futures contracts. A Portfolio may also enter into closing
purchase and sale transactions with respect to these contracts and options.
Futures contracts may be based on various securities (such as U.S. Government
securities), securities indices, foreign currencies and other financial
instruments and indices.

Each Portfolio may purchase and sell futures contracts on stock indices
and sell options on such futures. Each Portfolio may purchase and sell interest
rate futures and sell options on such futures. In addition, each Portfolio that
may invest in securities that are denominated in foreign currency may purchase
and sell futures on currencies. The Portfolios may purchase and sell options on
such futures. A Portfolio will engage in futures and related options
transactions only for bona fide hedging and non-hedging purposes as permitted in
regulations of the Commodity Futures Trading Commission. No Portfolio will enter
into futures contracts or options thereon for non-hedging purposes if,
immediately thereafter, the aggregate initial margin and premiums required to
establish non-hedging positions in futures contracts and options on futures will
exceed 5% of the net asset

<PAGE>

value of the Portfolio's portfolio, after taking into account unrealized profits
and losses on any such positions and excluding the amount by which such options
were in-the-money at the time of purchase.

A Portfolio may sell covered call options that are traded on U.S. or
foreign securities or commodity exchanges or which are issued by the Options
Clearing Corporation. In the case of foreign currency options, they may be
quoted by major recognized dealers in those options. The international component
of the Portfolios may purchase options on currency in the over-the-counter
markets.

o Interest Rate Swaps. (All Portfolios). The Portfolios may enter into
interest rate swaps both for hedging and to seek to increase total return. In an
interest rate swap, the Portfolio and another party exchange their right to
receive, or their obligation to pay, interest on a security. For example, they
may swap a right to receive floating rate interest payments for fixed rate
payments. The Portfolio enters into swaps only on a net basis, which means the
two payment streams are netted out, with the Portfolio receiving or paying, as
the case may be, only the net amount of the two payments. The Portfolio will
segregate liquid assets of any kind (such as cash or U.S. Government securities)
to cover any amounts it could owe under swaps that exceed the amounts it is
entitled to receive, and it will adjust that amount daily, as needed. Each
Portfolio will not invest more than 25% of its assets in interest rate swap
transactions and only on securities it owns.

<PAGE>

o Each Portfolio may not:

o Borrow money, except from banks for temporary purposes in amounts not in
excess of 331/3% of the value of its assets. Borrowings may also be made for
liquidity purposes to satisfy redemption requests when liquidation of portfolio
securities is considered inconvenient or disadvantageous. However, a Portfolio
may enter into futures contracts, options on futures contracts, securities or
indices and when-issued and delayed delivery transactions.

o With respect to 75% of its total assets, purchase any securities (other
than U.S. Government Securities) that would cause more than 5% of a Portfolio's
total assets to be invested in securities of a single issuer, or purchase more
than 10% of the outstanding voting securities of an issuer.

o Invest more than 25% of its assets in securities of
issuers in any single industry, provided
that this limitation shall not apply to obligations issued or
guaranteed by the U.S. Government, its

<PAGE>

agencies or instrumentalities. For the purpose of this restriction, each utility
that provides a separate service (e.g., gas, gas transmission, electric or
telephone) shall be considered a separate industry. This test shall be applied
on a pro forma basis using the market value of all assets immediately prior to
making any investment. (The Portfolios have undertaken to apply this restriction
to 25% or more of their assets.)

How the Portfolios Are Managed

The Company is governed by a Board of Directors, which is responsible for
protecting the interests of shareholders under Maryland law. The Directors meet
periodically throughout the year to oversee each Portfolio's activities, review
its performance, and review the actions of the Manager and Subadvisers.
"Directors and Officers of the Portfolios" in the Statement of Additional
Information names the Directors and officers of the Portfolios and provides more
information about them. Although the Company will not normally hold annual
meetings of shareholders, the Company may hold shareholder meetings from time to
time on important matters and call a meeting of shareholders upon proper request
of all shareholders of the Company. The Directors may also take other action
described in the Company's Articles of Incorporation. On matters affecting only
one Portfolio, only the shareholders of that Portfolio are entitled to vote.
Separate votes by Portfolio are required for matters relating to all Portfolios
but affecting the Portfolios differently. An insurance company issuing a
variable contract for which shares of a Portfolio are held by the insurance
company's separate account will vote the shares in accordance with applicable
law, which currently requires the insurance company to request voting
instructions from policy owners and to vote the shares in proportion to the
voting instructions received. For more information, please refer to your
insurance company's separate account prospectus.

The Manager, The Subadvisers and their Affiliates. The Portfolios
are managed by the Manager,
OppenheimerFunds, Inc., which supervises each Portfolio's
investment program and handles its

<PAGE>

day-to-day business. The Manager carries out its duties, subject to the policies
established by the Board of Directors, under separate Investment Advisory
Agreements for each Portfolio which state the Manager's responsibilities. The
Agreements set forth the fees
paid by a Portfolio to the Manager,
and describe the expenses that a Portfolio is responsible to pay
to conduct its business.

o The Subadvisers. The Manager has engaged three Subadvisers to provide
day-to-day portfolio management for certain components of the LifeSpan
Portfolios. The Manager has engaged Babson-Stewart to provide day-to-day
portfolio management services to the international components of the Capital
Appreciation Portfolio and Balanced Portfolio. Babson-Stewart, One Memorial
Drive, Cambridge, MA 02142, was originally established in 1987. The general
partners of Babson-Stewart are David L. Babson & Co., which is an indirect
subsidiary of Massachusetts Mutual Life Insurance Company, and Stewart Ivory &
Co., Ltd. As of December 31, 1997, Babson-Stewart, together with its global
affiliate, had approximately $4.5 billion in assets under management.

BEA Associates, One Citicorp Center, 153 East 53rd Street, 57th Floor, New
York, NY 10022, the Subadviser to the high yield/high risk bond component of the
LifeSpan Portfolios, has been providing fixed-income and equity management
services to institutional clients since 1984. BEA is a partnership between
Credit Suisse Capital Corporation and CS Advisors Corp. As of December 31, 1997,
BEA Associates, together with its global affiliate, had $128 billion in assets
under management.

<PAGE>

Pilgrim Baxter is a wholly-owned subsidiary of United Asset
Management Corporation. As of
December 31, 1997, Pilgrim Baxter had over $16 billion in assets
under management.

Each Subadviser is responsible for choosing the investments of its
respective component for each Portfolio and its duties and responsibilities are
set forth in its respective contract with the Manager. Babson-Stewart is
responsible for choosing all investments for the International Equity Portfolio.
The Manager, not the Portfolios, pays the Subadvisers.

o Portfolio Managers. The Manager supervises each Portfolio's investment
program and regularly reviews the asset allocation among each Portfolio's
classes and components. The Manager's personnel manage certain of the
components. The Portfolio Managers of each component are listed below.

Year
Became
Portfolio/Principal Portfolio Business Experience
Portfolio Manager Manager (last 5 years)
- -------------------------------------------------------------------

The Components of the LifeSpan Portfolios
International Component
(Babson-Stewart)
James W. Burns 1996 Managing Director,
Babson-Stewart (1993 -
present)
and Director, Stewart Ivory
& Co., Ltd. (since 1990).

John G.L. Wright 1996 Managing Director,
Babson-Stewart (1987 -
present);
Director, Stewart Ivory &
Co., Ltd. (since 1971).
- -------------------------------------------------------------------

Value/Growth and Growth/Income Components
(the Manager)
Peter M. Antos,
C.F.A. 1995 Principal Portfolio Manager
of the Portfolio; Senior
Vice President and Portfolio
Manager of the Portfolios
and of the Manager (since
March, 1996); Senior Vice
President of HarbourView
Asset Management
Corporation ("HarbourView");
portfolio manager of
other Oppenheimer funds;
previously Vice President
and Senior Portfolio
Manager, Equities-G.R.
Phelps, a
subsidiary of Connecticut
Mutual Life Insurance
Company (1989-1996).
Michael C. Strathearn,
C.F.A. 1995 Vice President and Portfolio
Manager of the Portfolio
and of the Manager (since
March, 1996); Vice
President of HarbourView;
Portfolio Manager of other
Oppenheimer funds;
previously a Portfolio
Manager,
Equities-Connecticut Mutual
Life Insurance Company
(1988-1996).
Kenneth B. White,
C.F.A. 1995 Vice President and Portfolio
Manager of the Portfolio
and the Manager since
March, 1996; Vice President
of HarbourView; Portfolio
Manager of other

<PAGE>

Oppenheimer funds;
previously a Portfolio
Manager,
Equities-Connecticut Mutual
Life Insurance Company
(1987-1996).
- -------------------------------------------------------------------

Small Cap Component
(Pilgrim Baxter)
Gary L. Pilgrim,
C.F.A. 1995 Director, President
(1985-1997).

Michael D. Jones,
C.F.A. 1995 Principal Portfolio Manager
of the Portfolio and
Analyst, Pilgrim Baxter
(since 1995); Vice
President/Portfolio Manager,
Bank of New York
(1990-1995).
- -------------------------------------------------------------------

Government Securities/Corporate Bonds Component
(the Manager)
Stephen F. Libera,
C.F.A. 1992 Vice President and Portfolio
Manager of the Portfolio
and of the Manager (since
March 1996); Vice
President of HarbourView;
Portfolio Manager of other
Oppenheimer funds;
previously Vice President and
Senior Portfolio Manager,
Fixed Income-G.R. Phelps
1985-1996).
- -------------------------------------------------------------------

High Yield Bonds Component
(BEA Associates)
Richard J. Lindquist 1995 Executive Director and High
Yield Portfolio Manager,
BEA Associates (1995); CS
First Boston (1989-1995).
- -------------------------------------------------------------------

Short-Term Bond Component
(the Manager)
Stephen F. Libera,
C.F.A. 1992 (see biographical data above)
- -------------------------------------------------------------------

o Fees and Expenses. Under separate Investment Advisory Agreements, the
Capital Appreciation Portfolio, Balanced Portfolio and Diversified Income
Portfolio pay the Manager an annual fee equal to 0.85%, 0.85% and 0.75%,
respectively, of the Portfolio's average annual net asset value up to $250
million and 0.75%, 0.75% and 0.65%, respectively on such assets over $250
million.

Under its Investment Subadvisory Agreements with Babson-Stewart, the
Manager pays Babson-Stewart a monthly fee at the following annual rates, which
decline as the average daily net assets of the portion of Capital Appreciation
Portfolio and Balanced Portfolio allocated to Babson-Stewart grows: 0.75% of the
first $10 million of average daily net assets allocated to Babson-Stewart,
0.625% of the next $15 million, 0.50% of the next $25 million and 0.375% of such
assets in excess of $50 million. The portion of the net assets of all Portfolios
allocated to Babson-Stewart will not be aggregated in applying these
breakpoints.

<PAGE>

allocated to BEA, 0.40% of the next $25 million, 0.35% of the next
$50 million and 0.25% of such
assets in excess of $100 million.

Under its Investment Subadvisory Agreements with Pilgrim Baxter, the
Manager pays Pilgrim Baxter a monthly fee at the annual rate of 0.60% of the
combined average daily net assets of the Portfolios allocated to Pilgrim Baxter.
For purposes of calculating the fee payable to BEA and Pilgrim Baxter, the net
asset values of that portion of the assets of each Portfolio subadvised by BEA
and Pilgrim Baxter are aggregated with that portion of the net asset value of
the assets of Oppenheimer Series Fund, Inc. managed by BEA and Pilgrim Baxter,
respectively.

Portfolio Management Fees Total Operating
Expense(1)
- -------------------------------------------------------------------

Capital Application (1) 0.85% 0.99%
- -------------------------------------------------------------------

Balanced (1) 0.85% 0.97%
- -------------------------------------------------------------------

Diversified Income (1) 0.75% 0.86%
- -------------------------------------------------------------------

(1)This table does not reflect expenses that apply at the Account level or to
related insurance products.

There is also information about the Portfolios' brokerage policies and
practices in "Brokerage Policies of the Portfolios" in the Statement of
Additional Information. That section discusses how brokers and dealers are
selected for the Portfolios' portfolio transactions. When deciding which brokers
to use, the Manager and Subadvisers are permitted by the Investment Advisory
Agreements to consider whether brokers have sold shares of the Portfolios or any
other funds for which the Manager serves as investment adviser.

<PAGE>

Performance of the Portfolios

Explanation of Performance Terminology. Each Portfolio uses the term "total
return" to illustrate their performance. These returns measure the performance
of a hypothetical account in a Portfolio over various periods, and do not show
the performance of each shareholder's account (which will vary if shares are
sold or purchased). A Portfolio's performance data may help you see how well
your investment has done over time and to compare it to market indices. However,
the performance data published by the Portfolios does not include expenses that
apply at the Account level or to related insurance products which, if
considered, would reduce such performance. Since shares of the Portfolios may be
purchased through a variable contract, you should carefully review the
prospectus of the insurance product you have chosen for information on charges
and expenses.

Management's Discussion of Performance.

o LifeSpan Capital Appreciation Portfolio. During the fiscal year ended
December 31, 1997, the Portfolio's positive performance was primarily affected
by the economic growth in the stock markets. In particular, the Portfolio
realized gains on its stock holdings in the financial and technology sectors.
The Portfolio's investments in foreign securities also performed well, due in
large part to a reduction of the Portfolio's exposure to the difficulties in
Southeast Asia. The Portfolio's investments in high-yield securities also
performed well, especially in strong growth sectors such as telecommunications.
The Portfolio's government/corporate bond investments benefited from the
controlled, non-inflationary growth in the U.S.

<PAGE>

o LifeSpan Balanced Portfolio. During the fiscal year ended December 31,
1997, the stock market performed strongly. The Portfolio benefited from the
stock market due primarily to the Manager's allocation of approximately 55% of
the Portfolio's
assets in equity securities. In particular,
the Portfolio's investments in financial and technology stocks contributed
significantly to the Portfolio's positive performance, followed by small cap and
international stocks. The Portfolio's returns were also helped by a bond market
rally later in the year.

o LifeSpan Diversified Income Portfolio. During the fiscal year ended
December 31, 1997, the Portfolio performed well despite volatility in the
short-term bond market. The Portfolio's positive performance was helped in large
part by the non-inflationary growth environment in the U.S. The Portfolio's
Growth/Income component performed the strongest, benefiting from overall strong
stock market returns.

Each Portfolio's portfolio holdings, allocations and strategies are
subject to change.

LifeSpan Capital Appreciation Portfolio is compared to the Wilshire 5000
Index and the S&P 500 Index. The Wilshire 5000 Index measures the performance of
all U.S. headquartered equity securities with readily available price data.
Approximately 6500 capitalization weighted security returns are used to adjust
the index. The index is an approximator of dollar changes in the U. S. equity
market. The Wilshire 5000 capitalization is about 82% NYSE, 2% AMEX and 16% OTC.
The S&P 500 Index is a broad-based index of equity securities widely regarded as
a general measurement of the U.S. equity securities market. LifeSpan Balanced
Portfolio is compared to the Lehman Brothers Corporate/Government Bond Index and
the S&P 500 Index. The Lehman Brothers Corporate/Government Bond Index includes
the Government and Corporate Bond Indices, including U.S. government treasury
and agency securities, corporate and yankee bonds. LifeSpan Diversified Income
Portfolio is compared to Lehman Brothers Intermediate Government/Corporate Bond
Index which includes fixed rate debt issues rated investment grade or higher by
Moody's, S&P, or Fitch, in that order. Index performance reflects the
reinvestment of dividends but does not consider the effect of capital gains or
transaction costs, and none of the data below shows the effect of taxes. Also, a
Portfolio's performance reflects the effect of that Portfolio's business and
operating expenses.

Comparison of Change in Value of
$10,000 Hypothetical Investments in

<PAGE>

LifeSpan Capital Appreciation Portfolio
Versus S&P 500 Index
and Wilshire 5000 Index

[Graph comparing total return of LifeSpan Capital Appreciation Portfolio shares
to performance of S&P 500 Index and Wilshire 5000 Index]

Average Annual Total Returns at 12/31/97(1)

1 year Life of Portfolio

12.53% 16.07%

(1) The inception date of the Portfolio was 9/1/95. Total returns and the ending
account value in the graph show change in share value and include reinvestment
of all dividends and capital gains distributions. Past performance is not
predictive of future performance. Graphs are not drawn to same scale.

Comparison of Change in Value of
$10,000 Hypothetical Investments in
LifeSpan Balanced Portfolio
Versus S&P 500 Index and
Lehman Brothers Corporate/Government Bond Index

[Graph comparing total return of LifeSpan Balanced Portfolio shares to
performance of S&P 500 Index and Lehman Brothers Corporate/Government Bond
Index]

Average Annual Total Returns at 12/31/97(1)

1 year Life of Portfolio

12.20% 13.71%

Comparison of Change in Value of
$10,000 Hypothetical Investments in

<PAGE>

LifeSpan Diversified Income Portfolio
Versus
Lehman Brothers Intermediate Government/Corporate Bond Index

[Graph comparing total return of LifeSpan Diversified Income Portfolio shares to
performance of Lehman Brothers Intermediate Government/Corporate Bond Index]

Average Annual Total Returns at 12/31/97(1)

1 year Life of Portfolio

12.51% 10.84%

ABOUT YOUR ACCOUNT

How to Buy Shares

<PAGE>

How to Sell Shares

Because shares of the Portfolios are held by insurance company Accounts,
and not directly by investors, you should refer to the prospectus of your
insurance company's Account for information on how to redeem shares of a
Portfolio held for your policy or contract. Payment for shares tendered by an
Account for redemption is made ordinarily in cash and forwarded within seven
days after receipt by the Company's transfer agent, OppenheimerFunds Services
(the "Transfer Agent"), of redemption instructions in proper form from an
Account, except under unusual circumstances as determined by the Securities and
Exchange Commission. The redemption price will be the net asset value next
determined after the receipt by the Transfer Agent of a request in proper form.
The market value of the securities in the portfolio of the Portfolios is subject
to daily fluctuations and the net asset value of the Portfolios' shares will
fluctuate accordingly. Therefore, the redemption value may be more or less than
the original cost.

Dividends, Capital Gains and Taxes

o Dividends of the Portfolios.

Each Portfolio intends to pay out all of its net investment
income and net realized capital
gains, if any, on an annual basis. The Portfolios distribute
their dividends, if any, each year on a date
set by the Board of Directors. Normally, net realized capital gains, if any, are
distributed annually for the Portfolios. Such income and capital gains are
reinvested in additional shares of the Portfolios. Each Portfolio makes dividend
and capital gain distributions on a per-share basis. After every distribution
from each of these Portfolios, the Portfolio's share price drops by the amount
of the distribution. Since dividends and capital gain distributions are
reinvested, the total value of an account will not be affected by such
distributions because, although the shares will have a lower price, there will
be correspondingly more of them.

o Tax Treatment to the Account as Shareholder. The portion of
distributions attributable to the excess of a Portfolio's net long-term capital
gain over its net short-term capital loss is generally characterized as
long-term capital gain. The tax treatment of such dividends and distributions to
an Account depends on the tax status of and the tax rules applicable to that
Account, concerning which you should consult the prospectus of your insurance
company's separate account. It is expected that shares of the Portfolios will be
held by life insurance company separate accounts that fund variable contracts.
Under current Federal tax law, dividends and capital gains distributions paid by
any Portfolio to reserves for a variable contract are not currently taxable.

<PAGE>

satisfy the tax diversification requirements to which they are subject. The
above discussion relates solely to Federal tax laws. This discussion is not
exhaustive and a qualified tax adviser should be consulted if you have any
questions about the tax effects of your investment through a variable contract.

<PAGE>

APPENDIX A

Description of Ratings Categories of Rating Services

Description of Moody's Investors Service, Inc. Bond Ratings

Caa: Bonds rated "Caa" are of poor standing and may be in
default or there may be present
elements of danger with respect to principal or interest.

Ca: Bonds rated "Ca" represent obligations which are
speculative in a high degree and are
often in default or have other marked shortcomings.

A-1

<PAGE>

C: Bonds rated "C" can be regarded as having extremely
poor prospects of ever attaining
any real investment standing.

Description of Standard & Poor's Bond Ratings

A: Bonds rated "A" have a strong capacity to pay principal and interest,
although they are somewhat more susceptible to adverse effects of change in
circumstances and economic conditions.

C, D: Bonds on which no interest is being paid are rated "C." Bonds rated
"D" are in default and payment of interest and/or repayment of principal is in
arrears.

A-2

<PAGE>

Panorama Series Fund, Inc.
6803 South Tucson Way
Englewood, Colorado 80112
1-800-525-7048

Investment Advisor
OppenheimerFunds, Inc.
Two World Trade Center
New York, New York 10048-0203

Transfer Agent
OppenheimerFunds Services
P.O. Box 5270
Denver, Colorado 80217
1-800-525-7048

Custodian of Portfolio Securities
Bank of New York
90 Washington Street
New York, NY 10206

Independent Auditors
Deloitte & Touche LLP
555 Seventeenth Street
Denver, Colorado 80202

Legal Counsel
Myer, Swanson, Adams & Wolf, P.C.
1600 Broadway
Denver, Colorado 80202

<PAGE>

Panorama Series Fund, Inc.

Prospectus Dated May 1, 1998

Panorama Series Fund, Inc. (referred to in this Prospectus as the
"Company") is an open-end
investment company consisting of seven separate series, six of
which are discussed in this Prospectus.
Each series is referred to as a "Portfolio" and collectively, as the
"Portfolios". Shares of the Portfolios are offered through certain variable
annuity or variable life insurance contracts by insurance
companies.

This Prospectus explains concisely what you should know before investing
in the Portfolios. Please read this Prospectus carefully and keep it for future
reference. You can find more detailed

<PAGE>

information about each Portfolio in the May 1, 1998 Statement of Additional
Information. For a free copy, call OppenheimerFunds Services, the Portfolios'
Transfer Agent, at 1-800-525-7048, or write to the Transfer Agent at the address
on the back cover. The Statement of Additional Information has been filed with
the Securities and Exchange Commission ("SEC") and is incorporated into this
Prospectus by reference (which means that it is legally part of this
Prospectus).

<PAGE>

Contents

ABOUT THE PORTFOLIOS
Overview of the Portfolios....................................3
Financial Highlights..........................................4
Investment Objectives and Policies............................11
Total Return Portfolio........................................11
Growth Portfolio..............................................11
International Equity Portfolio................................11
LifeSpan Portfolios...........................................12
Investment Risks..............................................15
Investment Techniques and Strategies..........................17
How the Portfolios Are Managed................................22
Performance of the Portfolios.................................26
ABOUT YOUR ACCOUNT
How to Buy Shares.............................................32
How to Sell Shares............................................32
Dividends, Capital Gains and Taxes............................32
Appendix A: Description of Ratings Categories of Ratings ServiA-1

<PAGE>

ABOUT THE PORTFOLIOS

Overview of the Portfolios

o What Are the Portfolios' Investment Objectives? Total Return Portfolio
seeks to maximize total investment return (including both capital appreciation
and income). Growth Portfolio seeks long term growth of capital by investing
primarily in common stocks with low price-earnings ratios and
better-than-anticipated earnings. International Equity Portfolio seeks long-term
growth of capital by investing primarily in equity securities of companies
wherever located, the primary stock market of which is outside the United
States. LifeSpan Capital Appreciation Portfolio ("Capital Appreciation
Portfolio") seeks long-term capital appreciation by investing in a strategically
allocated portfolio consisting primarily of stocks. LifeSpan Balanced Portfolio
("Balanced Portfolio") seeks a blend of capital appreciation and income by
investing in a strategically allocated portfolio of stocks and bonds with a
slightly stronger emphasis on stocks. LifeSpan Diversified Income Portfolio
("Diversified Income Portfolio") seeks high current income, with opportunities
for capital appreciation by investing in a strategically allocated portfolio
consisting primarily of bonds.

o What Do the Portfolios Invest In? To seek their respective investment
objectives, the Portfolios invest as follows. Total Return Portfolio invests by
principally allocating its assets among stocks, corporate bonds, U.S. Government
securities and money market instruments according to changing market conditions.
Growth Portfolio primarily invests in common stocks with low price-earnings
ratios and better-than-anticipated earnings. International Equity Portfolio
primarily invests in equity securities of companies wherever located, the
primary stock market of which is outside the United States. LifeSpan Capital
Appreciation Portfolio primarily invests in stocks. LifeSpan Balanced Portfolio
primarily invests in stocks and bonds with a slightly stronger emphasis on
stocks. LifeSpan Diversified Income Portfolio primarily invests in bonds. These
investments are more fully explained for each Fund in "Investment Objectives and
Policies," starting on page 11.

o Who Manages the Portfolios? The Portfolios'investment
adviser is OppenheimerFunds,
Inc. (the "Manager"), which (including a subsidiary) advises
investment company portfolios having
over $75 billion in assets. Each Portfolio's portfolio manager is
primarily responsible for the selection
of securities of that Portfolio. The portfolio managers are as
follows: for Total Return Portfolio,
Peter M. Antos, CFA, Michael C. Strathearn, CFA, Stephen F.
Libera, CFA, Kenneth B. White, CFA
and Arthur Zimmer; for Growth Portfolio, Peter M. Antos, CFA,
Michael C. Strathearn, CFA, and
Kenneth B. White, CFA; for International Equity Portfolio,
Babson-Stewart Ivory International
(Babson-Stewart) James W. Burns and John G.L. Wright; for LifeSpan
Capital Appreciation
Portfolio, LifeSpan Balanced Portfolio, and LifeSpan Diversified
Income Portfolio, (the
Manager) Peter M. Antos, CFA, Michael C. Strathearn, CFA, Stephen
F. Libera, CFA, Kenneth B.

<PAGE>

White, CFA, (Babson-Stewart) James W. Burns and John G.L. Wright,
(Pilgrim Baxter) Gary L.
Pilgrim, CFA and Michael D. Jones, CFA and (BEA Associates)
Richard J. Lindquist. The Manager
is paid an advisory fee by each Portfolio, based on its assets.
The Company's Board of Directors,
elected by shareholders, oversees the investment adviser and the portfolio
manager and subadviser. Please refer to "How The Portfolios Are Managed,"
starting on page 22 for more information about the Manager and Subadvisers and
their fees.

o How Risky Are The Portfolios? While different types of investments have
risks that differ in type and magnitude, all investments carry risk to some
degree. Changes in overall market movements or interest rates, or factors
affecting a particular industry or issuer, can affect the value of the
Portfolios' investments and their price per share. Equity investments are
generally subject to a number of risks including the risk that values will
fluctuate as a result of changing expectations for the economy and individual
issuers, and stocks which are small to medium size in capitalization may
fluctuate more than large capitalization stocks. For both equity and income
investments, foreign investments are subject to the risk of adverse currency
fluctuation and additional risks and expenses in comparison to domestic
investments. In comparing levels of risk among the Portfolios that invest to
some degree in equities, International Equity Portfolio is the most volatile
with its exposure to international markets, followed by Growth Portfolio,
LifeSpan Capital Appreciation Portfolio, Total Return Portfolio, and LifeSpan
Balanced Portfolio. The LifeSpan Diversified Income Portfolio invests in
fixed-income securities which are generally subject to the risk that values will
fluctuate with interest rates and inflation, with lower-rated fixed-income
investments being subject to a greater risk that the issuer will default in its
interest or principal payment obligations.

While the Manager and Subadvisers try to reduce risks by diversifying
investments, by carefully researching securities before they are purchased and
in some cases, the use of hedging techniques, there is no guarantee of success
in achieving a Portfolio's objective. Please refer to "Investment Risks"
starting on page 15 for a more complete discussion of the types of securities
the Portfolios purchase.

o How Have the Portfolios Performed? All of the Portfolios may measure
their performance by quoting average annual total return and cumulative total
return, which measure historical performance. Those returns can be compared to
the returns (over similar periods) of other funds. Of course, other funds may
have different objectives, investments, and levels of risk. The performance of
all the Portfolios can also be compared to broad market indices, which we have
done starting on page 29. Please remember that past performance does not
guarantee future results.

<PAGE>

Financial Highlights

<PAGE>

FINANCIAL HIGHLIGHTS
PANORAMA SERIES FUND, INC.--TOTAL RETURN PORTFOLIO

<PAGE>

FINANCIAL HIGHLIGHTS
PANORAMA SERIES FUND, INC.--GROWTH PORTFOLIO

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
1997 1996(1) 1995 1994
=========================================================================================================
<S> <C> <C> <C> <C>
PER SHARE OPERATING DATA
Net asset value, beginning of period $2.98 $2.53 $1.97 $2.08
- ---------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .04 .04 .04 .03
Net realized and unrealized gain (loss) .69 .43 .71 (.04)
----- ----- ----- -----
Total income (loss) from investment
operations .73 .47 .75 (.01)
- ---------------------------------------------------------------------------------------------------------
Dividends and distributions to
shareholders:
Dividends from net investment income (.03) (.01) (.04) (.03)
Distributions from net realized gain (.23) (.01) (.15) (.07)
----- ----- ----- -----
Total dividends and distributions to
shareholders (.26) (.02) (.19) (.10)
- ---------------------------------------------------------------------------------------------------------
Net asset value, end of period $3.45 $2.98 $2.53 $1.97
===== ===== ===== =====
=========================================================================================================
TOTAL RETURN, AT NET ASSET VALUE(2) 26.37% 18.87% 38.06% (0.51)%
=========================================================================================================
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in thousands) $831,371 $586,222 $405,935 $230,195
- ---------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $721,555 $494,281 $303,193(3) $198,879(3)
- ---------------------------------------------------------------------------------------------------------
Ratios to average net assets:
Net investment income 1.38% 1.63% 2.01% 1.87%
Expenses 0.54% 0.58% 0.66% 0.67%
- ---------------------------------------------------------------------------------------------------------
Portfolio turnover rate(4) 91.8% 82.5% 69.3% 97.3%
Average brokerage commission rate(5) $0.0699 $0.0697 -- --
</TABLE>

<PAGE>

4. The lesser of purchases or sales of portfolio securities for a period,
divided by the monthly average of the market value of portfolio securities owned
during the period. Securities with a maturity or expiration date at the time of
acquisition of one year or less are excluded from the calculation. Purchases and
sales of investment securities (excluding short-term securities) for the period
ended December 31, 1997 were $637,953,389 and $589,720,974, respectively. 5.
Total brokerage commissions paid on applicable purchases and sales of portfolio
securities for the period, divided by the total number of related shares
purchased and sold.

<PAGE>

FINANCIAL HIGHLIGHTS
PANORAMA SERIES FUND, INC.--INTERNATIONAL EQUITY PORTFOLIO

</TABLE>

<PAGE>

FINANCIAL HIGHLIGHTS
PANORAMA SERIES FUND, INC.--LIFESPAN DIVERSIFIED INCOME PORTFOLIO

<PAGE>

FINANCIAL HIGHLIGHTS
PANORAMA SERIES FUND, INC.--LIFESPAN BALANCED PORTFOLIO

1. For the period from September 1, 1995 (commencement of operations) to
December 31, 1995. 2. On March 1, 1996, OppenheimerFunds, Inc. became the
investment advisor to the Fund. 3. Assumes a hypothetical initial investment on
the business day before the first day of the fiscal period, with all dividends
and distributions reinvested in additional shares on the reinvestment date, and
redemption at the net asset value calculated on the last business day of the
fiscal period. Total returns are not annualized for periods of less than one
full year. Total return information does not reflect expenses that apply at the
separate account level or to related insurance products. Inclusion of these
charges would reduce the total return figures for all periods shown. 4. This
information is not covered by the auditors' opinion. 5. Annualized. 6. The
lesser of purchases or sales of portfolio securities for a period, divided by
the monthly average of the market value of portfolio securities owned during the
period. Securities with a maturity or expiration date at the time of acquisition
of one year or less are excluded from the calculation. Purchases and sales of
investment securities (excluding short-term securities) for the period ended
December 31, 1997 were $42,727,285 and $30,915,461, respectively. 7. Total
brokerage commissions paid on applicable purchases and sales of portfolio
securities for the period, divided by the total number of related shares
purchased and sold. Generally, non-U.S. commissions are lower than U.S.
commissions when expressed as cents per share but higher when expressed as a
percentage of transactions because of the per-share prices of many non-U.S.
securities.

<PAGE>

FINANCIAL HIGHLIGHTS
PANORAMA SERIES FUND, INC.--LIFESPAN CAPITAL APPRECIATION PORTFOLIO

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
1997 1996(2) 1995(1)
=============================================================================================
<S> <C> <C> <C>
PER SHARE OPERATING DATA
Net asset value, beginning of period $1.24 $1.06 $1.00
- ---------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income .03 .02 .01
Net realized and unrealized gain .12 .17 .06
----- ----- -----
Total income from investment operations .15 .19 .07
- ---------------------------------------------------------------------------------------------
Dividends and distributions to shareholders:
Dividends from net investment income (.01) (.01) (.01)
Distributions from net realized gain (.03) -- --
----- ----- -----
Total dividends and distributions to shareholders (.04) (.01) (.01)
- ---------------------------------------------------------------------------------------------
Net asset value, end of period $1.35 $1.24 $1.06
===== ===== =====
=============================================================================================
TOTAL RETURN, AT NET ASSET VALUE(3) 12.53% 17.97% 6.65%
=============================================================================================
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in thousands) $61,379 $41,994 $26,768
- ---------------------------------------------------------------------------------------------
Average net assets (in thousands) $51,473 $33,109 $25,460(4)
- ---------------------------------------------------------------------------------------------
Ratios to average net assets:
Net investment income 2.36% 1.92% 1.73%(5)
Expenses 0.99% 1.30% 1.50%(5)
- ---------------------------------------------------------------------------------------------
Portfolio turnover rate(6) 65.8% 70.7% 38.7%(5)
Average brokerage commission rate(7) $0.0372 $0.0028 --
</TABLE>

1. For the period from September 1, 1995 (commencement of operations) to
December 31, 1995. 2. On March 1, 1996, OppenheimerFunds, Inc. became the
investment advisor to the Fund. 3. Assumes a hypothetical initial investment on
the business day before the first day of the fiscal period, with all dividends
and distributions reinvested in additional shares on the reinvestment date, and
redemption at the net asset value calculated on the last business day of the
fiscal period. Total returns are not annualized for periods of less than one
full year. Total return information does not reflect expenses that apply at the
separate account level or to related insurance products. Inclusion of these
charges would reduce the total return figures for all periods shown. 4. This
information is not covered by the auditors' opinion. 5. Annualized. 6. The
lesser of purchases or sales of portfolio securities for a period, divided by
the monthly average of the market value of portfolio securities owned during the
period. Securities with a maturity or expiration date at the time of acquisition
of one year or less are excluded from the calculation. Purchases and sales of
investment securities (excluding short-term securities) for the period ended
December 31, 1997 were $42,328,007 and $30,095,785, respectively. 7. Total
brokerage commissions paid on applicable purchases and sales of portfolio
securities for the period, divided by the total number of related shares
purchased and sold. Generally, non-U.S. commissions are lower than U.S.
commissions when expressed as cents per share but higher when expressed as a
percentage of transactions because of the per-share prices of many non-U.S.
securities.

Investment Objectives and Policies

<PAGE>

The Portfolio may invest the remainder of its assets (up to 10% under
normal circumstances) in U.S. Government and corporate debt obligations,
including convertible bonds which may be rated as low as "B" by Moody's
Investors Service, Inc. ("Moody's") or Standard and Poor's Ratings Group
("Standard & Poor's") or other rating services. See Special Risks of Investing
in Lower Grade Securities regarding risks of investing in lower-rated
Securities.
Consistent with the foregoing
policies, the Portfolio may invest to a limited degree in securities of foreign
issuers, including issuers in developing countries, which involve special risks
(described below).

<PAGE>

and which the subadviser considers to have attractive characteristics in terms
of profitability, growth and financial resources. "Seasoned" companies are those
which in the Subadviser's opinion are known for the quality and acceptance of
their products or services and for their ability to generate profits.

<PAGE>

International investing can help investors reduce their overall portfolio
risk through diversification. In addition, international investing enables
investors to benefit from foreign economies that may have more favorable growth
rates than the United States economy. However, international investments,
particularly investments in developing countries, are subject to special risks.
For a description of these risks, see "Investment Risks," below.

The LifeSpan Portfolios. There are three LifeSpan Portfolios, each of which is
an asset allocation fund that seeks to achieve its objective by allocating its
assets between two broad classes of investments-stocks and bonds. The stock
class includes equity securities of all types and the bond class includes a
variety of fixed income investments. Within those broad classes are investment
components among which the Portfolio's assets are further allocated. The three
LifeSpan Portfolios are:

LifeSpan Capital Appreciation Portfolio which seeks long-term capital
appreciation (current income is not a primary consideration);

LifeSpan Balanced Portfolio which seeks a blend of capital
appreciation and income; and

LifeSpan Diversified Income Portfolio which seeks high current income with
opportunities for capital appreciation.

<PAGE>

Additional adjustments may be made at any time if in the judgment of the Manager
an asset allocation shift of 5% or more appears warranted.

o The Portfolio Components. The Manager will diversify each LifeSpan
Portfolio's stock investments among four stock components: international stocks,
value/growth stocks, growth and income stocks and small-capitalization growth
stocks ("small-cap" stocks). Each stock component is also permitted to invest a
portion of its assets in bonds when the Manager or relevant Subadviser
determines that increased flexibility in portfolio management is desirable to
enhance the potential for appreciation or income. The Manager will diversify a
Portfolio's bond investments among three bond components: government and
corporate bonds, high yield/high risk bonds (also called "junk bonds") and
short-term bonds. There is no requirement that the Manager allocate a
Portfolio's assets among all stock or bond components at all times. These stock
and bond components have been selected because the Manager believes that this
additional level of asset diversification will provide each Portfolio with the
potential for higher returns with lower overall volatility. Each Portfolio's
normal allocation and potential range of allocations are shown in the chart
below.