Registration No. 2-73969
File No. 811-3255
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 /X/
Pre-Effective Amendment No. / /
Post-Effective Amendment No. 27 /X/
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT
COMPANY ACT OF 1940 /X/
Amendment No. 26 /X/
PANORAMA SERIES FUND, INC.
- ----------------------------------------------------------------
(Exact Name of Registrant as Specified in Charter)
6803 South Tucson Way, Englewood, Colorado 80112
- ----------------------------------------------------------------
(Address of Principal Office)(Zip Code)
(203) 987-5047
- -----------------------------------------------------------------
Registrant's Telephone Number
Andrew J. Donohue, Secretary
Panorama Series Fund, Inc.
6803 South Tucson Way
Englewood, Colorado 80112
- -----------------------------------------------------------------
(Name and Address of Agent for Service)
It is proposed that this filing will become effective (check
appropriate box)
/ / immediately upon filing pursuant to paragraph (b)
/X/ on May 1, 1998 pursuant to paragraph (b)
/ / 60 days after filing pursuant to paragraph (a)
/ / on (date) pursuant to paragraph (a), of Rule 485
FORM N-1A
PANORAMA SERIES FUND, INC.
Cross Reference Sheet
Part A of
Form N-1A
Item No. Prospectus Heading
- --------- ------------------
1 Front Cover Page
2 Overview of the Portfolios
3 Financial Highlights; Performance of the
Portfolios
4 Front Cover Page; How the Portfolios are
Managed-- Organization and History; Investment Objectives
and Policies; Investment Restrictions
5 How the Portfolios are Managed; Expenses; Back
Cover
5A Performance of the Portfolios
6 How the Portfolios are Managed - Organization
and
History; The Transfer Agent; Dividends, Capital
Gains and Taxes; Investment Objectives and
Policies
8 How to Sell Shares
9 *
Part B of
Form N-1A
Item No. Statement of Additional Information Heading
- --------- -------------------------------------------
10 Cover Page
11 Cover Page
12 *
13 Investment Objectives and Policies; Other
Investment Techniques and Strategies; Additional
Investment Restrictions
14 How the Portfolios are Managed--Directors and
Officers of the Portfolios
15 How the Portfolios are Managed-- Major
Shareholders
16 How the Portfolios are Managed
17 Brokerage Policies of the Portfolios
18 Additional Information About the Portfolios
19 Your Investment Account - How to Buy Shares; How
to Sell Shares
20 Dividends, Capital Gains and Taxes
21 How the Portfolios are Managed; Brokerage
Policies
of the Portfolios
22 Performance of the Portfolios
23 Financial Statements
- --------------
* Not applicable or negative answer.
N1A\PANORAMA\N1ACOVER.98
<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 (each 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.
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.
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).
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.
1
<PAGE>
Contents
ABOUT THE PORTFOLIOS
Overview of the Portfolios
Financial Highlights
Investment Objectives and Policies Total Return Portfolio Growth Portfolio
International Equity Portfolio LifeSpan Portfolios Government Securities
Portfolio Investment Risks Investment Techniques and Strategies How the
Portfolios Are Managed Performance of the Portfolios ABOUT YOUR ACCOUNT How to
Buy Shares
How to Sell Shares
Dividends, Capital Gains and Taxes
Appendix A: Description of Ratings Categories of Ratings
Services
2
<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 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. 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.
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. 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 ___.
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. 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; 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 ____ 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. Fixed-income investments 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. In comparing levels of
risk among the fixed-income funds, LifeSpan Diversified Income Portfolio is more
volatile than Government Securities Portfolio.
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 __ 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 ___. 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 Annual Reports 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.
1
<PAGE>
<TABLE>
<CAPTION>
1993 1992 1991 1990 1989 1988
========================================================================================
<S> <C> <C> <C> <C> <C>
$1.56 $1.57 $1.33 $1.41 $1.27 $1.20
- ----------------------------------------------------------------------------------------
.06 .07 .07 .08 .09 .06
.20 .10 .32 (.07) .20 .08
----- ----- ----- ----- ----- -----
.26 .17 .39 .01 .29 .14
- ----------------------------------------------------------------------------------------
(.06) (.07) (.07) (.08) (.09) (.07)
(.11) (.11) (.08) (.01) (.06) --
----- ----- ----- ----- ----- -----
(.17) (.18) (.15) (.09) (.15) (.07)
- ----------------------------------------------------------------------------------------
$1.65 $1.56 $1.57 $1.33 $1.41 $1.27
===== ===== ===== ===== ===== =====
========================================================================================
16.28% 10.21% 28.79% 0.50% 22.98% 11.64%
========================================================================================
$610 $402 $304 $229 $221 $184
- ----------------------------------------------------------------------------------------
$502(3) $345(3) $261(3) $225(3) $204(3) $178(3)
- ----------------------------------------------------------------------------------------
3.90% 4.27% 4.44% 5.65% 6.20% 4.93%
0.60% 0.68% 0.72% 0.78% 0.80% 0.79%
- ----------------------------------------------------------------------------------------
161.6% 182.1% 128.8% 109.2% 151.0% 244.7%
-- -- -- -- -- --
</TABLE>
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.
2
<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>
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.
3
<PAGE>
<TABLE>
<CAPTION>
1993 1992 1991 1990 1989 1988
=========================================================================================================
<S> <C> <C> <C> <C> <C>
$1.91 $1.87 $1.46 $1.65 $1.36 $1.22
- ---------------------------------------------------------------------------------------------------------
.04 .04 .04 .05 .07 .03
.36 .19 .51 (.18) .42 .15
----- ----- ----- ----- ----- -----
.40 .23 .55 (.13) .49 .18
- ---------------------------------------------------------------------------------------------------------
(.04) (.04) (.04) (.05) (.07) (.04)
(.19) (.15) (.10) (.01) (.13) --
----- ----- ----- ----- ----- -----
(.23) (.19) (.14) (.06) (.20) (.04)
- ---------------------------------------------------------------------------------------------------------
$2.08 $1.91 $1.87 $1.46 $1.65 $1.36
===== ===== ===== ===== ===== =====
=========================================================================================================
21.22% 12.36% 37.53% (7.90)% 35.81% 14.46%
=========================================================================================================
$165,775 $101,215 $75,058 $50,998 $53,955 $41,434
- ---------------------------------------------------------------------------------------------------------
$131,292(3) $ 85,003(3) $62,282(3) $53,171(3) $48,409(3) $40,950(3)
- ---------------------------------------------------------------------------------------------------------
2.30% 2.19% 2.16% 3.04% 4.16% 2.24%
0.69% 0.76% 0.80% 0.84% 0.87% 0.88%
- ---------------------------------------------------------------------------------------------------------
97.6% 136.1% 142.9% 146.8% 174.1% 246.4%
-- -- -- -- -- --
</TABLE>
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.
4
<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.
5
<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.
6
<PAGE>
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.
7
<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.
8
<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.
9
3
<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.
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.
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.
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.
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.
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.
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.
CAPITAL DIVERSIFIED
ASSET APPRECIATION BALANCED INCOME
CLASSES AND PORTFOLIO PORTFOLIO PORTFOLIO
COMPONENTS
NORMAL NORMAL NORMAL
ALLOCATION RANGE ALLOCATION RANGE ALLOCATION RANGE
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/ 10% 5-15% 15% 10-25% 35% 30-45%
Corporate
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.
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 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.
o HIGH YIELD/HIGH RISK BOND COMPONENT. This component seeks to earn as
high a level of current income as is consistent with the risks associated with
high yield investments. The component's assets are invested primarily in bonds
that are rated BB or lower by Standard & Poor's or Ba or lower by Moody's or
comparable ratings from other rating organizations, or, if not rated, that are
deemed by the Subadviser to be of comparable quality to rated securities in
those categories. These 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.
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 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.
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 table above shows the
Portfolio's turnover rates during prior fiscal year.
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 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.
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. Each LifeSpan Portfolio may
invest in securities rated as low as D by Standard & Poor's or C by Moody's or
other rating services. Appendix A to this Prospectus describes the rating
categories of Moody's and Standard & Poor's.
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 (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.
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.
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 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. 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.
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 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. (ALL PORTFOLIOS
EXCEPT GROWTH PORTFOLIO AND INTERNATIONAL EQUITY PORTFOLIO).
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.
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. (ALL PORTFOLIOS EXCEPT GROWTH PORTFOLIO AND
INTERNATIONAL EQUITY PORTFOLIO). 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. (ALL PORTFOLIOS
EXCEPT GROWTH PORTFOLIO AND INTERNATIONAL EQUITY 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 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 (ALL PORTFOLIOS EXCEPT INTERNATIONAL EQUITY PORTFOLIO
AND GROWTH PORTFOLIO) 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). 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 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%
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 SMALL, UNSEASONED COMPANIES. (LIFESPAN PORTFOLIOS ONLY). 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 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 on going basis and at times the Fund 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 (the LifeSpan 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 Equity Portfolio and the
international component of the LifeSpan 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 LifeSpan Portfolio may not, as a non-fundamental policy, write
covered call or put options with respect to more than 25% of the value of their
respective 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 LifeSpan Portfolio at any time will not exceed 20% of that
Portfolio's total assets.
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 and the international portions of the
LifeSpan 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. The Total Return Portfolio and each LifeSpan
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 and the LifeSpan 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 percent 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.
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 and the international component of the respective LifeSpan Portfolios
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 AND LIFESPAN
PORTFOLIOS ONLY). Government Securities Portfolio and LifeSpan 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.
O DERIVATIVE INVESTMENTS. 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.
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. 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, OTHER THAN THE LIFESPAN PORTFOLIOS, 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 the Government Securities Portfolio). (Each
Portfolio subject to this restriction has undertaken to apply it to 25% or more
of its assets.)
o EACH LIFESPAN 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 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.)
Unless the prospectus states that a percentage restriction
applies continuously, it applies only at the time the Fund
makes an
investment, and the Fund need not sell securities to meet the
percentage limits if the value of the investment increases in
proportion to the size of the Fund. 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.
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,
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 SUBADVISERS 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 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 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 Equity Portfolio and for 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.
Pilgrim Baxter, 825 Duportail Road, Wayne, PA 19087, the
Subadviser to the small cap component of the Capital
Appreciation
and Balanced Portfolios, was established in 1982 to provide
specialized equity management for institutional investors
including
other investment companies. 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)
- --------------------------------------------------------------------------------
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 Harbour View;
portfolio Oppenheimer funds;
previously Vice President and
Senior Portfolio Manager,
Equities-G.R. Phelps, a subsidiary
of Connecticut Mutual Life
Insurance Company ("CML")
(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 Harbour View;
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 Harbour View;
Portfolio Manager of other
Oppenheimer funds; previously a
Portfolio Manager, Equities-CML
(1987-1996).
Arthur Zimmer 1996 Vice President and Portfolio
Manager of the Manager and
Centennial; 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)
- --------------------------------------------------------------------------------
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).
- --------------------------------------------------------------------------------
THE COMPONENTS OF THE LIFESPAN PORTFOLIOS
INTERNATIONAL COMPONENT
(Babson-Stewart)
James W. Burns 1996 (see biographical data above)
John G.L. Wright 1996 (see biographical data above)
VALUE/GROWTH AND GROWTH/INCOME COMPONENTS
(the Manager)
Peter M. Antos,
C.F.A. 1995 (see biographical data above)
Michael C. Strathearn,
C.F.A. 1995 (see biographical data above)
Kenneth B. White,
C.F.A. 1995 (see biographical data above)
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 (see biographical data above)
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)
- --------------------------------------------------------------------------------
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 P. Neg 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.
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 International Equity Portfolio
and that 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.
Under its Investment Subadvisory Agreements with BEA, the
Manager pays BEA a quarterly fee which declines as the combined
average daily net assets of each Portfolio allocated to BEA
grow at
the following annual rates: 0.45% of the first $25 million of
combined average daily net assets allocated to BEA, 0.40% of the
next $25 million, 0.35% of the next $50 million and 0.25% of the
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.
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:
MANAGEMENT TOTAL OPERATING
PORTFOLIO FEES EXPENSE(1)
- --------- ----- ----------
Total Return 0.54% 0.55%
Growth 0.53% 0.54%
International Equity 1.00% 1.12%
Capital Application (1) 0.85% 0.99%
Balanced (1) 0.85% 0.97%
Diversified Income (1) 0.75% 0.86%
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 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.
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 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 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
outperformed 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.
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 holding 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.
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.
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 Funds. If these charges and expenses
were taken into account, performance would be lower.
TOTAL RETURN PORTFOLIO'S performance is compared to the performance of the
Merrill Lynch Corporate & Government Master Index and S&P 500 Index. The Merrill
Lynch Corporate & Government Master Index is a composite of Corporate and
Government Master indices exclusive of pass-through securities and flower bonds.
The S&P 500 Index is a broad-based index of equity securities widely regarded as
a general measurement of the performance of the U.S. equity securities market.
The performance of GROWTH PORTFOLIO is compared to the performance of the S&P
500 Index. 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. INTERNATIONAL EQUITY PORTFOLIO is compared to the Morgan Stanley
Europe, Australia & Far East Index which is an index including approximately
1000 companies representing the stock markets of 18 countries. The average
company has a market capitalization of over $3 billion. 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. GOVERNMENT
SECURITIES PORTFOLIO is compared to Merrill Lynch Government Master Index which
is a composite of both the Treasury and Agency Master indices. It includes all
issues of the U.S. Government and agencies thereof, exclusive of pass-through
securities and flower bonds. 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. 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%
(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
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
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%
(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 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%
(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
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.
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.
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.
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.
4
<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.
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-1
<PAGE>
APPENDIX TO PROSPECTUS
Graphic material included in Prospectus of Panorama Series
Fund,
Inc.: "Comparison of Total Return of Panorama Series Fund, Inc.
with Broad-Based Indices - Changes in Value of a $10,000
Hypothetical Investment"
Linear graphs will be included in the Prospectus of Panorama
Series Fund, Inc. (the"Portfolios") depicting the initial
account
value and subsequent account value of a hypothetical $10,000
investment in shares of the Portfolios for the 10-year period
or,
if shorter, the life of each Portfolio and comparing such values
with the same investments over the same time periods in
Broad-Based
Indices. Set forth below are the relevant data points that will
appear on the linear graphs. Additional information with
respect
to the foregoing, including a description of the Broad-Based
Indices, is set forth in the Prospectus under "How Have the
Portfolios Performed? - Management's Discussion of
Performance."
Merrill
Lynch
Fiscal Total Return S&P 500 Corp.&Gov't
YEAR ENDED PORTFOLIO INDEX MASTER INDEX
12/31/87 $10,000 $10,000 $10,000
12/31/88 $11,164 $11,656 $10,772
12/31/89 $13,730 $15,343 $12,293
12/31/90 $13,798 $14,866 $13,338
12/31/91 $17,771 $19,386 $15,457
12/31/92 $19,585 $20,861 $16,645
12/31/93 $22,774 $22,958 $18,485
12/31/94 $22,325 $23,261 $17,849
12/31/95 $27,831 $31,991 $21,276
12/31/96 $30,656 $39,331 $21,909
12/31/97 $36,420 $52,449 $24,051
Fiscal Growth S&P 500
YEAR ENDED PORTFOLIO INDEX
12/31/87 $10,000 $10,000
12/31/88 $11,446 $11,656
12/31/89 $15,544 $15,343
12/31/90 $14,317 $14,866
12/31/91 $19,690 $19,386
12/31/92 $22,124 $20,861
12/31/93 $26,818 $22,958
12/31/94 $26,682 $23,261
12/31/95 $36,837 $31,991
12/31/96 $43,788 $39,331
12/31/97 $55,335 $52,449
Fiscal International Morgan Stanley
YEAR ENDED EQUITY PORTFOLIO EAFE INDEX
- ---------- ---------------- ----------
5/13/92(1) $10,000 $10,000
12/31/92 $9,567 $9,944
12/31/93 $11,653 $13,219
12/31/94 $11,822 $14,285
12/31/95 $13,039 $15,935
12/31/96 $14,768 $16,949
12/31/97 $15,965 $17,298
Fiscal LifeSpan Capital Wilshire
YEAR ENDED APPRECIATION PORTFOLIO S&P 500 INDEX 5000 INDEX
- ---------- ---------------------- ------------- ----------
9/1/95(1) $10,000 $10,000 $10,000
12/31/95 $10,665 $11,049 $10,812
12/31/96 $12,582 $13,584 $12,849
12/31/97 $14,159 $18,114 $16,597
Fiscal LifeSpan Balanced Lehman
Brothers
YEAR ENDED PORTFOLIO S&P 500 INDEX
- ---------- --------- -------------
CORP./GOV'T. BOND INDEX
- -----------------------
9/1/95(1) $10,000 $10,000 $10,000
12/31/95 $10,608 $11,049 $10,572
12/31/96 $12,027 $13,584 $10,879
12/31/97 $13,495 $18,114 $11,941
Lehman Brothers
Fiscal LifeSpan Diversified Intermediate
YEAR ENDED INCOME PORTFOLIO CORPORATE BOND INDEX
9/1/95(1) $10,000 $10,000
12/31/95 $10,569 $10,427
12/31/96 $11,301 $10,849
12/31/97 $12,715 $11,702
Merrill Lynch
Fiscal Government Government
YEAR ENDED SECURITIES PORTFOLIO MASTER INDEX
- ---------- -------------------- ------------
05/13/92(1) $10,000 $10,000
12/31/92 $10,661 $10,834
12/31/93 $11,832 $11,986
12/31/94 $11,254 $11,597
12/31/95 $13,382 $13,722
12/31/96 $13,640 $14,102
12/31/97 $14,843 $15,455
- -----------------------
(1) Commencement of operations.
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.
6803 South Tucson Way, Englewood, Colorado 80112
1-800-525-7048
STATEMENT OF ADDITIONAL INFORMATION DATED MAY 1, 1998
PANORAMA SERIES FUND, INC. (referred to as the "Company") is an investment
company
consisting of seven separate series (each is referred to as a "Portfolio" and
collectively as the
"Portfolios"):
TOTAL RETURN PORTFOLIO
GROWTH PORTFOLIO
INTERNATIONAL EQUITY PORTFOLIO
GOVERNMENT SECURITIES PORTFOLIO
(COLLECTIVELY, THESE ARE REFERRED TO AS THE "PANORAMA PORTFOLIOS")
AND
LIFESPAN CAPITAL APPRECIATION PORTFOLIO ("CAPITAL APPRECIATION
PORTFOLIO")
LIFESPAN BALANCED PORTFOLIO ("BALANCED PORTFOLIO")
LIFESPAN DIVERSIFIED INCOME PORTFOLIO ("DIVERSIFIED INCOME
PORTFOLIO")
(COLLECTIVELY, THESE ARE REFERRED TO AS THE "LIFESPAN PORTFOLIOS")
Shares of the Portfolios are sold only to provide benefits under variable
life insurance policies and variable annuity contracts (collectively, these are
referred to as the "Accounts"), as described in such Accounts' Prospectuses.
THIS STATEMENT OF ADDITIONAL INFORMATION IS NOT A PROSPECTUS. THIS
DOCUMENT CONTAINS ADDITIONAL INFORMATION ABOUT THE PORTFOLIOS AND SUPPLEMENTS
INFORMATION IN THE PORTFOLIOS' PROSPECTUS DATED MAY
1, 1998. IT SHOULD BE READ TOGETHER WITH THE PROSPECTUS WHICH MAY BE OBTAINED BY
WRITING TO THE PORTFOLIOS' TRANSFER AGENT, OPPENHEIMERFUNDS SERVICES, AT P.O.
BOX 5270, DENVER, COLORADO 80217 OR BY CALLING THE TRANSFER AGENT AT THE
TOLL-FREE NUMBER SHOWN ABOVE.
-1-
<PAGE>
CONTENTS
PAGE
ABOUT THE PORTFOLIOS
Investment Objective and Policies......................................
Investment Techniques and Strategies...................................
Other Investment Restrictions..........................................
How the Portfolios are Managed.........................................
Organization and History...........................................
Directors and Officers of the Company..............................
The Manager, and Subadvisers and their Affiliates..................
Brokerage Policies of the Portfolios...................................
Performance of the Portfolios..........................................
ABOUT YOUR ACCOUNT
How to Buy Shares......................................................
Dividends, Capital Gains and Taxes.....................................
Additional Information About the Portfolios............................
FINANCIAL INFORMATION ABOUT THE PORTFOLIOS
Independent Auditors' Report...........................................
Financial Statements...................................................
APPENDIX A: Industry Classifications................................... A-1
-2-
<PAGE>
ABOUT THE PORTFOLIOS
The Portfolios' investment adviser is OppenheimerFunds, Inc. (the
"Manager"). In the case of
the LifeSpan Portfolios, the Manager has engaged Babson-Stewart Ivory
International ("Babson-
Stewart"), BEA Associates ("BEA Associates")and Pilgrim, Baxter & Assoc. Ltd.
("Pilgrim") as
subadvisers to assist in the management of the LifeSpan Portfolios.
Babson-Stewart also serves as
subadviser to the International Equity Portfolio. Babson-Stewart, BEA
Associates and Pilgrim are
sometimes referred to herein individually as a "Subadviser" and collectively
as the "Subadvisers."
INVESTMENT OBJECTIVES AND POLICIES
The investment objectives and policies of each Portfolio are described in
the Prospectus. Set forth below is supplemental information about those policies
and the types of securities in which the Portfolios may invest, as well as the
strategies the Portfolios may use to
try to achieve their objective.
Certain capitalized terms used in this Statement of Additional Information have
the same meaning as those terms have in the Prospectus. Not all of the
Portfolios engage in all of the investment practices described below, and each
section indicates which Portfolios engage in a particular practice.
INVESTMENT TECHNIQUES AND STRATEGIES
FOREIGN SECURITIES (ALL PORTFOLIOS EXCEPT GOVERNMENT SECURITIES PORTFOLIO).
Consistent with any limitations a Portfolio may have on foreign investing set
forth in the Prospectus, each Portfolio and, in particular, the International
Equity Portfolio, may invest in foreign securities. The Portfolios may also
invest in debt and equity securities of corporate and governmental issuers of
countries with emerging economies or securities markets. The International
Equity Portfolio, Growth Portfolio and Total Return Portfolio are subject to
restrictions on the amount of its assets that may be invested in foreign
securities. See "Other Investment Restrictions," below.
Investing in foreign securities offers potential benefits not available
from investing solely in securities of domestic issuers, such as the opportunity
to invest in foreign issuers that appear to offer growth potential, or in
foreign countries with economic policies or business cycles different from those
of the U.S., or to reduce fluctuations in portfolio value by taking advantage of
foreign stock or bond markets that do not move in a manner parallel to U.S.
markets. If a Portfolio's portfolio securities are held abroad, the countries in
which such securities may be held and the sub-custodians holding them must be
approved by the Portfolio's Board of Directors under applicable rules of the
Securities and Exchange Commission ("SEC"). In buying foreign securities, a
Portfolio may convert U.S. dollars into foreign currency, but only to effect
securities transactions on foreign securities exchanges and not to hold such
currency as an investment. A Portfolio may also engage in transactions by
purchasing and selling futures and forward contracts.
"Foreign securities" include equity and debt securities of companies
organized under the laws of countries other than the United States and debt
securities of foreign governments that are traded primarily on foreign
securities exchanges or in the foreign over-the-counter markets. Securities of
foreign issuers that are represented by American depository receipts, or that
are primarily traded on a U.S. securities exchange, or are traded primarily in
the U.S.
over-the-counter market are not considered
"foreign securities" for purposes of a Portfolio's investment allocations,
because they are not subject to many of the special considerations and risks
(discussed below) that apply to foreign securities traded and held abroad.
RISKS OF FOREIGN INVESTING. Investing in foreign securities, and in
particular in securities in emerging countries, involves special additional
risks and considerations not typically associated with investing in securities
of issuers traded in the U.S. These include: reduction of income by foreign
taxes; fluctuation in value of foreign portfolio investments due to changes in
currency rates and control regulations (e.g., currency blockage); transaction
charges for currency exchange; lack of public information about foreign issuers;
lack of uniform accounting, auditing and financial reporting standards
comparable to those applicable to domestic issuers; less volume on foreign
exchanges than on U.S. exchanges; greater volatility and less liquidity in some
foreign markets than in the U.S.; less regulation of foreign issuers, stock
exchanges and brokers than in the U.S.; greater difficulties in commencing
lawsuits against foreign issuers; higher brokerage commission rates than in the
U.S.; increased risks of delays in settlement of portfolio transactions or loss
of certificates for portfolio securities; possibilities in some countries, and
in particular emerging countries, of expropriation or nationalization of assets,
confiscatory taxation, political, financial or social instability or adverse
diplomatic developments; and unfavorable differences between the U.S. economy
and foreign economies. In the past, U.S. Government policies have discouraged
certain investments abroad by U.S. investors, through taxation or other
restrictions, and it is possible that such restrictions could be re-imposed.
Because the Portfolios may invest in securities that are denominated or
quoted in foreign currencies, the strength or weakness of the U.S. dollar
against such currencies may account for part of a Portfolio's investment
performance. A decline in value of any particular currency against the U.S.
dollar will cause a decline in the U.S. dollar value of a Portfolio's holdings
of securities denominated in that currency, and therefore will cause an overall
decline in the Portfolio's net asset value and any net investment income (and
capital gains) to be distributed in U.S. dollars to shareholders of the
Portfolios.
A Portfolio's investment income or, in some cases, capital gains from
foreign issuers may be subject to foreign withholding or other foreign taxes,
thereby reducing a Portfolio's net investment
income and/or net realized capital gains.
CONVERTIBLE SECURITIES (ALL PORTFOLIOS EXCEPT GOVERNMENT SECURITIES PORTFOLIO).
While convertible securities are a form of debt security, in many cases their
conversion feature (allowing conversion into equity securities) causes them to
be regarded more as "equity equivalents." As a result, any rating assigned to
the security has less impact on the Manager's or relevant Subadviser's
investment decision with respect to convertible securities than in the case of
non-convertible debt securities. To determine whether convertible securities
should be regarded as "equity equivalents," the Manager or relevant Subadviser
examines the following factors: (1) whether, at the option of the investor, the
convertible security can be exchanged for a fixed number of shares of common
stock of the issuer, (2) whether the issuer of the convertible securities has
restated its earnings per share of common stock on a fully diluted basis
(considering the effect of converting the convertible securities), and (3) the
extent to which the convertible security may be a defensive "equity substitute,"
providing the ability to participate in any appreciation in the price of the
issuer's common stock.
DEBT SECURITIES (ALL PORTFOLIOS). All debt securities are subject to two
types of risks: credit risk and interest rate risk (these are in addition to
other investment risks that may affect a particular security).
CREDIT RISK. Credit risk relates to the ability of the issuer to meet
interest or principal payments or both as they become due. Generally, higher
yielding bonds are subject to credit risk to a greater
extent than higher quality bonds. U.S. Government securities (see below) are
generally considered not
to be subject to credit risk.
INTEREST RATE RISK. Interest rate risk refers to the fluctuations in value
of fixed-income securities resulting solely from the inverse relationship
between the market value of outstanding fixed-income securities and changes in
interest rates. An increase in interest rates will generally reduce the market
value of fixed-income investments, and a decline in interest rates will tend to
increase their value. In addition, debt securities with longer maturities, which
tend to produce higher yields, are subject to potentially greater capital
appreciation and depreciation than obligations with shorter maturities.
Fluctuations in the market value of fixed-income securities subsequent to their
acquisition will not affect the interest payable on those securities, and thus
the cash income from such securities, but will be reflected in the valuations of
those securities used to compute a Portfolio's net asset values.
U.S. GOVERNMENT SECURITIES (ALL PORTFOLIOS). U.S. Government
Securities are debt obligations issued or guaranteed by the U.S. Government
or one of its agencies or instrumentalities, and include
"zero coupon" Treasury securities. Some of these obligations, including U.S.
Treasury notes and bonds,
and mortgage-backed securities guaranteed by the Government National Mortgage
Association ("GNMA"), are supported by the full faith and credit of the United
States, which means that the government pledges to use its taxing power to repay
the debt. Other U.S. Government Securities issued or guaranteed by Federal
agencies or government-sponsored enterprises are not supported by the full faith
and credit of the United States. They may include obligations supported by the
ability of the issuer to borrow from the U.S. Treasury. However, the Treasury is
not under a legal obligation to make a loan. Examples of these are obligations
of Federal Home Loan Mortgage Corporation ("FHLMC") Other obligations are
supported by the credit of the instrumentality, such as bonds issued by Federal
National Mortgage Association ("FNMA").
U.S. TREASURY OBLIGATIONS. These include Treasury Bills (which have
maturities of one year or less when issued), Treasury Notes (which have
maturities of one to ten years when issued) and Treasury
Bonds (which have maturities generally greater than ten years when issued).
U.S. Treasury obligations
are backed by the full faith and credit of the United States.
MORTGAGE-BACKED SECURITIES (ALL PORTFOLIOS EXCEPT, GROWTH PORTFOLIO AND
INTERNATIONAL EQUITY PORTFOLIO). These securities represent participation
interests in pools of residential mortgage loans which are guaranteed by
agencies or instrumentalities of the U.S. Government. Such securities differ
from conventional debt securities which generally provide for periodic payment
of interest in fixed or determinable amounts (usually semi-annually) with
principal payments at maturity or specified call dates. Some mortgage-backed
securities in which the Portfolios may invest may be backed by the full faith
and credit of the U.S. Treasury (E.G., GNMA direct pass-through certificates;
some are supported by the right of the issuer to borrower from the U.S.
Government (E.G., FHLMC obligations); and some are backed by only the credit of
the issuer itself. Those guarantees do not extend to the value of or yield of
the mortgage-backed securities themselves or to the net asset value of a
Portfolio's shares.
The yield on mortgage-backed securities is based on the average expected
life of the underlying pool of mortgage loans. The actual life of any particular
pool will be shortened by any unscheduled or early payments of principal and
interest. Principal prepayments generally result from the sale of the underlying
property or the refinancing or foreclosure of underlying mortgages. The
occurrence of prepayments is affected by a wide range of economic, demographic
and social factors and, accordingly, it is not possible to predict accurately
the average life of a particular pool. Yield on such pools is usually computed
by using the historical record of prepayments for that pool, or, in the case of
newly issued mortgages, the prepayment history of similar pools. The actual
prepayment experience of a pool of mortgage loans may cause the yield realized
by a Portfolio to differ from the yield calculated on the basis of the expected
average life of the pool.
Prepayments tend to increase during periods of falling interest rates,
while during periods of rising interest rates prepayments will most likely
decline. When prevailing interest rates rise, the value of a pass-through
security may decrease as do the values of other debt securities, but, when
prevailing interest rates decline, the value of a pass-through security is not
likely to rise to the extent that the value of other debt securities rise,
because of the prepayment feature of pass-through securities. A Portfolio's
reinvestment of scheduled principal payments and unscheduled prepayments it
receives may occur at times when available investments offer higher or lower
rates than the original investment, thus affecting the yield of such Portfolio.
Monthly interest payments received by a Portfolio have a compounding effect
which may increase the yield to the Portfolio more than debt obligations that
pay interest semi-annually. A Portfolio may purchase mortgage-backed securities
at par, at a premium or at a discount. Accelerated prepayments adversely affect
yields for pass-through securities purchased at a premium (i.e., at a price in
excess of their principal amount) and may involve additional risk of loss of
principal because the premium may not have been fully amortized at the time the
obligation is repaid. The opposite is true for pass-through securities purchased
at a discount.
As new types of mortgage-related securities are developed and offered to
investors, the Manager will, subject to the direction of the Board of Directors
and consistent with a Portfolio's investment objective and policies, consider
making investments in such new types of
mortgage-related securities.
GNMA CERTIFICATES. GNMA certificates are mortgaged-backed securities of
GNMA that evidence an undivided interest in a pool or pools of mortgages ("GNMA
Certificates"). The GNMA Certificates that a Portfolio may purchase may be of
the "modified pass-through" type, which entitle the holder to receive timely
payment of all interest and principal payments due on the mortgage pool, net of
fees paid to the "issuer" and GNMA, regardless of whether the mortgagor actually
makes the payments.
The National Housing Act authorizes GNMA to guarantee the timely payment
of principal and interest on securities backed by a pool of mortgages insured by
the Federal Housing Administration ("FHA") or guaranteed by the Veterans
Administration ("VA"). The GNMA guarantee is backed by the full faith and credit
of the U.S. Government. GNMA is also empowered to borrow without limitation from
the U.S. Treasury if necessary to make any payments required under its
guarantee.
The average life of a GNMA Certificate is likely to be substantially
shorter than the original maturity of the mortgages underlying the securities.
Prepayments of principal by mortgagors and mortgage foreclosures will usually
result in the return of the principal investment long before the maturity of the
mortgages in the pool. Foreclosures impose no risk to principal investment
because of the GNMA guarantee, except to the extent that a Portfolio has
purchased the certificates at a premium in the secondary market.
FNMA SECURITIES. The Federal National Mortgage Association ("FNMA") was
established to create a secondary market in mortgages insured by the FHA.
FNMA issues guaranteed mortgage pass-
through certificates ("FNMA Certificates"). FNMA Certificates resemble GNMA
Certificates in that each FNMA Certificate represents a pro rata share of all
interest and principal payments made and owed on the underlying pool. FNMA
guarantees timely payment of interest and principal on FNMA Certificates. The
FNMA guarantee is not backed by the full faith and credit of the U.S.
Government.
FHLMC SECURITIES. The Federal Home Loan Mortgage Corporation ("FHLMC") was
created to promote development of a nationwide secondary market for conventional
residential mortgages. FHLMC issues two types of mortgage pass-through
certificates ("FHLMC Certificates"): mortgage participation certificates ("PCs")
and guaranteed mortgage certificates ("GMCs"). PCs resemble GNMA Certificates in
that each PC represents a pro rata share of all interest and principal payments
made and owed on the underlying pool. FHLMC guarantees timely monthly payment of
interest on PCs and the ultimate payment of principal. The FHLMC guarantee is
not backed by the full faith and credit of the U.S. Government. GMCs also
represent a pro rata interest in a pool of mortgages. However, these instruments
pay interest semi-annually and return principal once a year in guaranteed
minimum payments. The expected average life of these securities is approximately
ten years. The FHLMC guarantee is not backed by the full faith and credit of the
U.S. Government.
PRIVATE-ISSUER MORTGAGE-BACKED SECURITIES. Mortgage-backed securities may
also be issued by trusts or other entities formed or sponsored by private
originators of and institutional investors in mortgage loans and other foreign
or domestic non-governmental entities (or represent custodial arrangements
administered by such institutions). These private originators and institutions
include domestic and foreign savings and loan associations, mortgage bankers,
commercial banks, insurance companies, investment banks and special purpose
subsidiaries of the foregoing. Privately issued mortgage-backed securities are
generally backed by pools of conventional (i.e., non-government guaranteed or
insured) mortgage loans. Since such mortgage-backed securities are not
guaranteed by an entity having the credit standing of GNMA, FNMA or FHLMC, in
order to receive a high quality rating, they normally are structured with one or
more types of "credit enhancement." Such credit enhancements fall generally into
two categories; (1) liquidity protection and (2) protection against losses
resulting after default by a borrower and liquidation of the collateral.
Liquidity protection refers to the providing of cash advances to holders of
mortgage-backed securities when a borrower on an underlying mortgage fails to
make its monthly payment on time. Protection against losses resulting after
default and liquidation is designed to cover losses resulting when, for example,
the proceeds of a foreclosure sale are insufficient to cover the outstanding
amount on the mortgage. Such protection may be provided through guarantees,
insurance policies or letters of credit, through various means of structuring
the transaction or through a combination of such approaches.
COLLATERALIZED MORTGAGE-BACKED OBLIGATIONS ("CMOS"). Total Return
Portfolio, and Government Securities Portfolio and each of the LifeSpan
Portfolios may invest in collateralized mortgage obligations ("CMOs"). CMOs are
fully-collateralized bonds that are the general obligations of the issuer
thereof, either the U.S. Government, a U.S. Government instrumentality, or a
private issuer, which may be a domestic or foreign corporation. Such bonds
generally are secured by an assignment to a trustee (under the indenture
pursuant to which the bonds are issued) of collateral consisting of a pool of
mortgages. Payments with respect to the underlying mortgages generally are made
to the trustee under the indenture. Payments of principal and interest on the
underlying mortgages are not passed through to the holders of the CMOs as such
(I.E., the character of payments of principal and interest is not passed
through, and therefore payments to holders of CMOs attributable to interest paid
and principal repaid on the underlying mortgages do not necessarily constitute
income and return of capital, respectively, to such holders), but such payments
are dedicated to payment of interest on and repayment of principal of the CMOs.
CMOs often are issued in two or more classes with different characteristics such
as varying maturities and stated rates of interest. Because interest and
principal payments on the underlying mortgages are not passed through to holders
of CMOs, CMOs of varying maturities may be secured by the same pool of
mortgages, the payments on which are used to pay interest on each class and to
retire successive maturities in sequence. Unlike other mortgage-backed
securities (discussed above), CMOs are designed to be retired as the underlying
mortgages are repaid. In the event of prepayment on such mortgages, the class of
CMO first to mature generally will be paid down. Therefore, although in most
cases the issuer of CMOs will not supply additional collateral in the event of
such prepayment, there will be sufficient collateral to secure CMOs that remain
outstanding.
"STRIPPED" MORTGAGE-BACKED SECURITIES. The Total Return Portfolio,
and Government Securities Portfolio and each LifeSpan Portfolio may invest in
"stripped" mortgage-backed securities, in which the
principal and interest portions of the security are separated and sold. Stripped
mortgage-backed securities usually have at least two classes, each of which
receives different proportions of interest and principal distributions on the
underlying pool of mortgage assets. One common variety of stripped
mortgage-backed security has one class that receives some of the interest and
most of the principal, while the other class receives most of the interest and
remainder of the principal. In some cases, one class will receive all of the
interest (the "interest-only" or "IO" class), while the other class will receive
all of the principal (the "principal-only" or "PO" class).
Interest only securities are extremely sensitive to interest rate changes,
and prepayments of principal on the underlying mortgage assets. An increase in
principal payments or prepayments will reduce the income available from the IO
security. The Manager or the relevant Subadviser will consider if certain
privately-issued fixed rate IOs and POs should be considered illiquid securities
for purposes of a Portfolio's limitation on investments in illiquid securities.
Unless the Manager or the relevant Subadviser, acting pursuant to guidelines and
standards established by the Board of Directors, determines that a particular
government-issued fixed rate IO or PO is liquid, they will also consider these
IOs and POs to be illiquid. In other types of CMOs, the underlying principal
payments may apply to various classes in a particular order, and therefore the
value of certain classes or "tranches" of such securities may be more volatile
than the value of the pool as a whole, and losses may be more severe than on
other classes.
CUSTODIAL RECEIPTS. In addition to stripped mortgage-backed securities,
each of the Portfolios may acquire U.S. Government Securities and their
unmatured interest coupons that have been separated (stripped) by their holder,
typically a custodian bank or investment brokerage firm. Having separated the
interest coupons from the underlying principal of the U.S. Government
Securities, the holder will resell the stripped securities in custodial receipt
programs with a number of different names, including Treasury Income Growth
Receipts (TIGRs) and Certificate of Accrual on Treasury Securities (CATS). The
stripped coupons are sold separately from the underlying principal, which is
usually sold at a deep discount because the buyer receives only the right to
receive a future fixed payment on the security and does not receive any rights
to periodic interest (cash) payments. The underlying U.S. Treasury bonds and
notes themselves are generally held in book-entry form at a Federal Reserve
Bank.
Counsel to the underwriters of these certificates or other evidences of
ownership of U.S. Treasury securities have stated that, in their opinion,
purchasers of the stripped securities most likely will be deemed the beneficial
holders of the underlying U.S. Government Securities for federal tax and
securities purposes. In the case of CATS and TIGRs, the IRS has reached this
conclusion for the purpose of applying the tax diversification requirements
applicable to regulated investment companies such as the Portfolios. CATS and
TIGRs are not considered U.S. Government Securities by the staff of the SEC,
however. Further, the IRS' conclusion is contained only in a general counsel
memorandum, which is an internal document of no precedential value or binding
effect, and a private letter ruling, which also may not be relied upon by the
Portfolios. The Company is not aware of any binding legislative, judicial or
administrative authority on this issue.
ASSET-BACKED SECURITIES. (ALL PORTFOLIOS EXCEPT, GROWTH PORTFOLIO AND
INTERNATIONAL EQUITY PORTFOLIO). The value of an asset-backed security is
affected by changes in the market's perception of the asset backing the
security, the creditworthiness of the servicing agent for the loan pool, the
originator of the loans, or the financial institution providing any credit
enhancement, and is also affected if any credit enhancement has been exhausted.
The risks of investing in asset-backed securities are ultimately dependent upon
payment of consumer loans by the individual borrowers. As a purchaser of an
asset- backed security, a Portfolio would generally have no recourse to the
entity that originated the loans in the event of default by a borrower. The
underlying loans are subject to prepayments, which shorten the weighted average
life of asset-backed securities and may lower their return, in the same manner
as described above for the prepayments of a pool of mortgage loans underlying
mortgage-backed securities.
MORTGAGE DOLLAR ROLLS. The Total Return Portfolio, and Government
Securities Portfolio may enter into "forward roll" transactions with respect to
mortgage-backed securities issued by GNMA, FNMA or FHLMC. In a forward roll
transaction, which is considered to be a "borrowing" by a Portfolio, a Portfolio
will sell a mortgage security to a bank or other permitted entity and
simultaneously agree to repurchase a similar security from the institution at a
later date at an agreed upon price. The mortgage securities that are repurchased
will bear the same interest rate as those sold, but generally will be
collateralized by different pools of mortgages with different prepayment
histories than those sold. Risks of mortgage-backed security rolls include: (i)
the risk of prepayment prior to maturity, (ii) the possibility that the proceeds
of the sale may have to be invested in money market instruments (typically
repurchase agreements) maturing not later than the expiration of the roll, and
(iii) the possibility that the market value of the securities sold by a
Portfolio may decline below the price at which the Portfolio is obligated to
purchase the securities. Upon entering into a mortgage-backed security roll, a
Portfolio will be required to segregate liquid assets in an amount equal to its
obligation under the roll.
HIGH YIELD SECURITIES (ALL PORTFOLIOS EXCEPT GOVERNMENT SECURITIES
PORTFOLIO). A Portfolio may invest in high-yield/high risk securities (commonly
called junk bonds).
The Manager does not rely solely on credit ratings assigned by rating
agencies in assessing investment opportunities in debt securities. Ratings by
credit agencies assess safety of principal and interest payments and do not
reflect market risks. In addition, ratings by credit agencies may not be changed
by the agencies in a timely manner to reflect subsequent economic events. By
carefully selecting individual issues and diversifying portfolio holdings by
industry sector and issuer, the Manager believes that the risk of the Portfolio
holding defaulted lower grade securities can be reduced. Emphasis on credit risk
management involves the Manager's own internal analysis to determine the debt
service capability, financial flexibility and liquidity of an issuer, as well as
the fundamental trends and outlook for the issuer and its industry. The
Manager's rating helps it determine the attractiveness of specific issues
relative to the valuation by the market place of similarly rated credits.
SPECIAL RISKS OF LOWER RATED SECURITIES. High yield, lower-grade
securities, whether rated or unrated, often have speculative characteristics.
Lower-grade securities have special risks that make them
riskier investments than investment grade securities. They may be subject to
limited liquidity and secondary market support, as well as substantial market
price volatility resulting from changes in prevailing interest rates. They may
be subordinated to the prior claims of banks and other senior lenders. The
operation of mandatory sinking fund or call/redemption provisions during periods
of declining interest rates may cause the Portfolio to invest premature
redemption proceeds in lower yielding portfolio securities. There is a
possibility that earnings of the issuer may be insufficient to meet its debt
service, and the issuer may have low creditworthiness and potential for
insolvency during periods of rising interest rates and economic downturn. As a
result of the limited liquidity of some high yield securities, their prices have
at times experienced significant and rapid decline when a substantial number of
holders decided to sell. A decline is also likely in the high yield bond market
during an economic downturn. An economic downturn or an increase in interest
rates could severely disrupt the market for high yield bonds and adversely
affect the value of outstanding bonds and the ability of the issuers to repay
principal and interest. In addition, there have been several Congressional
attempts to limit the use of tax and other advantages of high yield bonds which,
if enacted, could adversely affect the value of these securities and the net
asset value of a Portfolio. For example, federally-insured savings and loan
associations have been required to divest their investments in high yield bonds.
ZERO COUPON SECURITIES AND DEFERRED INTEREST BONDS. The Portfolios may
invest in zero coupon securities and deferred interest bonds issued by the U.S.
Treasury or by private issuers such as domestic or foreign corporations. Zero
coupon U.S. Treasury securities include: (1) U.S. Treasury bills without
interest coupons, (2) U.S. Treasury notes and bonds that have been stripped of
their unmatured interest coupons and (3) receipts or certificates representing
interests in such stripped debt obligations or coupons. Zero coupon securities
and deferred interest bonds usually trade at a deep discount from their face or
par value and will be subject to greater fluctuations in market value in
response to changing interest rates than debt obligations of comparable
maturities that make current payments of interest. An additional risk of
private-issuer zero coupon securities and deferred interest bonds is the credit
risk that the issuer will be unable to make payment at maturity of the
obligation.
While zero coupon bonds do not require the periodic payment of interest,
deferred interest bonds generally provide for a period of delay before the
regular payment of interest begins. Although this period of delay is different
for each deferred interest bond, a typical period is approximately one-third of
the bond's term to maturity. Such investments benefit the issuer by mitigating
its initial need for cash to meet debt service, but some also provide a higher
rate of return to attract investors who are willing to defer receipt of such
cash. With zero coupon securities, however, the interest rate is "locked in" and
the investor avoids the risk of having to reinvest periodic interest payments in
securities having lower rates.
Because a Portfolio accrues taxable income from zero coupon and deferred
interest securities without receiving cash and is required to distribute its net
investment income for each taxable year, including such accrued income, in order
to avoid liability for federal income tax, a Portfolio may be required to sell
portfolio securities in order to obtain cash necessary to pay dividends or
redemption proceeds for its shares, which require the payment of cash. This will
depend on several factors: the proportion of shareholders who elect to receive
dividends in cash rather than reinvesting dividends in additional shares of a
Portfolio, and the amount of cash a Portfolio receives from other investments
and the sale of shares.
SHORT TERM DEBT SECURITIES
COMMERCIAL PAPER (ALL PORTFOLIOS). Each Portfolio may purchase
commercial paper for temporary defensive purposes as described in the
Prospectus. In addition, a Portfolio may invest in
floating rate notes as follows:
FLOATING RATE/VARIABLE RATE NOTES. Each Portfolio may purchase floating
rate/variable rate notes. Some of the notes a Portfolio may purchase may have
variable or floating interest rates. Variable rates are adjustable at stated
periodic intervals; floating rates are automatically adjusted according to a
specified market rate for such investments, such as the percentage of the prime
rate of a bank, or the 91- day U.S. Treasury Bill rate. Such obligations may be
secured by bank letters of credit or other support arrangements. Any bank
providing such a bank letter, line of credit, guarantee or loan commitment will
meet a Portfolio's investment quality standards relating to investments in bank
obligations.
A Portfolio will invest in variable and floating rate instruments only
when the Manager or relevant Subadviser deems the investment to meet the
investment guidelines applicable to a Portfolio. The Manager or relevant
Subadviser will also continuously monitor the creditworthiness of issuers of
such instruments to determine whether a Portfolio should continue to hold the
investments.
The absence of an active secondary market for certain variable and
floating rate notes could make it difficult to dispose of the instruments, and a
Portfolio could suffer a loss if the issuer defaults or during periods in which
the Portfolio is not entitled to exercise its demand rights.
Variable and floating rate instruments held by a Portfolio may be subject
to the Portfolio's limitation on investments in illiquid securities if the
Manager or Subadviser determines them to be illiquid under the Board's
procedures regarding illiquid securities as explained in the Prospectus.
BANK OBLIGATIONS AND INSTRUMENTS SECURED THEREBY (ALL PORTFOLIOS). The
bank obligations a Portfolio may invest in include time deposits, certificates
of deposit, and bankers' acceptances if they are: (i) obligations of a domestic
bank with total assets of at least $1 billion or (ii) obligations of a foreign
bank with total assets of at least U.S. $1 billion. A Portfolio may also invest
in instruments secured by such obligations (e.g., debt which is guaranteed by
the bank).
For purposes of this section,
the term "bank" includes commercial banks, savings banks, and savings and loan
associations which may or may not be members of the Federal Deposit Insurance
Corporation.
Time deposits are non-negotiable deposits in a bank for a specified period
of time at a stated interest rate, whether or not subject to withdrawal
penalties. However, time deposits that are subject to withdrawal penalties,
other than those maturing in seven days or less, are subject to the limitation
on investments by a Portfolio in illiquid investments, set forth in the
Prospectus under "Illiquid and Restricted Securities."
Banker's acceptances are marketable short-term credit instruments used to
finance the import, export, transfer or storage of goods. They are deemed
"accepted" when a bank guarantees their payment at maturity.
WARRANTS AND RIGHTS (ALL PORTFOLIOS EXCEPT GOVERNMENT SECURITIES PORTFOLIO).
Warrants are options to purchase equity securities at set prices valid for a
specified period of time. The prices of warrants do not necessarily move in a
manner parallel to the prices of the underlying securities. The price a
Portfolio pays for a warrant will be lost unless the warrant is exercised prior
to its expiration. Rights are similar to warrants, but normally have a short
duration and are distributed directly by the issuer to its shareholders. Rights
and warrants have no voting rights, receive no dividends and have no rights with
respect to the assets of the issuer.
PREFERRED STOCK (ALL PORTFOLIOS EXCEPT GOVERNMENT SECURITIES PORTFOLIO).
Preferred stocks are equity securities, but possess certain attributes of debt
securities and are generally considered fixed income securities. Holders of
preferred stocks normally have the right to receive dividends at a fixed rate
when and as declared by the issuer's board of directors, but do not participate
in other amounts available for distribution by the issuing corporation.
Dividends on the preferred stock may be cumulative, and all cumulative dividends
usually must be paid prior to dividend payments to common stockholders. Because
of this preference, preferred stocks generally entail less risk than common
stocks. Upon liquidation, preferred stocks are entitled to a specified
liquidation preference, which is generally the same as the par or stated value,
and are senior in right of payment to common stocks. However, preferred stocks
are equity securities in that they do not represent a liability of the issuer
and therefore do not offer as great a degree of protection of capital or
assurance of continued income as investments in corporate debt securities. In
addition, preferred stocks are subordinated in right of payment to all debt
obligations and creditors of the issuer, and convertible preferred stocks may be
subordinated to other preferred stock of the same issuer. Convertible preferred
securities may be treated as equity substitutes as described in the Prospectus.
LOANS OF PORTFOLIO SECURITIES. Each Portfolio may lend its portfolio securities
(other than in repurchase transactions) to brokers, dealers and other financial
institutions subject to the restrictions stated in the Prospectus. Under
applicable regulatory requirements (which are subject to change), the loan
collateral must, on each business day, at least equal the market value of the
loaned securities and must consist of cash, bank letters of credit, U.S.
Government Securities, or other cash equivalents in which the Portfolio is
permitted to invest. To be acceptable as collateral, letters of credit must
obligate a bank to pay amounts demanded by the Portfolio if the demand meets the
terms of the letter. Such terms and the issuing bank must be satisfactory to the
Portfolio. In a portfolio securities lending transaction, the Portfolio receives
from the borrower an amount equal to the interest paid or the dividends declared
on the loaned securities during the term of the loan as well as the interest on
the collateral securities, less any finders', administrative or other fees the
Portfolio pays in connection with the loan. The Portfolio may share the interest
it receives on the collateral securities with the borrower as long as it
realizes at least a minimum amount of interest required by the lending
guidelines established by the Board of Directors. A Portfolio will not lend its
portfolio securities to any officer, director, employee or affiliate of the
Company, the Manager or any Subadviser. The terms of a Portfolio's loans must
meet certain tests under the Internal Revenue Code and permit the Portfolio to
reacquire loaned securities on five business days' notice or in time to vote on
any important matter.
"WHEN-ISSUED" AND DELAYED DELIVERY TRANSACTIONS. (ALL PORTFOLIOS). Securities
may be purchased by a Portfolio on a "when-issued" or on a "forward commitment"
basis. These transactions, which involve a commitment by a Portfolio to purchase
or sell particular securities with payment and delivery taking place at a future
date (not more than 120 days), permit the Portfolio to lock in a price or yield
on a security, regardless of future changes in interest rates. A Portfolio will
purchase securities on a "when- issued" or forward commitment basis only with
the intention of completing the transaction and actually purchasing the
securities. If deemed appropriate by the Manager or, in the case of the LifeSpan
Portfolios and the International Equity Portfolio, the relevant Subadviser,
however, a Portfolio may dispose of or renegotiate a commitment after it is
entered into, and may sell securities it has committed to purchase before those
securities are delivered to the Portfolio on the settlement date. In these
cases, the Portfolio may realize a gain or loss.
When a Portfolio agrees to purchase securities on a "when-issued" or
forward commitment basis, the Portfolio's custodian will set aside liquid
securities equal to the amount of the commitment in a separate account. The
market value of a Portfolio's net assets may fluctuate to a greater degree when
it sets aside portfolio securities to cover such purchase commitments then when
it sets aside cash. Because a Portfolio's liquidity and ability to manage its
portfolio might be affected when it sets aside cash or portfolio securities to
cover such purchase commitments, each Portfolio expects that its commitments to
purchase when-issued securities and forward commitments will not exceed 33% of
the value of its total assets absent unusual market conditions. When a Portfolio
engages in "when-issued" and forward commitment transactions, it relies on the
other party to the transaction to consummate the trade. Failure of such party to
do so may result in the Portfolio incurring a loss or missing an opportunity to
obtain a price considered to be advantageous.
The market value of the securities underlying a "when-issued" purchase or
a forward commitment to purchase securities, and any subsequent fluctuations in
their market value, are taken into account when determining the market value of
a Portfolio starting on the day the Portfolio agrees to purchase the securities.
The Portfolio does not earn interest or dividends on the securities it has
committed to purchase until the settlement date.
REPURCHASE AGREEMENTS. Each Portfolio may acquire securities that are subject to
repurchase agreements, in order to generate income while providing liquidity. In
a repurchase transaction, the Portfolio acquires a security from, and
simultaneously resells it to, an approved vendor for delivery on an agreed-upon
future date. An "approved vendor" is a U.S. commercial bank, the U.S. branch of
a foreign bank or a broker-dealer which has been designated a primary dealer in
government securities, which must meet the credit requirements set by the
Portfolio's Board of Directors from time to time. The sale price exceeds the
purchase price by an amount that reflects an agreed-upon interest rate effective
for the period during which the repurchase agreement is in effect. The majority
of these transactions run from day to day, and delivery pursuant to resale
typically will occur within one to five days of the purchase. Repurchase
agreements are considered "loans" under the Investment Company Act
collateralized by the underlying security. The Portfolio's repurchase agreements
will require that at all times while the repurchase agreement is in effect, the
collateral's value must equal or exceed the repurchase price to fully
collateralize the repayment obligation. Additionally, the Manager or relevant
Subadviser will impose creditworthiness requirements to confirm that the vendor
is financially sound and will continuously monitor the collateral's value. If
the vendor of a repurchase agreement fails to pay the agreed-upon resale price
on the delivery date, the Portfolio's risks in such event may include any costs
of disposing of the collateral, and any loss from any delay in foreclosing on
the collateral.
REVERSE REPURCHASE AGREEMENTS. The LifeSpan Portfolios are permitted to
engage in reverse repurchase transactions but have no current intention to do
so. A LifeSpan Portfolio that does so will
maintain, in a segregated account with its Custodian, cash, Treasury bills or
other U.S. Government Securities having an aggregate value equal to the amount
of such commitment to repurchase, including accrued interest, until payment is
made. The Portfolio will use reverse repurchase agreements as a source of funds
on a short-term basis (and not for leverage). In determining whether to enter
into a reverse repurchase agreement with a bank or broker-dealer, the Portfolio
will take into account the creditworthiness of such party.
RESTRICTED AND ILLIQUID SECURITIES. To enable each Portfolio to sell restricted
securities not registered under the Securities Act of 1933, the Portfolio may
have to cause those securities to be registered. The expenses of registration of
restricted securities may be negotiated by the Portfolio with the issuer at the
time such securities are purchased by the Portfolio, if such registration is
required before such securities may be sold publicly. When registration must be
arranged because the Portfolio wishes to sell the security, a considerable
period may elapse between the time the decision is made to sell the securities
and the time the Portfolio would be permitted to sell them. The Portfolio would
bear the risks of any downward price fluctuation during that period. A Portfolio
may also acquire, through private placements, securities having contractual
restrictions on their resale, which might limit the Portfolio's ability to
dispose of such securities and might lower the amount realized upon the sale of
such securities.
HEDGING. (ALL PORTFOLIOS). Consistent with the limitations set forth in the
Prospectus and below, a Portfolio may employ one or more of the types of
hedging instruments described below. In the future,
a Portfolio may employ hedging instruments and strategies that are not presently
contemplated but which may be developed, to the extent such investment methods
are consistent with the Portfolio's investment objective, legally permissible
and adequately disclosed.
FUTURES CONTRACTS AND RELATED OPTIONS. 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 write covered call options on such
contracts. The International Equity Portfolio and the Government Securities
Portfolio may also purchase and sell call and put options on such futures
contracts. A Portfolio may also enter into closing purchase and sale
transactions with respect to any of these contracts and options. The Total
Return Portfolio, the International Equity Portfolio, the Growth Portfolio and
the Government Securities Portfolio may purchase and sell stock index futures
contracts. In addition, each Portfolio (except Government Securities Portfolio)
that may invest in securities that are denominated in a foreign currency may
purchase and each Portfolio may sell futures on currencies. The International
Equity Portfolio may purchase and sell options on futures on currencies. A
Portfolio will engage in futures and related options transactions only for bona
fide hedging purposes as defined in regulations promulgated by the CFTC. All
futures contracts entered into by the Portfolios are traded on U.S. exchanges or
boards of trade that are licensed and regulated by the CFTC or on foreign
exchanges approved by the CFTC.
HEDGING STRATEGIES. Hedging, by use of futures contracts, seeks to
establish with more certainty the effective price and rate of return on
portfolio securities and securities that a Portfolio proposes to acquire. The
Portfolios may, for example, take a "short" position in the futures market by
selling futures contracts in order to hedge against an anticipated rise in
interest rates or a decline in market prices that would adversely affect the
value of a Portfolio's portfolio securities. Such futures contracts may include
contracts for the future delivery of securities held by the Portfolio or
securities with characteristics similar to those of the Portfolio's portfolio
securities.
If, in the opinion of the Portfolio's Manager or, in the case of the
LifeSpan Portfolios and the International Equity Portfolio, the relevant
Subadviser, there is a sufficient degree of correlation between price trends for
a Portfolio's portfolio securities and futures contracts based on other
financial instruments, securities indices or other indices, the Portfolio may
also enter into such futures contracts as part of its hedging strategy. Although
under some circumstances prices of securities in a Portfolio's portfolio may be
more or less volatile than prices of such futures contracts, the Manager or, in
the case of the LifeSpan Portfolios and the International Equity Portfolio, the
relevant Subadviser will attempt to estimate the extent of this volatility
difference based on historical patterns and compensate for any such differential
by having the Portfolio enter into a greater or lesser number of futures
contracts or by attempting to achieve only a partial hedge against price changes
affecting a Portfolio's securities portfolio. When hedging of this character is
successful, any depreciation in the value of portfolio securities will be
substantially offset by appreciation in the value of the futures position. On
the other hand, any unanticipated appreciation in the value of a Portfolio's
portfolio securities would be substantially offset by a decline in the value of
the futures position.
On other occasions, the Portfolios may take a "long" position by
purchasing futures contracts. This would be done, for example, when a Portfolio
anticipates the subsequent purchase of particular securities when it has the
necessary cash, but expects the prices then available in the applicable market
to be less favorable than prices that are currently available.
Total Return Portfolio, International Equity Portfolio and Government
Securities Portfolio and each LifeSpan Portfolio may buy and sell futures
contracts on interest rates ("Interest Rate Futures"). No price is paid or
received upon the purchase or sale of an Interest Rate Future. An Interest Rate
Future obligates the seller to deliver and the purchaser to take a specific type
of debt security at a specific future date for a fixed price. That obligation
may be satisfied by actual delivery of the debt security or by entering into an
offsetting contract.
Total Return Portfolio, International Equity Portfolio and Government
Securities Portfolio may buy and sell futures contracts related to financial
indices (a "Financial Future"). A financial index assigns relative values to the
securities included in the index and fluctuates with the changes in the market
value of those securities. Financial indices cannot be purchased or sold
directly. The contracts obligate the seller to deliver, and the purchaser to
take, cash to settle the futures transaction or to enter into an offsetting
contract. No physical delivery of the securities underlying the index is made on
settling the futures obligation. No price is paid or received by a Portfolio on
the purchase or sale of a Financial Future.
Upon entering into a futures transaction, a Portfolio will be required to
deposit an initial margin payment in cash or U.S. Treasury bills with the
futures commission merchant (the "futures broker"). The initial margin will be
deposited with a Portfolio's Custodian in an account registered in the futures
broker's name; however the futures broker can gain access to that account only
under specified conditions. As the Future is marked to market to reflect changes
in its market value, subsequent margin payments, called variation margin, will
be made to or by the futures broker on a daily basis. Prior to expiration of the
Future, if a Portfolio elects to close out its position by taking an opposite
position, a final determination of variation margin is made and additional cash
is required to be paid by or released to the Portfolio. Although Financial
Futures and Interest Rate Futures by their terms call for settlement by delivery
of cash or securities, respectively, in most cases the obligation is fulfilled
by entering into an offsetting position. All futures transactions are effected
through a clearinghouse associated with the exchange on which the contracts are
traded.
OPTIONS ON FUTURES CONTRACTS. The Portfolios may use options on
futures contracts solely for bona fide hedging purposes as described below.
The writing of a call option on a futures contract
generates a premium which may partially offset a decline in the value of a
Portfolio's assets. By writing a call option, a Portfolio becomes obligated, in
exchange for the premium, to sell a futures contract (if the option is
exercised), which may have a value higher than the exercise price. Conversely,
the writing of a put option on a futures contract generates a premium which may
partially offset an increase in the price of securities that a Portfolio intends
to purchase. However, a Portfolio becomes obligated to purchase a futures
contract (if the option is exercised) which may have a value lower than the
exercise price. Thus, the loss incurred by a Portfolio in writing options on
futures is potentially unlimited and may exceed the amount of the premium
received. The Portfolios will incur transaction costs in connection with the
writing of options on futures.
The holder or writer of an option on a futures contract may terminate its
position by selling or purchasing an offsetting option on the same series. There
is no guarantee that such closing transactions can be effected. The Portfolios'
ability to establish and close out positions on such options will be subject to
the development and maintenance of a liquid market.
OPTIONS ON SECURITIES, SECURITIES INDICES AND FOREIGN CURRENCIES. Each
Portfolio may write covered call options. In addition, the International
Equity Portfolio and the Government Securities
Portfolio may purchase covered call options. Such options may relate to
particular U.S. or non-U.S.
securities, to various U.S. or non-U.S. stock indices or to U.S. or non-U.S.
currencies. To the extent
that a Portfolio engages in options transactions, the Portfolio may purchase
and write call options which
are issued by the Options Clearing Corporation (the "OCC") or which are
traded on U.S. and non-U.S.
exchanges. The International Equity Portfolio may purchase options on
currency in the over-the-counter
markets ("OTC Markets").
WRITING COVERED CALLS. When a Portfolio writes a call on an investment, it
receives a premium and agrees to sell the callable investment to a purchaser of
a corresponding call on the same investment if the option is exercised during
the call period (usually not more than nine months) at a fixed exercise price
(which may differ from the market price of the underlying investment),
regardless of market price changes during the call period. A Portfolio retains
the risk of loss should the price of the underlying investment decline during
the call period, which may be offset to some extent by the premium.
To terminate its obligation on a call it has written, a Portfolio may
purchase a corresponding call in a "closing purchase transaction." A profit or
loss will be realized, depending upon whether the net of the amount of the
option transaction costs and the premium received on the call written was more
or less than the price of the call subsequently purchased. A profit may also be
realized if the call expires unexercised, because a Portfolio retains the
underlying investment and the premium received. If a Portfolio could not effect
a closing purchase transaction due to lack of a market, it would have to hold
the callable investments until the call lapsed or was exercised.
PURCHASING COVERED CALLS. When a Portfolio purchases a call (other than in
a closing purchase transaction), it pays a premium and, except as to calls on
indices or futures, has the right to buy the underlying investment from a seller
of a corresponding call on the same investment during the call period at a fixed
exercise price. When a Portfolio purchases a call on a securities index or
future, it pays a premium, but settlement is in cash rather than by delivery of
the underlying investment to the Portfolio. In purchasing a call, a Portfolio
benefits only if the call is sold at a profit or if, during the call period, the
market price of the underlying investment is above the sum of the exercise
price, transaction costs and the premium paid, and the call is exercised. If the
call is neither exercised nor sold (whether or not at a profit), it will become
worthless at its expiration date and the Portfolio will lose its premium payment
and the right to purchase the underlying investment.
Calls on broadly-based indices or futures are similar to calls on
securities or futures contracts except that all settlements are in cash and gain
or loss depends on changes in the index in question (and thus on price movements
in the underlying market generally) rather than on price movements in individual
securities or futures contracts. When a Portfolio buys a call on an index or
future, it pays a premium. During the call period, upon exercise of a call by a
Portfolio, a seller of a corresponding call on the same investment will pay the
Portfolio an amount of cash to settle the call if the closing level of the index
or future upon which the call is based is greater than the exercise price of the
call. That cash payment is equal to the difference between the closing price of
the index and the exercise price of the call times a specified multiple (the
"multiplier"), which determines the total dollar value for each point of
difference.
An option position may be closed out only on a market which provides
secondary trading for options of the same series and there is no assurance that
a liquid secondary market will exist for any particular option. A Portfolio's
option activities may affect its turnover rate and brokerage commissions. A
Portfolio may pay a brokerage commission each time it buys a call, sells a call,
or buys or sells an underlying investment in connection with the exercise of a
call. Such commissions may be higher than those which would apply to direct
purchases or sales of such underlying investments. Premiums paid for options are
small in relation to the market value of the related investments, and
consequently, call options offer large amounts of leverage. The leverage offered
by trading in options could result in a Portfolio's net asset value being more
sensitive to changes in the value of the underlying investments.
FORWARD CONTRACTS. Each Portfolio (except the Government Securities
Portfolio) may enter into foreign currency exchange contracts ("Forward
Contracts") for hedging and non-hedging purposes. A forward currency exchange
contract generally has no deposit requirement, and no commissions are generally
charged at any stage for trades. A Forward Contract involves bilateral
obligations of one party to purchase, and another party to sell, a specific
currency at a future date (which may be any fixed number of days from the date
of the contract agreed upon by the parties), at a price set at the time the
contract is entered into. A Portfolio generally will not enter into a forward
currency exchange contract with a term of greater than one year. These contracts
are traded in the interbank market conducted directly between currency traders
(usually large commercial banks) and their customers.
A Portfolio may use Forward Contracts to protect against uncertainty in
the level of future exchange rates. The use of Forward Contracts does not
eliminate fluctuations in the prices of the underlying securities a Portfolio
owns or intends to acquire, but it does fix a rate of exchange in advance. In
addition, although Forward Contracts limit the risk of loss due to a decline in
the value of the hedged currencies, at the same time they limit any potential
gain that might result should the value of the currencies increase.
A Portfolio may enter into Forward Contracts with respect to specific
transactions. For example, when a Portfolio enters into a contract for the
purchase or sale of a security denominated in a foreign currency, or when it
anticipates receipt of dividend payments in a foreign currency, a Portfolio may
desire to "lock-in" the U.S. dollar price of the security or the U.S. dollar
equivalent of such payment by entering into a Forward Contract, for a fixed
amount of U.S. dollars per unit of foreign currency, for the purchase or sale of
the amount of foreign currency involved in the underlying transaction
("transaction hedge"). A Portfolio will thereby be able to protect itself
against a possible loss resulting from an adverse change in the relationship
between the currency exchange rates during the period between the date on which
the security is purchased or sold, or on which the payment is declared, and the
date on which such payments are made or received.
A Portfolio may also use Forward Contracts to lock in the U.S. dollar
value of portfolio positions ("position hedge"). In a position hedge, for
example, when a Portfolio believes that foreign currency may suffer a
substantial decline against the U.S. dollar, it may enter into a forward sale
contract to sell an amount of that foreign currency approximating the value of
some or all of a Portfolio's portfolio securities denominated in such foreign
currency, or when it believes that the U.S. dollar may suffer a substantial
decline against a foreign currency, it may enter into a forward purchase
contract to buy that foreign currency for a fixed dollar amount. In this
situation a Portfolio may, in the alternative, enter into a Forward Contract to
sell a different foreign currency for a fixed U.S. dollar amount where the
Portfolio believes that the U.S. dollar value of the currency to be sold
pursuant to the Forward Contract will fall whenever there is a decline in the
U.S. dollar value of the currency in which portfolio securities of the Portfolio
are denominated ("cross hedge").
A Portfolio will not enter into such Forward Contracts or maintain a net
exposure to such contracts where the consummation of the contracts would
obligate the Portfolio to deliver an amount of foreign currency in excess of the
value of the Portfolio's portfolio securities or other assets denominated in
that currency or another currency that is also the subject of the hedge.
However, in order to avoid excess transactions and transaction costs, a
Portfolio may maintain a net exposure to Forward Contracts in excess of the
value of the Portfolio's portfolio securities or other assets denominated in
those currencies provided the excess amount is "covered" by liquid, high-grade
debt securities, denominated in any currency, at least equal at all times to the
amount of such excess. As an alternative, a LifeSpan Portfolio may purchase a
call option permitting the Portfolio to purchase the amount of foreign currency
being hedged by a forward sale contract at a price no higher than the forward
contract price. A LifeSpan Portfolio may purchase a put option permitting the
Portfolio to sell the amount of foreign currency subject to a forward purchase
contract at a price as high as or higher than the forward contract price.
Unanticipated changes in currency prices may result in poorer overall
performance for a Portfolio than if it had not entered into such contracts.
The precise matching of the Forward Contract amounts and the value of the
securities involved will not generally be possible because the future value of
such securities in foreign currencies will change as a consequence of market
movements in the value of these securities between the date the Forward Contract
is entered into and the date it is sold. Accordingly, it may be necessary for a
Portfolio to purchase additional foreign currency on the spot (i.e., cash)
market (and bear the expense of such purchase), if the market value of the
security is less than the amount of foreign currency a Portfolio is obligated to
deliver and if a decision is made to sell the security and make delivery of the
foreign currency. Conversely, it may be necessary to sell on the spot market
some of the foreign currency received upon the sale of the portfolio security if
its market value exceeds the amount of foreign currency a Portfolio is obligated
to deliver. The projection of short-term currency market movements is extremely
difficult, and the successful execution of a short-term hedging strategy is
highly uncertain. Forward Contracts involve the risk that anticipated currency
movements will not be accurately predicted, causing a Portfolio to sustain
losses on these contracts and transactions costs.
At or before the maturity of a Forward Contract requiring a Portfolio to
sell a currency, a Portfolio may either sell a portfolio security and use the
sale proceeds to make delivery of the currency or retain the security and offset
its contractual obligation to deliver the currency by purchasing a second
contract pursuant to which the Portfolio will obtain, on the same maturity date,
the same amount of the currency that it is obligated to deliver. Similarly, a
Portfolio may close out a Forward Contract requiring it to purchase a specified
currency by entering into a second contract entitling it to sell the same amount
of the same currency on the maturity date of the first contract. The Portfolio
would realize a gain or loss as a result of entering into such an offsetting
Forward Contract under either circumstance to the extent the exchange rate or
rates between the currencies involved moved between the execution dates of the
first contract and offsetting contract.
The cost to a Portfolio of engaging in Forward Contracts varies with
factors such as the currencies involved, the length of the contract period and
the market conditions then prevailing. Because Forward Contracts are usually
entered into on a principal basis, no fees or commissions are involved. Because
such contracts are not traded on an exchange, a Portfolio must evaluate the
credit and performance risk of each particular counter party under a Forward
Contract.
Although a Portfolio values its assets daily in terms of U.S. dollars, it
does not intend to convert its holdings of foreign currencies into U.S. dollars
on a daily basis. A Portfolio may convert foreign currency from time to time,
and there are costs of currency conversion. Foreign exchange dealers do not
charge a fee for conversion, but they do seek to realize a profit based on the
difference between the prices at which they buy and sell various currencies.
Thus, a dealer may offer to sell a foreign currency to a Portfolio at one rate,
while offering a lesser rate of exchange should a Portfolio desire to resell
that currency to the dealer.
INTEREST RATE SWAP TRANSACTIONS. Government Securities Portfolio and the
LifeSpan Portfolios may enter into swap transactions. A Portfolio will enter
into swap transactions with appropriate counterparties pursuant to master
netting agreements. A master netting agreement provides that all swaps done
between a Portfolio and that counterparty under that master agreement shall be
regarded as parts of an integral agreement. If on any date amounts are payable
in the same currency in respect of one or more swap transactions, the net amount
payable on that date in that currency shall be paid. In addition, the master
netting agreement may provide that if one party defaults generally or on one
swap, the counterparty may terminate the swaps with that party. Under such
agreements, if there is a default resulting in a loss to one party, the measure
of that party's damages is calculated by reference to the average cost of a
replacement swap with respect to each swap (i.e., the mark-to-market value at
the time of the termination of each swap). The gains and losses on all swaps are
then netted, and the result is the counterparty's gain or loss on termination.
The termination of all swaps and the netting of gains and losses on termination
is generally referred to as "aggregation."
Swap agreements entail both interest rate risk and credit risk. There is a
risk that, based on movements of interest rates in the future, the payments made
by a Portfolio under a swap agreement will have been greater than those received
by them. Credit risk arises from the possibility that the counterparty will
default. If the counterparty to an interest rate swap defaults, a Portfolio's
loss will consist of the net amount of contractual interest payments that the
Portfolio has not yet received. The Manager or relevant Subadviser will monitor
the creditworthiness of counterparties to a Portfolio's interest rate swap
transactions on an ongoing basis.
The swap market has grown substantially in recent years with a large
number of banks and investment banking firms acting both as principals and as
agents utilizing standardized swap documentation. As a result, the swap market
has become relatively liquid in comparison with the markets for other similar
instruments which are traded in the interbank market. However, the staff of the
SEC currently takes the position that swaps, caps and floors are illiquid
investments that are subject to a limitation on such investments by investment
companies.
ADDITIONAL INFORMATION ABOUT HEDGING INSTRUMENTS AND THEIR USE. A
Portfolio's Custodian, or a securities depository acting for the Custodian, will
act as a Portfolio's escrow agent, through the facilities of the Options
Clearing Corporation ("OCC"), as to the investments on which a Portfolio has
written options traded on exchanges or as to other acceptable escrow securities,
so that no margin will be required for such transactions. OCC will release the
securities covering a call on the expiration of the option or upon a Portfolio
entering into a closing purchase transaction. An option position may be closed
out only on a market which provides secondary trading for options of the same
series, and there is no assurance that a liquid secondary market will exist for
any particular option.
If International Equity Portfolio writes an over-the-counter ("OTC")
option, it will enter into an arrangement with a primary U.S. Government
securities dealer, which would establish a formula price at which the Portfolio
would have the absolute right to repurchase that OTC option. That formula price
would generally be based on a multiple of the premium received for the option,
plus the amount by which the option is exercisable below the market price of the
underlying security (that is, the extent to which the option "is in-the-money").
When International Equity Portfolio writes an OTC option, it will treat as
illiquid (for purposes of the limit on its assets that may be invested in
illiquid securities, stated in the Prospectus) the mark-to-market value of any
OTC option it holds unless the option is subject to a buy- back agreement by the
executing broker. The SEC is evaluating whether OTC options should be considered
liquid securities, and the procedure described above could be affected by the
outcome of that evaluation.
REGULATORY ASPECTS OF HEDGING INSTRUMENTS. The Portfolios are required to
operate within certain guidelines and restrictions with respect to their use of
futures and options thereon as established by the Commodities Futures Trading
Commission ("CFTC"). In particular, the Portfolios are excluded from
registration as a "commodity pool operator" if they comply with the requirements
of Rule 4.5 adopted by the CFTC. The Rule does not limit the percentage of the
Portfolios' assets that may be used for Futures margin and related options
premiums for a bona fide hedging position. However, under the Rule a Portfolio
must limit its aggregate initial futures margin and related option premiums to
no more than 5% of the Portfolios' net assets for hedging strategies that are
not considered bona fide hedging strategies under the Rule.
Transactions in options by the Portfolios are subject to limitations
established by each of the exchanges governing the maximum number of options
which may be written or held by a single investor or group of investors acting
in concert, regardless of whether the options were written or purchased on the
same or different exchanges or are held in one or more accounts or through one
or more different exchanges through one or more brokers. Thus, the number of
options which the Portfolios may write or hold may be affected by options
written or held by other entities, including other investment companies having
the same or an affiliated investment adviser. Position limits also apply to
Futures. An exchange may order the liquidation of positions found to be in
violation of those limits and may impose certain other sanctions. Due to
requirements under the Investment Company Act, when the Portfolios purchase a
Future, the Portfolios will maintain, in a segregated account or accounts with
their Custodian, cash or readily-marketable, short-term (maturing in one year or
less) debt instruments in an amount equal to the market value of the securities
underlying such Future, less the margin deposit applicable to it.
RISKS OF HEDGING WITH OPTIONS AND FUTURES. In addition to the risks with
respect to hedging discussed in the Prospectus and above, there is a risk in
using short hedging by selling Futures to attempt to protect against a decline
in value of a Portfolio's portfolio securities (due to an increase in interest
rates) that the prices of such Futures will correlate imperfectly with the
behavior of the cash (i.e., market value) prices of a Portfolio's securities.
The ordinary spreads between prices in the cash and futures markets are subject
to distortions due to differences in the natures of those markets. First, all
participants in the futures markets are subject to margin deposit and
maintenance requirements. Rather than meeting additional margin deposit
requirements, investors may close out futures contracts through offsetting
transactions which could distort the normal relationship between the cash and
futures markets. Second, the liquidity of the futures markets depends on
participants entering into offsetting transactions rather than making or taking
delivery. To the extent participants decide to make or take delivery, liquidity
in the futures markets could be reduced, thus producing distortion. Third, from
the point of view of speculators, the deposit requirements in the futures
markets are less onerous than margin requirements in the securities markets.
Therefore, increased participation by speculators in the futures markets may
cause temporary price distortions.
PORTFOLIO TURNOVER. Each Portfolio's particular portfolio securities may be
changed without regard to the holding period of these securities (subject to
certain tax restrictions), when the Manager or respective Subadviser deems that
this action will help achieve the Portfolio's objective given a change in an
issuer's operations or changes in general market conditions. Short-term trading
means the purchase and subsequent sale of a security after it has been held for
a relatively brief period of time. The Portfolios do not generally intend to
invest for the purpose of seeking short-term profits. Variations in portfolio
turnover rate from year to year reflect the investment discipline applied to the
particular Portfolio and do not generally reflect trading for short-term
profits.
OTHER INVESTMENT RESTRICTIONS
INVESTMENT RESTRICTIONS THAT ARE FUNDAMENTAL POLICIES. Each Portfolio has
adopted the following investment restrictions that are "fundamental policies."
Each Portfolio's most significant investment restrictions are also set forth in
the Prospectus. Fundamental policies cannot be changed without the vote of a
"majority" of a Portfolio's outstanding voting securities. Under the Investment
Company Act, such a "majority" vote is defined as the vote of the holders of the
lesser of (i) 67% or more of the shares present or represented by proxy at a
shareholder meeting, if the holders of more than 50% of the outstanding shares
are present, or (ii) more than 50% of the outstanding shares.
With respect to each Panorama Portfolio, the Company does not issue senior
securities; in addition, except as noted, each Panorama Portfolio may not:
1. (a) Invest more than 5% of its 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 is not
applicable to the Government Securities Portfolio).
2. Invest more than 25% of its total assets (taken at market value at the time
of each investment) in the securities of issuers primarily engaged in the same
industry. Utilities will be divided according to their services; for example,
gas, gas transmissions, electric and telephone each will be considered a
separate industry for purposes of this restriction; provided that this
limitation shall not apply to the purchase of obligations issued or guaranteed
by the U.S. Government, its agencies or instrumentalities, certificates of
deposit issued by domestic banks and bankers' acceptances. (This restriction is
not applicable to the International Equity Portfolio or the Government
Securities Portfolio).
3. Alone, or together with any other Portfolio or Portfolios, make investments
for the purpose of exercising control over, or management of, any issuer.
4. Purchase securities of other investment companies, except in connection with
a merger, consolidation, acquisition or reorganization, or by purchase in the
open market of securities of closed-end investment companies where no
underwriter or dealer's commission or profit, other than customary broker's
commission, is involved, and only if immediately thereafter not more than 10% of
such Portfolio's total assets, taken at market value, would be invested in such
securities.
5. Purchase or sell interests in oil, gas or other mineral exploration or
development programs, commodities, commodity contracts or real estate, except
that the Total Return Portfolio, the International Equity Portfolio, the Growth
Portfolio, and the Government Securities Portfolio each may: (1) purchase
securities of issuers which invest or deal in any of the above and (2) invest
for hedging purposes in futures contracts on securities, financial instruments
and indices, and foreign currency, as are approved for trading on a registered
exchange. The International Equity Portfolio may also invest in options on
foreign futures contracts on securities, financial instruments and indices and
foreign currency.
6. Purchase any securities on margin (except that the Company may obtain such
short term credits as may be necessary for the clearance of purchases and sales
of portfolio securities) or make short sales of securities or maintain a short
position. The deposit or payment by a Portfolio of initial or maintenance margin
in connection with futures contracts or related options transactions is not
considered the purchase of a security on margin.
7. Make loans, except that the Portfolio (1) may lend portfolio securities in
accordance with the Portfolio's investment policies up to 33 1/3% of the
Portfolio's total assets taken at market value, (2) enter into repurchase
agreements, and (3) purchase all or a portion of an issue of publicly
distributed debt securities, bank loan participation interests, bank
certificates of deposit, bankers' acceptances, debentures or other securities,
whether or not the purchase is made upon the original issuance of the
securities.
8. Borrow amounts in excess of 10% of its 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 its outstanding borrowings exceed 5% of its total assets.
9. Mortgage, pledge, hypothecate or in any manner transfer, as security for
indebtedness, any securities owned or held by such Portfolio except as may be
necessary in connection with borrowings mentioned in (8) above, and then such
mortgaging, pledging or hypothecating may not exceed 10% of such Portfolio's
total assets, taken at market value at the time thereof. The deposit of cash
equivalents and liquid debt securities in a segregated account with the
custodian and/or with a broker in connection with futures contracts or related
options transactions and the purchase of securities on a "when-issued" basis are
not deemed to be pledges.
10. Underwrite securities of other issuers except insofar as the Portfolio may
be deemed an underwriter under the 1933 Act in selling portfolio securities.
11. Write, purchase or sell puts, calls or combinations thereof, except that the
Total Return Portfolio, and the Growth Portfolio may write covered call options
and engage in closing purchase transactions. (This restriction is not applicable
to the International Equity Portfolio and the Government Securities
Portfolio.)
12. Invest in securities of foreign issuers if at the time of acquisition more
than 10% of its total assets, taken at market value at the time of the
investment, would be invested in such securities. However, up to 25% of the
total assets of such Portfolio may be invested in securities (i) issued, assumed
or guaranteed by foreign governments, or political subdivisions or
instrumentalities thereof, (ii) assumed or guaranteed by domestic issuers,
including Eurodollar securities, or (iii) issued, assumed or guaranteed by
foreign issuers having a class of securities listed for trading on The New York
Stock Exchange. (This restriction is not applicable to the International Equity
Portfolio.)
Each LifeSpan Portfolio may not:
1. Issue senior securities, except as permitted by paragraphs 2, 3, 6 and 7
below. For purposes of this restriction, the issuance of shares of common stock
in multiple classes or series, the purchase or sale of options, futures
contracts and options on futures contracts, forward commitments and repurchase
agreements entered into in accordance with the Portfolio's investment policies,
are not deemed to be senior securities.
2. Purchase any securities on margin (except that the Company may obtain such
short-term credits as may be necessary for the clearance of purchases and sales
of portfolio securities) or make short sales of securities or maintain a short
position. The deposit or payment by a Portfolio of initial or maintenance margin
in connection with futures contracts or related options transactions is not
considered the purchase of a security on margin.
3. Borrow money, except for emergency or extraordinary purposes including (i)
from banks for temporary or short-term purposes or for the clearance of
transactions in amounts not to exceed 33 1/3% of the value of the Portfolio's
total assets (including the amount borrowed) taken at market value, (ii) in
connection with the redemption of Portfolio shares or to finance failed
settlements of portfolio trades without immediately liquidating portfolio
securities or other assets; and (iii) in order to fulfill commitments or plans
to purchase additional securities pending the anticipated sale of other
portfolio securities or assets, but only if after each such borrowing there is
asset coverage of at least 300% as defined in the Investment Company Act. For
purposes of this investment restriction, reverse repurchase agreements, mortgage
dollar rolls, short sales, futures contracts, options on futures contracts,
securities or indices and forward commitment transactions shall not constitute
borrowing.
4. Act as an underwriter, except to the extent that in connection with the
disposition of portfolio securities, the Portfolio may be deemed to be an
underwriter for purposes of the 1933 Act.
5. Purchase or sell real estate except that the Portfolio may (i) acquire or
lease office space for its own use, (ii) invest in securities of issuers that
invest in real estate or interests therein, (iii) invest in securities that are
secured by real estate or interests therein, (iv) purchase and sell
mortgage-related securities and (v) hold and sell real estate acquired by the
Portfolio as a result of the ownership of securities.
6. Invest in commodities, except the Portfolio may purchase and sell options on
securities, securities indices and currency, futures contracts on securities,
securities indices and currency and options on such futures, forward foreign
currency exchange contracts, forward commitments, securities index put or call
options and repurchase agreements entered into in accordance with the
Portfolio's investment policies.
7. Make loans, except that the Portfolio (1) may lend portfolio securities in
accordance with the Portfolio's investment policies up to 33 1/3% of the
Portfolio's total assets taken at market value, (2) enter into repurchase
agreements, and (3) purchase all or a portion of an issue of publicly
distributed bonds, debentures or other similar obligations.
8. Purchase the securities of issuers conducting their principal activity in the
same industry if, immediately after such purchase, the value of its investments
in such industry would exceed 25% of its total assets taken at market value at
the time of such investment. This limitation does not apply to investments in
obligations of the U.S. Government or any of its agencies, instrumentalities or
authorities.
9. With respect to 75% of total assets, purchase securities of an issuer (other
than the U.S. Government, its agencies, instrumentalities or authorities), if:
(a) such purchase would cause more than 5% of the Portfolio's total
assets taken at market value to be invested in the securities of
such issuer; or
(b) such purchase would at the time result in more than 10% of the
outstanding voting securities of such issuer being held by the
Portfolio.
INVESTMENT RESTRICTIONS THAT ARE NON-FUNDAMENTAL. The following
restrictions are non-
fundamental and may be changed by the Board of Directors without the approval
of shareholders.
Each LifeSpan Portfolio may not:
(1) Pledge, mortgage or hypothecate its assets, except to secure permitted
borrowings and then only if such pledging, mortgaging or hypothecating does not
exceed 33 1/3% of the Portfolio's total assets taken at market value. Collateral
arrangements with respect to margin, option and other risk management and
when-issued and forward commitment transactions are not deemed to be pledges or
other encumbrances for purposes of this restriction.
(2) Participate on a joint or joint-and-several basis in any securities trading
account. The "bunching" of orders for the sale or purchase of marketable
portfolio securities with other accounts under the management of the Manager or
the relevant Subadvisers to save commissions or to average prices among them is
not deemed to result in a joint securities trading account.
(3) Purchase or retain securities of an issuer if one or more of the Directors
or officers of the Company or directors or officers of the Manager or any
Subadviser or any investment management subsidiary of the Manager or any
Subadviser individually owns beneficially more than 0.5% and together own
beneficially more than 5% of the securities of such issuer.
(4) Purchase a security if, as a result, (i) more than 10% of the Portfolio's
assets would be invested in securities of other investment companies, (ii) such
purchase would result in more than 3% of the total
outstanding voting securities of any one such investment company being held by
the Portfolio or (iii) more than 5% of the Portfolio's assets would be invested
in any one such investment company. The Portfolio will not purchase the
securities of any open-end investment company except when such purchase is part
of a plan of merger, consolidation, reorganization or purchase of substantially
all of the assets of any other investment company, or purchase the securities of
any closed-end investment company except in the open market where no commission
or profit to a sponsor or dealer results from the purchase, other than customary
brokerage fees. The Portfolio has no current intention of investing in other
investment companies.
(5) Invest more than 15% of total assets in restricted securities, including
securities eligible for resale pursuant to Rule 144A under the Securities Act of
1933.
(6) Invest more than 5% of total assets in securities of any issuer which,
together with its predecessors, has been in operation for less than three years.
(7) Invest in securities which are illiquid if, as a result, more than 15% of
its net assets would consist of such securities, including repurchase agreements
maturing in more than seven days, securities that are not readily marketable,
certain restricted securities, purchased OTC options, certain assets used to
cover written OTC options, and privately issued stripped mortgage-backed
securities.
(8) Purchase securities while outstanding borrowings exceed 5% of the
Portfolio's total assets.
(9) Invest in real estate limited partnership interests.
(10) Purchase warrants of any issuer, if, as a result of such purchase, more
than 2% of the value of the Portfolio's total assets would be invested in
warrants which are not listed on an exchange or more than 5% of the value of the
total assets of the Portfolio would be invested in warrants generally, whether
or not so listed. For these purposes, warrants are to be valued at the lesser of
cost or market, but warrants acquired by the Portfolio in units with or attached
to debt securities shall be deemed to be without value.
(11) Purchase interests in oil, gas, or other mineral exploration programs or
mineral leases; however, this policy will not prohibit the acquisition of
securities of companies engaged in the production or transmission of oil, gas,
or other minerals.
(12) 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 the Portfolio at any time will not exceed 20% of
the Portfolio's total assets.
(13) Invest for the purpose of exercising control over or management of any
company.
For purposes of a Portfolios' policy not to concentrate their assets,
described above in Restriction (2) for the Panorama Portfolios and Restriction
(8) for the LifeSpan Portfolios, the Portfolios have adopted the industry
classifications set forth in the Appendix to this Statement of Additional
Information. This is not a fundamental policy.
The percentage restrictions described above and in the Prospectus are
applicable only at the time of investment and require no action by a Portfolio
as a result of subsequent changes in value of the investments or the size of a
Portfolio.
As a matter of non-fundamental policy, each Portfolio has undertaken to
limit its investments in illiquid securities to a stated percentage of net
assets.
HOW THE PORTFOLIOS ARE MANAGED
ORGANIZATION AND HISTORY. The Company was incorporated in Maryland on August
17, 1981. Prior to May 1, 1996, the Company was named Connecticut Mutual
Financial Services Series Fund I, Inc.
As series of a Maryland corporation, the Portfolios are not required to
hold, and do not plan to hold, regular annual meetings of shareholders. The
Portfolios will hold meetings when required to do so by the Investment Company
Act or other applicable law, or when a shareholder meeting is called by the
Directors or upon proper request of the shareholders.
DIRECTORS AND OFFICERS OF THE COMPANY. The Company's Directors and officers and
their principal occupations and business affiliations during the past five years
are listed below. All of the Directors are also trustees, directors or managing
general partners of Oppenheimer Total Return Fund, Inc., Oppenheimer Equity
Income Fund, Oppenheimer Cash Reserves, Centennial America Fund, L.P.,
Oppenheimer Variable Account Funds, Oppenheimer Champion Income Fund,
Oppenheimer High Yield Fund, Oppenheimer Main Street Funds, Inc., Oppenheimer
Strategic Income Fund,
Oppenheimer
International Bond Fund, Oppenheimer Integrity Funds, Oppenheimer Limited-Term
Government Fund, Oppenheimer Municipal Fund, The New York Tax-Exempt Income
Fund, Inc., Oppenheimer Real Asset Fund, Centennial Money Market Trust,
Centennial Government Trust, Centennial New York Tax Exempt Trust, Centennial
California Tax Exempt Trust and Centennial Tax-Exempt Trust (which together with
the Fund, comprise the "Denver Oppenheimer funds"). Ms. Macaskill is the
President and Mr. Swain is the Chairman and CEO, of all the Denver Oppenheimer
funds. As of April 1, 1998, none of the Directors or officers were account
owners and thus none owned any Portfolio shares.
-3-
<PAGE>
ROBERT G. AVIS, DIRECTOR*; AGE 65
One North Jefferson Ave., St. Louis, Missouri 63103
Vice Chairman of A.G. Edwards & Sons, Inc. (a broker-dealer) and A.G.
Edwards, Inc. (its parent
holding company); Chairman of A.G.E. Asset Management and A.G. Edwards Trust
Company (its
affiliated investment adviser and trust company, respectively).
WILLIAM A. BAKER, DIRECTOR; AGE 82
197 Desert Lakes Drive, Palm Springs, California 92264
Management Consultant.
CHARLES CONRAD, JR., DIRECTOR; AGE 66
1501 Quail Street, Newport Beach, CA 92660
Chairman and CEO of Universal Space Lines, Inc. (a space services management
company); formerly
Vice President of McDonnell Douglas Space Systems Co. and A.G. Edwards Trust
Company (its affiliated investment adviser and trust company, respectively).
JON S. FOSSEL, DIRECTOR; AGE 46
P.O. Box 44, Mead Street, Waccabuc, New York 10597
Formerly Chairman and a director of the Manager, President and a director of
Oppenheimer Acquisition
Corp. ("OAC"), the Manager's parent holding company, and Shareholder
Services, Inc. ("SSI"),
Shareholder Financial Services, Inc. ("SFSI"), transfer agent subsidiaries of
the Manager.
SAM FREEDMAN, DIRECTOR; AGE 56
4975 Lakeshore Drive, Littleton, Colorado 80123
Formerly Chairman and Chief Executive Officer of OppenheimerFunds Services,
Chairman, Chief
Executive Officer and a director of SSI, Chairman, Chief Executive and
Officer and director of SFSI,
Vice President and director of OAC and a director of OppenheimerFunds, Inc.
RAYMOND J. KALINOWSKI, DIRECTOR; AGE 67
44 Portland Drive, St. Louis, Missouri 63131
Director of Wave Technologies International, Inc. (a computer products
training company).
C. HOWARD KAST, DIRECTOR; AGE 75
2552 East Alameda, Denver, Colorado 80209
Formerly Managing Partner of Deloitte, Haskins & Sells (an accounting firm).
ROBERT M. KIRCHNER, DIRECTOR; AGE 75
7500 E. Arapahoe Road, Englewood, Colorado 80112
President of The Kirchner Company (management consultants).
NED M. STEEL, DIRECTOR; AGE 81
3416 South Race Street, Englewood, Colorado 80110
Chartered Property and Casualty Underwriter; a director of Visiting Nurse
Corporation of Colorado.
- ---------------
* Director who is an "interested person" of the Fund.
JAMES C. SWAIN, CHAIRMAN, CHIEF EXECUTIVE OFFICER AND DIRECTOR*; AGE 63 6803
South Tucson Way, Englewood, Colorado 80112 Vice Chairman of the Manager (since
September, 1988); formerly President and a director of Centennial Asset
Management Corporation, an investment adviser subsidiary of the Manager
("Centennial"), and Chairman of the Board of SSI.
BRIDGET A. MACASKILL, PRESIDENT; AGE 49
President (since June 1991), Chief Executive Officer (since September 1995) and
a Director (since December 1994) of the Manager ; President and director (since
June 1991) of HarbourView Asset Management Corporation ("HarbourView"); Chairman
and a director of SSI (since
August 1994),
and SFSI (September 1995); President (since September 1995) and a director
(since October 1990) of OAC; President (since September 1995) and a director
(since November 1989) of Oppenheimer Partnership Holdings, Inc., a holding
company subsidiary of the Manager; a director of Oppenheimer Real Asset
Management, Inc. (since July 1996) ; President and a director (since October
1997) of OppenheimerFunds International Ltd., an offshore fund manager
subsidiary of the Manager ("OFIL") and Oppenheimer Millennium Funds plc (since
October 1997); President and a director of other Oppenheimer funds; a director
of the NASDAQ Stock Market, Inc. and of Hillsdown Holdings plc (a U.K. food
company); formerly an Executive Vice President of the Manager.
ANDREW J. DONOHUE, VICE PRESIDENT AND SECRETARY; AGE 47
Executive Vice President (since January 1993), General Counsel (since October
1991) and a Director (since September 1995) of the Manager; Executive Vice
President and General Counsel (since September 1993) and a director (since
January 1992) of the Distributor; Executive Vice President, General Counsel and
a director of HarbourView, SSI, SFSI and Oppenheimer Partnership Holdings, Inc.
(since September 1995) and MultiSource Services, Inc. (a broker-dealer) (since
December 1995); President and a director of Centennial Asset Management
Corporation ("Centennial") (since September 1995); President, General Counsel
and a director of Oppenheimer Real Asset Management, Inc. (since July 1996);
General Counsel (since May 1996) and Secretary (since April 1997) of OAC; a
director of OFIL and Oppenheimer Millennium Funds plc (since October 1997); an
officer of other Oppenheimer funds.
GEORGE C. BOWEN, VICE PRESIDENT, TREASURER, ASSISTANT SECRETARY; AGE 61 6803
South Tucson Way, Englewood, Colorado 80112 Senior Vice President (since
September 1987) and Treasurer (since March 1985) of the Manager; Vice President
(since June 1983) and Treasurer (since March 1985) of the Distributor ; Vice
President (since October 1989) and Treasurer (since April 1986) of HarbourView;
Senior Vice President (since February 1992), Treasurer (since July 1991) and a
director (since December 1991) of Centennial; President, Treasurer and a
director of Centennial Capital Corporation (since June 1989); Vice President and
Treasurer (since August 1978) and Secretary (since April 1981) of SSI; Vice
President, Treasurer and Secretary of SFSI (since November 1989); Treasurer of
OAC (since June 1990); Treasurer of Oppenheimer Partnership Holdings, Inc.
(since November 1989); Vice President and Treasurer of Oppenheimer Real Asset
Management, Inc. (since July 1996); Chief Executive Officer, Treasurer and a
director of MultiSource Services, Inc., a broker-dealer (since December 1995);
an officer of other Oppenheimer funds.
- ----------
* Director who is an "interested person" of the Fund.
ROBERT J. BISHOP, ASSISTANT TREASURER; AGE 39
6803 South Tucson Way, Englewood, Colorado 80112
Vice President of the Manager/Mutual Fund Accounting (since May 1996); an
officer of other Oppenheimer funds; formerly an Assistant Vice President of the
Manager/Mutual Fund Accounting (April
1994-May 1996), and a Fund Controller for the Manager.
SCOTT T. FARRAR, ASSISTANT TREASURER; AGE 32
6803 South Tucson Way, Englewood, Colorado 80112
Vice President of the Manager/Mutual Fund Accounting (since May 1996); Assistant
Treasurer of Oppenheimer Millennium Funds plc (since October 1997); an officer
of other Oppenheimer funds; formerly an Assistant Vice President of the
Manager/Mutual Fund Accounting (April 1994-May 1996), and a Fund Controller for
the Manager.
ROBERT G. ZACK, ASSISTANT SECRETARY; AGE 49
Senior Vice President (since May 1985) and Associate General Counsel (since May
1981) of the Manager, Assistant Secretary of SSI (since May 1985), and SFSI
(since November 1989);
Assistant Secretary of
Oppenheimer Millennium Funds plc (since October 1997); an officer of other
Oppenheimer funds.
PETER M. ANTOS, VICE PRESIDENT AND PORTFOLIO MANAGER; AGE 52
One Financial Plaza, 755 Main Street, Hartford, CT 06103-2603
Chartered Financial Analyst, Vice President of the Company and Senior Vice
President of the Manager and HarbourView; portfolio manager of other Oppenheimer
funds; previously Vice President and Senior Portfolio Manager,
Equities-Connecticut Mutual Life Insurance Company -
G.R. Phelps & Co. ("G.R.
Phelps") (1989-1996).
MICHAEL C. STRATHEARN, VICE PRESIDENT AND PORTFOLIO MANAGER; AGE 45
One Financial Plaza, 755 Main Street, Hartford, CT 06103-2603
Chartered Financial Analyst, Vice President of the Company 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 ("CML") (1988-1996).
KENNETH B. WHITE, VICE PRESIDENT AND PORTFOLIO MANAGER; AGE 46
One Financial Plaza, 755 Main Street, Hartford, CT 06103-2603
Chartered Financial Analyst, Vice President of the Company and the Manager
since March, 1996; Vice President of HarbourView; portfolio manager of other
Oppenheimer funds; previously a Portfolio Manager, Equities-CML (1982-1996);
Senior Investment Officer, Equities-CML (1987-1992).
STEPHEN F. LIBERA, VICE PRESIDENT AND PORTFOLIO MANAGER; AGE 47
One Financial Plaza, 755 Main Street, Hartford, CT 06103-2603
Chartered Financial Analyst, Vice President of the Company and the Manager
since March, 1996; Vice President of HarbourView; portfolio manager of other
Oppenheimer funds; previously a Vice President and Senior Portfolio Manager,
Fixed Income--G.R. Phelps (1985-1996).
ARTHUR J. ZIMMER, VICE PRESIDENT AND PORTFOLIO MANGER; AGE 51
Vice President of the Manager and Centennial; an officer of other Oppenheimer
funds.
DAVID P. NEGRI, VICE PRESIDENT AND PORTFOLIO MANAGER; AGE 44
Vice President of the Manager; an officer of other Oppenheimer funds.
JERRY A. WEBMAN, VICE PRESIDENT AND PORTFOLIO MANAGER; AGE 48
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.
o REMUNERATION OF DIRECTORS. The officers of the Company and one
Director of the Company (Mr. Swain) who is affiliated with the Manager
receive no salary or fee from the Fund. Mr. Fossel
became a Director of the Company effective July 1, 1997, and received no
compensation from the Company before that date. The compensation from the
Company was paid during its fiscal year ended December 31, 1997. The
compensation from all of the Denver-based Oppenheimer funds includes the Company
and is compensation received as a director, trustee, managing general partner or
member of a committee of the Board during the calendar year 1997.
Total Compensation
Aggregate From All
Compensation Denver-based
NAME AND POSITION FROM FUND OPPENHEIMER FUNDS1
Robert G. Avis $4,260 $63,501.00
Director
William a. Baker 5,200 77,502.00
Audit and Review
Committee
Ex-Officio Member(2)
and Director
Charles Conrad, Jr. 4,830 72,000.00
Director (3)
Jon Fossel 4,244 66,501.00
Director
Sam Freedman 4,461 66,501.00
Audit and Review
Committee Member(2)
and Director
Raymond J. Kalinowski 4,800 71,561.00
Audit and Review
Committee Member(2)
and Director
-4-
<PAGE>
Total Compensation
Aggregate From All
Compensation Denver-based
NAME AND POSITION FROM FUND OPPENHEIMER FUNDS1
C.Howard Kast 5,131 76,503.00
Audit and Review
Committee Member (2)
and Director
Robert M. Kirchner 4,830 72,000.00
Director (3)
Ned M. Steel 4,260 63,501.00
Director
- ----------------------
1 For the 1997 calendar year.
2 Committee positions effective July 1, 1997
3 Prior to July 1, 1997, Messrs. Conrad and Kirchner were also members of
the Audit and
Review Committee.
As of December 31, 1997, the then Directors and officers of the Company as
a group owned of record or beneficially none of the outstanding shares of the
Company.
MAJOR SHAREHOLDERS. As of April 1,1998 Massachusetts Mutual Life Insurance
Company ("MML") and its affiliates (and not on behalf of any separate account)
owned 100% of the shares of the Portfolios. MML and its affiliates are deemed to
be controlling persons of any Portfolio of the Company of which they own more
than 25% of the shares outstanding. As such, the exercise by MML and its
affiliates of their voting rights may diminish the voting power of
contract owners who have selected shares of the Portfolios for investment.
THE MANAGER, THE SUBADVISERS AND THEIR AFFILIATES. The Manager is wholly-owned
by Oppenheimer Acquisition Corporation ("OAC"), a holding company controlled by
MML. OAC is also owned in part by certain of the Manager's directors and
officers, some of whom also serve as officers of the Portfolios, and two of whom
(Messrs. Swain and Bowen) serves as a Director of the Company.
The Manager and the Company have a Code of Ethics, as does each
Subadviser. The Codes of Ethics are designed to detect and prevent improper
personal trading by certain employees, including portfolio managers, that would
compete with or take advantage of a Portfolio's portfolio transactions.
Compliance with the respective Code of Ethics is carefully monitored and
strictly enforced by the Manager or the relevant Subadviser.
THE INVESTMENT ADVISORY AGREEMENTS. Each Portfolio has entered into an
Investment Advisory Agreement with the Manager, effective March 1, 1996. The
investment advisory agreement between the Manager and each Portfolio requires
the Manager, at its expense, to provide each Portfolio with adequate office
space, facilities and equipment, and to provide and supervise the activities of
all administrative and clerical personnel required to provide effective
corporate administration for each Portfolio, including the compilation and
maintenance of records with respect to its operations, the preparation and
filing of specified reports, and composition of proxy materials and registration
statements for the continuous public sale of shares of each Portfolio.
Expenses not expressly assumed by the Manager under an advisory agreement
are paid by the relevant Portfolio. The advisory agreement lists examples of
expenses to be paid by a Portfolio, the major categories of which relate to
interest, taxes, brokerage commissions, fees to certain Directors, legal, and
audit expenses, custodian and transfer agent expenses, share issuance costs,
certain printing and registration costs and non-recurring expenses, including
litigation.
The advisory fees paid by the Portfolios to G.R. Phelps, the Portfolios'
prior investment advisor (until March 1, 1996), and the management fees paid to
the Manager from March 1, 1996 to December 31, 1996 and for the fiscal year
ended December 31, 1997 were as
follows:
1995 1996 1997
----- ---- ----
Total Return Portfolio $4,780,963 $5,817,245 $6,482,637
Growth Portfolio $1,890,963 $2,801,667 $3,818,977
International Equity Portfolio$ 374,740 $569,471 $ 732,642
Life Span Capital Appreciation$ 72,333 $281,564 $437,070
LifeSpan Balanced Portfolio $ 96,385 $355,893 $504,390
LifeSpan Diversified Income $ 51,050 $171,569 $213,594
Government Securities Portfoli$ 117,370 $125,427 $120,922
Total All Portfolios $8,324,959 $10,122,836 $12,310,232
=========== =========== ===========
The advisory agreements provide that in the absence of willful
misfeasance, bad faith, gross negligence in the performance of its duties, or
reckless disregard of its obligations and duties under the advisory agreement,
the Manager is not liable for any loss resulting from any good faith errors or
omissions in connection with any matters to which the agreement relates. Each
advisory agreement permits the Manager to act as investment adviser for any
other person, firm or corporation and to use the name "Oppenheimer" in
connection with its other investment activities. The Manager permits the Company
to use the name "Oppenheimer" as part of its corporate name and for the names of
the series, if the Board of Directors so elects. If the Manager shall no longer
act as investment adviser to the Portfolios, the right of the Portfolios to use
the name "Oppenheimer" as part of their names may be withdrawn.
THE INVESTMENT SUBADVISORY AGREEMENTS. The advisory agreements permit
the Manager to hire one or more subadvisers to assist with the management of
the Portfolios. The Manager
has done so for the International Equity Portfolio and the LifeSpan
Portfolios.
With respect to the International Equity Portfolio and the international
component for the LifeSpan Capital Appreciation Portfolio and LifeSpan Balanced
Portfolio, the Manager has entered into investment subadvisory agreements with
Babson-Stewart Ivory
International ("Babson-
Stewart"). With respect to the small cap component of the LifeSpan Capital
Appreciation and LifeSpan Balanced Portfolios, the Manager has entered into
investment subadvisory agreements with Pilgrim Baxter & Associates, Ltd.
("Pilgrim Baxter"). With respect to the high yield/high risk bond component for
each LifeSpan Portfolio, the Manager has entered into investment subadvisory
agreements with BEA Associates.
Babson-Stewart, One Memorial Drive, Cambridge, Massachusetts 02142, is a
Massachusetts general partnership and a registered investment adviser and was
originally established in 1987. The general partners of Babson-Stewart are David
L. Babson & Co., which is an indirect subsidiary of Massachusetts Life Insurance
Company, and Stewart Ivory & Co. (International), Ltd. As of December 31, 1997,
Babson-Stewart had approximately $4.5 billion in assets under management.
BEA Associates, One Citicorp Center, 153 E. 53rd Street, 57th Floor, New
York, NY 10022, is a partnership between Credit Suisse Capital Corporation and
CS Advisors Corp. BEA Associates has been providing domestic and global fixed
income and equity investment management services for institutional clients and
mutual funds since 1984 and, had $128 billion in assets under management as of
December 31, 1997.
Pilgrim Baxter, 825 Duportail Road, Wayne, Pennsylvania 19087, was
established in 1982 to provide specialized equity management for institutional
investors. Pilgrim Baxter is a Delaware corporation and a wholly owned
subsidiary of United Asset Management
Corporation.
As of December 31, 1997, Pilgrim had over $16 billion in assets under
management.
Under the respective investment subadvisory agreements, the corresponding
Subadviser, subject to the review of the Board of Directors and the overall
supervision of the Manager, is responsible for managing the investment
operations of the corresponding LifeSpan Portfolio component and the composition
of the component's portfolio and furnishing the LifeSpan Portfolio with advice
and recommendations with respect to investments and the purchase and sale of
securities for the respective component. The shareholders of the Portfolios
approved new subadvisory agreements with the relevant subadvisers effective
March 1, 1996.
The Manager, not
the Portfolios, pays the subadvisers. The subadvisers are paid at the rate
set forth in the
Prospectus.
The investment subadvisory agreements with Babson-Stewart provide that in
the absence of willful misfeasance, bad faith, gross negligence or reckless
disregard with respect to its obligations and duties under the agreements,
Babson-Stewart will not be subject to liability for any loss sustained by reason
of its good faith errors of omissions in connection with any matters to which
the agreements relate.
The investment subadvisory agreements with Pilgrim Baxter provide that in
the absence of willful misfeasance, bad faith, negligence, or reckless disregard
of the performance of its duties under the agreements, Pilgrim is not subject to
liability for any error of judgment or mistake of law or for any other action or
omission in the course of, or connected with, rendering services or for any
losses that may be sustained in the purchase, holding or sale of any security,
or otherwise.
The investment subadvisory agreements with BEA Associates provide that in
the absence of willful misfeasance, bad faith, negligence, or reckless disregard
of the performance of its duties under the agreement, BEA Associates is not
subject to liability for losses as a result of its activities in connection with
the adoption of any investment policy or the purchase, sale or retention of
securities on behalf of the LifeSpan Portfolios subadvised by BEA Associates if
such activities were made with due care and in good faith.
For the period from June, 1996 through December, 1996 and for the fiscal
year ended December 31, 1997, the Manager paid subadvisory fees to
Babson-Stewart totaling $251,772.80 and $520,403.32, respectively; Pilgrim
Baxter totaling $55,857.40 and $116,743.77, respectively; and BEA Associates
totaling $35,061.40 and $78,164.82, respectively.
THE TRANSFER AGENT. OppenheimerFunds Services, a division of the
Manager, each Portfolio's transfer agent, is responsible for maintaining each
Portfolio's shareholder registry and
shareholder accounting records, and for shareholder servicing and
administrative functions. It
provides these services "at cost."
BROKERAGE POLICIES OF THE PORTFOLIOS
The Company has no obligation to deal with any dealer or group of dealers
in the execution of transactions in portfolio securities. Subject to any policy
established by the Board of Directors, the Manager and the relevant Subadvisers
are primarily responsible for the investment decisions of each Portfolio or
Portfolio component and the placing of its portfolio transactions. It is the
policy of each Portfolio to obtain the most favorable net results, taking into
account various factors, including price, dealer spread or commission, if any,
size of the transaction and difficulty of execution. While the Manager and the
Subadvisers generally seek reasonably competitive spreads or commissions, the
Portfolios will not necessarily pay the lowest spread or commission available.
BROKERAGE PROVISIONS OF THE INVESTMENT ADVISORY AGREEMENTS. One of the duties of
the Manager under each advisory agreement is to arrange the portfolio
transactions for each Portfolio. Each advisory agreement contains provisions
relating to the employment of broker-dealers ("brokers") to effect a Portfolio's
portfolio transactions. In doing so, the Manager is authorized by the advisory
agreement to employ such broker-dealers, including "affiliated" brokers, as that
term is defined in the Investment Company Act, as may, in its best judgment
based on all relevant factors, implement the policy of a Portfolio to obtain, at
reasonable expense, the "best execution" (prompt and reliable execution at the
most favorable price obtainable) of such transactions. The Manager need not seek
competitive commission bidding, but is expected to minimize the commissions paid
to the extent consistent with the interest and policies of a Portfolio as
established by its Board of Directors. Purchases of securities from underwriters
include a commission or concession paid by the issuer to the underwriter, and
purchasers from dealers include a spread between the bid and asked price.
Under each advisory agreement, the Manager is authorized to select brokers
that provide brokerage and/or research services for a Portfolio and/or the other
accounts over which the Manager or its affiliates have investment discretion.
The commissions paid to such brokers may be higher than another qualified broker
would have charged, if a good faith determination is made by the Manager and the
commission is fair and reasonable in relation to the services provided. Subject
to the foregoing considerations, the Manager may also consider sales of shares
of a Portfolio and other investment companies managed by the Manager or its
affiliates as a factor in the selection of brokers for a Portfolio's portfolio
transactions.
DESCRIPTION OF BROKERAGE PRACTICES FOLLOWED BY THE MANAGER AND SUBADVISERS. Most
purchases of debt securities, commercial paper, and money market instruments
made by the Portfolios are principal transactions at net prices, and the
Portfolios incur little or no brokerage costs for these transactions.
Subject to the provisions of the advisory agreements and the subadvisory
agreements and the procedures and rules described above, allocations of
brokerage are generally made by the Manager's or the Subadviser's portfolio
traders based upon recommendations from the Manager's portfolio managers. In
certain instances, portfolio managers may directly place trades and allocate
brokerage, also subject to the provisions of the advisory agreements and the
subadvisory agreements and the procedures and rules described above. In either
case, brokerage is allocated under the supervision of the Manager's or the
Subadviser's executive officers. Transactions in securities other than those for
which an exchange is the primary market are generally done with principals or
market makers. Brokerage commissions are paid primarily for effecting
transactions in listed securities or for certain fixed income agency
transactions in the secondary market and otherwise only if it appears likely
that a better price or execution can be obtained.
When the Portfolios engage in an option transaction, ordinarily the same
broker will be used for the purchase or sale of the option and any transaction
in the securities to which the option relates. When possible, concurrent orders
to purchase or sell the same security by more than one of the accounts managed
by the Manager, the Subadvisers and their affiliates are combined. The
transactions effected pursuant to such combined orders are averaged as to price
and allocated in accordance with the purchase or sale orders actually placed for
each account.
The research services provided by a particular broker may be useful only
to one or more of the advisory accounts of the Manager and its affiliates, or a
Subadviser, and investment research received for the commissions of those other
accounts may be useful both to the Portfolios and one or more of such other
accounts. Such research, which may be supplied by a third party at the instance
of a broker, includes information and analyses on particular companies and
industries as well as market or economic trends and portfolio strategy, receipt
of market quotations for portfolio evaluations, information systems, computer
hardware and similar products and services. If a research service also assists
the Manager in a non-research capacity (such as bookkeeping or other
administrative functions), then only the percentage or component that provides
assistance to the Manager (or Subadviser) in the investment decision-making
process may be paid in commission dollars. The Board of Directors permits the
Manager to use concessions on fixed price offerings to obtain research, in the
same manner as is permitted for agency transactions. The Board also permits the
Manager to use stated commissions on secondary fixed-income trades to obtain
research where the broker has represented to the Manager that (i) the trade is
not from the broker's own inventory, (ii) the trade was executed by the broker
on an agency basis at the stated commission, and (iii) the trade is not a
riskless principal transaction.
The research services provided by brokers broadens the scope and
supplements the research activities of the Manager and Subadvisers, by making
available additional views for consideration and comparisons, and enabling the
Manager and Subadvisers to obtain market information for the valuation of
securities held in a Portfolio's portfolio or being considered for purchase.
As most purchases made by Government Securities Portfolio are principal
transactions at net prices, that Portfolio incurs little or no brokerage costs.
Purchases of securities from underwriters include a commission or concession
paid by the issuer to the underwriter, and purchases from dealers include a
spread between the bid and asked price. No principal transactions and, except
under unusual circumstances, no agency transactions for this Portfolio will be
handled by any affiliated securities dealer. In the unusual circumstance when
this Portfolio pays brokerage commissions, the above-described brokerage
practices and policies are followed. However, since brokerage commissions, if
any, are small, high portfolio turnover does not have an appreciable adverse
effect upon net asset value of the Portfolio.
During the Portfolios' fiscal years ended December 31, 1995 , 1996 and
1997, total brokerage commissions paid by the Portfolios listed below were:
1995 1996 1997
Brokerage Brokerage Brokerage
PORTFOLIO COMMISSIONS COMMISSIONS COMMISSIONS
Growth Portfolio $781,682 $558,861 $1,587,706
Total Return Portfolio 910,605 802,877 2,051,990
International Equity Portfolio 216,759 190,606
224,663
LifeSpan Capital Appreciation Portfolio 91,744 29,204 84,779
Lifespan Diversified Income Portfolio 9,149 2,766 7,358
LifeSpan Balanced Portfolio 40,872 24,827 70,620
PERFORMANCE OF THE PORTFOLIOS
YIELD AND TOTAL RETURN INFORMATION. From time to time, as set forth in the
Prospectus, the "standardized yield," "dividend yield," "average annual total
return," or "cumulative total return," as the case may be, of an investment in a
Portfolio may be advertised. An explanation of how yields and total returns are
calculated and the components of those calculations is set forth below.
A Portfolio's advertisement of its performance must, under applicable
rules of the SEC, include the average annual total returns for the Portfolio for
the 1, 5 and 10-year periods (or the life of the Portfolio, if less) as of the
most recently ended calendar quarter prior to the publication of the
advertisement. This enables an investor to compare a Portfolio's performance to
the performance of other funds for the same periods. However, a number of
factors should be considered before using such information as a basis for
comparison with other investments. The performance data for a Portfolio does not
reflect the effect of any charges or costs of the insurance company separate
account that invests in the Portfolio on behalf of the variable contracts of
contract owners. An investment in a Portfolio is not insured; its yields and
total returns and share prices are not guaranteed and normally will fluctuate on
a daily basis. When redeemed, shares may be worth more or less than their
original cost. Yields and total returns for any given past period are not a
prediction or representation by a Portfolio of future yields or rates of return
on its shares. The yields and total returns of a Portfolio are affected by
portfolio quality, the type of investments the Portfolio holds and its operating
expenses.
o YIELD INFORMATION.
o STANDARDIZED YIELD. The "standardized yield" (referred to as "yield") is
shown for a stated 30-day period. It is not based on actual distributions paid
by the Portfolios to shareholders in the 30- day period, but is a hypothetical
yield based upon the net investment income from the Portfolios' portfolio
investments for that period. It may therefore differ from the "dividend yield,"
as shown below. It is calculated using the following formula set forth in rules
adopted by the Securities and Exchange Commission designed to assure uniformity
in the way that all portfolios calculate their yields:
2 [( A-B + 1)6 - 1]
Standardized Yield = ( c d )
The symbols above represent the following factors:
a = dividends and interest earned during the 30-day period.
b = net expenses accrued for the period (expense reimbursements).
c = the average daily number of Portfolio shares outstanding during
the 30-day period that were entitled to receive dividends.
d = the Portfolio's maximum offering price per share on the last day
of the period, adjusted for undistributed net investment income.
The standardized yield of a Portfolio for a 30-day period may differ from
its yield for any other period. The Securities and Exchange Commission formula
assumes that the standardized yield for a 30-day period occurs at a constant
rate for a six-month period and is annualized at the end of the six-month
period. For the 30 days ended December 31, 1997, the yield of Government
Securities Portfolio, calculated as described above was 5.47%.
o DIVIDEND YIELD AND DISTRIBUTION RETURN. From time to time a
Portfolio may quote a "dividend yield" or "distribution return." Dividend
yield is based on a Portfolio's dividends derived
from net investment income during a stated period. Distribution return includes
dividends derived from net investment income and from realized capital gains
declared during a stated period. Under those calculations, a Portfolio's
dividends and/or distributions declared during a stated period of one year or
less (for example, 30 days, are added together, and the sum is divided by the
Portfolio's maximum offering price on the last day of the period). When the
result is annualized for a period of less than one year, the "dividend yield" is
calculated as follows:
Dividend Yield = DIVIDENDS / Number of days (accrual
Maximum Offering Price period) x 365
(last day of period)
For the 30-day period ended December 31, 1997, the dividend yield for
Government
Securities Porfolio was 6.86%.
TOTAL RETURN INFORMATION
o AVERAGE ANNUAL TOTAL RETURNS. A Portfolio's "average annual total
return" is an average annual compounded rate of return for each year in a
specified number of years. It is the rate of
return based on the change in value of a hypothetical initial investment of
$1,000 ("P" in the formula below) held for a number of years ("n") to achieve an
Ending Redeemable Value ("ERV") of that investment according to the following
formula:
(ERV)1/n - 1 = AVERAGE ANNUAL TOTAL RETURN
P
o CUMULATIVE TOTAL RETURNS. The "cumulative total return" calculation
measures the change in value of a hypothetical investment of $1,000 over an
entire period of years. Its calculation uses some of the same factors as average
annual total return, but it does not average the rate of return on an annual
basis. Cumulative total return is determined as follows:
ERV-P = TOTAL RETURN
P
Both formulas assume that all dividends and capital gains distributions during
the period are reinvested at net asset value per share, and that the investment
is redeemed at the end of the period. Set forth below is the "average annual
total return" and "total return" for each Fund (using the method described
above) during the periods indicated:
AVERAGE ANNUAL TOTAL RETURN BY PORTFOLIO:
Five Ten Cumulative
Fiscal Year Year Total Return
Year Period Period From
Ended Ended Ended Inception(1)Inception(1)
PORTFOLIO 12/31/97 12/31/97 12/31/97 TO 12/31/97 TO 12/31/97
Total Return Portfoli 18.81% 13.21% 13.80% 14.05% 643.28%
Growth Portfolio 26.37% 20.12% 18.66% 18.31% 1359.05%
International Equity 8.11% 10.78% N/A 8.66% 59.65%
LifeSpan Capital
Appreciation 12.53% N/A N/A 16.07% 41.59%
LifeSpan Balanced 12.20% N/A N/A 13.71% 34.95%
LifeSpan Diversified
Income 12.52% N/A N/A 10.84% 27.15%
Government Securities 8.82 6.84% N/A 7.26% 48.43%
- --------------
(1)Inception dates are as follows: May 13, 1992 for International Equity
Portfolio and Government Securities Portfolio; and September 1, 1995 for
LifeSpan Capital Appreciation Portfolio, LifeSpan Balanced Portfolio and
LifeSpan Diversified Income Portfolio.
From time to time a Portfolio may also include in its advertisements and
sales literature performance information about a Portfolio or rankings of a
Portfolio's performance cited in newspapers or periodicals, such as The New York
Times or the Wall Street Journal. These articles may include quotations of
performance from other sources, such as Lipper Analytical Services, Inc. or
Morningstar, Inc.
OTHER PERFORMANCE COMPARISONS. From time to time a Portfolio may publish the
ranking of its shares by Lipper Analytical Services, Inc. ("Lipper"), a
widely-recognized independent mutual fund monitoring service. Lipper monitors
the performance of regulated investment companies, including the Portfolios, and
ranks their performance for various periods based on categories relating to
investment objectives. The performance of the Portfolios is ranked against other
mutual funds offered under variable contracts. The Lipper performance rankings
are based on total returns that include the reinvestment of capital gain
distributions and income dividends but do not take taxes into consideration.
From time to time a Portfolio may publish the star ranking of the
performance of its shares by Morningstar, Inc., an independent mutual fund
monitoring service that ranks mutual funds, including the Portfolios, in broad
investment categories (domestic stock, international stock, taxable bond,
municipal bond and hybrid) based on risk-adjusted investment return. Investment
return measures a fund's three, five and ten-year average annual total returns
(when available) in excess of 90-day U.S. Treasury bill returns after
considering expenses. Risk measures fund performance below 90-day U.S. Treasury
bill monthly returns. Risk and investment return are combined to produce star
rankings reflecting performance relative to the average fund in a fund's
category. Five stars is the "highest" ranking (top 10%), four stars is "above
average" (next 22.5%), three stars is "average" (next 35%), two stars is "below
average" (next 22.5%) and one star is "lowest" (bottom 10%). Morningstar may
rank the shares of the Portfolio in relation to other funds in their respective
categories. Rankings are subject to change monthly.
A Portfolio may also compare its performance to that of other funds in its
Morningstar Category. In addition to its star rankings, Morningstar also
categorizes and compares a fund's 3-year performance based on Morningstar's
classification of the fund's investments and investment style, rather than how a
fund defines its investment objective. Morningstar's four broad categories
(domestic equity, international equity, municipal bond and taxable bond) are
each further subdivided into categories based on types of investments and
investment styles. Those comparisons by Morningstar are based on the same risk
and return measurements as its star rankings but do not consider the effect of
sales charges.
From time to time, the Manager may publish rankings or ratings of the
Manager (or the Transfer Agent), by independent third-parties, on the investor
services provided by them to shareholders of the Oppenheimer funds, other than
the performance rankings of the Oppenheimer funds themselves. These ratings or
rankings of shareholder/investor services by third parties may compare the
Oppenheimer funds services to those of other mutual fund families selected by
the rating or ranking services, and may be based upon the opinions of the rating
or ranking service itself, using its own research or judgment, or based upon
surveys of investors, brokers, shareholders or others.
ABOUT YOUR ACCOUNT
HOW TO BUY SHARES
Insurance Companies are the record holders and the owners of shares of
beneficial interest in each Portfolio of the Company. In accordance with any
limitations set forth in their variable contracts, contract holders may direct
their Insurance Companies to allocate amounts available for investment among the
Company's Portfolios. Instructions for any such allocation, or for the purpose
of redemption of shares of a Portfolio, must be made by the investor's Insurance
Company. The rights of Insurance Companies as record holders and owners of
shares of a Portfolio are different from the rights of variable contract
holders. The term "shareholder" in this Statement of Additional Information
refers only to Insurance Companies and not to contract holders. The Company
reserves the right to limit the types of separate accounts that may invest in
any Portfolio.
The sale of shares of the Portfolios is currently limited to Accounts as
explained on the cover page of this Statement of Additional Information and the
Prospectus. Such shares are sold at their respective offering prices (net asset
values without sales charges) and redeemed at their respective net asset values
as described in the Prospectus.
DETERMINATION OF NET ASSET VALUE PER SHARE. The net asset value per share of
each Portfolio is determined as of the close of business of The New York Stock
Exchange on each day the Exchange is open by dividing the value of a Portfolio's
net assets by the number of shares outstanding. The Exchange normally closes at
4:00 P.M., New York time, but may close earlier on some days (for example, in
case of weather emergencies or on days falling before or after a holiday). The
Exchange's most recent annual holiday schedule (which is subject to change)
states that it will close New Year's Day, Martin Luther King, Jr. Day,
Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day and Christmas Day; it may close on other days. Trading may
occur at times when the Exchange is closed (including weekends and holidays or
after 4:00 P.M., on a regular business day). Because the net asset values of a
Portfolio will not be calculated at such times, if securities held by a
Portfolio are traded at such time, the net asset values per share of a Portfolio
may be significantly affected on such days when shareholders do not have the
ability to purchase or redeem shares.
The Fund's Board of Directors has established procedures for the valuation
of each Portfolio's securities, generally as follows:
(i) equity securities traded on a U.S. securities exchange or on the
Automated Quotation System ("NASDAQ") of the Nasdaq Stock Market, Inc. for
which last sale information is regularly reported are valued at the last
reported sale price on the principal exchange for such security or NASDAQ
that day (the "Valuation Date") or, in the absence of sales that day, at
the last reported sale price preceding the Valuation Date if it is within
the spread of the closing "bid" and "asked" prices on the Valuation Date
or, if not, the closing "bid" price on the Valuation Date;
(ii) equity securities traded on a foreign securities exchange are valued
generally at the last sales price available to the pricing service
approved by the Fund's Board of Directors or to the Manager as reported by
the principal exchange on which the security is traded at its last trading
session on or immediately preceding the Valuation Date, or, if
unavailable, at the mean between "bid" and "asked" prices obtained from
the principal exchange or two active market makers in the security on the
basis of reasonable inquiry;
(iii) a non-money market fund will value (x) debt instruments that had a
maturity of more than 397 days when issued, (y) debt instruments that had
a maturity of 397 days or less when issued and have a remaining maturity
in excess of 60 days , and (z) non-money market type debt instruments that
had a maturity of 397 days or less when issued and have a remaining
maturity of sixty days or less, at the mean between "bid" and "asked"
prices determined by a pricing service approved by the Fund's Board of
Trustees or, if unavailable, obtained by the Manager from two active
market makers in the security on the basis of reasonable inquiry;
(iv) money market-type debt securities held by a non-money market fund
that had a maturity of less than 397 days when issued and have a remaining
maturity of 60 days or less , and debt instruments held by a money market
fund that have a remaining maturity of 397 days or less , shall be valued
at cost, adjusted for amortization of premiums and accretion of discount;
and
(v) securities (including restricted securities) not having
readily-available market quotations are valued at fair value determined
under the Board's procedures.
If the Manager is unable to locate two market makers willing to give
quotes (see (ii) and (iii)
above), the security may be priced at the mean between the "bid" and
"asked" prices provided by a single active market maker (which in certain
cases may be the "bid" price if no "asked" price is available) provided
that the Manager is satisfied that the firm rendering the quotes is
reliable and that the quotes reflect the current market value.
In the case of U.S. Government Securities and mortgage-backed securities,
corporate debt, and foreign securities, where last sale information is not
generally available, such pricing procedures may include "matrix" comparisons to
the prices for comparable instruments on the basis of quality, yield, maturity
and other special factors involved. The Manager may use pricing services
approved by the Board of Directors to price U.S. Government Securities,
corporate debt, and foreign securities or mortgage-backed securities for which
last sale information is not generally available. The Manager will monitor the
accuracy of such pricing services, which may include comparing prices used for
portfolio evaluation to actual sales prices of selected securities.
Trading in securities on European and Asian exchanges and over-the-counter
markets is normally completed before the close of the New York Stock Exchange.
Events affecting the values of foreign securities traded in securities markets
that occur between the time their prices are determined and the close of the New
York Stock Exchange will not be reflected in the Portfolio's calculation of net
asset value unless the Board of Directors or the Manager, under procedures
established by the Board of Directors, determines that the particular event is
likely to effect a material change in the net asset value of a Portfolio's
share. Foreign currency, including forward contracts, will be valued at the
closing price in the London foreign exchange market that day as provided by a
reliable bank, dealer or pricing service. The values of securities denominated
in foreign currency will be converted to U.S. dollars at the closing price in
the London foreign exchange market that day as provided by a reliable bank,
dealer or pricing service.
Puts, calls and Futures are valued at the last sales price on the
principal exchange on which they are traded or on NASDAQ, as applicable, as
determined by a pricing service approved by the Board of Directors or by the
Manager. If there were no sales that day, value shall be the last sale price on
the preceding trading day if it is within the spread of the closing "bid" and
"ask" prices on the principal exchange or on NASDAQ on the valuation date, or,
if not, value shall be the closing "bid" price on the principal exchange or on
NASDAQ on the valuation date. If the put, call or future is not traded on an
exchange or on NASDAQ, it shall be valued at the mean between "bid" and "ask"
prices obtained by the Manager from two active market makers (which in certain
cases may be the "bid" price if no "ask" price is available).
DIVIDENDS, CAPITAL GAINS AND TAXES
DIVIDENDS AND DISTRIBUTIONS. The Company intends for each Portfolio to qualify
and be treated as a "regulated investment company" under Subchapter M of the
Internal Revenue Code of 1986, as amended (the "Code") for each taxable year. By
so qualifying, the Portfolios will not be subject to Federal income taxes on
amounts paid by them as dividends and distributions, as described in the
Prospectus. Each Portfolio is treated as a separate entity for purposes of
determining Federal tax treatment. The Company will endeavor to ensure that each
Portfolio's assets are so invested so that all such requirements are satisfied,
but there can be no assurance that it will be successful in doing so.
In order to qualify as a regulated investment company under Subchapter M
of the Code, a Portfolio must, among other things, derive at least 90% of its
gross income for the taxable year from dividends, interest, gains from the sale
or other disposition of stock, securities or foreign currencies, fees from
certain securities loans or other income (including gains from options, futures
and forward contracts) derived with respect to its business of investing in such
stock, securities or currencies (the "90% income test"), and satisfy certain
annual distribution and quarterly diversification requirements. For purposes of
the 90% income test, income that a Portfolio earns from equity interests in
certain entities that are not treated as corporations (E.G., are treated as
partnerships or trusts) for U.S. tax purposes will generally have the same
character for the Portfolio as in the hands of such entities; consequently, the
Portfolio may be required to limit its equity investments in such entities that
earn fee income, rental income, or other nonqualifying income.
As noted in the Prospectus, each Portfolio must, and intends to, comply
with the diversification requirements imposed by Section 817(h) of the Code and
the regulations thereunder. These requirements, which are in addition to the
diversification requirements imposed on a Portfolio by the Investment Company
Act and Subchapter M of the Code, place certain limitations on the assets of
each separate account and, because Section 817(h) and those regulations treat
the assets of the Portfolio as assets of the related separate account, the
assets of a Portfolio, that may be invested in securities of a single issuer.
Specifically, the regulations provide that, except as permitted by the "safe
harbor" described below, as of the end of each calendar quarter or within 30
days thereafter no more than 55% of the total assets of a Portfolio may be
represented by any one investment, no more than 70% by any two investments, no
more than 80% by any three investments and no more than 90% by any four
investments. For this purpose, all securities of the same issuer are considered
a single investment, and each U.S. Government agency and instrumentality is
considered a separate issuer. Section 817(h) provides, as a safe harbor, that a
separate account will be treated as being adequately diversified if the
diversification requirements under Subchapter M are satisfied and no more than
55% of the value of the account's total assets are cash and cash items
(including receivables), U.S. Government securities and securities of other
regulated investment companies. Failure by a Portfolio to both qualify as a
regulated investment company and satisfy the Section 817(h) requirements would
generally result in treatment of the variable contract holders other than as
described in the applicable variable contract prospectus, including inclusion in
ordinary income of income accrued under the contracts for the current and all
prior taxable years. Any such failure may also result in adverse tax
consequences for the Portfolio and the insurance company issuing the contracts.
Foreign exchange gains and losses realized by a Portfolio in connection
with certain transactions involving foreign currency denominated debt
securities, certain options and futures contracts relating to foreign currency,
forward foreign currency contracts, foreign currencies, or payables or
receivables denominated in a foreign currency are subject to Section 988 of the
Code, which generally causes such gains and losses to be treated as ordinary
income and losses and may affect the amount, timing and character of
distributions to shareholders. If the net foreign exchange loss for a year were
to exceed the Portfolio's investment company taxable income (computed without
regard to such loss) the resulting overall ordinary loss for such year would not
be deductible by the Portfolio or its shareholders in future years.
Limitations imposed by the Code on regulated investment companies like the
Portfolios may restrict the Portfolios' ability to enter into futures, options
and
currency forward transactions.
The Portfolios may be subject to withholding and other taxes imposed by
foreign countries with respect to their investments in foreign securities. Tax
conventions between certain countries and the U.S. may reduce or eliminate such
taxes.
The federal income tax rules applicable to mortgage dollar rolls and
interest rate swaps, caps, floors and collars are unclear in certain respects,
and the Portfolios may be required to account for these instruments under tax
rules in a manner that, under certain circumstances, may limit their
transactions in these instruments.
If a Portfolio acquires stock in certain non-U.S. corporations that
receive at least 75% of their annual gross income from passive sources (such as
interest, dividends, rents, royalties or capital gain) or hold at least 50% of
their assets in investments producing such passive income ("passive foreign
investment companies"), the Portfolio could be subject to Federal income tax and
additional interest charges on "excess distributions" received from such
companies or gain from the sale of stock in such companies, even if all income
or gain actually received by the Portfolio is timely distributed to its
shareholders. The Portfolio would not be able to pass through to its
shareholders any credit or deduction for such a tax. Certain elections may, if
available, ameliorate these adverse tax consequences, but any such election
would require the Portfolio to recognize taxable income or gain without the
concurrent receipt of cash. Each Portfolio may limit and/or manage its stock
holdings in passive foreign investment companies to minimize its tax liability
or maximize its return from these investments.
ADDITIONAL INFORMATION ABOUT THE PORTFOLIOS
THE CUSTODIAN. The Bank of New York is the Custodian of the Portfolios'
assets. The Custodian's responsibilities include safeguarding and controlling
the Portfolios' portfolio securities, collecting income on the portfolio
securities and handling the delivery of such securities to and from the
Portfolios.
INDEPENDENT AUDITORS. The independent auditors of the Portfolios audit the
Portfolios' financial statements and perform other related audit services.
They also act as auditors for certain other funds advised by the Manager and its
affiliates.
-5-
<PAGE>
PANORAMA SERIES FUND, INC.
INDEPENDENT AUDITORS' REPORT
- --------------------------------------------------------------------------------
The Board of Directors and Shareholders of Panorama Series Fund, Inc.:
We have audited the accompanying statement of assets and liabilities, including
the statement of investments, of Total Return Portfolio, Growth Portfolio,
Government Securities Portfolio, International Equity Portfolio, LifeSpan
Diversified Income Portfolio, LifeSpan Balanced Portfolio and LifeSpan Capital
Appreciation Portfolio (all of which are series of Panorama Series Fund, Inc.)
as of December 31, 1997, the related statements of operations for the year then
ended, the statements of changes in net assets and the financial highlights for
the years ended December 31, 1997 and 1996. These financial statements and
financial highlights are the responsibility of the Fund's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits. The financial highlights for the
period January 1, 1993 to December 31, 1995 were audited by other auditors whose
report dated February 15, 1996, expressed an unqualified opinion on this
information.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned at December
31, 1997 by correspondence with the custodian and brokers; where replies were
not received from brokers, we performed other auditing procedures. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, such financial statements and financial highlights present
fairly, in all material respects, the financial position of Total Return
Portfolio, Growth Portfolio, Government Securities Portfolio, International
Equity Portfolio, LifeSpan Diversified Income Portfolio, LifeSpan Balanced
Portfolio and LifeSpan Capital Appreciation Portfolio at December 31, 1997, the
results of their operations, the changes in their net assets, and the financial
highlights for the respective stated periods, in conformity with generally
accepted accounting principles.
/s/ Deloitte & Touche LLP
DELOITTE & TOUCHE LLP
Denver, Colorado
January 23, 1998
<PAGE>
PANORAMA SERIES FUND, INC. - TOTAL RETURN PORTFOLIO
STATEMENT OF INVESTMENTS
DECEMBER 31, 1997
<TABLE>
<CAPTION>
MARKET VALUE
SHARES NOTE 1
- -----------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS - 48.8%
- -----------------------------------------------------------------
BASIC MATERIALS - 1.2%
- -----------------------------------------------------------------
METALS - 0.4%
Allegheny Teledyne, Inc. 185,200 $ 4,792,050
- -----------------------------------------------------------------
PAPER - 0.8%
Fort James Corp. 272,375 10,418,344
- -----------------------------------------------------------------
CONSUMER CYCLICALS - 6.3%
- -----------------------------------------------------------------
AUTOS & HOUSING - 0.9%
Goodyear Tire & Rubber Co. 86,300 5,490,837
- -----------------------------------------------------------------
Lear Corp.(1) 128,300 6,094,250
--------------
11,585,087
- -----------------------------------------------------------------
LEISURE & ENTERTAINMENT - 2.2%
Alaska Air Group, Inc.(1) 147,400 5,711,750
- -----------------------------------------------------------------
America West Holdings Corp., Cl.
B(1) 238,400 4,440,200
- -----------------------------------------------------------------
AMR Corp.(1) 88,500 11,372,250
- -----------------------------------------------------------------
Hasbro, Inc. 106,500 3,354,750
- -----------------------------------------------------------------
Outback Steakhouse, Inc.(1) 121,800 3,501,750
--------------
28,380,700
- -----------------------------------------------------------------
RETAIL: GENERAL - 2.3%
Dayton Hudson Corp. 123,800 8,356,500
- -----------------------------------------------------------------
Federated Department Stores,
Inc.(1) 218,900 9,426,381
- -----------------------------------------------------------------
Penney (J.C.) Co., Inc. 183,000 11,037,187
--------------
28,820,068
- -----------------------------------------------------------------
RETAIL: SPECIALTY - 0.9%
Brylane, Inc.(1) 66,900 3,294,825
- -----------------------------------------------------------------
Payless ShoeSource, Inc.(1) 122,800 8,242,950
--------------
11,537,775
- -----------------------------------------------------------------
CONSUMER NON-CYCLICALS - 3.8%
- -----------------------------------------------------------------
FOOD - 1.6%
Kroger Co.(1) 314,700 11,624,231
- -----------------------------------------------------------------
Safeway, Inc.(1) 136,100 8,608,325
--------------
20,232,556
- -----------------------------------------------------------------
HEALTHCARE/SUPPLIES & SERVICES -
0.9%
Tenet Healthcare Corp.(1) 265,020 8,778,787
- -----------------------------------------------------------------
WellPoint Health Networks, Inc.(1) 75,400 3,185,650
--------------
11,964,437
- -----------------------------------------------------------------
HOUSEHOLD GOODS - 1.3%
Dial Corp. (The) 295,200 6,143,850
- -----------------------------------------------------------------
Premark International, Inc. 368,300 10,680,700
--------------
16,824,550
</TABLE>
<PAGE>
PANORAMA SERIES FUND, INC. - TOTAL RETURN PORTFOLIO
STATEMENT OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
MARKET VALUE
SHARES NOTE 1
- -----------------------------------------------------------------
<S> <C> <C>
ENERGY - 5.7%
- -----------------------------------------------------------------
ENERGY SERVICES & PRODUCERS - 2.3%
Diamond Offshore Drilling, Inc. 186,300 $ 8,965,687
- -----------------------------------------------------------------
Global Marine, Inc.(1) 235,700 5,774,650
- -----------------------------------------------------------------
Oryx Energy Co.(1) 269,900 6,882,450
- -----------------------------------------------------------------
Tidewater, Inc. 132,700 7,315,087
--------------
28,937,874
- -----------------------------------------------------------------
OIL-INTEGRATED - 3.4%
Amoco Corp. 71,200 6,060,900
- -----------------------------------------------------------------
Chevron Corp. 161,700 12,450,900
- -----------------------------------------------------------------
Exxon Corp. 82,500 5,047,969
- -----------------------------------------------------------------
Mobil Corp. 143,600 10,366,125
- -----------------------------------------------------------------
Occidental Petroleum Corp. 335,000 9,819,687
--------------
43,745,581
- -----------------------------------------------------------------
FINANCIAL - 11.9%
- -----------------------------------------------------------------
BANKS - 4.3%
BankAmerica Corp. 117,500 8,577,500
- -----------------------------------------------------------------
BankBoston Corp. 144,600 13,583,362
- -----------------------------------------------------------------
First Union Corp. 260,500 13,350,625
- -----------------------------------------------------------------
NationsBank Corp. 94,600 5,752,862
- -----------------------------------------------------------------
Wells Fargo & Co. 40,100 13,611,444
--------------
54,875,793
- -----------------------------------------------------------------
DIVERSIFIED FINANCIAL - 2.4%
Crescent Real Estate Equities, Inc. 214,500 8,445,938
- -----------------------------------------------------------------
Money Store, Inc. (The) 118,100 2,480,100
- -----------------------------------------------------------------
Morgan Stanley, Dean Witter,
Discover & Co. 102,600 6,066,225
- -----------------------------------------------------------------
Travelers Group, Inc. 262,646 14,150,053
--------------
31,142,316
- -----------------------------------------------------------------
INSURANCE - 5.2%
Allstate Corp. 85,000 7,724,375
- -----------------------------------------------------------------
Chubb Corp. 135,600 10,254,750
- -----------------------------------------------------------------
Conseco, Inc. 293,300 13,326,819
- -----------------------------------------------------------------
Equitable Cos., Inc. 269,000 13,382,750
- -----------------------------------------------------------------
Torchmark Corp. 239,800 10,086,588
- -----------------------------------------------------------------
Travelers Property Casualty Corp.,
Cl. A 270,300 11,893,200
--------------
66,668,482
- -----------------------------------------------------------------
INDUSTRIAL - 8.4%
- -----------------------------------------------------------------
INDUSTRIAL SERVICES - 0.5%
Viad Corp. 297,400 5,743,538
- -----------------------------------------------------------------
MANUFACTURING - 7.4%
Aeroquip-Vickers, Inc. 109,600 5,377,250
</TABLE>
<PAGE>
PANORAMA SERIES FUND, INC. - TOTAL RETURN PORTFOLIO
STATEMENT OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
MARKET VALUE
SHARES NOTE 1
- -----------------------------------------------------------------
<S> <C> <C>
MANUFACTURING (CONTINUED)
AGCO Corp. 302,900 $ 8,859,825
- -----------------------------------------------------------------
Case Corp. 173,900 10,510,081
- -----------------------------------------------------------------
Deere & Co. 251,800 14,683,088
- -----------------------------------------------------------------
Ingersoll-Rand Co. 184,100 7,456,050
- -----------------------------------------------------------------
PACCAR, Inc. 248,700 13,056,750
- -----------------------------------------------------------------
Parker-Hannifin Corp. 143,800 6,596,825
- -----------------------------------------------------------------
Textron, Inc. 231,800 14,487,500
- -----------------------------------------------------------------
U.S. Industries, Inc. 458,050 13,798,756
--------------
94,826,125
- -----------------------------------------------------------------
TRANSPORTATION - 0.5%
Burlington Northern Santa Fe Corp. 68,100 6,329,044
- -----------------------------------------------------------------
TECHNOLOGY - 6.3%
- -----------------------------------------------------------------
AEROSPACE/DEFENSE - 1.0%
General Dynamics Corp. 69,700 6,024,694
- -----------------------------------------------------------------
Lockheed Martin Corp. 69,051 6,801,524
--------------
12,826,218
- -----------------------------------------------------------------
COMPUTER HARDWARE - 3.7%
CHS Electronics, Inc.(1) 73,650 1,261,256
- -----------------------------------------------------------------
Compaq Computer Corp. 185,900 10,491,731
- -----------------------------------------------------------------
International Business Machines
Corp. 116,600 12,191,988
- -----------------------------------------------------------------
Lexmark International Group, Inc.,
Cl. A(1) 92,500 3,515,000
- -----------------------------------------------------------------
Storage Technology Corp. (New)(1) 324,300 20,086,331
--------------
47,546,306
- -----------------------------------------------------------------
COMPUTER SOFTWARE/SERVICES - 0.7%
Electronic Data Systems Corp. 161,000 7,073,938
- -----------------------------------------------------------------
Symantec Corp.(1) 63,200 1,386,450
--------------
8,460,388
- -----------------------------------------------------------------
ELECTRONICS - 0.7%
National Semiconductor Corp.(1) 83,900 2,176,156
- -----------------------------------------------------------------
SCI Systems, Inc.(1) 154,400 6,726,050
--------------
8,902,206
- -----------------------------------------------------------------
TELECOMMUNICATIONS-TECHNOLOGY -
0.2%
Bay Networks, Inc.(1) 66,200 1,692,238
- -----------------------------------------------------------------
Dycom Industries, Inc.(1) 56,900 1,226,906
--------------
2,919,144
- -----------------------------------------------------------------
UTILITIES - 5.2%
- -----------------------------------------------------------------
ELECTRIC UTILITIES - 0.8%
FPL Group, Inc. 171,400 10,144,738
- -----------------------------------------------------------------
GAS UTILITIES - 1.7%
Columbia Gas System, Inc. 282,700 22,209,619
</TABLE>
<PAGE>
PANORAMA SERIES FUND, INC. - TOTAL RETURN PORTFOLIO
STATEMENT OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
MARKET VALUE
SHARES NOTE 1
- -----------------------------------------------------------------
<S> <C> <C>
TELEPHONE UTILITIES - 2.7%
Bell Atlantic Corp. 144,600 $ 13,158,600
- -----------------------------------------------------------------
Century Telephone Enterprises, Inc. 50,600 2,520,513
- -----------------------------------------------------------------
Frontier Corp. 140,500 3,380,781
- -----------------------------------------------------------------
U S West Communications Group 336,400 15,180,050
--------------
34,239,944
--------------
Total Common Stocks (Cost
$545,906,403) 624,072,883
PRINCIPAL
AMOUNT
- -----------------------------------------------------------------
ASSET-BACKED SECURITIES - 1.0%
- -----------------------------------------------------------------
IROQUOIS Trust, Asset-Backed
Amortizing Nts., Series 1997-2, Cl.
A, 6.752%, 6/25/07(2) $ 4,500,000 4,515,996
- -----------------------------------------------------------------
Olympic Automobile Receivables
Trust:
Receivables-Backed Nts., Series
1997-A, Cl. A5, 6.80%, 2/15/05 4,050,000 4,104,919
Series 1996-A, Cl. A4, 5.85%,
7/15/01 4,000,000 3,991,250
--------------
Total Asset-Backed Securities (Cost
$12,519,787) 12,612,165
- -----------------------------------------------------------------
MORTGAGE-BACKED OBLIGATIONS - 7.3%
- -----------------------------------------------------------------
BankAmerica Manufactured Housing
Contract Trust Sr. Sub.
Pass-Through Certificates, Series
1996-1, Cl. A1, 6.125%, 10/10/26 846,547 846,679
- -----------------------------------------------------------------
Chase Commercial Mortgage
Securities Corp., Commercial Mtg.
Obligations, Series 1996-1, Cl. A2,
7.60%, 3/18/06 6,000,000 6,202,383
- -----------------------------------------------------------------
Contimortgage Home Equity Loan
Trust, Series 1995-2, Cl. A2,
7.95%, 4/15/10 33,936 33,916
- -----------------------------------------------------------------
Federal Home Loan Mortgage Corp.:
Collateralized Mtg. Obligations,
Gtd. Multiclass Mtg. Participation
Certificates, Series 1711, Cl. EA,
7%, 3/15/24 3,750,000 3,810,937
Collateralized Mtg. Obligations,
Gtd. Multiclass Mtg. Participation
Certificates, Series 1987, Cl. K,
7.50%, 9/15/27(2) 4,000,000 3,970,000
Gtd. Multiclass Mtg. Participation
Certificates, 6%, 3/1/09 3,464,343 3,439,365
Gtd. Multiclass Mtg. Participation
Certificates, Series 1337, Cl. D,
6%, 8/15/07 3,000,000 2,940,000
Gtd. Multiclass Mtg. Participation
Certificates, Series 1574, Cl. PD,
5.55%, 3/15/13 686,854 684,918
Gtd. Multiclass Mtg. Participation
Certificates, Series 1694, Cl. PG,
5.75%, 12/15/21 5,000,000 4,925,000
Gtd. Multiclass Mtg. Participation
Certificates, Series 1820, Cl. PL,
5.75%, 7/15/06 4,880,000 4,835,738
Gtd. Multiclass Mtg. Participation
Certificates, Series 1843, Cl. VB,
7%, 4/15/03 3,578,600 3,671,393
Gtd. Multiclass Mtg. Participation
Certificates, Series 1849, Cl. VA,
6%, 12/15/10 4,538,091 4,515,401
Gtd. Multiclass Mtg. Participation
Certificates, Series 1994-43, Cl.
PE, 6%, 12/25/19 2,950,000 2,936,165
Interest-Only Stripped Mtg.-Backed
Security, Series 1583, Cl. IC,
6.65%, 1/15/20(3) 8,345,178 1,255,037
- -----------------------------------------------------------------
Federal National Mortgage Assn.:
6%, 12/1/03 2,830,995 2,814,519
6.50%, 2/1/26 263,014 260,258
6.50%, 2/1/26 241,608 239,077
6.50%, 2/1/26 343,636 340,681
6.50%, 2/1/26 136,599 135,424
6.50%, 2/1/26 1,019,881 1,009,194
6.50%, 3/1/26 451,849 447,114
6.50%, 4/1/24 544,722 540,375
</TABLE>
<PAGE>
PANORAMA SERIES FUND, INC. - TOTAL RETURN PORTFOLIO
STATEMENT OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL MARKET VALUE
AMOUNT NOTE 1
<S> <C> <C>
- -----------------------------------------------------------------
MORTGAGE-BACKED OBLIGATIONS
(CONTINUED)
- -----------------------------------------------------------------
Federal National Mortgage Assn.:
(Continued)
6.50%, 4/1/26 $ 325,537 $ 322,125
7%, 4/1/00 980,077 986,948
7.50%, 11/1/08 163,746 168,768
7.50%, 12/1/08 293,339 302,336
7.50%, 2/1/08 313,342 322,106
7.50%, 4/1/08 142,596 146,198
7.50%, 5/1/07 184,084 188,734
7.50%, 8/1/08 270,422 277,987
8%, 3/1/17 155,891 163,330
8%, 6/1/17 108,130 113,290
Collateralized Mtg. Obligations,
Gtd. Multiclass Mtg. Participation
Certificates, Series 1992-15, Cl.
KZ, 7%, 2/25/22 2,253,787 2,182,635
Collateralized Mtg. Obligations,
Gtd. Real Estate Mtg. Investment
Conduit Pass-Through Certificates,
Trust 1993-181, Cl. C, 5.40%,
10/25/02 848,466 843,690
Collateralized Mtg. Obligations,
Gtd. Real Estate Mtg. Investment
Conduit Pass-Through Certificates,
Trust 1993-190, Cl. Z, 5.85%,
7/25/08 1,492,065 1,481,575
Interest-Only Stripped Mtg.-Backed
Security, Trust 1993-223, Cl. PM,
7.309%, 10/25/23(3) 8,202,184 1,243,123
- -----------------------------------------------------------------
GE Capital Mortgage Services, Inc.,
Gtd. Real Estate Mtg. Investment
Conduit Pass-Through Certificates,
Series 1994-7, Cl. A18, 6%, 2/25/09 4,707,789 4,438,551
- -----------------------------------------------------------------
Government National Mortgage Assn.:
6.50%, 4/15/26 2,865,526 2,837,559
6.50%, 4/15/26 925,268 916,238
6.50%, 4/15/26 946,176 936,942
7%, 1/15/24 696,612 704,519
7%, 11/15/08 311,912 319,315
7%, 12/15/08 401,108 410,250
7%, 12/15/23 494,068 499,982
7%, 2/15/09 428,596 438,767
7%, 6/15/09 295,013 301,737
7.50%, 1/15/09 476,358 491,830
7.50%, 1/15/10 713,564 736,520
7.50%, 1/15/23 310,489 319,100
7.50%, 10/15/23 52,186 53,633
7.50%, 11/15/23 749,719 770,509
7.50%, 3/15/09 542,002 559,607
7.50%, 3/15/23 22,697 23,327
7.50%, 6/15/09 657,995 679,164
7.50%, 6/15/23 43,117 44,313
7.50%, 6/15/24 766,843 787,633
7.50%, 8/15/23 1,853,068 1,904,455
7.50%, 8/15/23 37,362 38,398
7.50%, 9/15/23 46,865 48,165
7.50%, 9/15/23 40,794 41,926
8%, 5/15/17 278,965 293,184
8%, 5/15/17 795,960 836,531
- -----------------------------------------------------------------
Green Tree Financial Corp., Series
1994-7, Cl. A3, 8%, 3/15/20 917,092 921,100
- -----------------------------------------------------------------
Housing Securities, Inc., Series
1994-3, Cl. A3, 7.25%, 9/25/12(2) 264,912 265,161
</TABLE>
<PAGE>
PANORAMA SERIES FUND, INC. - TOTAL RETURN PORTFOLIO
STATEMENT OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL MARKET VALUE
AMOUNT NOTE 1
- -----------------------------------------------------------------
<S> <C> <C>
MORTGAGE-BACKED OBLIGATIONS
(CONTINUED)
- -----------------------------------------------------------------
Norwest Asset Securities Corp.,
Mtg. Pass-Through Certificates,
Series 1997-14, Cl. A3, 6.75%,
10/25/27 $ 5,000,000 $ 5,023,438
- -----------------------------------------------------------------
PNC Mortgage Securities Corp.,
Commercial Mtg. Pass-Through
Certificates,
Series 1995-2, Cl. A3, 6.50%,
2/25/12 4,000,000 4,007,656
- -----------------------------------------------------------------
Prudential Home Mortgage Securities
Co., Sub. Fixed Rate Mtg.
Securities, Real Estate Mtg.
Investment Conduit Pass-Through
Certificates, Series 1993-L, Cl.
1B2, 6.64%, 12/25/23(2)(4) 1,900,000 1,903,191
- -----------------------------------------------------------------
Residential Accredit Loans, Inc.,
Mortgage Asset-Backed Pass-Through
Certificates, Series 1997-QS9, Cl.
A2, 6.75%, 9/25/27 3,620,000 3,614,909
--------------
Total Mortgage-Backed Obligations
(Cost $92,043,834) 93,764,029
- -----------------------------------------------------------------
U.S. GOVERNMENT OBLIGATIONS - 14.6%
- -----------------------------------------------------------------
U.S. Treasury Bonds:
10.375%, 11/15/12 3,000,000 3,989,064
6%, 2/15/26 5,000,000 4,995,315
7.50%, 11/15/16 104,700,000 122,171,917
8.75%, 5/15/17 3,000,000 3,932,814
8.875%, 8/15/17 1,000,000 1,327,188
STRIPS, 7.835%, 5/15/15(5) 2,250,000 796,446
- -----------------------------------------------------------------
U.S. Treasury Nts.:
6.50%, 8/15/05 30,560,000 31,897,031
6.75%, 6/30/99 8,000,000 8,127,504
7.50%, 11/15/01 8,775,000 9,309,731
--------------
Total U.S. Government Obligations
(Cost $177,711,247) 186,547,010
- -----------------------------------------------------------------
FOREIGN GOVERNMENT OBLIGATIONS -
0.2%
- -----------------------------------------------------------------
Colombia (Republic of) Unsub. Nts.,
7.125%, 5/11/98 600,000 601,769
- -----------------------------------------------------------------
United Mexican States Bonds, 6.97%,
8/12/00 1,750,000 1,713,906
--------------
Total Foreign Government
Obligations (Cost $2,318,005) 2,315,675
- -----------------------------------------------------------------
MUNICIPAL BONDS AND NOTES - 0.3%
- -----------------------------------------------------------------
California Infrastructure &
Economic Development Bank Special
Purpose Trust Certificates, Series
1997-1, 6.28%, 9/25/05 (Cost
$4,007,640) 4,000,000 4,021,600
- -----------------------------------------------------------------
NON-CONVERTIBLE CORPORATE BONDS AND
NOTES - 17.3%
- -----------------------------------------------------------------
BASIC MATERIALS - 1.9%
- -----------------------------------------------------------------
CHEMICALS - 0.8%
Du Pont (E.I.) De Nemours & Co.,
8.50% Debs., 2/15/03 2,320,000 2,465,629
- -----------------------------------------------------------------
FMC Corp., 8.75% Sr. Nts., 4/1/99 2,500,000 2,573,660
- -----------------------------------------------------------------
Morton International, Inc., 9.25%
Credit Sensitive Nts., 6/1/20 2,512,000 3,271,571
- -----------------------------------------------------------------
PPG Industries, Inc., 9% Debs.,
5/1/21 1,190,000 1,485,966
--------------
9,796,826
</TABLE>
<PAGE>
PANORAMA SERIES FUND, INC. - TOTAL RETURN PORTFOLIO
STATEMENT OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL MARKET VALUE
AMOUNT NOTE 1
<S> <C> <C>
- -----------------------------------------------------------------
HOUSEHOLD GOODS - 0.4%
Fort James Corp., 6.875% Sr. Nts.,
9/15/07 $ 5,000,000 $ 5,071,500
- -----------------------------------------------------------------
METALS - 0.3%
Alcan Aluminum Ltd., 9.625% Debs.,
7/15/19 4,000,000 4,329,880
- -----------------------------------------------------------------
PAPER - 0.4%
Celulosa Arauco y Constitucion SA,
7.25% Debs., 6/11/98(2) 2,250,000 2,235,937
- -----------------------------------------------------------------
Donohue Forest Products, Inc.,
7.625% Gtd. Sr. Nts., 5/15/07 2,500,000 2,619,550
--------------
4,855,487
- -----------------------------------------------------------------
CONSUMER CYCLICALS - 2.4%
- -----------------------------------------------------------------
AUTOS & HOUSING - 0.4%
Black & Decker Corp., 6.625% Nts.,
11/15/00 2,700,000 2,726,379
- -----------------------------------------------------------------
First Industrial LP, 7.15% Bonds,
5/15/27 3,000,000 3,082,923
--------------
5,809,302
- -----------------------------------------------------------------
LEISURE & ENTERTAINMENT - 0.3%
Blockbuster Entertainment Corp.,
6.625% Sr. Nts., 2/15/98 1,750,000 1,750,632
- -----------------------------------------------------------------
Felcor Suites LP, 7.375% Sr. Nts.,
10/1/04(2) 2,000,000 2,017,042
--------------
3,767,674
- -----------------------------------------------------------------
MEDIA - 1.3%
Reed Elsevier, Inc., 6.625% Nts.,
10/15/23(6) 1,600,000 1,567,344
- -----------------------------------------------------------------
TCI Communications, Inc., 6.375%
Nts., 9/15/99 5,000,000 5,014,210
- -----------------------------------------------------------------
Tele-Communications, Inc., 7.14%
Sr. Medium-Term Nts., 2/3/98 1,500,000 1,501,228
- -----------------------------------------------------------------
Tele-Communications, Inc., 7.15%
Sr. Medium-Term Nts., 2/3/98 1,600,000 1,601,323
- -----------------------------------------------------------------
Time Warner, Inc., 7.45% Nts.,
2/1/98 3,900,000 3,903,385
- -----------------------------------------------------------------
TKR Cable I, Inc., 10.50% Sr.
Debs., 10/30/07 3,250,000 3,612,843
--------------
17,200,333
- -----------------------------------------------------------------
RETAIL: GENERAL - 0.4%
Federated Department Stores, Inc.,
10% Sr. Nts., 2/15/01 1,770,000 1,952,514
- -----------------------------------------------------------------
Price/Costco Cos., Inc., 7.125% Sr.
Nts., 6/15/05 2,000,000 2,048,966
- -----------------------------------------------------------------
Sears Roebuck & Co., 8.39%
Medium-Term Nts., 3/23/99 1,590,000 1,632,835
--------------
5,634,315
- -----------------------------------------------------------------
CONSUMER NON-CYCLICALS - 1.0%
- -----------------------------------------------------------------
FOOD - 0.6%
CPC International, Inc., 6.15%
Unsec. Nts., Series C, 1/15/06 2,000,000 1,991,316
- -----------------------------------------------------------------
Dole Food Distributing, Inc., 6.75%
Nts., 7/15/00 3,500,000 3,543,274
- -----------------------------------------------------------------
Great Atlantic & Pacific Tea Co.,
Inc., (The) 9.125% Debs., 1/15/98 2,000,000 2,001,408
--------------
7,535,998
- -----------------------------------------------------------------
HEALTHCARE/SUPPLIES & SERVICES -
0.3%
Tenet Healthcare Corp., 8% Sr.
Nts., 1/15/05 1,500,000 1,537,500
- -----------------------------------------------------------------
Tenet Healthcare Corp., 8.625% Sr.
Unsec. Nts., 12/1/03 2,000,000 2,123,046
--------------
3,660,546
- -----------------------------------------------------------------
HOUSEHOLD GOODS - 0.1%
Procter & Gamble Co., 9.36% Debs.,
Series A, 1/1/21 750,000 966,399
</TABLE>
<PAGE>
PANORAMA SERIES FUND, INC. - TOTAL RETURN PORTFOLIO
STATEMENT OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL MARKET VALUE
AMOUNT NOTE 1
- -----------------------------------------------------------------
<S> <C> <C>
ENERGY - 3.3%
- -----------------------------------------------------------------
ENERGY SERVICES & PRODUCERS - 1.9%
Chesapeake Energy Corp., 7.875% Sr.
Nts., Series B, 3/15/04 $ 3,250,000 $ 3,225,625
- -----------------------------------------------------------------
Coastal Corp., 8.125% Sr. Nts.,
9/15/02 3,190,000 3,419,638
- -----------------------------------------------------------------
Colorado International Gas Corp.,
10% Sr. Debs., 6/15/05 455,000 549,885
- -----------------------------------------------------------------
Columbia Gas System, Inc., 6.80%
Nts., Series C, 11/28/05 2,000,000 2,042,142
- -----------------------------------------------------------------
Falcon Drilling Co., Inc., 9.75%
Sr. Nts., Series B, 1/15/01 2,430,000 2,548,462
- -----------------------------------------------------------------
Ferrellgas LP/Ferrellgas Finance
Corp., 10% Sr. Nts., Series A,
8/1/01 2,000,000 2,112,500
- -----------------------------------------------------------------
HNG Internorth/Enron Corp., 9.625%
Debs., 3/15/06 700,000 840,338
- -----------------------------------------------------------------
Louisiana Land & Exploration Co.,
7.65% Debs., 12/1/23 4,000,000 4,373,164
- -----------------------------------------------------------------
Petroliam Nasional Berhad, 6.875%
Nts., 7/1/03(6) 2,500,000 2,377,010
- -----------------------------------------------------------------
TransCanada PipeLines Ltd., 9.875%
Debs., 1/1/21 2,250,000 2,992,500
--------------
24,481,264
- -----------------------------------------------------------------
OIL-INTEGRATED - 1.4%
Gulf Canada Resources Ltd., 8.25%
Sr. Nts., 3/15/17 2,000,000 2,206,840
- -----------------------------------------------------------------
Gulf Canada Resources Ltd., 9%
Debs., 8/15/99 1,750,000 1,831,623
- -----------------------------------------------------------------
Norcen Energy Resources Ltd., 6.80%
Debs., 7/2/02 4,500,000 4,579,726
- -----------------------------------------------------------------
Petroleum Geo-Services ASA, 7.50%
Nts., 3/31/07 3,600,000 3,841,337
- -----------------------------------------------------------------
Phillips Petroleum Co., 7.53%
Pass-Through Certificates, Series
1994-A1, 9/27/98 1,390,525 1,404,820
- -----------------------------------------------------------------
Standard Oil/British Petroleum Co.
plc, 9% Debs., 6/1/19 3,190,000 3,297,972
- -----------------------------------------------------------------
Texaco Capital, Inc., 8.875% Gtd.
Debs., 9/1/21 500,000 626,775
--------------
17,789,093
- -----------------------------------------------------------------
FINANCIAL - 5.4%
- -----------------------------------------------------------------
BANKS - 0.9%
BankAmerica Corp., 7.75% Sub. Nts.,
7/15/02 1,250,000 1,323,269
- -----------------------------------------------------------------
Chase Manhattan Corp. (New),
10.125% Sub. Nts., 11/1/00 1,000,000 1,103,047
- -----------------------------------------------------------------
Citicorp, 5.625% Sr. Nts., 2/15/01 2,135,000 2,094,935
- -----------------------------------------------------------------
First Fidelity Bancorp, 8.50% Sub.
Capital Nts., 4/1/98 1,500,000 1,507,974
- -----------------------------------------------------------------
Fleet Mtg./Norstar Group, Inc.,
9.90% Sub. Nts., 6/15/01 750,000 834,180
- -----------------------------------------------------------------
People's Bank of Bridgeport
(Connecticut) 7.20% Sub. Nts.,
12/1/06 4,000,000 4,083,788
--------------
10,947,193
- -----------------------------------------------------------------
DIVERSIFIED FINANCIAL - 3.2%
American General Finance Corp.,
5.875% Sr. Nts., 7/1/00 1,500,000 1,491,454
- -----------------------------------------------------------------
American General Institutional
Capital B, 8.125% Bonds, Series B,
3/15/46(6) 2,750,000 3,050,501
- -----------------------------------------------------------------
Capital One Financial Corp., 6.83%
Sr. Nts., 5/17/99 2,500,000 2,518,145
- -----------------------------------------------------------------
Capital One Financial Corp., 7.25%
Nts., 12/1/03 2,300,000 2,324,270
- -----------------------------------------------------------------
Chelsea GCA Realty Partner, Inc.,
7.75% Gtd. Unsec. Unsub. Nts.,
1/26/01 4,720,000 4,842,862
- -----------------------------------------------------------------
Commercial Credit Co., 5.55% Unsec.
Nts., 2/15/01 4,000,000 3,928,712
- -----------------------------------------------------------------
Countrywide Home Loans, Inc., 6.05%
Gtd. Medium-Term Nts., Series D,
3/1/01 1,285,000 1,279,510
- -----------------------------------------------------------------
Countrywide Home Loans, Inc.,
6.085% Gtd. Medium-Term Nts.,
Series B, 7/14/99 1,800,000 1,799,640
- -----------------------------------------------------------------
Fleet Mtg. Group, Inc., 6.50% Nts.,
9/15/99 750,000 755,475
</TABLE>
<PAGE>
PANORAMA SERIES FUND, INC. - TOTAL RETURN PORTFOLIO
STATEMENT OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL MARKET VALUE
AMOUNT NOTE 1
- -----------------------------------------------------------------
<S> <C> <C>
DIVERSIFIED FINANCIAL (CONTINUED)
Ford Motor Credit Co., 6.25% Unsub.
Nts., 2/26/98 $ 1,000,000 $ 1,003,160
- -----------------------------------------------------------------
General Motors Acceptance Corp.,
5.625% Nts., 2/15/01 1,200,000 1,182,118
- -----------------------------------------------------------------
Golden West Financial Corp., 8.625%
Sub. Nts., 8/30/98 500,000 508,717
- -----------------------------------------------------------------
Household Finance Corp., 8.95%
Debs., 9/15/99 1,200,000 1,253,971
- -----------------------------------------------------------------
Household International BV, 6% Gtd.
Sr. Nts., 3/15/99 1,500,000 1,503,084
- -----------------------------------------------------------------
Merrill Lynch & Co., Inc., 6% Nts.,
3/1/01 1,500,000 1,493,433
- -----------------------------------------------------------------
Merrill Lynch & Co., Inc., 6.50%
Nts., 4/1/01 2,500,000 2,524,110
- -----------------------------------------------------------------
Norsk Hydro AS, 8.75% Bonds,
10/23/01 1,500,000 1,616,250
- -----------------------------------------------------------------
PHH Corp., 6.50% Nts., 2/1/00 1,250,000 1,261,654
- -----------------------------------------------------------------
Salomon, Inc., 8.69% Sr.
Medium-Term Nts., Series D, 3/1/99 4,000,000 4,117,832
- -----------------------------------------------------------------
Sears Roebuck Acceptance Corp.,
5.99% Medium-Term Nts., Series 1,
12/26/00 2,000,000 1,991,144
--------------
40,446,042
- -----------------------------------------------------------------
INSURANCE - 1.3%
Cigna Corp., 7.90% Nts., 12/14/98 320,000 325,130
- -----------------------------------------------------------------
Conseco Financing Trust III, 8.796%
Bonds, 4/1/27 2,750,000 3,097,872
- -----------------------------------------------------------------
Equitable Life Assurance Society
(U.S.A.), 6.95% Surplus Nts.,
12/1/05(6) 2,000,000 2,039,432
- -----------------------------------------------------------------
GenAmerica Capital I, 8.525% Gtd.
Bonds, 6/30/27(6) 3,250,000 3,457,503
- -----------------------------------------------------------------
Life Re Capital Trust I, 8.72% Gtd.
Bonds, 6/15/27(6) 2,500,000 2,687,480
- -----------------------------------------------------------------
SunAmerica, Inc., 9% Sr. Nts.,
1/15/99 1,700,000 1,745,290
- -----------------------------------------------------------------
Travelers Property Casualty Corp.,
6.75% Nts., 4/15/01 3,500,000 3,561,260
--------------
16,913,967
- -----------------------------------------------------------------
INDUSTRIAL - 1.7%
- -----------------------------------------------------------------
INDUSTRIAL MATERIALS - 0.2%
American Standard Cos., Inc.,
10.875% Sr. Nts., 5/15/99(2) 2,750,000 2,901,250
- -----------------------------------------------------------------
INDUSTRIAL SERVICES - 0.7%
Raytheon Co., 6.45% Nts., 8/15/02 2,500,000 2,514,690
- -----------------------------------------------------------------
Sun Co., Inc., 7.95% Debs.,
12/15/01 4,000,000 4,223,876
- -----------------------------------------------------------------
USI American Holdings, Inc., 7.25%
Gtd. Sr. Nts., Series B, 12/1/06 2,860,000 2,926,220
--------------
9,664,786
- -----------------------------------------------------------------
MANUFACTURING - 0.2%
Mark IV Industries, Inc., 8.75%
Sub. Nts., 4/1/03(2) 2,200,000 2,332,000
- -----------------------------------------------------------------
TRANSPORTATION - 0.6%
Federal Express Corp., 6.25% Nts.,
4/15/98 3,485,000 3,486,474
- -----------------------------------------------------------------
Union Pacific Corp., 7% Nts.,
6/15/00 2,030,000 2,063,747
- -----------------------------------------------------------------
Union Pacific Corp., 7.60% Nts.,
5/1/05 2,000,000 2,115,228
--------------
7,665,449
- -----------------------------------------------------------------
TECHNOLOGY - 0.4%
- -----------------------------------------------------------------
COMPUTER SOFTWARE/SERVICES - 0.2%
Electric Data Systems Corp., 7.125%
Nts., 5/15/05(6) 2,000,000 2,103,060
</TABLE>
<PAGE>
PANORAMA SERIES FUND, INC. - TOTAL RETURN PORTFOLIO
STATEMENT OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL MARKET VALUE
AMOUNT NOTE 1
- -----------------------------------------------------------------
<S> <C> <C>
TELECOMMUNICATIONS-TECHNOLOGY -
0.2%
U S West Capital Funding, Inc.,
6.85% Gtd. Nts., 1/15/02 $ 2,250,000 $ 2,289,400
- -----------------------------------------------------------------
UTILITIES - 1.2%
- -----------------------------------------------------------------
ELECTRIC UTILITIES - 0.3%
Consumers Energy Co., 8.75% First
Mtg. Nts., 2/15/98 2,000,000 2,004,774
- -----------------------------------------------------------------
El Paso Electric Co., 7.25% First
Mtg. Nts., Series A, 2/1/99(2) 2,000,000 2,020,000
--------------
4,024,774
- -----------------------------------------------------------------
GAS UTILITIES - 0.7%
Northern Illinois Gas Co., 6.45%
First Mtg. Bonds, 8/1/01 2,000,000 2,027,154
- -----------------------------------------------------------------
Southern California Gas Co., 6.38%
Medium-Term Nts., 10/29/01 2,500,000 2,515,500
- -----------------------------------------------------------------
Tennessee Gas Pipeline Co., 7.50%
Bonds, 4/1/17 3,800,000 4,079,737
--------------
8,622,391
- -----------------------------------------------------------------
TELEPHONE UTILITIES - 0.2%
GTE Corp., 8.85% Debs., 3/1/98 2,350,000 2,359,534
--------------
Total Non-Convertible Corporate
Bonds and Notes (Cost $217,623,119) 221,168,463
- -----------------------------------------------------------------
SHORT-TERM NOTES - 6.5%
- -----------------------------------------------------------------
Federal Farm Credit Bank, 5.76%,
1/16/98(7) 5,000,000 4,988,000
- -----------------------------------------------------------------
Federal Home Loan Mortgage Corp.,
5.70%, 1/14/98(7) 13,088,000 13,060,682
- -----------------------------------------------------------------
Federal Home Loan Mortgage Corp.,
5.73%, 1/15/98(7) 46,565,000 46,535,147
- -----------------------------------------------------------------
Federal National Mortgage Assn.,
5.78%, 1/16/98(7) 18,000,000 17,956,650
--------------
Total Short-Term Notes (Cost
$82,540,479) 82,540,479
- -----------------------------------------------------------------
REPURCHASE AGREEMENTS - 3.8%
- -----------------------------------------------------------------
Repurchase agreement with First
Chicago Capital Markets, 6.60%,
dated 12/31/97, to be repurchased
at $48,517,783 on 1/2/98,
collateralized by U.S. Treasury
Bonds, 8%-10.625%,
8/15/15-11/15/21, with a value of
$35,948,308, and U.S. Treasury
Nts., 5.875%-7.50%,
9/30/01-12/31/01, with a value of
$13,547,857 (Cost $48,500,000) 48,500,000 48,500,000
- -----------------------------------------------------------------
TOTAL INVESTMENTS, AT VALUE (COST
$1,183,170,514) 99.8% 1,275,542,304
- -----------------------------------------------------------------
OTHER ASSETS NET OF LIABILITIES 0.2 3,181,013
------------ --------------
NET ASSETS 100.0% $1,278,723,317
------------ --------------
------------ --------------
</TABLE>
1. Non-income producing security.
2. Identifies issues considered to be illiquid or restricted - See Note 5 of
Notes to Financial Statements.
3. Interest-Only Strips represent the right to receive the monthly interest
payments on an underlying pool of mortgage loans. These securities typically
decline in price as interest rates decline. Most other fixed income securities
increase in price when interest rates decline. The principal amount of the
underlying pool represents the notional amount on which current interest is
calculated. The price of these securities is typically more sensitive to changes
in prepayment rates than traditional mortgage-backed securities (for example,
GNMA pass-throughs). Interest rates disclosed represent current yields based
upon the current cost basis and estimated timing and amount of future cash
flows.
4. Represents the current interest rate for a variable rate security.
5. For zero coupon bonds, the interest rate shown is the effective yield on the
date of purchase.
6. Represents securities sold under Rule 144A, which are exempt from
registration under the Securities Act of 1933, as amended. These securities have
been determined to be liquid under guidelines established by the Board of
Directors. These securities amount to $17,282,330 or 1.35% of the Fund's net
assets as of December 31, 1997.
7. Short-term notes are generally traded on a discount basis; the interest rate
is the discount rate received by the Fund at the time of purchase.
See accompanying Notes to Financial Statements.
<PAGE>
PANORAMA SERIES FUND, INC. - GROWTH PORTFOLIO
STATEMENT OF INVESTMENTS
DECEMBER 31, 1997
<TABLE>
<CAPTION>
MARKET VALUE
SHARES NOTE 1
- -----------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS - 88.1%
- -----------------------------------------------------------------
BASIC MATERIALS - 2.1%
- -----------------------------------------------------------------
METALS - 0.7%
Allegheny Teledyne, Inc. 216,600 $ 5,604,525
- -----------------------------------------------------------------
PAPER - 1.4%
Fort James Corp. 313,362 11,986,096
- -----------------------------------------------------------------
CONSUMER CYCLICALS - 11.3%
- -----------------------------------------------------------------
AUTOS & HOUSING - 1.8%
Goodyear Tire & Rubber Co. 120,300 7,654,087
- -----------------------------------------------------------------
Lear Corp.(1) 145,500 6,911,250
-------------
14,565,337
- -----------------------------------------------------------------
LEISURE & ENTERTAINMENT - 4.1%
Alaska Air Group, Inc.(1) 190,100 7,366,375
- -----------------------------------------------------------------
America West Holdings Corp., Cl.
B(1) 307,500 5,727,187
- -----------------------------------------------------------------
AMR Corp.(1) 100,300 12,888,550
- -----------------------------------------------------------------
Hasbro, Inc. 126,500 3,984,750
- -----------------------------------------------------------------
Outback Steakhouse, Inc.(1) 143,600 4,128,500
-------------
34,095,362
- -----------------------------------------------------------------
RETAIL: GENERAL - 3.7%
Dayton Hudson Corp. 168,300 11,360,250
- -----------------------------------------------------------------
Federated Department Stores,
Inc.(1) 188,000 8,095,750
- -----------------------------------------------------------------
Penney (J.C.) Co., Inc. 194,000 11,700,625
-------------
31,156,625
- -----------------------------------------------------------------
RETAIL: SPECIALTY - 1.7%
Brylane, Inc.(1) 87,900 4,329,075
- -----------------------------------------------------------------
Payless ShoeSource, Inc.(1) 139,900 9,390,787
-------------
13,719,862
- -----------------------------------------------------------------
CONSUMER NON-CYCLICALS - 6.6%
- -----------------------------------------------------------------
FOOD - 2.6%
Kroger Co.(1) 297,000 10,970,437
- -----------------------------------------------------------------
Safeway, Inc.(1) 166,200 10,512,150
-------------
21,482,587
- -----------------------------------------------------------------
HEALTHCARE/SUPPLIES & SERVICES -
1.7%
Tenet Healthcare Corp.(1) 354,230 11,733,869
- -----------------------------------------------------------------
WellPoint Health Networks, Inc.(1) 54,200 2,289,950
-------------
14,023,819
- -----------------------------------------------------------------
HOUSEHOLD GOODS - 2.3%
Dial Corp. (The) 379,800 7,904,587
- -----------------------------------------------------------------
Premark International, Inc. 397,600 11,530,400
-------------
19,434,987
</TABLE>
<PAGE>
PANORAMA SERIES FUND, INC. - GROWTH PORTFOLIO
STATEMENT OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
MARKET VALUE
SHARES NOTE 1
- -----------------------------------------------------------------
<S> <C> <C>
ENERGY - 10.3%
- -----------------------------------------------------------------
ENERGY SERVICES & PRODUCERS - 4.2%
Diamond Offshore Drilling, Inc. 201,200 $ 9,682,750
- -----------------------------------------------------------------
Global Marine, Inc.(1) 329,500 8,072,750
- -----------------------------------------------------------------
Oryx Energy Co.(1) 334,200 8,522,100
- -----------------------------------------------------------------
Tidewater, Inc. 153,700 8,472,712
-------------
34,750,312
- -----------------------------------------------------------------
OIL-INTEGRATED - 6.1%
Amoco Corp. 82,200 6,997,275
- -----------------------------------------------------------------
Chevron Corp. 187,300 14,422,100
- -----------------------------------------------------------------
Exxon Corp. 117,700 7,201,769
- -----------------------------------------------------------------
Mobil Corp. 144,400 10,423,875
- -----------------------------------------------------------------
Occidental Petroleum Corp. 400,900 11,751,381
-------------
50,796,400
- -----------------------------------------------------------------
FINANCIAL - 22.1%
- -----------------------------------------------------------------
BANKS - 7.9%
BankAmerica Corp. 159,400 11,636,200
- -----------------------------------------------------------------
BankBoston Corp. 166,500 15,640,594
- -----------------------------------------------------------------
First Union Corp. 318,700 16,333,375
- -----------------------------------------------------------------
NationsBank Corp. 92,300 5,612,994
- -----------------------------------------------------------------
Wells Fargo & Co. 47,300 16,055,394
-------------
65,278,557
- -----------------------------------------------------------------
DIVERSIFIED FINANCIAL - 4.8%
Crescent Real Estate Equities, Inc. 256,200 10,087,875
- -----------------------------------------------------------------
Money Store, Inc. (The) 157,600 3,309,600
- -----------------------------------------------------------------
Morgan Stanley, Dean Witter,
Discover & Co. 147,700 8,732,762
- -----------------------------------------------------------------
Travelers Group, Inc. 337,526 18,184,213
-------------
40,314,450
- -----------------------------------------------------------------
INSURANCE - 9.4%
Allstate Corp. 112,600 10,232,525
- -----------------------------------------------------------------
Chubb Corp. 175,500 13,272,187
- -----------------------------------------------------------------
Conseco, Inc. 296,200 13,458,588
- -----------------------------------------------------------------
Equitable Cos., Inc. 315,900 15,716,025
- -----------------------------------------------------------------
Torchmark Corp. 303,300 12,757,556
- -----------------------------------------------------------------
Travelers Property Casualty Corp.,
Cl. A 294,000 12,936,000
-------------
78,372,881
- -----------------------------------------------------------------
INDUSTRIAL - 14.8%
- -----------------------------------------------------------------
INDUSTRIAL SERVICES - 0.8%
Viad Corp. 336,800 6,504,450
- -----------------------------------------------------------------
MANUFACTURING - 13.1%
Aeroquip-Vickers, Inc. 138,300 6,785,344
</TABLE>
<PAGE>
PANORAMA SERIES FUND, INC. - GROWTH PORTFOLIO
STATEMENT OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
MARKET VALUE
SHARES NOTE 1
- -----------------------------------------------------------------
<S> <C> <C>
MANUFACTURING (CONTINUED)
AGCO Corp. 288,800 $ 8,447,400
- -----------------------------------------------------------------
Case Corp. 198,300 11,984,756
- -----------------------------------------------------------------
Deere & Co. 309,200 18,030,225
- -----------------------------------------------------------------
Ingersoll-Rand Co. 281,500 11,400,750
- -----------------------------------------------------------------
PACCAR, Inc. 231,800 12,169,500
- -----------------------------------------------------------------
Parker-Hannifin Corp. 184,550 8,466,231
- -----------------------------------------------------------------
Textron, Inc. 236,700 14,793,750
- -----------------------------------------------------------------
U.S. Industries, Inc. 548,100 16,511,513
-------------
108,589,469
- -----------------------------------------------------------------
TRANSPORTATION - 0.9%
Burlington Northern Santa Fe Corp. 79,000 7,342,063
- -----------------------------------------------------------------
TECHNOLOGY - 11.7%
- -----------------------------------------------------------------
AEROSPACE/DEFENSE - 1.8%
General Dynamics Corp. 85,500 7,390,406
- -----------------------------------------------------------------
Lockheed Martin Corp. 76,252 7,510,822
-------------
14,901,228
- -----------------------------------------------------------------
COMPUTER HARDWARE - 6.9%
CHS Electronics, Inc.(1) 71,250 1,220,156
- -----------------------------------------------------------------
Compaq Computer Corp. 217,300 12,263,869
- -----------------------------------------------------------------
International Business Machines
Corp. 163,100 17,054,144
- -----------------------------------------------------------------
Lexmark International Group, Inc.,
Cl. A(1) 113,200 4,301,600
- -----------------------------------------------------------------
Storage Technology Corp. (New)(1) 366,600 22,706,288
-------------
57,546,057
- -----------------------------------------------------------------
COMPUTER SOFTWARE/SERVICES - 1.3%
Electronic Data Systems Corp. 198,600 8,725,988
- -----------------------------------------------------------------
Symantec Corp.(1) 86,100 1,888,819
-------------
10,614,807
- -----------------------------------------------------------------
ELECTRONICS - 1.2%
National Semiconductor Corp.(1) 85,000 2,204,688
- -----------------------------------------------------------------
SCI Systems, Inc.(1) 180,600 7,867,388
-------------
10,072,076
- -----------------------------------------------------------------
TELECOMMUNICATIONS-TECHNOLOGY -
0.5%
Bay Networks, Inc.(1) 82,700 2,114,019
- -----------------------------------------------------------------
Dycom Industries, Inc.(1) 79,200 1,707,750
-------------
3,821,769
- -----------------------------------------------------------------
UTILITIES - 9.2%
- -----------------------------------------------------------------
ELECTRIC UTILITIES - 1.5%
FPL Group, Inc. 216,700 12,825,931
- -----------------------------------------------------------------
GAS UTILITIES - 3.0%
Columbia Gas System, Inc. 316,900 24,896,456
</TABLE>
<PAGE>
PANORAMA SERIES FUND, INC. - GROWTH PORTFOLIO
STATEMENT OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
MARKET VALUE
SHARES NOTE 1
- -----------------------------------------------------------------
<S> <C> <C>
TELEPHONE UTILITIES - 4.7%
Bell Atlantic Corp. 170,300 $ 15,497,300
- -----------------------------------------------------------------
Century Telephone Enterprises, Inc. 55,900 2,784,519
- -----------------------------------------------------------------
Frontier Corp. 169,800 4,085,813
- -----------------------------------------------------------------
U S West Communications Group 368,200 16,615,025
-------------
38,982,657
-------------
Total Common Stocks (Cost
$571,738,788) 731,678,763
PRINCIPAL
AMOUNT
- -----------------------------------------------------------------
SHORT-TERM NOTES - 9.0%
- -----------------------------------------------------------------
Federal Farm Credit Bank, 5.76%,
1/16/98(2) $ 5,000,000 4,988,000
- -----------------------------------------------------------------
Federal Home Loan Mortgage Corp.:
5.70%, 1/14/98(2) 20,000,000 19,958,545
5.73%, 1/7/98(2) 20,000,000 19,980,900
5.73%, 1/9/98(2) 30,000,000 29,961,711
-------------
Total Short-Term Notes (Cost
$74,889,156) 74,889,156
- -----------------------------------------------------------------
REPURCHASE AGREEMENTS - 3.7%
- -----------------------------------------------------------------
Repurchase agreement with First
Chicago Capital Markets, 6.60%,
dated 12/31/97, to be repurchased
at $31,111,403 on 1/2/98,
collateralized by U.S. Treasury
Bonds, 8%-10.625%,
8/15/15-11/15/21, with a value of
$23,051,389, and U.S. Treasury
Nts., 5.875%-7.50%,
9/30/01-12/31/01, with a value of
$8,687,389 (Cost $31,100,000) 31,100,000 31,100,000
- -----------------------------------------------------------------
TOTAL INVESTMENTS, AT VALUE (COST
$677,727,944) 100.8% 837,667,919
- -----------------------------------------------------------------
LIABILITIES IN EXCESS OF OTHER
ASSETS (0.8) (6,296,579)
------------ -------------
NET ASSETS 100.0% $831,371,340
------------ -------------
------------ -------------
</TABLE>
1. Non-income producing security.
2. Short-term notes are generally traded on a discount basis; the interest rate
is the discount rate received by the Fund at the time of purchase.
See accompanying Notes to Financial Statements.
<PAGE>
PANORAMA SERIES FUND, INC. - GOVERNMENT SECURITIES PORTFOLIO
STATEMENT OF INVESTMENTS
DECEMBER 31, 1997
<TABLE>
<CAPTION>
MARKET
PRINCIPAL VALUE
AMOUNT NOTE 1
- ------------------------------------------------------------
<S> <C> <C>
MORTGAGE-BACKED OBLIGATIONS - 35.5%
- ------------------------------------------------------------
Federal Farm Credit Bank
Medium-Term Nts., 6.37%, 9/1/00 $1,000,000 $1,013,120
- ------------------------------------------------------------
Federal Home Loan Bank, 5.725%,
6/15/98 1,000,000 1,000,247
- ------------------------------------------------------------
Federal Home Loan Mortgage Corp.;
Collateralized Mtg. Obligations,
Gtd. Multiclass Mtg. Participation
Certificates,
10.50%, 10/1/20 183,143 204,714
Mtg.-Backed Certificates, 6.11%,
7/31/98 1,000,000 1,002,500
Mtg.-Backed Certificates, 7.125%,
7/21/99 1,000,000 1,019,757
- ------------------------------------------------------------
Federal National Mortgage Assn.;
- ------------------------------------------------------------
6.50%, 12/1/23 744,533 738,704
- ------------------------------------------------------------
6.50%, 2/1/09 198,944 200,056
- ------------------------------------------------------------
7.50%, 9/1/22 504,511 519,752
- ------------------------------------------------------------
Government National Mortgage Assn.,
7%, 10/15/23-3/15/26 2,696,309 2,724,960
-----------
Total Mortgage-Backed Obligations
(Cost $8,398,530) 8,423,810
- ------------------------------------------------------------
U.S. GOVERNMENT OBLIGATIONS - 39.6%
- ------------------------------------------------------------
U.S. Treasury Bonds:
7.50%, 11/15/16 2,175,000 2,537,955
8.125%, 8/15/19 500,000 625,938
9.25%, 2/15/16 1,200,000 1,627,876
- ------------------------------------------------------------
U.S. Treasury Nts.:
5.75%, 8/15/03 500,000 500,625
7.25%, 8/15/04 2,700,000 2,919,378
7.50%, 11/15/01 405,000 429,680
7.50%, 2/15/05 500,000 549,531
8.50%, 2/15/00 200,000 211,188
-----------
Total U.S. Government Obligations
(Cost $8,759,875) 9,402,171
- ------------------------------------------------------------
CORPORATE BONDS AND NOTES - 6.6%
- ------------------------------------------------------------
Private Export Funding Corp.:
6.90% Nts., 1/31/03 500,000 521,737
7.30% Debs., 1/31/02 1,000,000 1,050,184
-----------
Total Corporate Bonds and Notes
(Cost $1,627,081) 1,571,921
- ------------------------------------------------------------
SHORT-TERM NOTES - 13.9%
- ------------------------------------------------------------
Federal Home Loan Mortgage Corp.,
5.73%, 1/15/98 (Cost $3,297,900)(1) 3,300,000 3,297,900
- ------------------------------------------------------------
REPURCHASE AGREEMENTS - 2.6%
- ------------------------------------------------------------
Repurchase agreement with First
Chicago Capital Markets, 6.60%,
dated 12/31/97, to be repurchased
at $600,220 on 1/2/98,
collateralized by U.S. Treasury
Bonds, 8%-10.625%,
8/15/15-11/15/21, with a value of
$444,721, and U.S. Treasury Nts.,
5.875%-7.50%, 9/30/01-12/31/01,
with a value of $167,602 (Cost
$600,000) 600,000 600,000
- ------------------------------------------------------------
TOTAL INVESTMENTS, AT VALUE (COST
$22,683,386) 98.2% 23,295,802
- ------------------------------------------------------------
OTHER ASSETS NET OF LIABILITIES 1.8 423,218
---------- -----------
NET ASSETS 100.0% $23,719,020
---------- -----------
---------- -----------
</TABLE>
1. Short-term notes are generally traded on a discount basis; the interest rate
is the discount rate received by the Fund at the time of purchase.
See accompanying Notes to Financial Statements.
<PAGE>
PANORAMA SERIES FUND, INC. - INTERNATIONAL EQUITY PORTFOLIO
STATEMENT OF INVESTMENTS
DECEMBER 31, 1997
<TABLE>
<CAPTION>
MARKET VALUE
SHARES NOTE 1
- ---------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS - 95.7%
- ---------------------------------------------------------------
BASIC MATERIALS - 3.6%
- ---------------------------------------------------------------
CHEMICALS - 2.3%
Ciba Specialty Chemicals AG(1) 10,000 $ 1,192,965
- ---------------------------------------------------------------
Fuji Photo Film Co. 19,000 730,651
------------
1,923,616
- ---------------------------------------------------------------
PAPER - 1.3%
Fletcher Challenge Forest 600,000 498,201
- ---------------------------------------------------------------
Kimberly-Clark de Mexico, SA, Cl. A 121,000 573,345
------------
1,071,546
- ---------------------------------------------------------------
CONSUMER CYCLICALS - 14.3%
- ---------------------------------------------------------------
AUTOS & HOUSING - 1.9%
Bridgestone Corp. 22,000 478,845
- ---------------------------------------------------------------
Groupe SEB SA 7,500 1,045,985
------------
1,524,830
- ---------------------------------------------------------------
LEISURE & ENTERTAINMENT - 2.1%
CDL Hotels International Ltd. 2,250,000 682,411
- ---------------------------------------------------------------
Granada Group plc 67,000 1,025,250
------------
1,707,661
- ---------------------------------------------------------------
MEDIA - 3.9%
Benpres Holdings Corp., GDR(1)(2) 19,200 57,746
- ---------------------------------------------------------------
Benpres Holdings Corp., Sponsored
GDR(1) 48,000 144,365
- ---------------------------------------------------------------
Reed International plc 88,000 883,252
- ---------------------------------------------------------------
Reuters Holdings plc 60,000 659,971
- ---------------------------------------------------------------
Television Broadcasts Ltd. 192,000 547,632
- ---------------------------------------------------------------
Wolters Kluwer NV 7,000 904,339
------------
3,197,305
- ---------------------------------------------------------------
RETAIL: GENERAL - 3.0%
adidas AG 8,000 1,058,929
- ---------------------------------------------------------------
Circle K Japan Co. Ltd. 9,300 447,043
- ---------------------------------------------------------------
Marks & Spencer plc 100,000 985,596
------------
2,491,568
- ---------------------------------------------------------------
RETAIL: SPECIALTY - 3.4%
Argos plc 66,000 596,738
- ---------------------------------------------------------------
Dickson Concepts International Ltd. 250,000 364,598
- ---------------------------------------------------------------
Hennes & Mauritz AB, B Shares 20,000 882,239
- ---------------------------------------------------------------
Koninklijke Ahold NV 35,000 913,317
------------
2,756,892
</TABLE>
<PAGE>
PANORAMA SERIES FUND, INC. - INTERNATIONAL EQUITY PORTFOLIO
STATEMENT OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
MARKET VALUE
SHARES NOTE 1
- ---------------------------------------------------------------
<S> <C> <C>
CONSUMER NON-CYCLICALS - 22.7%
- ---------------------------------------------------------------
BEVERAGES - 2.3%
Embotelladora Andina SA, Series A,
Sponsored ADR 12,400 $ 258,075
- ---------------------------------------------------------------
Embotelladora Andina SA, Series B,
Sponsored ADR 12,400 241,025
- ---------------------------------------------------------------
Quilmes Industrial Quinsa SA,
Sponsored ADR 25,000 342,187
- ---------------------------------------------------------------
Scottish & Newcastle plc 88,000 1,064,970
------------
1,906,257
- ---------------------------------------------------------------
FOOD - 5.1%
Colruyt SA 2,000 1,021,595
- ---------------------------------------------------------------
Groupe Danone 5,000 893,471
- ---------------------------------------------------------------
Jeronimo Martins & Filho SA 35,000 1,111,810
- ---------------------------------------------------------------
William Morrison Supermarkets plc 306,000 1,158,034
------------
4,184,910
- ---------------------------------------------------------------
HEALTHCARE/DRUGS - 11.1%
Gedeon Richter Ltd., GDR(2) 9,500 1,079,001
- ---------------------------------------------------------------
Novartis AG 550 893,695
- ---------------------------------------------------------------
Novartis AG, Bearer Shares 100 162,833
- ---------------------------------------------------------------
Novo-Nordisk AS, B Shares 10,300 1,474,177
- ---------------------------------------------------------------
Roche Holding AG 115 1,143,652
- ---------------------------------------------------------------
Sanofi SA 8,000 890,978
- ---------------------------------------------------------------
Schering AG 8,000 771,950
- ---------------------------------------------------------------
SKW Trostberg AG 32,000 1,016,216
- ---------------------------------------------------------------
Takeda Chemical Industries Ltd. 31,000 886,933
- ---------------------------------------------------------------
Zeneca Group plc 23,000 808,732
------------
9,128,167
- ---------------------------------------------------------------
HEALTHCARE/SUPPLIES & SERVICES -
2.0%
Luxottica Group SpA, Sponsored ADR 12,000 750,000
- ---------------------------------------------------------------
SmithKline Beecham plc 90,370 926,370
------------
1,676,370
- ---------------------------------------------------------------
HOUSEHOLD GOODS - 2.2%
L'OREAL 2,400 939,516
- ---------------------------------------------------------------
Reckitt & Colman plc 58,000 911,388
------------
1,850,904
- ---------------------------------------------------------------
ENERGY - 3.0%
- ---------------------------------------------------------------
OIL-INTEGRATED - 3.0%
Quinenco SA, ADR(1) 21,000 241,500
- ---------------------------------------------------------------
Shell Transport & Trading Co. plc 135,000 980,701
- ---------------------------------------------------------------
Total SA, B Shares 11,157 1,214,761
------------
2,436,962
</TABLE>
<PAGE>
PANORAMA SERIES FUND, INC. - INTERNATIONAL EQUITY PORTFOLIO
STATEMENT OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
MARKET VALUE
SHARES NOTE 1
- ---------------------------------------------------------------
<S> <C> <C>
FINANCIAL - 18.3%
- ---------------------------------------------------------------
BANKS - 11.4%
Banco Popular Espanol SA 17,000 $ 1,187,872
- ---------------------------------------------------------------
Bank of Tokyo-Mitsubishi Ltd. 47,000 650,664
- ---------------------------------------------------------------
Bayerische Vereinsbank AG 14,600 941,913
- ---------------------------------------------------------------
Credit Suisse Group 6,700 1,038,154
- ---------------------------------------------------------------
Credito Italiano 440,000 1,357,582
- ---------------------------------------------------------------
Halifax plc(1) 70,000 870,171
- ---------------------------------------------------------------
Lloyds TSB Group plc 133,000 1,722,259
- ---------------------------------------------------------------
Mitsubishi Trust & Banking Corp. 70,000 705,270
- ---------------------------------------------------------------
Nordbanken Holding AB(1) 155,000 877,134
------------
9,351,019
- ---------------------------------------------------------------
DIVERSIFIED FINANCIAL - 6.9%
Cattles plc 125,000 828,872
- ---------------------------------------------------------------
Haw Par Brothers International Ltd. 230,000 297,578
- ---------------------------------------------------------------
ING Groep NV 20,000 842,530
- ---------------------------------------------------------------
Lend Lease Corp. Ltd. 29,000 566,863
- ---------------------------------------------------------------
Nichiei Co. Ltd. 9,000 962,152
- ---------------------------------------------------------------
Northern Rock plc(1) 86,000 843,368
- ---------------------------------------------------------------
Perlis Plantations Berhad 175,000 247,716
- ---------------------------------------------------------------
Southcorp Holdings Ltd. 110,000 364,095
- ---------------------------------------------------------------
Swire Pacific Ltd., Cl. B 700,000 709,191
------------
5,662,365
- ---------------------------------------------------------------
INDUSTRIAL - 10.7%
- ---------------------------------------------------------------
ELECTRICAL EQUIPMENT - 1.9%
Johnson Electric Holdings Ltd. 288,000 828,882
- ---------------------------------------------------------------
Siebe plc 39,000 766,840
------------
1,595,722
- ---------------------------------------------------------------
INDUSTRIAL SERVICES - 3.5%
Adecco SA 2,900 842,034
- ---------------------------------------------------------------
Guilbert SA 5,000 713,115
- ---------------------------------------------------------------
Hays plc 78,000 1,042,132
- ---------------------------------------------------------------
Kurita Water Industries Ltd. 29,000 296,644
------------
2,893,925
- ---------------------------------------------------------------
MANUFACTURING - 4.5%
Canon Sales Co., Inc. 200 2,292
- ---------------------------------------------------------------
Mannesmann AG 2,000 1,004,425
- ---------------------------------------------------------------
NSK Ltd. 61,000 152,475
- ---------------------------------------------------------------
Ricoh Co. Ltd. 81,000 1,009,221
- ---------------------------------------------------------------
SMC Corp. 8,400 742,956
</TABLE>
<PAGE>
PANORAMA SERIES FUND, INC. - INTERNATIONAL EQUITY PORTFOLIO
STATEMENT OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
MARKET VALUE
SHARES NOTE 1
- ---------------------------------------------------------------
<S> <C> <C>
MANUFACTURING (CONTINUED)
Smiths Industries plc 57,000 $ 811,735
------------
3,723,104
- ---------------------------------------------------------------
TRANSPORTATION - 0.8%
Brambles Industries Ltd. 33,000 654,727
- ---------------------------------------------------------------
TECHNOLOGY - 18.4%
- ---------------------------------------------------------------
COMPUTER SOFTWARE/SERVICES - 1.8%
SAP AG, Preference 4,500 1,462,090
- ---------------------------------------------------------------
ELECTRONICS - 11.4%
Bowthorpe plc 111,000 684,899
- ---------------------------------------------------------------
Electrocomponents plc 114,000 849,719
- ---------------------------------------------------------------
Getronics NV 28,500 908,186
- ---------------------------------------------------------------
Hirose Electric Co. 16,000 820,790
- ---------------------------------------------------------------
Keyence Corp. 4,730 702,109
- ---------------------------------------------------------------
Matsushita Electric Industrial Co. 29,000 426,008
- ---------------------------------------------------------------
Omron Corp. 41,000 643,280
- ---------------------------------------------------------------
Philips Electronics NV 14,500 869,760
- ---------------------------------------------------------------
Rohm Co. 3,000 306,873
- ---------------------------------------------------------------
Samsung Electronics Co. Ltd.,
GDR(1)(2) 298 4,232
- ---------------------------------------------------------------
Samsung Electronics, GDS(1) 18,000 101,250
- ---------------------------------------------------------------
Sony Corp. 13,000 1,159,812
- ---------------------------------------------------------------
TDK Corp. 9,000 681,120
- ---------------------------------------------------------------
VTech Holdings Ltd. 400,000 1,179,619
------------
9,337,657
- ---------------------------------------------------------------
TELECOMMUNICATIONS-TECHNOLOGY -
5.2%
British Sky Broadcasting Group plc 65,000 487,697
- ---------------------------------------------------------------
Nippon Telegraph & Telephone Corp. 88 758,031
- ---------------------------------------------------------------
SK Telecommunications Co. Ltd., ADR 79,310 515,515
- ---------------------------------------------------------------
Telecom Italia Mobile SpA 240,000 1,108,373
- ---------------------------------------------------------------
Vodafone Group plc 197,000 1,437,580
------------
4,307,196
- ---------------------------------------------------------------
UTILITIES - 4.7%
- ---------------------------------------------------------------
ELECTRIC UTILITIES - 2.5%
United Utilities plc 60,000 774,985
- ---------------------------------------------------------------
Veba AG 19,200 1,308,089
------------
2,083,074
- ---------------------------------------------------------------
GAS UTILITIES - 1.3%
RWE AG, Preference 25,000 1,070,608
- ---------------------------------------------------------------
TELEPHONE UTILITIES - 0.9%
Telefonica de Espana 25,000 713,511
------------
Total Common Stocks (Cost
$67,763,237) 78,711,986
</TABLE>
<PAGE>
PANORAMA SERIES FUND, INC. - INTERNATIONAL EQUITY PORTFOLIO
STATEMENT OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
MARKET VALUE
SHARES NOTE 1
- ---------------------------------------------------------------
<S> <C> <C>
PREFERRED STOCKS - 1.1%
- ---------------------------------------------------------------
Fresenius AG, Preferred (Cost
$896,307) 5,000 $ 909,322
UNITS
- ---------------------------------------------------------------
RIGHTS, WARRANTS AND CERTIFICATES -
0.0%
- ---------------------------------------------------------------
Haw Par Brothers International Ltd.
Wts., Exp. 7/01 (Cost $13,861) 23,000 5,460
PRINCIPAL
AMOUNT
- ---------------------------------------------------------------
SHORT-TERM NOTES - 1.2%
- ---------------------------------------------------------------
Federal Home Loan Mortgage Corp.,
5.73%, 1/9/98 (Cost $998,718)(3) $ 1,000,000 998,718
- ---------------------------------------------------------------
REPURCHASE AGREEMENTS - 2.8%
- ---------------------------------------------------------------
Repurchase agreement with First
Chicago Capital Markets, 6.60%,
dated 12/31/97, to be repurchased
at $2,300,843 on 1/2/98,
collateralized by U.S. Treasury
Bonds, 8%-10.625%,
8/15/15-11/15/21, with a value of
$1,704,765, and U.S. Treasury Nts.,
5.875%-7.50%, 9/30/01-12/31/01,
with a value of $642,476 (Cost
$2,300,000) 2,300,000 2,300,000
- ---------------------------------------------------------------
TOTAL INVESTMENTS, AT VALUE (COST
$71,972,123) 100.8% 82,925,486
- ---------------------------------------------------------------
LIABILITIES IN EXCESS OF OTHER
ASSETS (0.8) (668,038)
----------- ------------
NET ASSETS 100.0% $82,257,448
----------- ------------
----------- ------------
</TABLE>
1. Non-income producing security.
2. Represents securities sold under Rule 144A, which are exempt from
registration under the Securities Act of 1933, as amended. These securities have
been determined to be liquid under guidelines established by the Board of
Directors. These securities amount to $1,140,979 or 1.39% of the Fund's net
assets as of December 31, 1997.
3. Short-term notes are generally traded on a discount basis; the interest rate
is the discount rate received by the Fund at the time of purchase.
<PAGE>
PANORAMA SERIES FUND, INC. - INTERNATIONAL EQUITY PORTFOLIO
STATEMENT OF INVESTMENTS (CONTINUED)
Distribution of investments by country of issue, as a percentage of total
investments at value, is as follows:
<TABLE>
<CAPTION>
<S> <C> <C>
COUNTRY MARKET VALUE PERCENT
- ----------------------------------------------------------
Great Britain $21,121,260 25.5%
- ----------------------------------------------------------
Japan 12,563,170 15.1
- ----------------------------------------------------------
Germany 9,543,542 11.5
- ----------------------------------------------------------
France 5,697,826 6.9
- ----------------------------------------------------------
Switzerland 5,273,333 6.4
- ----------------------------------------------------------
The Netherlands 4,438,131 5.4
- ----------------------------------------------------------
Hong Kong 4,312,332 5.2
- ----------------------------------------------------------
United States 3,298,718 4.0
- ----------------------------------------------------------
Italy 3,215,955 3.9
- ----------------------------------------------------------
Spain 1,901,383 2.3
- ----------------------------------------------------------
Sweden 1,759,373 2.1
- ----------------------------------------------------------
Australia 1,585,685 1.9
- ----------------------------------------------------------
Denmark 1,474,177 1.8
- ----------------------------------------------------------
Portugal 1,111,810 1.3
- ----------------------------------------------------------
Hungary 1,079,001 1.3
- ----------------------------------------------------------
Belgium 1,021,595 1.2
- ----------------------------------------------------------
Chile 740,600 0.9
- ----------------------------------------------------------
Korea, Republic of (South) 620,997 0.7
- ----------------------------------------------------------
Mexico 573,345 0.7
- ----------------------------------------------------------
New Zealand 498,201 0.6
- ----------------------------------------------------------
Luxembourg 342,187 0.4
- ----------------------------------------------------------
Singapore 303,038 0.4
- ----------------------------------------------------------
Malaysia 247,716 0.3
- ----------------------------------------------------------
Philippines 202,111 0.2
- ----------------------------------------------------------
Total $82,925,486 100.0%
------------ ------
------------ ------
</TABLE>
See accompanying Notes to Financial Statements.
<PAGE>
PANORAMA SERIES FUND, INC. - LIFESPAN DIVERSIFIED INCOME PORTFOLIO
STATEMENT OF INVESTMENTS
DECEMBER 31, 1997
<TABLE>
<CAPTION>
MARKET
PRINCIPAL VALUE
AMOUNT NOTE 1
- ------------------------------------------------------------
<S> <C> <C>
ASSET-BACKED SECURITIES - 1.7%
- ------------------------------------------------------------
Dayton Hudson Credit Card Master
Trust, Asset-Backed Certificates,
Series 1997-1, Cl. A, 6.25%,
8/25/05 $ 125,000 $ 125,325
- ------------------------------------------------------------
IROQUOIS Trust, Asset-Backed
Amortizing Nts., Series 1997-2, Cl.
A, 6.752%, 6/25/07(1) 175,000 175,622
- ------------------------------------------------------------
Olympic Automobile Receivables
Trust:
Receivables-Backed Nts., Series
1997-A, Cl. A5, 6.80%, 2/15/05 150,000 152,034
Series 1996-A, Cl. A4, 5.85%,
7/15/01 125,000 124,727
-----------
Total Asset-Backed Securities (Cost
$573,759) 577,708
- ------------------------------------------------------------
MORTGAGE-BACKED OBLIGATIONS - 8.0%
- ------------------------------------------------------------
Countrywide Funding Corp., Mtg.
Pass-Through Certificates, Series
1994-10, Cl. A3, 6%, 5/25/09 250,000 247,520
- ------------------------------------------------------------
Federal Home Loan Mortgage Corp.:
Collateralized Mtg. Obligations,
Gtd. Multiclass Mtg. Participation
Certificates, Series 1711, Cl. EA,
7%, 3/15/24 200,000 203,250
Gtd. Multiclass Mtg. Participation
Certificates, 6%, 3/1/09 212,512 210,981
Gtd. Multiclass Mtg. Participation
Certificates, Series 1574, Cl. PD,
5.55%, 3/15/13 110,783 110,471
Gtd. Multiclass Mtg. Participation
Certificates, Series 1843, Cl. VB,
7%, 4/15/03 75,000 76,945
Gtd. Multiclass Mtg. Participation
Certificates, Series 1849, Cl. VA,
6%, 12/15/10 198,239 197,248
Interest-Only Stripped Mtg.-Backed
Security, Series 1542, Cl. QC,
7.35%, 10/15/20(2) 500,000 104,541
Interest-Only Stripped Mtg.-Backed
Security, Series 1583, Cl. IC,
6.65%, 1/15/20(2) 500,000 75,195
Interest-Only Stripped Mtg.-Backed
Security, Series 1661, Cl. PK,
5.775%, 11/15/06(2) 801,135 66,062
- ------------------------------------------------------------
Federal National Mortgage Assn.:
6%, 12/1/03 180,482 179,432
6.50%, 4/1/26 185,523 183,579
7%, 4/1/00 110,456 111,230
Collateralized Mtg. Obligations,
Gtd. Real Estate Mtg. Investment
Conduit Pass-Through Certificates,
Trust 1993-181, Cl. C, 5.40%,
10/25/02 163,632 162,712
Collateralized Mtg. Obligations,
Gtd. Real Estate Mtg. Investment
Conduit Pass-Through Certificates,
Trust 1993-190, Cl. Z, 5.85%,
7/25/08 178,537 177,282
Medium-Term Nts., 6.56%, 11/13/01 125,000 125,117
Trust 1994-13, Cl. B, 6.50%,
2/25/09 150,000 149,531
- ------------------------------------------------------------
GE Capital Mortgage Services, Inc.,
Gtd. Real Estate Mtg. Investment
Conduit Pass-Through Certificates,
Series 1994-7, Cl. A18, 6%, 2/25/09 174,024 164,072
- ------------------------------------------------------------
Residential Accredit Loans, Inc.,
Mortgage Asset-Backed Pass-Through
Certificates, Series 1997-QS9, Cl.
A2, 6.75%, 9/25/27 175,000 174,754
-----------
Total Mortgage-Backed Obligations
(Cost $2,684,487) 2,719,922
- ------------------------------------------------------------
U.S. GOVERNMENT OBLIGATIONS - 20.2%
- ------------------------------------------------------------
U.S. Treasury Bonds:
6%, 2/15/26 325,000 324,696
7.50%, 11/15/16 2,265,000 2,642,974
- ------------------------------------------------------------
U.S. Treasury Nts.:
5.125%, 4/30/98 250,000 249,844
6.50%, 8/15/05 1,550,000 1,617,814
</TABLE>
<PAGE>
PANORAMA SERIES FUND, INC. - LIFESPAN DIVERSIFIED INCOME PORTFOLIO
STATEMENT OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
MARKET
PRINCIPAL VALUE
AMOUNT NOTE 1
<S> <C> <C>
- ------------------------------------------------------------
U.S. GOVERNMENT OBLIGATIONS
(CONTINUED)
- ------------------------------------------------------------
U.S. Treasury Nts.: (Continued)
6.75%, 6/30/99 $1,015,000 $1,031,177
7.50%, 11/15/01 950,000 1,007,891
-----------
Total U.S. Government Obligations
(Cost $6,621,726) 6,874,396
- ------------------------------------------------------------
CORPORATE BONDS AND NOTES - 34.4%
- ------------------------------------------------------------
BASIC INDUSTRY - 3.4%
- ------------------------------------------------------------
CHEMICALS - 1.8%
Du Pont (E.I.) De Nemours & Co.,
8.50% Debs., 2/15/03 140,000 148,788
- ------------------------------------------------------------
Laroche Industries, Inc., 9.50% Sr.
Sub. Nts., 9/15/07(3) 50,000 49,500
- ------------------------------------------------------------
Morton International, Inc., 9.25%
Credit Sensitive Nts., 6/1/20 75,000 97,678
- ------------------------------------------------------------
NL Industries, Inc., 0%/13% Sr.
Sec. Disc. Nts., 10/15/05(4) 100,000 100,000
- ------------------------------------------------------------
PPG Industries, Inc., 9% Debs.,
5/1/21 75,000 93,653
- ------------------------------------------------------------
Rexene Corp. (New), 11.75% Sr.
Nts., 12/1/04 75,000 84,937
- ------------------------------------------------------------
Texas Petrochemical Corp., 11.125%
Sr. Sub. Nts., Series B, 7/1/06 50,000 54,000
-----------
628,556
- ------------------------------------------------------------
CONTAINERS - 0.2%
Portola Packaging, Inc., 10.75% Sr.
Nts., 10/1/05(1) 75,000 79,687
- ------------------------------------------------------------
METALS/MINING - 0.4%
Alcan Aluminum Ltd., 9.625% Debs.,
7/15/19 125,000 135,309
- ------------------------------------------------------------
PAPER - 0.8%
Celulosa Arauco y Constitucion SA,
7.25% Debs., 6/11/98(1) 125,000 124,219
- ------------------------------------------------------------
Gaylord Container Corp., 12.75% Sr.
Sub. Disc. Debs., 5/15/05 75,000 80,625
- ------------------------------------------------------------
Stone Container Corp., 9.875% Sr.
Nts., 2/1/01 75,000 75,281
-----------
280,125
- ------------------------------------------------------------
STEEL - 0.2%
Gulf States Steel, Inc. (Alabama),
13.50% First Mtg. Nts., Series B,
4/15/03 50,000 49,750
- ------------------------------------------------------------
WCI Steel, Inc., 10% Sr. Nts.,
Series B, 12/1/04 25,000 25,625
-----------
75,375
- ------------------------------------------------------------
CONSUMER RELATED - 6.1%
- ------------------------------------------------------------
CONSUMER PRODUCTS - 0.6%
Black & Decker Corp., 6.625% Nts.,
11/15/00 125,000 126,221
- ------------------------------------------------------------
Kimberly-Clark Corp., 7.875% Debs.,
2/1/23 75,000 81,805
-----------
208,026
- ------------------------------------------------------------
FOOD/BEVERAGES/TOBACCO - 0.8%
AmeriServe Food Distribution, Inc.,
8.875% Sr. Nts., 10/15/06 50,000 50,500
- ------------------------------------------------------------
Dole Food Distributing, Inc., 6.75%
Nts., 7/15/00 125,000 126,545
- ------------------------------------------------------------
Van De Kamps, Inc., 12% Sr. Sub.
Nts., 9/15/05(1) 75,000 83,625
-----------
260,670
- ------------------------------------------------------------
HEALTHCARE - 1.6%
Columbia/HCA Healthcare Corp.,
6.875% Nts., 7/15/01 145,000 145,338
- ------------------------------------------------------------
Dade International, Inc., 11.125%
Sr. Sub. Nts., 5/1/06 75,000 82,875
</TABLE>
<PAGE>
PANORAMA SERIES FUND, INC. - LIFESPAN DIVERSIFIED INCOME PORTFOLIO
STATEMENT OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
MARKET
PRINCIPAL VALUE
AMOUNT NOTE 1
<S> <C> <C>
- ------------------------------------------------------------
HEALTHCARE (CONTINUED)
Graphic Controls Corp., 12% Sr.
Sub. Nts., Series A, 9/15/05 $ 75,000 $ 84,000
- ------------------------------------------------------------
Integrated Health Services, Inc.,
9.25% Sr. Sub. Nts., 1/15/08(3) 50,000 51,125
- ------------------------------------------------------------
Kinetics Concepts, Inc., 9.625% Sr.
Sub. Nts., 11/1/07(3) 75,000 76,594
- ------------------------------------------------------------
Paracelsus Healthcare Corp., 10%
Sr. Unsec. Sub. Nts., 8/15/06 50,000 51,250
- ------------------------------------------------------------
Playtex Products, Inc., 8.875% Sr.
Nts., 7/15/04 50,000 51,062
-----------
542,244
- ------------------------------------------------------------
HOTEL/GAMING - 2.6%
Casino America, Inc., 12.50% Sr.
Nts., 8/1/03 75,000 81,844
- ------------------------------------------------------------
Casino Magic of Louisiana Corp.,
13% First Mtg. Nts., Series B,
8/15/03 75,000 72,375
- ------------------------------------------------------------
Colorado Gaming & Entertainment
Co., 12% Sr. Nts., 6/1/03(1) 50,000 54,000
- ------------------------------------------------------------
Hilton Hotels Corp., 7.375% Nts.,
6/1/02 150,000 153,855
- ------------------------------------------------------------
HMH Properties, Inc., 8.875% Sr.
Nts., 7/15/07 50,000 52,875
- ------------------------------------------------------------
Hollywood Casino Corp., 12.75% Sr.
Sec. Gtd. Nts., 11/1/03 50,000 53,500
- ------------------------------------------------------------
Horseshoe Gaming LLC, 9.375% Sr.
Sub. Nts., 6/15/07 50,000 52,625
- ------------------------------------------------------------
Mohegan Tribal Gaming Authority
(Connecticut), 13.50% Sr. Sec.
Nts., Series B, 11/15/02 75,000 96,375
- ------------------------------------------------------------
Players International, Inc.,
10.875% Sr. Nts., 4/15/05 50,000 54,000
- ------------------------------------------------------------
Prime Hospitality Corp., 9.75% Sr.
Sub. Nts., 4/1/07 75,000 79,875
- ------------------------------------------------------------
Rio Hotel & Casino, Inc., 10.625%
Sr. Sub. Nts., 7/15/05 75,000 81,375
- ------------------------------------------------------------
Wyndham Hotel Corp., 10.50% Sr.
Sub. Nts., 5/15/06 50,000 58,625
-----------
891,324
- ------------------------------------------------------------
LEISURE - 0.3%
Ameristar Casinos, Inc., 10.50% Sr.
Sub. Nts., 8/1/04(3) 50,000 51,250
- ------------------------------------------------------------
Bally Total Fitness Holdings,
9.875% Sr. Sub. Nts., 10/15/07(3) 50,000 50,625
-----------
101,875
- ------------------------------------------------------------
TEXTILE/APPAREL - 0.2%
William Carter Co., 10.375% Sr.
Sub. Nts., Series A, 12/1/06 50,000 52,750
- ------------------------------------------------------------
ENERGY - 2.5%
- ------------------------------------------------------------
Coastal Corp., 8.125% Sr. Nts.,
9/15/02 75,000 80,399
- ------------------------------------------------------------
Coastal Corp., 8.75% Sr. Nts.,
5/15/99 50,000 51,692
- ------------------------------------------------------------
Falcon Drilling Co., Inc., 9.75%
Sr. Nts., Series B, 1/15/01 70,000 73,412
- ------------------------------------------------------------
Forcenergy, Inc., 8.50% Sr. Sub.
Nts., Series B, 2/15/07 50,000 50,875
- ------------------------------------------------------------
Gulf Canada Resources Ltd., 8.25%
Sr. Nts., 3/15/17 75,000 82,756
- ------------------------------------------------------------
Gulf Canada Resources Ltd., 9%
Debs., 8/15/99 75,000 78,498
- ------------------------------------------------------------
Louisiana Land & Exploration Co.,
7.65% Debs., 12/1/23 75,000 81,997
- ------------------------------------------------------------
Norcen Energy Resources Ltd., 6.80%
Debs., 7/2/02 50,000 50,886
- ------------------------------------------------------------
Petroleum Geo-Services ASA, 7.50%
Nts., 3/31/07 75,000 80,028
- ------------------------------------------------------------
Southwest Royalties, Inc., 10.50%
Sr. Gtd. Nts., 10/15/04(3) 50,000 50,000
- ------------------------------------------------------------
Standard Oil/British Petroleum Co.
plc, 9% Debs., 6/1/19 75,000 77,539
- ------------------------------------------------------------
Transamerican Energy Corp., 11.50%
Sr. Nts., 6/15/02(3) 25,000 24,625
</TABLE>
<PAGE>
PANORAMA SERIES FUND, INC. - LIFESPAN DIVERSIFIED INCOME PORTFOLIO
STATEMENT OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
MARKET
PRINCIPAL VALUE
AMOUNT NOTE 1
- ------------------------------------------------------------
<S> <C> <C>
ENERGY (CONTINUED)
- ------------------------------------------------------------
Williams Holdings of Delaware,
Inc., 6.25% Sr. Unsec. Debs.,
2/1/06 $ 75,000 $ 73,623
-----------
856,330
- ------------------------------------------------------------
FINANCIAL SERVICES - 7.4%
- ------------------------------------------------------------
BANKS & THRIFTS - 1.6%
Barnett Banks, Inc., 8.50% Sub.
Exchangeable Nts., 3/1/99 55,000 56,509
- ------------------------------------------------------------
Chase Manhattan Corp. (New), 6.625%
Sr. Nts., 1/15/98 50,000 50,008
- ------------------------------------------------------------
Citicorp, 5.625% Sr. Nts., 2/15/01 75,000 73,593
- ------------------------------------------------------------
First Fidelity Bancorp, 8.50% Sub.
Capital Nts., 4/1/98 50,000 50,266
- ------------------------------------------------------------
First Union Corp., 6.75% Sr. Nts.,
1/15/98 50,000 50,010
- ------------------------------------------------------------
Fleet Mtg./Norstar Group, Inc.,
9.90% Sub. Nts., 6/15/01 125,000 139,030
- ------------------------------------------------------------
Integra Financial Corp., 6.50% Sub.
Nts., 4/15/00 125,000 126,163
-----------
545,579
- ------------------------------------------------------------
DIVERSIFIED FINANCIAL - 4.3%
American General Finance Corp.,
8.50% Sr. Nts., 8/15/98 55,000 55,850
- ------------------------------------------------------------
American General Institutional
Capital B, 8.125% Bonds, Series B,
3/15/46(3) 75,000 83,195
- ------------------------------------------------------------
Beneficial Corp., 9.125% Debs.,
2/15/98 125,000 125,418
- ------------------------------------------------------------
Capital One Financial Corp., 6.83%
Sr. Nts., 5/17/99 60,000 60,435
- ------------------------------------------------------------
Capital One Financial Corp., 7.25%
Nts., 12/1/03 50,000 50,528
- ------------------------------------------------------------
Chelsea GCA Realty Partner, Inc.,
7.75% Gtd. Unsec. Unsub. Nts.,
1/26/01 60,000 61,562
- ------------------------------------------------------------
Commercial Credit Co., 5.55% Unsec.
Nts., 2/15/01 125,000 122,772
- ------------------------------------------------------------
Countrywide Home Loans, Inc., 6.05%
Gtd. Medium-Term Nts., Series D,
3/1/01 75,000 74,680
- ------------------------------------------------------------
Countrywide Home Loans, Inc.,
6.085% Gtd. Medium-Term Nts.,
Series B, 7/14/99 55,000 54,989
- ------------------------------------------------------------
Ford Motor Credit Co., 6.25% Unsub.
Nts., 2/26/98 125,000 125,395
- ------------------------------------------------------------
General Motors Acceptance Corp.,
5.625% Nts., 2/15/01 250,000 246,274
- ------------------------------------------------------------
Golden West Financial Corp., 8.625%
Sub. Nts., 8/30/98 50,000 50,872
- ------------------------------------------------------------
Merrill Lynch & Co., Inc., 6.50%
Nts., 4/1/01 125,000 126,205
- ------------------------------------------------------------
Olympic Financial Ltd., Units (each
unit consists of $1,000 principal
amount of 11.50% sr. nts., 3/15/07
and one warrant to purchase 6.84
shares of common stock)(5) 50,000 49,750
- ------------------------------------------------------------
Salomon, Inc., 8.69% Sr.
Medium-Term Nts., Series D, 3/1/99 130,000 133,830
- ------------------------------------------------------------
Wilshire Financial Services Group,
Inc., 13% Nts., Series A,
8/15/04(3) 50,000 51,125
-----------
1,472,880
- ------------------------------------------------------------
INSURANCE - 1.5%
Cigna Corp., 7.90% Nts., 12/14/98 140,000 142,244
- ------------------------------------------------------------
Conseco Financing Trust III, 8.796%
Bonds, 4/1/27 100,000 112,650
- ------------------------------------------------------------
SunAmerica, Inc., 9% Sr. Nts.,
1/15/99 135,000 138,597
- ------------------------------------------------------------
Travelers Property Casualty Corp.,
6.75% Nts., 4/15/01 125,000 127,188
-----------
520,679
- ------------------------------------------------------------
HOUSING RELATED - 0.6%
- ------------------------------------------------------------
BUILDING MATERIALS - 0.4%
American Standard Cos., Inc.,
10.875% Sr. Nts., 5/15/99(1) 140,000 147,700
</TABLE>
<PAGE>
PANORAMA SERIES FUND, INC. - LIFESPAN DIVERSIFIED INCOME PORTFOLIO
STATEMENT OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
MARKET
PRINCIPAL VALUE
AMOUNT NOTE 1
- ------------------------------------------------------------
<S> <C> <C>
HOMEBUILDERS/REAL ESTATE - 0.2%
First Industrial LP, 7.15% Bonds,
5/15/27 $ 75,000 $ 77,073
- ------------------------------------------------------------
MANUFACTURING - 0.8%
- ------------------------------------------------------------
AEROSPACE - 0.2%
GPA Delaware, Inc., 8.75% Gtd.
Nts., 12/15/98 50,000 51,000
- ------------------------------------------------------------
AUTOMOTIVE - 0.2%
Cambridge Industries, Inc., 10.25%
Sr. Sub. Nts., 7/15/07(3) 50,000 52,500
- ------------------------------------------------------------
CAPITAL GOODS - 0.4%
Jordan Industries, Inc., 10.375%
Sr. Nts., Series B, 8/1/07 50,000 50,750
- ------------------------------------------------------------
Mark IV Industries, Inc., 8.75%
Sub. Nts., 4/1/03(1) 35,000 37,100
- ------------------------------------------------------------
Titan Wheel International, Inc.,
8.75% Sr. Sub. Nts., 4/1/07 50,000 52,625
-----------
140,475
- ------------------------------------------------------------
MEDIA - 3.7%
- ------------------------------------------------------------
BROADCASTING - 0.5%
Argyle Television, Inc., 9.75% Sr.
Sub. Nts., 11/1/05 45,000 50,400
- ------------------------------------------------------------
Sinclair Broadcast Group, Inc., 10%
Sr. Sub. Nts., 9/30/05 75,000 79,312
- ------------------------------------------------------------
Spanish Broadcasting Systems, Inc.,
11% Sr. Nts., 3/15/04 50,000 55,250
-----------
184,962
- ------------------------------------------------------------
CABLE TELEVISION - 1.8%
Adelphia Communications Corp.,
10.50% Sr. Unsec. Nts., Series B,
7/15/04 50,000 54,125
- ------------------------------------------------------------
Comcast Corp., 9.125% Sr. Sub.
Debs., 10/15/06 75,000 80,063
- ------------------------------------------------------------
EchoStar Communications Corp.,
0%/12.875% Sr. Disc. Nts.,
6/1/04(4) 25,000 23,000
- ------------------------------------------------------------
Falcon Holdings Group LP, 11% Sr.
Sub. Nts., 9/15/03(6) 92,911 97,089
- ------------------------------------------------------------
Marcus Cable Operating Co.
LP/Marcus Cable Capital Corp.,
0%/13.50% Gtd. Sr. Sub. Disc. Nts.,
Series II, 8/1/04(4) 50,000 46,500
- ------------------------------------------------------------
TCI Satellite Entertainment, Inc.,
10.875% Sr. Sub. Nts., 2/15/07(3) 50,000 52,625
- ------------------------------------------------------------
TKR Cable I, Inc., 10.50% Sr.
Debs., 10/30/07 135,000 150,072
- ------------------------------------------------------------
United International Holdings,
Inc., Zero Coupon Sr. Sec. Disc.
Nts., Series B, 11.657%,
11/15/99(7) 50,000 41,750
- ------------------------------------------------------------
United International Holdings,
Inc., Zero Coupon Sr. Sec. Disc.
Nts., 14%, 11/15/99(7) 100,000 83,500
-----------
628,724
- ------------------------------------------------------------
DIVERSIFIED MEDIA - 0.8%
Fox/Liberty Networks LLC, 8.875%
Sr. Nts., 8/15/07(3) 25,000 25,125
- ------------------------------------------------------------
Lamar Advertising Co., 8.625% Sr.
Sub. Nts., 9/15/07 50,000 51,625
- ------------------------------------------------------------
MDC Communications Corp., 10.50%
Sr. Sub. Nts., 12/1/06 50,000 53,125
- ------------------------------------------------------------
Time Warner, Inc., 7.45% Nts.,
2/1/98 125,000 125,109
-----------
254,984
- ------------------------------------------------------------
ENTERTAINMENT/FILM - 0.6%
American Skiing Corp., 12% Sr. Sub.
Nts., Series B, 7/15/06(1) 50,000 55,750
- ------------------------------------------------------------
Ascent Entertainment Group, Inc.,
0%/11.875% Sr. Sec. Disc. Nts.,
12/15/04(3)(4) 50,000 28,875
- ------------------------------------------------------------
Blockbuster Entertainment Corp.,
6.625% Sr. Nts., 2/15/98 125,000 125,045
-----------
209,670
</TABLE>
<PAGE>
PANORAMA SERIES FUND, INC. - LIFESPAN DIVERSIFIED INCOME PORTFOLIO
STATEMENT OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
MARKET
PRINCIPAL VALUE
AMOUNT NOTE 1
- ------------------------------------------------------------
<S> <C> <C>
OTHER - 1.0%
- ------------------------------------------------------------
SERVICES - 1.0%
Employee Solutions, Inc., 10% Sr.
Nts., 10/15/04(1) $ 50,000 $ 48,250
- ------------------------------------------------------------
KSL Recreation Group, Inc., 10.25%
Sr. Sub. Nts., 5/1/07 50,000 53,375
- ------------------------------------------------------------
Maxim Group, Inc. (The), 9.25% Sr.
Sub. Nts., 10/15/07(3) 50,000 49,875
- ------------------------------------------------------------
Production Resource Group, 11.50%
Sr. Sub. Nts., 1/15/08(3) 50,000 50,375
- ------------------------------------------------------------
Sun Co., Inc., 7.95% Debs.,
12/15/01 75,000 79,198
- ------------------------------------------------------------
USI American Holdings, Inc., 7.25%
Gtd. Sr. Nts., Series B, 12/1/06 70,000 71,621
-----------
352,694
- ------------------------------------------------------------
RETAIL - 2.0%
- ------------------------------------------------------------
DEPARTMENT STORES - 1.2%
Federated Department Stores, Inc.,
10% Sr. Nts., 2/15/01 50,000 55,156
- ------------------------------------------------------------
Price/Costco Cos., Inc., 7.125% Sr.
Nts., 6/15/05 100,000 102,448
- ------------------------------------------------------------
Sears Roebuck & Co., 8.39%
Medium-Term Nts., 3/23/99 255,000 261,870
-----------
419,474
- ------------------------------------------------------------
SPECIALTY RETAILING - 0.3%
K Mart Corp., 7.75% Debs., 10/1/12 50,000 48,250
- ------------------------------------------------------------
Pantry, Inc. (The), 10.25% Sr. Sub.
Nts., 10/15/07(1) 50,000 51,250
-----------
99,500
- ------------------------------------------------------------
SUPERMARKETS - 0.5%
Great Atlantic & Pacific Tea Co.,
Inc., (The) 9.125% Debs., 1/15/98 125,000 125,088
- ------------------------------------------------------------
Jitney-Jungle Stores of America,
Inc., 10.375% Sr. Sub. Nts.,
9/15/07 50,000 52,125
-----------
177,213
- ------------------------------------------------------------
TECHNOLOGY - 3.8%
- ------------------------------------------------------------
INFORMATION TECHNOLOGY - 1.4%
DecisionOne Corp., 9.75% Sr. Sub.
Nts., 8/1/07 50,000 51,625
- ------------------------------------------------------------
Geotek Communications, Inc., 12%
Cv. Sr. Sub. Nts., 2/15/01(1) 50,000 40,000
- ------------------------------------------------------------
Iridium LLC/Iridium Capital Corp.,
11.25% Sr. Nts., 7/15/05(3) 50,000 49,250
- ------------------------------------------------------------
Microcell Telecommunications, Inc.,
0%/14% Sr. Disc. Nts., Series B,
6/1/06(4) 50,000 33,750
- ------------------------------------------------------------
Nextel Communications, Inc.,
0%/9.75% Sr. Disc. Nts., 8/15/04(4) 50,000 44,625
- ------------------------------------------------------------
Price Communications Cellular
Holdings, Inc., 0%/13.50% Sr. Disc.
Nts., Series A, 8/1/07(1)(4) 75,000 47,625
- ------------------------------------------------------------
PriCellular Wireless Corp.,
0%/12.25% Sr. Sub. Disc. Nts.,
10/1/03(4) 100,000 103,000
- ------------------------------------------------------------
Sprint Spectrum LP/Sprint Spectrum
Finance Corp., 11% Sr. Nts.,
8/15/06 50,000 56,500
- ------------------------------------------------------------
Western Wireless Corp., 10.50% Sr.
Sub. Nts., 2/1/07 50,000 54,250
-----------
480,625
- ------------------------------------------------------------
TELECOMMUNICATIONS/TECHNOLOGY -
2.4%
American Communications Services,
Inc., 0%/13% Sr. Disc. Nts.,
11/1/05(4) 50,000 40,250
- ------------------------------------------------------------
Brooks Fiber Properties, Inc.,
0%/11.875% Sr. Disc. Nts.,
11/1/06(4) 75,000 60,375
- ------------------------------------------------------------
Comcast UK Cable Partner Ltd.,
0%/11.20% Sr. Disc. Debs.,
11/15/07(4) 75,000 61,125
- ------------------------------------------------------------
Diamond Cable Communications plc,
0%/10.75% Sr. Disc. Nts.,
2/15/07(4) 50,000 34,250
</TABLE>
<PAGE>
PANORAMA SERIES FUND, INC. - LIFESPAN DIVERSIFIED INCOME PORTFOLIO
STATEMENT OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
MARKET
PRINCIPAL VALUE
AMOUNT NOTE 1
- ------------------------------------------------------------
<S> <C> <C>
TELECOMMUNICATIONS/TECHNOLOGY
(CONTINUED)
ICG Holdings, Inc., 0%/11.625% Sr.
Disc. Nts., 3/15/07(4) $ 75,000 $ 51,375
- ------------------------------------------------------------
International CableTel, Inc.,
0%/11.50% Sr. Deferred Coupon Nts.,
Series B, 2/1/06(4) 100,000 78,125
- ------------------------------------------------------------
IXC Communications, Inc., 12.50%
Sr. Nts., Series B, 10/1/05 50,000 57,875
- ------------------------------------------------------------
Talton Holdings, Inc., 11% Gtd. Sr.
Unsec. Bonds, 6/30/07(3) 50,000 54,500
- ------------------------------------------------------------
Teleport Communications Group,
Inc., 0%/11.125% Sr. Disc. Nts.,
7/1/07(4) 50,000 40,875
- ------------------------------------------------------------
Teleport Communications Group,
Inc., 9.875% Sr. Nts., 7/1/06 50,000 56,250
- ------------------------------------------------------------
Telewest Communications plc, 0%/11%
Sr. Disc. Debs., 10/1/07(4) 50,000 39,063
- ------------------------------------------------------------
Telewest Communications plc, 9.625%
Sr. Debs., 10/1/06 50,000 52,125
- ------------------------------------------------------------
U S West Capital Funding, Inc.,
6.85% Gtd. Nts., 1/15/02 150,000 152,627
- ------------------------------------------------------------
UNIFI Communications, Inc., 14% Sr.
Nts., 3/1/04 50,000 39,500
-----------
818,315
- ------------------------------------------------------------
TRANSPORTATION - 1.2%
- ------------------------------------------------------------
RAILROADS - 0.8%
CSX Corp., 7.05% Debs., 5/1/02 85,000 87,027
- ------------------------------------------------------------
Norfolk Southern Corp., 7.35% Nts.,
5/15/07 75,000 79,400
- ------------------------------------------------------------
Union Pacific Corp., 7% Nts.,
6/15/00 95,000 96,579
-----------
263,006
- ------------------------------------------------------------
SHIPPING - 0.4%
Federal Express Corp., 6.25% Nts.,
4/15/98 135,000 135,057
- ------------------------------------------------------------
UTILITIES - 1.9%
- ------------------------------------------------------------
ELECTRIC UTILITIES - 0.6%
Consumers Energy Co., 8.75% First
Mtg. Nts., 2/15/98 125,000 125,298
- ------------------------------------------------------------
El Paso Electric Co., 7.25% First
Mtg. Nts., Series A, 2/1/99(1) 65,000 65,650
-----------
190,948
- ------------------------------------------------------------
GAS UTILITIES - 1.1%
AES Corp., 8.50% Sr. Sub. Nts.,
11/1/07(3) 50,000 50,250
- ------------------------------------------------------------
Northern Illinois Gas Co., 6.45%
First Mtg. Bonds, 8/1/01 200,000 202,715
- ------------------------------------------------------------
Tennessee Gas Pipeline Co., 7.50%
Bonds, 4/1/17 100,000 107,362
-----------
360,327
- ------------------------------------------------------------
TELEPHONE UTILITIES - 0.2%
GTE Corp., 8.85% Debs., 3/1/98 55,000 55,223
-----------
Total Corporate Bonds and Notes
(Cost $11,423,484) 11,750,879
SHARES
- ------------------------------------------------------------
COMMON STOCKS - 21.2%
- ------------------------------------------------------------
BASIC INDUSTRY - 1.9%
- ------------------------------------------------------------
CHEMICALS - 1.0%
Dexter Corp. 3,900 168,431
- ------------------------------------------------------------
Ethyl Corp. 12,200 93,787
- ------------------------------------------------------------
IMC Global, Inc. 2,834 92,813
-----------
355,031
</TABLE>
<PAGE>
PANORAMA SERIES FUND, INC. - LIFESPAN DIVERSIFIED INCOME PORTFOLIO
STATEMENT OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
MARKET
VALUE
SHARES NOTE 1
<S> <C> <C>
- ------------------------------------------------------------
PAPER - 0.3%
Unisource Worldwide, Inc. 6,800 $ 96,900
- ------------------------------------------------------------
STEEL - 0.6%
Carpenter Technology Corp. 3,100 148,994
- ------------------------------------------------------------
ROHN Industries, Inc. 12,000 61,875
-----------
210,869
- ------------------------------------------------------------
CONSUMER RELATED - 0.8%
- ------------------------------------------------------------
HEALTHCARE - 0.5%
Glaxo Wellcome plc, Sponsored ADR 3,500 167,562
- ------------------------------------------------------------
RESTAURANTS - 0.3%
Piccadilly Cafeterias, Inc. 7,000 91,875
- ------------------------------------------------------------
ENERGY - 3.0%
- ------------------------------------------------------------
Amoco Corp. 1,300 110,662
- ------------------------------------------------------------
Atlantic Richfield Co. 2,500 200,312
- ------------------------------------------------------------
Chevron Corp. 2,500 192,500
- ------------------------------------------------------------
Exxon Corp. 3,100 189,681
- ------------------------------------------------------------
Mobil Corp. 2,500 180,469
- ------------------------------------------------------------
Occidental Petroleum Corp. 4,700 137,769
-----------
1,011,393
- ------------------------------------------------------------
FINANCIAL SERVICES - 4.2%
- ------------------------------------------------------------
BANKS & THRIFTS - 2.1%
BankAmerica Corp. 1,300 94,900
- ------------------------------------------------------------
BankBoston Corp. 1,800 169,087
- ------------------------------------------------------------
First Union Corp. 3,000 153,750
- ------------------------------------------------------------
NationsBank Corp. 1,800 109,462
- ------------------------------------------------------------
Wells Fargo & Co. 500 169,719
-----------
696,918
- ------------------------------------------------------------
DIVERSIFIED FINANCIAL - 1.7%
Camden Property Trust 4,800 148,800
- ------------------------------------------------------------
Capstone Capital Corp. 5,500 140,937
- ------------------------------------------------------------
Crescent Real Estate Equities, Inc. 4,100 161,438
- ------------------------------------------------------------
Health & Retirement Properties
Trust 6,400 128,000
-----------
579,175
- ------------------------------------------------------------
INSURANCE - 0.4%
HSB Group, Inc. 2,500 137,969
- ------------------------------------------------------------
HOUSING RELATED - 1.2%
- ------------------------------------------------------------
HOMEBUILDERS/REAL ESTATE - 1.2%
Cornerstone Properties, Inc. 8,400 161,175
- ------------------------------------------------------------
Meditrust Corp., Paired Stock 3,724 136,392
- ------------------------------------------------------------
Tower Realty Trust, Inc. 5,000 123,125
-----------
420,692
</TABLE>
<PAGE>
PANORAMA SERIES FUND, INC. - LIFESPAN DIVERSIFIED INCOME PORTFOLIO
STATEMENT OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
MARKET
VALUE
SHARES NOTE 1
- ------------------------------------------------------------
<S> <C> <C>
MANUFACTURING - 1.7%
- ------------------------------------------------------------
AEROSPACE - 1.0%
General Dynamics Corp. 2,500 $ 216,094
- ------------------------------------------------------------
Lockheed Martin Corp. 1,200 118,200
-----------
334,294
- ------------------------------------------------------------
CAPITAL GOODS - 0.7%
PACCAR, Inc. 4,700 246,750
- ------------------------------------------------------------
RETAIL - 1.1%
- ------------------------------------------------------------
DEPARTMENT STORES - 0.4%
Penney (J.C.) Co., Inc. 2,300 138,719
- ------------------------------------------------------------
SPECIALTY RETAILING - 0.7%
Brown Group, Inc. 6,400 85,200
- ------------------------------------------------------------
New England Business Service, Inc. 4,700 158,625
-----------
243,825
- ------------------------------------------------------------
TRANSPORTATION - 0.6%
- ------------------------------------------------------------
RAILROADS - 0.6%
GATX Corp. 3,000 217,688
- ------------------------------------------------------------
UTILITIES - 6.7%
- ------------------------------------------------------------
ELECTRIC UTILITIES - 2.4%
Duke Energy Corp. 3,686 204,112
- ------------------------------------------------------------
FPL Group, Inc. 3,500 207,156
- ------------------------------------------------------------
Illinova Corp. 3,800 102,363
- ------------------------------------------------------------
Kansas City Power & Light Co. 5,000 147,813
- ------------------------------------------------------------
Western Resources, Inc. 3,900 167,700
-----------
829,144
- ------------------------------------------------------------
GAS UTILITIES - 2.2%
El Paso Natural Gas Co. 3,800 252,700
- ------------------------------------------------------------
MCN Energy Group, Inc. 3,800 153,425
- ------------------------------------------------------------
National Fuel Gas Co. 3,700 180,144
- ------------------------------------------------------------
Questar Corp. 3,500 156,188
-----------
742,457
- ------------------------------------------------------------
TELEPHONE UTILITIES - 2.1%
Ameritech Corp. 2,200 177,100
- ------------------------------------------------------------
Bell Atlantic Corp. 2,166 197,106
- ------------------------------------------------------------
Frontier Corp. 5,700 137,156
- ------------------------------------------------------------
Nextel Communications, Inc., Cl.
A(8) 77 2,002
- ------------------------------------------------------------
U S West Communications Group 4,300 194,038
-----------
707,402
-----------
Total Common Stocks (Cost
$5,570,938) 7,228,663
- ------------------------------------------------------------
PREFERRED STOCKS - 0.6%
- ------------------------------------------------------------
Case Corp., $4.50 Cum. Cv., Series
A, Non-Vtg. 1,100 157,987
</TABLE>
<PAGE>
PANORAMA SERIES FUND, INC. - LIFESPAN DIVERSIFIED INCOME PORTFOLIO
STATEMENT OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
MARKET
VALUE
SHARES NOTE 1
<S> <C> <C>
- ------------------------------------------------------------
PREFERRED STOCKS (CONTINUED)
- ------------------------------------------------------------
PRIMEDIA, Inc., 10% Preferred
Stock, Series D(1) 500 $ 52,750
-----------
Total Preferred Stocks (Cost
$155,325) 210,737
UNITS
- ------------------------------------------------------------
RIGHTS, WARRANTS AND CERTIFICATES -
0.0%
- ------------------------------------------------------------
In-Flight Phone Corp. Wts., Exp.
8/02 75 --
- ------------------------------------------------------------
Microcell Telecommunications, Inc.
Conditional Wts., Exp. 6/06(1) 200 125
- ------------------------------------------------------------
Microcell Telecommunications, Inc.
Wts., Exp. 6/06(1) 200 2,600
- ------------------------------------------------------------
Price Communications Corp. Wts.,
Exp. 8/07(1) 258 --
- ------------------------------------------------------------
UNIFI Communications, Inc. Wts.,
Exp. 3/07(1) 50 77
-----------
Total Rights, Warrants and
Certificates (Cost $2,950) 2,802
PRINCIPAL
AMOUNT
- ------------------------------------------------------------
REPURCHASE AGREEMENTS - 12.5%
- ------------------------------------------------------------
Repurchase agreement with Zion
First National Bank, 6.60%, dated
12/31/97, to be repurchased at
$4,274,567 on 1/2/98,
collateralized by U.S. Treasury
Nts., 8.25%, 7/15/98, with a value
of $4,363,573 (Cost $4,273,000) $4,273,000 4,273,000
- ------------------------------------------------------------
TOTAL INVESTMENTS, AT VALUE (COST
$31,305,669) 98.6% 33,638,107
- ------------------------------------------------------------
OTHER ASSETS NET OF LIABILITIES 1.4 477,708
---------- -----------
NET ASSETS 100.0% $34,115,815
---------- -----------
---------- -----------
</TABLE>
1. Identifies issues considered to be illiquid or restricted - See Note 5 of
Notes to Financial Statements.
2. Interest-Only Strips represent the right to receive the monthly interest
payments on an underlying pool of mortgage loans. These securities typically
decline in price as interest rates decline. Most other fixed income securities
increase in price when interest rates decline. The principal amount of the
underlying pool represents the notional amount on which current interest is
calculated. The price of these securities is typically more sensitive to changes
in prepayment rates than traditional mortgage-backed securities (for example,
GNMA pass-throughs). Interest rates disclosed represent current yields based
upon the current cost basis and estimated timing and amount of future cash
flows.
3. Represents securities sold under Rule 144A, which are exempt from
registration under the Securities Act of 1933, as amended. These securities have
been determined to be liquid under guidelines established by the Board of
Directors. These securities amount to $901,414 or 2.64% of the Fund's net assets
as of December 31, 1997.
4. Denotes a step bond: a zero coupon bond that converts to a fixed or variable
interest rate at a designated future date.
5. Units may be comprised of several components, such as debt and equity and/or
warrants to purchase equity at some point in the future. For units which
represent debt securities, principal amount disclosed represents total
underlying principal.
6. Interest or dividend is paid in kind.
7. For zero coupon bonds, the interest rate shown is the effective yield on the
date of purchase.
8. Non-income producing security.
See accompanying Notes to Financial Statements.
<PAGE>
PANORAMA SERIES FUND, INC. - LIFESPAN BALANCED PORTFOLIO
STATEMENT OF INVESTMENTS
DECEMBER 31, 1997
<TABLE>
<CAPTION>
MARKET
VALUE
SHARES NOTE 1
- ------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS - 54.4%
- ------------------------------------------------------------
BASIC MATERIALS - 2.0%
- ------------------------------------------------------------
CHEMICALS - 0.9%
Ciba Specialty Chemicals AG(1) 1,200 $ 143,156
- ------------------------------------------------------------
Dexter Corp. 4,700 202,981
- ------------------------------------------------------------
Ethyl Corp. 14,400 110,700
- ------------------------------------------------------------
Fuji Photo Film Co. 2,000 76,911
- ------------------------------------------------------------
IMC Global, Inc. 2,834 92,813
-----------
626,561
- ------------------------------------------------------------
METALS - 0.5%
Allegheny Teledyne, Inc. 2,900 75,037
- ------------------------------------------------------------
Carpenter Technology Corp. 3,600 173,025
- ------------------------------------------------------------
ROHN Industries, Inc. 12,000 61,875
-----------
309,937
- ------------------------------------------------------------
PAPER - 0.6%
Fletcher Challenge Forest 70,000 58,123
- ------------------------------------------------------------
Fort James Corp. 4,950 189,337
- ------------------------------------------------------------
Kimberly-Clark de Mexico, SA, Cl. A 15,000 71,076
- ------------------------------------------------------------
Unisource Worldwide, Inc. 7,900 112,575
-----------
431,111
- ------------------------------------------------------------
CONSUMER CYCLICALS - 7.2%
- ------------------------------------------------------------
AUTOS & HOUSING - 1.3%
Bridgestone Corp. 5,000 108,828
- ------------------------------------------------------------
Cornerstone Properties, Inc. 9,500 182,281
- ------------------------------------------------------------
Goodyear Tire & Rubber Co. 1,700 108,162
- ------------------------------------------------------------
Groupe SEB SA 800 111,572
- ------------------------------------------------------------
Lear Corp.(1) 2,000 95,000
- ------------------------------------------------------------
Meditrust Corp., Paired Stock 4,325 158,403
- ------------------------------------------------------------
Tower Realty Trust, Inc. 5,700 140,362
-----------
904,608
- ------------------------------------------------------------
LEISURE & ENTERTAINMENT - 1.9%
Alaska Air Group, Inc.(1) 2,900 112,375
- ------------------------------------------------------------
America West Holdings Corp., Cl.
B(1) 4,500 83,812
- ------------------------------------------------------------
American Skiing Corp.(1) 5,600 83,300
- ------------------------------------------------------------
AMR Corp.(1) 1,500 192,750
- ------------------------------------------------------------
CDL Hotels International Ltd. 270,000 81,889
- ------------------------------------------------------------
Granada Group plc 8,000 122,418
- ------------------------------------------------------------
Hasbro, Inc. 1,600 50,400
- ------------------------------------------------------------
Outback Steakhouse, Inc.(1) 1,900 54,625
</TABLE>
<PAGE>
PANORAMA SERIES FUND, INC. - LIFESPAN BALANCED PORTFOLIO
STATEMENT OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
MARKET
VALUE
SHARES NOTE 1
- ------------------------------------------------------------
<S> <C> <C>
LEISURE & ENTERTAINMENT (CONTINUED)
Piccadilly Cafeterias, Inc. 8,000 $ 105,000
- ------------------------------------------------------------
Prime Hospitality Corp.(1) 2,600 52,975
- ------------------------------------------------------------
Regal Cinemas, Inc.(1) 6,050 168,644
- ------------------------------------------------------------
Vistana, Inc.(1) 10,000 230,000
-----------
1,338,188
- ------------------------------------------------------------
MEDIA - 0.9%
Applied Graphics Technologies,
Inc.(1) 4,300 228,975
- ------------------------------------------------------------
Benpres Holdings Corp., GDR(1)(2) 2,400 7,218
- ------------------------------------------------------------
Benpres Holdings Corp., Sponsored
GDR(1) 6,000 18,046
- ------------------------------------------------------------
Reed International plc 10,000 100,370
- ------------------------------------------------------------
Reuters Holdings plc 8,000 87,996
- ------------------------------------------------------------
Television Broadcasts Ltd. 23,000 65,602
- ------------------------------------------------------------
Wolters Kluwer NV 750 96,893
-----------
605,100
- ------------------------------------------------------------
RETAIL: GENERAL - 1.7%
adidas AG 750 99,275
- ------------------------------------------------------------
Circle K Japan Co. Ltd. 1,200 57,683
- ------------------------------------------------------------
Dayton Hudson Corp. 2,300 155,250
- ------------------------------------------------------------
Federated Department Stores,
Inc.(1) 2,400 103,350
- ------------------------------------------------------------
Marks & Spencer plc 12,000 118,272
- ------------------------------------------------------------
North Face, Inc. (The)(1) 5,100 112,200
- ------------------------------------------------------------
Penney (J.C.) Co., Inc. 5,300 319,656
- ------------------------------------------------------------
Wolverine World Wide, Inc. 7,950 179,869
-----------
1,145,555
- ------------------------------------------------------------
RETAIL: SPECIALTY - 1.4%
Argos plc 10,000 90,415
- ------------------------------------------------------------
Brown Group, Inc. 7,900 105,169
- ------------------------------------------------------------
Brylane, Inc.(1) 1,100 54,175
- ------------------------------------------------------------
Dickson Concepts International Ltd. 32,000 46,668
- ------------------------------------------------------------
Guitar Center, Inc.(1) 4,200 96,600
- ------------------------------------------------------------
Hennes & Mauritz AB, B Shares 2,400 105,869
- ------------------------------------------------------------
Koninklijke Ahold NV 3,600 93,941
- ------------------------------------------------------------
New England Business Service, Inc. 5,300 178,875
- ------------------------------------------------------------
Payless ShoeSource, Inc.(1) 1,700 114,112
- ------------------------------------------------------------
Stage Stores, Inc.(1) 2,800 104,650
-----------
990,474
- ------------------------------------------------------------
CONSUMER NON-CYCLICALS - 7.7%
- ------------------------------------------------------------
BEVERAGES - 0.3%
Embotelladora Andina SA, Series B,
Sponsored ADR 2,450 47,622
- ------------------------------------------------------------
Quilmes Industrial Quinsa SA,
Sponsored ADR 3,750 51,328
</TABLE>
<PAGE>
PANORAMA SERIES FUND, INC. - LIFESPAN BALANCED PORTFOLIO
STATEMENT OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
MARKET
VALUE
SHARES NOTE 1
- ------------------------------------------------------------
<S> <C> <C>
BEVERAGES (CONTINUED)
Scottish & Newcastle plc 9,000 $ 108,917
-----------
207,867
- ------------------------------------------------------------
FOOD - 1.4%
Colruyt SA 200 102,160
- ------------------------------------------------------------
Groupe Danone 600 107,217
- ------------------------------------------------------------
Jeronimo Martins & Filho SA 3,375 107,210
- ------------------------------------------------------------
Kroger Co.(1) 4,100 151,444
- ------------------------------------------------------------
Safeway, Inc.(1) 2,400 151,800
- ------------------------------------------------------------
Suiza Foods Corp.(1) 2,650 157,841
- ------------------------------------------------------------
United Natural Foods, Inc.(1) 1,200 31,200
- ------------------------------------------------------------
William Morrison Supermarkets plc 33,000 124,886
-----------
933,758
- ------------------------------------------------------------
HEALTHCARE/DRUGS - 2.7%
Dura Pharmaceuticals, Inc.(1) 2,600 119,275
- ------------------------------------------------------------
Gedeon Richter Ltd., GDR(2) 900 102,221
- ------------------------------------------------------------
Glaxo Wellcome plc, Sponsored ADR 4,000 191,500
- ------------------------------------------------------------
Incyte Pharmaceuticals, Inc.(1) 2,700 121,500
- ------------------------------------------------------------
Jones Medical Industries, Inc. 1,000 38,250
- ------------------------------------------------------------
Medicis Pharmaceutical Corp., Cl.
A(1) 4,200 214,725
- ------------------------------------------------------------
Novartis AG 100 162,490
- ------------------------------------------------------------
Novo-Nordisk AS, B Shares 1,000 143,124
- ------------------------------------------------------------
PharMerica, Inc.(1) 2,400 24,900
- ------------------------------------------------------------
Roche Holding AG 13 129,282
- ------------------------------------------------------------
Sanofi SA 1,000 111,372
- ------------------------------------------------------------
Schering AG 1,000 96,494
- ------------------------------------------------------------
SKW Trostberg AG 4,000 127,027
- ------------------------------------------------------------
Takeda Chemical Industries Ltd. 5,000 143,054
- ------------------------------------------------------------
Zeneca Group plc 4,000 140,649
-----------
1,865,863
- ------------------------------------------------------------
HEALTHCARE/SUPPLIES & SERVICES -
2.4%
Alternative Living Services,
Inc.(1) 4,800 141,900
- ------------------------------------------------------------
Concentra Managed Care, Inc.(1) 3,700 124,875
- ------------------------------------------------------------
FPA Medical Management, Inc.(1) 6,500 121,062
- ------------------------------------------------------------
HealthCare Financial Partners,
Inc.(1) 2,500 88,750
- ------------------------------------------------------------
Luxottica Group SpA, Sponsored ADR 1,500 93,750
- ------------------------------------------------------------
National Surgery Centers, Inc.(1) 8,300 217,875
- ------------------------------------------------------------
Pediatrix Medical Group, Inc.(1) 4,400 188,100
- ------------------------------------------------------------
Renal Treatment Centers, Inc.(1) 2,200 79,475
- ------------------------------------------------------------
Rural/Metro Corp.(1) 6,100 203,587
</TABLE>
<PAGE>
PANORAMA SERIES FUND, INC. - LIFESPAN BALANCED PORTFOLIO
STATEMENT OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
MARKET
VALUE
SHARES NOTE 1
- ------------------------------------------------------------
<S> <C> <C>
HEALTHCARE/SUPPLIES & SERVICES
(CONTINUED)
SmithKline Beecham plc 14,592 $ 149,581
- ------------------------------------------------------------
Tenet Healthcare Corp.(1) 4,490 148,731
- ------------------------------------------------------------
Total Renal Care Holdings, Inc.(1) 3,066 84,315
- ------------------------------------------------------------
WellPoint Health Networks, Inc.(1) 700 29,575
-----------
1,671,576
- ------------------------------------------------------------
HOUSEHOLD GOODS - 0.9%
Blyth Industries, Inc.(1) 3,400 101,787
- ------------------------------------------------------------
Dial Corp. (The) 5,500 114,469
- ------------------------------------------------------------
L'OREAL 300 117,440
- ------------------------------------------------------------
Premark International, Inc. 4,600 133,400
- ------------------------------------------------------------
Reckitt & Colman plc 8,000 125,709
-----------
592,805
- ------------------------------------------------------------
ENERGY - 4.4%
- ------------------------------------------------------------
ENERGY SERVICES & PRODUCERS - 0.9%
Diamond Offshore Drilling, Inc. 3,200 154,000
- ------------------------------------------------------------
Global Marine, Inc.(1) 4,700 115,150
- ------------------------------------------------------------
Gulf Island Fabrication, Inc.(1) 2,800 56,000
- ------------------------------------------------------------
Oryx Energy Co.(1) 3,800 96,900
- ------------------------------------------------------------
Pool Energy Services Co.(1) 2,600 57,850
- ------------------------------------------------------------
Tidewater, Inc. 2,200 121,275
-----------
601,175
- ------------------------------------------------------------
OIL-INTEGRATED - 3.5%
Amoco Corp. 2,600 221,325
- ------------------------------------------------------------
Atlantic Richfield Co. 2,800 224,350
- ------------------------------------------------------------
Chevron Corp. 5,500 423,500
- ------------------------------------------------------------
Cliffs Drilling Co.(1) 1,700 84,787
- ------------------------------------------------------------
Exxon Corp. 5,100 312,056
- ------------------------------------------------------------
Mobil Corp. 4,600 332,062
- ------------------------------------------------------------
Occidental Petroleum Corp. 11,200 328,300
- ------------------------------------------------------------
Patterson Energy, Inc.(1) 2,500 96,719
- ------------------------------------------------------------
Quinenco SA, ADR(1) 2,500 28,750
- ------------------------------------------------------------
Shell Transport & Trading Co. plc 19,000 138,025
- ------------------------------------------------------------
Total SA, B Shares 1,200 130,655
- ------------------------------------------------------------
UTI Energy Corp.(1) 2,500 64,687
-----------
2,385,216
- ------------------------------------------------------------
FINANCIAL - 9.3%
- ------------------------------------------------------------
BANKS - 4.1%
Banco Popular Espanol SA 1,600 111,800
- ------------------------------------------------------------
Bank of Tokyo-Mitsubishi Ltd. 6,000 83,063
- ------------------------------------------------------------
BankAmerica Corp. 3,800 277,400
</TABLE>
<PAGE>
PANORAMA SERIES FUND, INC. - LIFESPAN BALANCED PORTFOLIO
STATEMENT OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
MARKET
VALUE
SHARES NOTE 1
- ------------------------------------------------------------
<S> <C> <C>
BANKS (CONTINUED)
BankBoston Corp. 4,400 $ 413,325
- ------------------------------------------------------------
Bayerische Vereinsbank AG 1,750 112,901
- ------------------------------------------------------------
Credit Suisse Group 670 103,815
- ------------------------------------------------------------
Credito Italiano 48,000 148,100
- ------------------------------------------------------------
First Union Corp. 8,000 410,000
- ------------------------------------------------------------
Halifax plc(1) 8,000 99,448
- ------------------------------------------------------------
Lloyds TSB Group plc 14,000 181,290
- ------------------------------------------------------------
Mitsubishi Trust & Banking Corp. 10,000 100,753
- ------------------------------------------------------------
NationsBank Corp. 3,300 200,681
- ------------------------------------------------------------
Nordbanken Holding AB(1) 19,000 107,520
- ------------------------------------------------------------
Wells Fargo & Co. 1,300 441,269
-----------
2,791,365
- ------------------------------------------------------------
DIVERSIFIED FINANCIAL - 3.3%
Amresco, Inc. 8,100 245,025
- ------------------------------------------------------------
Camden Property Trust 5,400 167,400
- ------------------------------------------------------------
Capstone Capital Corp. 6,300 161,437
- ------------------------------------------------------------
Cattles plc 15,000 99,465
- ------------------------------------------------------------
Crescent Real Estate Equities, Inc. 8,200 322,875
- ------------------------------------------------------------
Franchise Mortgage Acceptance Co.
LLC(1) 3,200 58,800
- ------------------------------------------------------------
Haw Par Brothers International Ltd. 25,000 32,345
- ------------------------------------------------------------
Health & Retirement Properties
Trust 7,300 146,000
- ------------------------------------------------------------
ING Groep NV 2,500 105,316
- ------------------------------------------------------------
Lend Lease Corp. Ltd. 3,500 68,414
- ------------------------------------------------------------
Money Store, Inc. (The) 2,400 50,400
- ------------------------------------------------------------
Morgan Stanley, Dean Witter,
Discover & Co. 1,700 100,512
- ------------------------------------------------------------
Nichiei Co. Ltd. 1,000 106,906
- ------------------------------------------------------------
Northern Rock plc(1) 11,000 107,873
- ------------------------------------------------------------
Perlis Plantations Berhad 17,500 24,772
- ------------------------------------------------------------
Sirrom Capital Corp. 2,600 135,525
- ------------------------------------------------------------
Southcorp Holdings Ltd. 13,000 43,029
- ------------------------------------------------------------
Swire Pacific Ltd., Cl. B 78,500 79,531
- ------------------------------------------------------------
Travelers Group, Inc. 4,492 242,006
-----------
2,297,631
- ------------------------------------------------------------
INSURANCE - 1.9%
Allstate Corp. 1,500 136,312
- ------------------------------------------------------------
Chubb Corp. 2,100 158,812
- ------------------------------------------------------------
Conseco, Inc. 5,100 231,731
- ------------------------------------------------------------
Equitable Cos., Inc. 4,100 203,975
- ------------------------------------------------------------
HSB Group, Inc. 2,500 137,969
</TABLE>
<PAGE>
PANORAMA SERIES FUND, INC. - LIFESPAN BALANCED PORTFOLIO
STATEMENT OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
MARKET
VALUE
SHARES NOTE 1
- ------------------------------------------------------------
<S> <C> <C>
INSURANCE (CONTINUED)
Pre-Paid Legal Services, Inc.(1) 4,500 $ 153,844
- ------------------------------------------------------------
Torchmark Corp. 3,500 147,219
- ------------------------------------------------------------
Travelers Property Casualty Corp.,
Cl. A 3,800 167,200
-----------
1,337,062
- ------------------------------------------------------------
INDUSTRIAL - 7.4%
- ------------------------------------------------------------
ELECTRICAL EQUIPMENT - 0.3%
Johnson Electric Holdings Ltd. 26,400 75,981
- ------------------------------------------------------------
Siebe plc 5,000 98,313
-----------
174,294
- ------------------------------------------------------------
INDUSTRIAL SERVICES - 3.1%
Adecco SA 250 72,589
- ------------------------------------------------------------
American Disposal Services, Inc.(1) 4,600 167,900
- ------------------------------------------------------------
Caribiner International, Inc.(1) 2,100 93,450
- ------------------------------------------------------------
Central Parking Corp. 2,300 104,219
- ------------------------------------------------------------
Computer Horizons Corp.(1) 6,000 270,000
- ------------------------------------------------------------
Computer Task Group, Inc. 7,800 277,387
- ------------------------------------------------------------
Corestaff, Inc.(1) 5,750 152,375
- ------------------------------------------------------------
Eastern Environmental Services,
Inc.(1) 6,600 145,200
- ------------------------------------------------------------
Guilbert SA 625 89,139
- ------------------------------------------------------------
Hays plc 9,000 120,246
- ------------------------------------------------------------
Helix Technology Corp. 4,000 78,000
- ------------------------------------------------------------
Kurita Water Industries Ltd. 5,000 51,146
- ------------------------------------------------------------
Lamar Advertising Co., Cl. A(1) 3,500 139,125
- ------------------------------------------------------------
Tetra Tech, Inc.(1) 6,218 124,375
- ------------------------------------------------------------
Transaction Systems Architects,
Inc., Cl. A(1) 4,700 178,600
- ------------------------------------------------------------
Viad Corp. 4,700 90,769
-----------
2,154,520
- ------------------------------------------------------------
MANUFACTURING - 3.2%
Aeroquip-Vickers, Inc. 1,800 88,312
- ------------------------------------------------------------
AGCO Corp. 4,400 128,700
- ------------------------------------------------------------
Canon Sales Co., Inc. 300 3,438
- ------------------------------------------------------------
Case Corp. 2,700 163,181
- ------------------------------------------------------------
Deere & Co. 3,600 209,925
- ------------------------------------------------------------
Halter Marine Group, Inc.(1) 2,450 70,744
- ------------------------------------------------------------
Ingersoll-Rand Co. 3,300 133,650
- ------------------------------------------------------------
Mannesmann AG 195 97,931
- ------------------------------------------------------------
NSK Ltd. 3,000 7,499
- ------------------------------------------------------------
PACCAR, Inc. 8,900 467,250
- ------------------------------------------------------------
Parker-Hannifin Corp. 2,450 112,394
</TABLE>
<PAGE>
PANORAMA SERIES FUND, INC. - LIFESPAN BALANCED PORTFOLIO
STATEMENT OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
MARKET
VALUE
SHARES NOTE 1
- ------------------------------------------------------------
<S> <C> <C>
MANUFACTURING (CONTINUED)
Ricoh Co. Ltd. 9,000 $ 112,136
- ------------------------------------------------------------
SMC Corp. 100 8,845
- ------------------------------------------------------------
Smiths Industries plc 7,000 99,687
- ------------------------------------------------------------
Textron, Inc. 4,300 268,750
- ------------------------------------------------------------
U.S. Industries, Inc. 7,350 221,419
-----------
2,193,861
- ------------------------------------------------------------
TRANSPORTATION - 0.8%
Brambles Industries Ltd. 4,000 79,361
- ------------------------------------------------------------
Burlington Northern Santa Fe Corp. 1,100 102,231
- ------------------------------------------------------------
GATX Corp. 3,500 253,969
- ------------------------------------------------------------
Gulfmark Offshore, Inc.(1) 2,200 72,600
- ------------------------------------------------------------
MotivePower Industries, Inc.(1) 2,400 55,800
-----------
563,961
- ------------------------------------------------------------
TECHNOLOGY - 10.5%
- ------------------------------------------------------------
AEROSPACE/DEFENSE - 0.9%
General Dynamics Corp. 4,100 354,394
- ------------------------------------------------------------
Lockheed Martin Corp. 2,400 236,400
-----------
590,794
- ------------------------------------------------------------
COMPUTER HARDWARE - 1.9%
Apex PC Solutions, Inc.(1) 3,200 70,800
- ------------------------------------------------------------
CHS Electronics, Inc.(1) 1,050 17,981
- ------------------------------------------------------------
Compaq Computer Corp. 3,100 174,956
- ------------------------------------------------------------
Digital Lightwave, Inc.(1) 3,500 45,937
- ------------------------------------------------------------
Insight Enterprises, Inc.(1) 4,750 174,562
- ------------------------------------------------------------
International Business Machines
Corp. 1,900 198,669
- ------------------------------------------------------------
Lexmark International Group, Inc.,
Cl. A(1) 1,600 60,800
- ------------------------------------------------------------
Network Appliance, Inc.(1) 5,400 191,700
- ------------------------------------------------------------
Semtech Corp.(1) 2,100 82,162
- ------------------------------------------------------------
Storage Technology Corp. (New)(1) 4,400 272,525
-----------
1,290,092
- ------------------------------------------------------------
COMPUTER SOFTWARE/SERVICES - 2.8%
BEA Systems, Inc.(1) 7,200 124,650
- ------------------------------------------------------------
Electronic Data Systems Corp. 2,800 123,025
- ------------------------------------------------------------
HNC Software, Inc.(1) 2,900 124,700
- ------------------------------------------------------------
JDA Software Group, Inc.(1) 3,600 126,000
- ------------------------------------------------------------
Pegasystems, Inc.(1) 5,700 115,069
- ------------------------------------------------------------
Remedy Corp.(1) 2,000 42,000
- ------------------------------------------------------------
SAP AG, Preference 550 178,700
- ------------------------------------------------------------
Sapient Corp.(1) 2,600 159,250
- ------------------------------------------------------------
Security Dynamics Technologies,
Inc.(1) 3,900 139,425
</TABLE>
<PAGE>
PANORAMA SERIES FUND, INC. - LIFESPAN BALANCED PORTFOLIO
STATEMENT OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
MARKET
VALUE
SHARES NOTE 1
- ------------------------------------------------------------
<S> <C> <C>
COMPUTER SOFTWARE/SERVICES
(CONTINUED)
Summit Design, Inc.(1) 5,100 $ 52,912
- ------------------------------------------------------------
Sykes Enterprises, Inc.(1) 3,850 75,075
- ------------------------------------------------------------
Symantec Corp.(1) 1,200 26,325
- ------------------------------------------------------------
Technology Solutions Co.(1) 5,350 141,106
- ------------------------------------------------------------
Veritas Software Corp.(1) 3,425 174,675
- ------------------------------------------------------------
Viasoft, Inc.(1) 2,900 122,525
- ------------------------------------------------------------
Visio Corp.(1) 2,800 107,450
- ------------------------------------------------------------
Wind River Systems, Inc.(1) 2,950 117,078
-----------
1,949,965
- ------------------------------------------------------------
ELECTRONICS - 2.6%
Bowthorpe plc 18,000 111,065
- ------------------------------------------------------------
Electrocomponents plc 13,000 96,898
- ------------------------------------------------------------
Getronics NV 2,900 92,412
- ------------------------------------------------------------
Hirose Electric Co. 2,000 102,599
- ------------------------------------------------------------
Keyence Corp. 660 97,969
- ------------------------------------------------------------
Matsushita Electric Industrial Co. 4,000 58,760
- ------------------------------------------------------------
National Semiconductor Corp.(1) 1,000 25,937
- ------------------------------------------------------------
Omron Corp. 3,000 47,069
- ------------------------------------------------------------
Philips Electronics NV 2,000 119,967
- ------------------------------------------------------------
Rohm Co. 1,000 102,291
- ------------------------------------------------------------
Samsung Electronics Co. Ltd.,
GDR(1)(2) 32 454
- ------------------------------------------------------------
Samsung Electronics, GDS(1) 1,950 10,969
- ------------------------------------------------------------
Sawtek, Inc.(1) 2,500 65,937
- ------------------------------------------------------------
SCI Systems, Inc.(1) 2,400 104,550
- ------------------------------------------------------------
Sony Corp. 1,400 124,903
- ------------------------------------------------------------
TDK Corp. 1,000 75,680
- ------------------------------------------------------------
Vitesse Semiconductor Corp.(1) 4,150 156,662
- ------------------------------------------------------------
VTech Holdings Ltd. 65,000 191,688
- ------------------------------------------------------------
Waters Corp.(1) 5,700 214,463
-----------
1,800,273
- ------------------------------------------------------------
TELECOMMUNICATIONS-TECHNOLOGY -
2.3%
Bay Networks, Inc.(1) 1,200 30,675
- ------------------------------------------------------------
British Sky Broadcasting Group plc 8,500 63,776
- ------------------------------------------------------------
Comverse Technology, Inc.(1) 3,800 148,200
- ------------------------------------------------------------
DSP Communications, Inc.(1) 3,800 45,600
- ------------------------------------------------------------
Dycom Industries, Inc.(1) 1,100 23,719
- ------------------------------------------------------------
Inter-Tel, Inc. 4,700 91,063
- ------------------------------------------------------------
Nextel Communications, Inc., Cl.
A(1) 232 6,032
- ------------------------------------------------------------
Nippon Telegraph & Telephone Corp. 12 103,368
</TABLE>
<PAGE>
PANORAMA SERIES FUND, INC. - LIFESPAN BALANCED PORTFOLIO
STATEMENT OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
MARKET
VALUE
SHARES NOTE 1
- ------------------------------------------------------------
<S> <C> <C>
TELECOMMUNICATIONS-TECHNOLOGY
(CONTINUED)
P-COM, Inc.(1) 7,500 $ 129,375
- ------------------------------------------------------------
Pacific Gateway Exchange, Inc.(1) 3,400 182,963
- ------------------------------------------------------------
REMEC, Inc.(1) 2,600 58,500
- ------------------------------------------------------------
SK Telecommunications Co. Ltd., ADR 6,077 39,501
- ------------------------------------------------------------
Tekelec(1) 3,300 100,650
- ------------------------------------------------------------
Tel-Save Holdings, Inc.(1) 2,300 45,713
- ------------------------------------------------------------
Telecom Italia Mobile SpA 30,000 138,547
- ------------------------------------------------------------
Uniphase Corp.(1) 3,600 148,950
- ------------------------------------------------------------
Vodafone Group plc 21,000 153,245
- ------------------------------------------------------------
Yurie Systems, Inc.(1) 2,600 52,488
-----------
1,562,365
- ------------------------------------------------------------
UTILITIES - 5.9%
- ------------------------------------------------------------
ELECTRIC UTILITIES - 1.9%
Duke Energy Corp. 4,117 227,979
- ------------------------------------------------------------
FPL Group, Inc. 7,000 414,313
- ------------------------------------------------------------
Illinova Corp. 4,200 113,138
- ------------------------------------------------------------
Kansas City Power & Light Co. 5,600 165,550
- ------------------------------------------------------------
Veba AG 2,500 170,324
- ------------------------------------------------------------
Western Resources, Inc. 4,400 189,200
-----------
1,280,504
- ------------------------------------------------------------
GAS UTILITIES - 1.9%
Columbia Gas System, Inc. 4,500 353,531
- ------------------------------------------------------------
El Paso Natural Gas Co. 4,200 279,300
- ------------------------------------------------------------
MCN Energy Group, Inc. 4,300 173,613
- ------------------------------------------------------------
National Fuel Gas Co. 4,400 214,225
- ------------------------------------------------------------
Questar Corp. 4,100 182,963
- ------------------------------------------------------------
RWE AG, Preference 2,500 107,061
-----------
1,310,693
- ------------------------------------------------------------
TELEPHONE UTILITIES - 2.1%
Ameritech Corp. 2,500 201,250
- ------------------------------------------------------------
Bell Atlantic Corp. 4,973 452,543
- ------------------------------------------------------------
Century Telephone Enterprises, Inc. 800 39,850
- ------------------------------------------------------------
Frontier Corp. 9,100 218,969
- ------------------------------------------------------------
Telefonica de Espana 3,500 99,891
- ------------------------------------------------------------
U S West Communications Group 10,300 464,788
-----------
1,477,291
-----------
Total Common Stocks (Cost
$30,775,366) 37,384,465
- ------------------------------------------------------------
PREFERRED STOCKS - 0.5%
- ------------------------------------------------------------
Case Corp., $4.50 Cum. Cv., Series
A, Non-Vtg. 1,100 157,987
</TABLE>
<PAGE>
PANORAMA SERIES FUND, INC. - LIFESPAN BALANCED PORTFOLIO
STATEMENT OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
MARKET
VALUE
SHARES NOTE 1
- ------------------------------------------------------------
<S> <C> <C>
PREFERRED STOCKS (CONTINUED)
- ------------------------------------------------------------
Fresenius AG, Preferred 600 $ 109,119
- ------------------------------------------------------------
PRIMEDIA, Inc., 10% Preferred
Stock, Series D(3) 1,000 105,500
-----------
Total Preferred Stocks (Cost
$315,456) 372,606
UNITS
- ------------------------------------------------------------
RIGHTS, WARRANTS AND CERTIFICATES -
0.0%
- ------------------------------------------------------------
Haw Par Brothers International Ltd.
Wts., Exp. 7/01 2,500 593
- ------------------------------------------------------------
In-Flight Phone Corp. Wts., Exp.
8/02 125 --
- ------------------------------------------------------------
Microcell Telecommunications, Inc.
Conditional Wts., Exp. 6/06(3) 500 313
- ------------------------------------------------------------
Microcell Telecommunications, Inc.
Wts., Exp. 6/06(3) 500 6,500
- ------------------------------------------------------------
Price Communications Corp. Wts.,
Exp. 8/07(3) 516 5
- ------------------------------------------------------------
UNIFI Communications, Inc. Wts.,
Exp. 3/07(3) 125 188
-----------
Total Rights, Warrants and
Certificates (Cost $8,882) 7,599
PRINCIPAL
AMOUNT
- ------------------------------------------------------------
ASSET-BACKED SECURITIES - 0.8%
- ------------------------------------------------------------
Dayton Hudson Credit Card Master
Trust, Asset-Backed Certificates,
Series 1997-1, Cl. A, 6.25%,
8/25/05 $ 125,000 125,325
- ------------------------------------------------------------
Olympic Automobile Receivables
Trust:
Receivables-Backed Nts., Series
1997-A, Cl. A5, 6.80%, 2/15/05 150,000 152,034
Series 1996-A, Cl. A4, 5.85%,
7/15/01 90,000 89,803
- ------------------------------------------------------------
IROQUOIS Trust, Asset-Backed
Amortizing Nts., Series 1997-2, Cl.
A, 6.752%, 6/25/07(3) 175,000 175,622
-----------
Total Asset-Backed Securities (Cost
$538,963) 542,784
- ------------------------------------------------------------
MORTGAGE-BACKED OBLIGATIONS - 3.9%
- ------------------------------------------------------------
Countrywide Funding Corp., Mtg.
Pass-Through Certificates, Series
1994-10, Cl. A3, 6%, 5/25/09 250,000 247,520
- ------------------------------------------------------------
Federal Home Loan Mortgage Corp.:
Collateralized Mtg. Obligations,
Gtd. Multiclass Mtg. Participation
Certificates,
Series 1711, Cl. EA, 7%, 3/15/24 200,000 203,250
Gtd. Multiclass Mtg. Participation
Certificates, 6%, 3/1/09 166,146 164,948
Gtd. Multiclass Mtg. Participation
Certificates, Series 1574, Cl. PD,
5.55%, 3/15/13 88,626 88,377
Gtd. Multiclass Mtg. Participation
Certificates, Series 1843, Cl. VB,
7%, 4/15/03 50,000 51,297
Gtd. Multiclass Mtg. Participation
Certificates, Series 1849, Cl. VA,
6%, 12/15/10 134,802 134,129
Interest-Only Stripped Mtg.-Backed
Security, Series 1542, Cl. QC,
7.35%, 10/15/20(4) 900,000 188,174
Interest-Only Stripped Mtg.-Backed
Security, Series 1583, Cl. IC,
6.65%, 1/15/20(4) 750,000 112,792
Interest-Only Stripped Mtg.-Backed
Security, Series 1661, Cl. PK,
5.775%, 11/15/06(4) 801,135 66,062
- ------------------------------------------------------------
Federal National Mortgage Assn.:
6%, 12/1/03 128,916 128,166
6.50%, 4/1/26 139,142 137,684
</TABLE>
<PAGE>
PANORAMA SERIES FUND, INC. - LIFESPAN BALANCED PORTFOLIO
STATEMENT OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
MARKET
PRINCIPAL VALUE
AMOUNT NOTE 1
<S> <C> <C>
- ------------------------------------------------------------
MORTGAGE-BACKED OBLIGATIONS
(CONTINUED)
- ------------------------------------------------------------
Federal National Mortgage Assn.:
(Continued)
7%, 4/1/00 $ 147,274 $ 148,307
Collateralized Mtg. Obligations,
Gtd. Real Estate Mtg. Investment
Conduit Pass-Through Certificates,
Trust 1993-181, Cl. C, 5.40%,
10/25/02 121,209 120,527
Collateralized Mtg. Obligations,
Gtd. Real Estate Mtg. Investment
Conduit Pass-Through Certificates,
Trust 1993-190, Cl. Z, 5.85%,
7/25/08 127,526 126,630
Medium-Term Nts., 6.56%, 11/13/01 225,000 225,212
Trust 1994-13, Cl. B, 6.50%,
2/25/09 100,000 99,687
- ------------------------------------------------------------
GE Capital Mortgage Services, Inc.,
Gtd. Real Estate Mtg. Investment
Conduit Pass-Through Certificates,
Series 1994-7, Cl. A18, 6%, 2/25/09 149,164 140,634
- ------------------------------------------------------------
PNC Mortgage Securities Corp.,
Commercial Mtg. Pass-Through
Certificates,
Series 1995-2, Cl. A3, 6.50%,
2/25/12 125,000 125,239
- ------------------------------------------------------------
Residential Accredit Loans, Inc.,
Mortgage Asset-Backed Pass-Through
Certificates, Series 1997-QS9, Cl.
A2, 6.75%, 9/25/27 175,000 174,754
-----------
Total Mortgage-Backed Obligations
(Cost $2,655,002) 2,683,389
- ------------------------------------------------------------
U.S. GOVERNMENT OBLIGATIONS - 8.1%
- ------------------------------------------------------------
U.S. Treasury Bonds:
6%, 2/15/26 200,000 199,813
7.50%, 11/15/16 1,835,000 2,141,217
- ------------------------------------------------------------
U.S. Treasury Nts.:
5.125%, 4/30/98 550,000 549,657
6.50%, 8/15/05 1,120,000 1,169,001
6.75%, 6/30/99 745,000 756,874
7.50%, 11/15/01 700,000 742,656
-----------
Total U.S. Government Obligations
(Cost $5,355,558) 5,559,218
- ------------------------------------------------------------
NON-CONVERTIBLE CORPORATE BONDS AND
NOTES - 21.8%
- ------------------------------------------------------------
BASIC MATERIALS - 2.3%
- ------------------------------------------------------------
CHEMICALS - 1.3%
Du Pont (E.I.) De Nemours & Co.,
8.50% Debs., 2/15/03 100,000 106,277
- ------------------------------------------------------------
Laroche Industries, Inc., 9.50% Sr.
Sub. Nts., 9/15/07(2) 125,000 123,750
- ------------------------------------------------------------
Morton International, Inc., 9.25%
Credit Sensitive Nts., 6/1/20 50,000 65,119
- ------------------------------------------------------------
NL Industries, Inc., 0%/13% Sr.
Sec. Disc. Nts., 10/15/05(5) 175,000 175,000
- ------------------------------------------------------------
PPG Industries, Inc., 9% Debs.,
5/1/21 50,000 62,436
- ------------------------------------------------------------
Rexene Corp. (New), 11.75% Sr.
Nts., 12/1/04 125,000 141,562
- ------------------------------------------------------------
Sterling Chemicals Holdings, Inc.,
0%/13.50% Sr. Disc. Nts.,
8/15/08(5) 125,000 76,875
- ------------------------------------------------------------
Texas Petrochemical Corp., 11.125%
Sr. Sub. Nts., Series B, 7/1/06 125,000 135,000
-----------
886,019
- ------------------------------------------------------------
METALS - 0.5%
Alcan Aluminum Ltd., 9.625% Debs.,
7/15/19 100,000 108,247
- ------------------------------------------------------------
Gulf States Steel, Inc. (Alabama),
13.50% First Mtg. Nts., Series B,
4/15/03 125,000 124,375
</TABLE>
<PAGE>
PANORAMA SERIES FUND, INC. - LIFESPAN BALANCED PORTFOLIO
STATEMENT OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
MARKET
PRINCIPAL VALUE
AMOUNT NOTE 1
- ------------------------------------------------------------
<S> <C> <C>
METALS (CONTINUED)
WCI Steel, Inc., 10% Sr. Nts.,
Series B, 12/1/04 $ 75,000 $ 76,875
-----------
309,497
- ------------------------------------------------------------
PAPER - 0.5%
Celulosa Arauco y Constitucion SA,
7.25% Debs., 6/11/98(3) 85,000 84,469
- ------------------------------------------------------------
Gaylord Container Corp., 12.75% Sr.
Sub. Disc. Debs., 5/15/05 125,000 134,375
- ------------------------------------------------------------
Stone Container Corp., 9.875% Sr.
Nts., 2/1/01 125,000 125,469
-----------
344,313
- ------------------------------------------------------------
CONSUMER CYCLICALS - 7.2%
- ------------------------------------------------------------
AUTOS & HOUSING - 0.4%
Black & Decker Corp., 6.625% Nts.,
11/15/00 85,000 85,830
- ------------------------------------------------------------
Cambridge Industries, Inc., 10.25%
Sr. Sub. Nts., 7/15/07(2) 125,000 131,250
- ------------------------------------------------------------
First Industrial LP, 7.15% Bonds,
5/15/27 60,000 61,658
-----------
278,738
- ------------------------------------------------------------
LEISURE & ENTERTAINMENT - 3.1%
American Skiing Corp., 12% Sr. Sub.
Nts., Series B, 7/15/06(3) 100,000 111,500
- ------------------------------------------------------------
Ameristar Casinos, Inc., 10.50% Sr.
Sub. Nts., 8/1/04(2) 50,000 51,250
- ------------------------------------------------------------
Ascent Entertainment Group, Inc.,
0%/11.875% Sr. Sec. Disc. Nts.,
12/15/04(2)(5) 125,000 72,187
- ------------------------------------------------------------
Bally Total Fitness Holdings,
9.875% Sr. Sub. Nts., 10/15/07(2) 125,000 126,562
- ------------------------------------------------------------
Blockbuster Entertainment Corp.,
6.625% Sr. Nts., 2/15/98 85,000 85,031
- ------------------------------------------------------------
Casino America, Inc., 12.50% Sr.
Nts., 8/1/03 125,000 136,406
- ------------------------------------------------------------
Casino Magic of Louisiana Corp.,
13% First Mtg. Nts., Series B,
8/15/03 200,000 193,000
- ------------------------------------------------------------
Colorado Gaming & Entertainment
Co., 12% Sr. Nts., 6/1/03(3) 125,000 135,000
- ------------------------------------------------------------
Hilton Hotels Corp., 7.375% Nts.,
6/1/02 125,000 128,212
- ------------------------------------------------------------
HMH Properties, Inc., 8.875% Sr.
Nts., 7/15/07 125,000 132,187
- ------------------------------------------------------------
Hollywood Casino Corp., 12.75% Sr.
Sec. Gtd. Nts., 11/1/03 125,000 133,750
- ------------------------------------------------------------
Horseshoe Gaming LLC, 9.375% Sr.
Sub. Nts., 6/15/07 50,000 52,625
- ------------------------------------------------------------
Mohegan Tribal Gaming Authority
(Connecticut), 13.50% Sr. Sec.
Nts., Series B, 11/15/02 125,000 160,625
- ------------------------------------------------------------
Players International, Inc.,
10.875% Sr. Nts., 4/15/05 125,000 135,000
- ------------------------------------------------------------
Prime Hospitality Corp., 9.75% Sr.
Sub. Nts., 4/1/07 125,000 133,125
- ------------------------------------------------------------
Rio Hotel & Casino, Inc., 10.625%
Sr. Sub. Nts., 7/15/05 125,000 135,625
- ------------------------------------------------------------
Showboat, Inc., 9.25% First Mtg.
Bonds, 5/1/08 100,000 107,000
- ------------------------------------------------------------
Wyndham Hotel Corp., 10.50% Sr.
Sub. Nts., 5/15/06 100,000 117,250
-----------
2,146,335
- ------------------------------------------------------------
MEDIA - 2.7%
Adelphia Communications Corp.,
10.50% Sr. Unsec. Nts., Series B,
7/15/04 125,000 135,312
- ------------------------------------------------------------
Cablevision Systems Corp., 9.875%
Sr. Sub. Nts., 5/15/06 50,000 55,125
- ------------------------------------------------------------
Century Communications Corp., 9.75%
Sr. Nts., 2/15/02 100,000 106,750
- ------------------------------------------------------------
Comcast Corp., 9.125% Sr. Sub.
Debs., 10/15/06 125,000 133,437
- ------------------------------------------------------------
EchoStar Satellite Broadcasting
Corp., 0%/13.125% Sr. Sec. Disc.
Nts., 3/15/04(5) 100,000 85,500
</TABLE>
<PAGE>
PANORAMA SERIES FUND, INC. - LIFESPAN BALANCED PORTFOLIO
STATEMENT OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
MARKET
PRINCIPAL VALUE
AMOUNT NOTE 1
- ------------------------------------------------------------
<S> <C> <C>
MEDIA (CONTINUED)
Falcon Holdings Group LP, 11% Sr.
Sub. Nts., 9/15/03(6) $ 154,852 $ 161,816
- ------------------------------------------------------------
Fox/Liberty Networks LLC, 8.875%
Sr. Nts., 8/15/07(2) 50,000 50,250
- ------------------------------------------------------------
Hollinger International Publishing,
Inc., 9.25% Gtd. Sr. Sub. Nts.,
3/15/07 100,000 105,500
- ------------------------------------------------------------
Lamar Advertising Co., 8.625% Sr.
Sub. Nts., 9/15/07 100,000 103,250
- ------------------------------------------------------------
Marcus Cable Operating Co.
LP/Marcus Cable Capital Corp.,
0%/13.50% Gtd. Sr. Sub. Disc. Nts.,
Series II, 8/1/04(5) 125,000 116,250
- ------------------------------------------------------------
MDC Communications Corp., 10.50%
Sr. Sub. Nts., 12/1/06 125,000 132,812
- ------------------------------------------------------------
Sinclair Broadcast Group, Inc., 10%
Sr. Sub. Nts., 9/30/05 125,000 132,187
- ------------------------------------------------------------
Spanish Broadcasting Systems, Inc.,
11% Sr. Nts., 3/15/04 100,000 110,500
- ------------------------------------------------------------
TCI Satellite Entertainment, Inc.,
10.875% Sr. Sub. Nts., 2/15/07(2) 125,000 131,562
- ------------------------------------------------------------
Time Warner, Inc., 7.45% Nts.,
2/1/98 85,000 85,074
- ------------------------------------------------------------
TKR Cable I, Inc., 10.50% Sr.
Debs., 10/30/07 125,000 138,955
- ------------------------------------------------------------
United International Holdings,
Inc., Zero Coupon Sr. Sec. Disc.
Nts., 12.915%, 11/15/99(7) 100,000 83,500
-----------
1,867,780
- ------------------------------------------------------------
RETAIL: GENERAL - 0.6%
Federated Department Stores, Inc.,
10% Sr. Nts., 2/15/01 35,000 38,609
- ------------------------------------------------------------
Price/Costco Cos., Inc., 7.125% Sr.
Nts., 6/15/05 90,000 92,203
- ------------------------------------------------------------
Sears Roebuck & Co., 8.39%
Medium-Term Nts., 3/23/99 175,000 179,715
- ------------------------------------------------------------
William Carter Co., 10.375% Sr.
Sub. Nts., Series A, 12/1/06 125,000 131,875
-----------
442,402
- ------------------------------------------------------------
RETAIL: SPECIALTY - 0.4%
K Mart Corp., 7.75% Debs., 10/1/12 125,000 120,625
- ------------------------------------------------------------
Pantry, Inc. (The), 10.25% Sr. Sub.
Nts., 10/15/07(3) 150,000 153,750
-----------
274,375
- ------------------------------------------------------------
CONSUMER NON-CYCLICALS - 2.0%
- ------------------------------------------------------------
FOOD - 0.8%
AmeriServe Food Distribution, Inc.,
8.875% Sr. Nts., 10/15/06 125,000 126,250
- ------------------------------------------------------------
Dole Food Distributing, Inc., 6.75%
Nts., 7/15/00 95,000 96,175
- ------------------------------------------------------------
Fresh Del Monte Produce NV, 10% Sr.
Nts., Series B, 5/1/03 71,000 74,195
- ------------------------------------------------------------
Great Atlantic & Pacific Tea Co.,
Inc., (The), 9.125% Debs., 1/15/98 85,000 85,060
- ------------------------------------------------------------
Jitney-Jungle Stores of America,
Inc., 10.375% Sr. Sub. Nts.,
9/15/07 50,000 52,125
- ------------------------------------------------------------
Van De Kamps, Inc., 12% Sr. Sub.
Nts., 9/15/05(3) 125,000 139,375
-----------
573,180
- ------------------------------------------------------------
HEALTHCARE/DRUGS - 0.1%
Integrated Health Services, Inc.,
9.25% Sr. Sub. Nts., 1/15/08(2) 50,000 51,125
- ------------------------------------------------------------
HEALTHCARE/SUPPLIES & SERVICES -
1.0%
Columbia/HCA Healthcare Corp.,
6.875% Nts., 7/15/01 100,000 100,233
- ------------------------------------------------------------
Dade International, Inc., 11.125%
Sr. Sub. Nts., 5/1/06 125,000 138,125
- ------------------------------------------------------------
Graphic Controls Corp., 12% Sr.
Sub. Nts., Series A, 9/15/05 125,000 140,000
</TABLE>
<PAGE>
PANORAMA SERIES FUND, INC. - LIFESPAN BALANCED PORTFOLIO
STATEMENT OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
MARKET
PRINCIPAL VALUE
AMOUNT NOTE 1
- ------------------------------------------------------------
<S> <C> <C>
HEALTHCARE/SUPPLIES & SERVICES
(CONTINUED)
Kinetics Concepts, Inc., 9.625% Sr.
Sub. Nts., 11/1/07(2) $ 50,000 $ 51,063
- ------------------------------------------------------------
Paracelsus Healthcare Corp., 10%
Sr. Unsec. Sub. Nts., 8/15/06 100,000 102,500
- ------------------------------------------------------------
Playtex Products, Inc., 8.875% Sr.
Nts., 7/15/04 75,000 76,594
- ------------------------------------------------------------
Tenet Healthcare Corp., 8% Sr.
Nts., 1/15/05 75,000 76,875
-----------
685,390
- ------------------------------------------------------------
HOUSEHOLD GOODS - 0.1%
Kimberly-Clark Corp., 7.875% Debs.,
2/1/23 50,000 54,537
- ------------------------------------------------------------
ENERGY - 1.2%
- ------------------------------------------------------------
ENERGY SERVICES & PRODUCERS - 0.7%
Coastal Corp., 8.125% Sr. Nts.,
9/15/02 50,000 53,599
- ------------------------------------------------------------
Coastal Corp., 8.75% Sr. Nts.,
5/15/99 35,000 36,184
- ------------------------------------------------------------
Falcon Drilling Co., Inc., 9.75%
Sr. Nts., Series B, 1/15/01 55,000 57,681
- ------------------------------------------------------------
Forcenergy, Inc., 8.50% Sr. Sub.
Nts., Series B, 2/15/07 50,000 50,875
- ------------------------------------------------------------
Louisiana Land & Exploration Co.,
7.65% Debs., 12/1/23 50,000 54,665
- ------------------------------------------------------------
Southwest Royalties, Inc., 10.50%
Sr. Gtd. Nts., 10/15/04(2) 125,000 125,000
- ------------------------------------------------------------
Transamerican Energy Corp., 11.50%
Sr. Nts., 6/15/02(2) 50,000 49,250
- ------------------------------------------------------------
Williams Holdings of Delaware,
Inc., 6.25% Sr. Unsec. Debs.,
2/1/06 50,000 49,082
-----------
476,336
- ------------------------------------------------------------
OIL-INTEGRATED - 0.5%
Gulf Canada Resources Ltd., 8.25%
Sr. Nts., 3/15/17 75,000 82,757
- ------------------------------------------------------------
Gulf Canada Resources Ltd., 9%
Debs., 8/15/99 75,000 78,498
- ------------------------------------------------------------
Norcen Energy Resources Ltd., 6.80%
Debs., 7/2/02 50,000 50,886
- ------------------------------------------------------------
Petroleum Geo-Services ASA, 7.50%
Nts., 3/31/07 75,000 80,028
- ------------------------------------------------------------
Standard Oil/British Petroleum Co.
plc, 9% Debs., 6/1/19 50,000 51,692
-----------
343,861
- ------------------------------------------------------------
FINANCIAL - 2.9%
- ------------------------------------------------------------
BANKS - 0.5%
Chase Manhattan Corp. (New), 6.625%
Sr. Nts., 1/15/98 35,000 35,006
- ------------------------------------------------------------
Citicorp, 5.625% Sr. Nts., 2/15/01 50,000 49,062
- ------------------------------------------------------------
First Fidelity Bancorp, 8.50% Sub.
Capital Nts., 4/1/98 35,000 35,186
- ------------------------------------------------------------
First Union Corp., 6.75% Sr. Nts.,
1/15/98 35,000 35,007
- ------------------------------------------------------------
Fleet Mtg./Norstar Group, Inc.,
9.90% Sub. Nts., 6/15/01 85,000 94,540
- ------------------------------------------------------------
Integra Financial Corp., 6.50% Sub.
Nts., 4/15/00 85,000 85,791
-----------
334,592
- ------------------------------------------------------------
DIVERSIFIED FINANCIAL - 1.8%
American General Finance Corp.,
8.50% Sr. Nts., 8/15/98 40,000 40,618
- ------------------------------------------------------------
American General Institutional
Capital B, 8.125% Bonds, Series B,
3/15/46(2) 75,000 83,195
- ------------------------------------------------------------
Beneficial Corp., 9.125% Debs.,
2/15/98 85,000 85,284
- ------------------------------------------------------------
Capital One Financial Corp., 6.83%
Sr. Nts., 5/17/99 45,000 45,327
</TABLE>
<PAGE>
PANORAMA SERIES FUND, INC. - LIFESPAN BALANCED PORTFOLIO
STATEMENT OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
MARKET
PRINCIPAL VALUE
AMOUNT NOTE 1
- ------------------------------------------------------------
<S> <C> <C>
DIVERSIFIED FINANCIAL (CONTINUED)
Capital One Financial Corp., 7.25%
Nts., 12/1/03 $ 40,000 $ 40,422
- ------------------------------------------------------------
Chelsea GCA Realty Partner, Inc.,
7.75% Gtd. Unsec. Unsub. Nts.,
1/26/01 40,000 41,041
- ------------------------------------------------------------
Commercial Credit Co., 5.55% Unsec.
Nts., 2/15/01 85,000 83,485
- ------------------------------------------------------------
Countrywide Home Loans, Inc., 6.05%
Gtd. Medium-Term Nts., Series D,
3/1/01 50,000 49,786
- ------------------------------------------------------------
Countrywide Home Loans, Inc.,
6.085% Gtd. Medium-Term Nts.,
Series B, 7/14/99 40,000 39,992
- ------------------------------------------------------------
Ford Motor Credit Co., 6.25% Unsub.
Nts., 2/26/98 85,000 85,269
- ------------------------------------------------------------
General Motors Acceptance Corp.,
5.625% Nts., 2/15/01 175,000 172,392
- ------------------------------------------------------------
Golden West Financial Corp., 8.625%
Sub. Nts., 8/30/98 35,000 35,610
- ------------------------------------------------------------
Merrill Lynch & Co., Inc., 6.50%
Nts., 4/1/01 85,000 85,820
- ------------------------------------------------------------
Olympic Financial Ltd., Units (each
unit consists of $1,000 principal
amount of 11.50% sr. nts., 3/15/07
and one warrant to purchase 6.84
shares of common stock)(8) 125,000 124,375
- ------------------------------------------------------------
Salomon, Inc., 8.69% Sr.
Medium-Term Nts., Series D, 3/1/99 100,000 102,946
- ------------------------------------------------------------
Wilshire Financial Services Group,
Inc., 13% Nts., Series A,
8/15/04(2) 125,000 127,813
-----------
1,243,375
- ------------------------------------------------------------
INSURANCE - 0.6%
Cigna Corp., 7.90% Nts., 12/14/98 100,000 101,603
- ------------------------------------------------------------
Conseco Financing Trust III, 8.796%
Bonds, 4/1/27 100,000 112,650
- ------------------------------------------------------------
SunAmerica, Inc., 9% Sr. Nts.,
1/15/99 110,000 112,931
- ------------------------------------------------------------
Travelers Property Casualty Corp.,
6.75% Nts., 4/15/01 85,000 86,488
-----------
413,672
- ------------------------------------------------------------
INDUSTRIAL - 2.1%
- ------------------------------------------------------------
INDUSTRIAL MATERIALS - 0.3%
American Standard Cos., Inc.,
10.875% Sr. Nts., 5/15/99(3) 100,000 105,500
- ------------------------------------------------------------
Portola Packaging, Inc., 10.75% Sr.
Nts., 10/1/05(3) 125,000 132,813
-----------
238,313
- ------------------------------------------------------------
INDUSTRIAL SERVICES - 0.9%
Armco, Inc., 9% Unsec. Sr. Nts.,
9/15/07 50,000 48,875
- ------------------------------------------------------------
Employee Solutions, Inc., 10% Sr.
Nts., 10/15/04(3) 125,000 120,625
- ------------------------------------------------------------
Jordan Telecommunication Products,
Inc., 9.875% Sr. Nts., 8/1/07(2) 50,000 51,375
- ------------------------------------------------------------
KSL Recreation Group, Inc., 10.25%
Sr. Sub. Nts., 5/1/07 100,000 106,750
- ------------------------------------------------------------
Production Resource Group, 11.50%
Sr. Sub. Nts., 1/15/08(2) 75,000 75,563
- ------------------------------------------------------------
Sun Co., Inc., 7.95% Debs.,
12/15/01 125,000 131,996
- ------------------------------------------------------------
USI American Holdings, Inc., 7.25%
Gtd. Sr. Nts., Series B, 12/1/06 70,000 71,621
-----------
606,805
- ------------------------------------------------------------
MANUFACTURING - 0.4%
Jordan Industries, Inc., 10.375%
Sr. Nts., Series B, 8/1/07 125,000 126,875
- ------------------------------------------------------------
Mark IV Industries, Inc., 8.75%
Sub. Nts., 4/1/03(3) 25,000 26,500
- ------------------------------------------------------------
Titan Wheel International, Inc.,
8.75% Sr. Sub. Nts., 4/1/07 100,000 105,250
-----------
258,625
</TABLE>
<PAGE>
PANORAMA SERIES FUND, INC. - LIFESPAN BALANCED PORTFOLIO
STATEMENT OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
MARKET
PRINCIPAL VALUE
AMOUNT NOTE 1
- ------------------------------------------------------------
<S> <C> <C>
TRANSPORTATION - 0.5%
CSX Corp., 7.05% Debs., 5/1/02 $ 70,000 $ 71,669
- ------------------------------------------------------------
Federal Express Corp., 6.25% Nts.,
4/15/98 90,000 90,038
- ------------------------------------------------------------
Norfolk Southern Corp., 7.35% Nts.,
5/15/07 75,000 79,400
- ------------------------------------------------------------
Union Pacific Corp., 7% Nts.,
6/15/00 85,000 86,413
-----------
327,520
- ------------------------------------------------------------
TECHNOLOGY - 3.4%
- ------------------------------------------------------------
AEROSPACE/DEFENSE - 0.1%
GPA Delaware, Inc., 8.75% Gtd.
Nts., 12/15/98 100,000 102,000
- ------------------------------------------------------------
COMPUTER SOFTWARE/SERVICES - 0.1%
DecisionOne Corp., 9.75% Sr. Sub.
Nts., 8/1/07 75,000 77,438
- ------------------------------------------------------------
TELECOMMUNICATIONS-TECHNOLOGY -
3.2%
American Communications Services,
Inc., 0%/13% Sr. Disc. Nts.,
11/1/05(5) 100,000 80,500
- ------------------------------------------------------------
Brooks Fiber Properties, Inc.,
0%/11.875% Sr. Disc. Nts.,
11/1/06(5) 125,000 100,625
- ------------------------------------------------------------
Comcast UK Cable Partner Ltd.,
0%/11.20% Sr. Disc. Debs.,
11/15/07(5) 125,000 101,875
- ------------------------------------------------------------
Diamond Cable Communications plc,
0%/10.75% Sr. Disc. Nts.,
2/15/07(5) 125,000 85,625
- ------------------------------------------------------------
ICG Holdings, Inc., 0%/11.625% Sr.
Disc. Nts., 3/15/07(5) 125,000 85,625
- ------------------------------------------------------------
International CableTel, Inc.,
0%/11.50% Sr. Deferred Coupon Nts.,
Series B, 2/1/06(5) 200,000 156,250
- ------------------------------------------------------------
Iridium LLC/Iridium Capital Corp.,
11.25% Sr. Nts., 7/15/05(2) 125,000 123,125
- ------------------------------------------------------------
IXC Communications, Inc., 12.50%
Sr. Nts., Series B, 10/1/05 125,000 144,688
- ------------------------------------------------------------
Microcell Telecommunications, Inc.,
0%/14% Sr. Disc. Nts., Series B,
6/1/06(5) 125,000 84,375
- ------------------------------------------------------------
Nextel Communications, Inc.,
0%/9.75% Sr. Disc. Nts., 8/15/04(5) 150,000 133,875
- ------------------------------------------------------------
Price Communications Cellular
Holdings, Inc., 0%/13.50% Sr. Disc.
Nts., Series A, 8/1/07(3)(5) 150,000 95,250
- ------------------------------------------------------------
PriCellular Wireless Corp.,
0%/12.25% Sr. Sub. Disc. Nts.,
10/1/03(5) 175,000 180,250
- ------------------------------------------------------------
Sprint Spectrum LP/Sprint Spectrum
Finance Corp., 11% Sr. Nts.,
8/15/06 100,000 113,000
- ------------------------------------------------------------
Talton Holdings, Inc., 11% Gtd. Sr.
Unsec. Bonds, 6/30/07(2) 125,000 136,250
- ------------------------------------------------------------
Teleport Communications Group,
Inc., 0%/11.125% Sr. Disc. Nts.,
7/1/07(5) 50,000 40,875
- ------------------------------------------------------------
Teleport Communications Group,
Inc., 9.875% Sr. Nts., 7/1/06 50,000 56,250
- ------------------------------------------------------------
Telewest Communications plc, 0%/11%
Sr. Disc. Debs., 10/1/07(5) 75,000 58,594
- ------------------------------------------------------------
Telewest Communications plc, 9.625%
Sr. Debs., 10/1/06 75,000 78,188
- ------------------------------------------------------------
U S West Capital Funding, Inc.,
6.85% Gtd. Nts., 1/15/02 175,000 178,064
- ------------------------------------------------------------
UNIFI Communications, Inc., 14% Sr.
Nts., 3/1/04 125,000 98,750
- ------------------------------------------------------------
Western Wireless Corp., 10.50% Sr.
Sub. Nts., 2/1/07 50,000 54,250
-----------
2,186,284
- ------------------------------------------------------------
UTILITIES - 0.7%
- ------------------------------------------------------------
ELECTRIC UTILITIES - 0.2%
Consumers Energy Co., 8.75% First
Mtg. Nts., 2/15/98 85,000 85,203
- ------------------------------------------------------------
El Paso Electric Co., 7.25% First
Mtg. Nts., Series A, 2/1/99(3) 40,000 40,400
-----------
125,603
</TABLE>
<PAGE>
PANORAMA SERIES FUND, INC. - LIFESPAN BALANCED PORTFOLIO
STATEMENT OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
MARKET
PRINCIPAL VALUE
AMOUNT NOTE 1
- ------------------------------------------------------------
<S> <C> <C>
GAS UTILITIES - 0.4%
Northern Illinois Gas Co., 6.45%
First Mtg. Bonds, 8/1/01 $ 170,000 $ 172,308
- ------------------------------------------------------------
Tennessee Gas Pipeline Co., 7.50%
Bonds, 4/1/17 75,000 80,521
-----------
252,829
- ------------------------------------------------------------
TELEPHONE UTILITIES - 0.1%
GTE Corp., 8.85% Debs., 3/1/98 40,000 40,162
-----------
Total Non-Convertible Corporate
Bonds and Notes (Cost $14,358,002) 14,941,106
- ------------------------------------------------------------
CONVERTIBLE CORPORATE BONDS AND
NOTES - 0.2%
- ------------------------------------------------------------
Barnett Banks, Inc., 8.50% Sub.
Exchangeable Nts., 3/1/99 35,000 35,960
- ------------------------------------------------------------
Geotek Communications, Inc., 12%
Cv. Sr. Sub. Nts., 2/15/01(3) 100,000 80,000
-----------
Total Convertible Corporate Bonds
and Notes (Cost $128,557) 115,960
- ------------------------------------------------------------
REPURCHASE AGREEMENTS - 9.8%
- ------------------------------------------------------------
Repurchase agreement with Zion
First National Bank, 6.60%, dated
12/31/97, to be repurchased at
$6,717,462 on 1/2/98,
collateralized by U.S. Treasury
Nts., 8.25%, 7/15/98, with a value
of $6,857,336 (Cost $6,715,000) 6,715,000 6,715,000
- ------------------------------------------------------------
TOTAL INVESTMENTS, AT VALUE (COST
$60,850,786) 99.5% 68,322,127
- ------------------------------------------------------------
OTHER ASSETS NET OF LIABILITIES 0.5 370,656
---------- -----------
NET ASSETS 100.0% $68,692,783
---------- -----------
---------- -----------
</TABLE>
1. Non-income producing security.
2. Represents securities sold under Rule 144A, which are exempt from
registration under the Securities Act of 1933, as amended. These securities have
been determined to be liquid under guidelines established by the Board of
Directors. These securities amount to $1,670,463 or 2.43% of the Fund's net
assets as of December 31, 1997.
3. Identifies issues considered to be illiquid or restricted - See Note 5 of
Notes to Financial Statements.
4. Interest-Only Strips represent the right to receive the monthly interest
payments on an underlying pool of mortgage loans. These securities typically
decline in price as interest rates decline. Most other fixed income securities
increase in price when interest rates decline. The principal amount of the
underlying pool represents the notional amount on which current interest is
calculated. The price of these securities is typically more sensitive to changes
in prepayment rates than traditional mortgage-backed securities (for example,
GNMA pass-throughs). Interest rates disclosed represent current yields based
upon the current cost basis and estimated timing and amount of future cash
flows.
5. Denotes a step bond: a zero coupon bond that converts to a fixed or variable
interest rate at a designated future date.
6. Interest or dividend is paid in kind.
7. For zero coupon bonds, the interest rate shown is the effective yield on the
date of purchase.
8. Units may be comprised of several components, such as debt and equity and/or
warrants to purchase equity at some point in the future. For units which
represent debt securities, principal amount disclosed represents total
underlying principal.
See accompanying Notes to Financial Statements.
<PAGE>
PANORAMA SERIES FUND, INC. - LIFESPAN CAPITAL APPRECIATION PORTFOLIO
STATEMENT OF INVESTMENTS
DECEMBER 31, 1997
<TABLE>
<CAPTION>
MARKET VALUE
SHARES NOTE 1
- ----------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS - 70.2%
- ----------------------------------------------------------------------
BASIC MATERIALS - 2.5%
- ----------------------------------------------------------------------
CHEMICALS - 1.2%
Ciba Specialty Chemicals AG(1) 1,400 $ 167,015
- ----------------------------------------------------------------------
Dexter Corp. 6,000 259,125
- ----------------------------------------------------------------------
Ethyl Corp. 16,200 124,537
- ----------------------------------------------------------------------
Fuji Photo Film Co. 2,000 76,911
- ----------------------------------------------------------------------
IMC Global, Inc. 2,834 92,813
---------------
720,401
- ----------------------------------------------------------------------
METALS - 0.6%
Allegheny Teledyne, Inc. 3,100 80,212
- ----------------------------------------------------------------------
Carpenter Technology Corp. 4,300 206,669
- ----------------------------------------------------------------------
ROHN Industries, Inc. 12,000 61,875
---------------
348,756
- ----------------------------------------------------------------------
PAPER - 0.7%
Fletcher Challenge Forest 80,000 66,427
- ----------------------------------------------------------------------
Fort James Corp. 5,087 194,578
- ----------------------------------------------------------------------
Kimberly-Clark de Mexico, SA, Cl. A 16,000 75,814
- ----------------------------------------------------------------------
Unisource Worldwide, Inc. 9,000 128,250
---------------
465,069
- ----------------------------------------------------------------------
CONSUMER CYCLICALS - 9.3%
- ----------------------------------------------------------------------
AUTOS & HOUSING - 1.7%
Bridgestone Corp. 5,000 108,828
- ----------------------------------------------------------------------
Cornerstone Properties, Inc. 11,400 218,737
- ----------------------------------------------------------------------
Goodyear Tire & Rubber Co. 1,800 114,525
- ----------------------------------------------------------------------
Groupe SEB SA 850 118,545
- ----------------------------------------------------------------------
Lear Corp.(1) 2,300 109,250
- ----------------------------------------------------------------------
Meditrust Corp., Paired Stock 5,407 198,031
- ----------------------------------------------------------------------
Tower Realty Trust, Inc. 6,500 160,062
---------------
1,027,978
- ----------------------------------------------------------------------
LEISURE & ENTERTAINMENT - 2.5%
Alaska Air Group, Inc.(1) 3,100 120,125
- ----------------------------------------------------------------------
America West Holdings Corp., Cl.
B(1) 4,900 91,262
- ----------------------------------------------------------------------
American Skiing Corp.(1) 6,700 99,662
- ----------------------------------------------------------------------
AMR Corp.(1) 1,600 205,600
- ----------------------------------------------------------------------
CDL Hotels International Ltd. 300,000 90,988
- ----------------------------------------------------------------------
Granada Group plc 9,000 137,720
- ----------------------------------------------------------------------
Hasbro, Inc. 1,900 59,850
- ----------------------------------------------------------------------
Outback Steakhouse, Inc.(1) 2,400 69,000
</TABLE>
<PAGE>
PANORAMA SERIES FUND, INC. - LIFESPAN CAPITAL APPRECIATION PORTFOLIO
STATEMENT OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
MARKET VALUE
SHARES NOTE 1
- ----------------------------------------------------------------------
<S> <C> <C>
LEISURE & ENTERTAINMENT (CONTINUED)
Piccadilly Cafeterias, Inc. 9,300 $ 122,062
- ----------------------------------------------------------------------
Prime Hospitality Corp.(1) 3,100 63,162
- ----------------------------------------------------------------------
Regal Cinemas, Inc.(1) 7,325 204,184
- ----------------------------------------------------------------------
Vistana, Inc.(1) 12,000 276,000
---------------
1,539,615
- ----------------------------------------------------------------------
MEDIA - 1.1%
Applied Graphics Technologies,
Inc.(1) 5,100 271,575
- ----------------------------------------------------------------------
Benpres Holdings Corp., GDR(1)(2) 2,400 7,218
- ----------------------------------------------------------------------
Benpres Holdings Corp., Sponsored
GDR(1) 6,000 18,046
- ----------------------------------------------------------------------
Reed International plc 10,000 100,370
- ----------------------------------------------------------------------
Reuters Holdings plc 8,000 87,996
- ----------------------------------------------------------------------
Television Broadcasts Ltd. 23,000 65,602
- ----------------------------------------------------------------------
Wolters Kluwer NV 900 116,272
---------------
667,079
- ----------------------------------------------------------------------
RETAIL: GENERAL - 2.1%
adidas AG 1,000 132,366
- ----------------------------------------------------------------------
Circle K Japan Co. Ltd. 1,200 57,683
- ----------------------------------------------------------------------
Dayton Hudson Corp. 2,600 175,500
- ----------------------------------------------------------------------
Federated Department Stores,
Inc.(1) 2,400 103,350
- ----------------------------------------------------------------------
Marks & Spencer plc 12,000 118,272
- ----------------------------------------------------------------------
North Face, Inc. (The)(1) 6,000 132,000
- ----------------------------------------------------------------------
Penney (J.C.) Co., Inc. 6,000 361,875
- ----------------------------------------------------------------------
Wolverine World Wide, Inc. 9,475 214,372
---------------
1,295,418
- ----------------------------------------------------------------------
RETAIL: SPECIALTY - 1.9%
Argos plc 15,000 135,622
- ----------------------------------------------------------------------
Brown Group, Inc. 9,700 129,131
- ----------------------------------------------------------------------
Brylane, Inc.(1) 1,400 68,950
- ----------------------------------------------------------------------
Dickson Concepts International Ltd. 32,000 46,668
- ----------------------------------------------------------------------
Guitar Center, Inc.(1) 5,000 115,000
- ----------------------------------------------------------------------
Hennes & Mauritz AB, B Shares 2,700 119,102
- ----------------------------------------------------------------------
Koninklijke Ahold NV 3,600 93,941
- ----------------------------------------------------------------------
New England Business Service, Inc. 6,300 212,625
- ----------------------------------------------------------------------
Payless ShoeSource, Inc.(1) 1,800 120,825
- ----------------------------------------------------------------------
Stage Stores, Inc.(1) 3,400 127,075
---------------
1,168,939
- ----------------------------------------------------------------------
CONSUMER NON-CYCLICALS - 9.9%
- ----------------------------------------------------------------------
BEVERAGES - 0.4%
Embotelladora Andina SA, Series B,
Sponsored ADR 2,800 54,425
- ----------------------------------------------------------------------
Quilmes Industrial Quinsa SA,
Sponsored ADR 3,750 51,328
</TABLE>
<PAGE>
PANORAMA SERIES FUND, INC. - LIFESPAN CAPITAL APPRECIATION PORTFOLIO
STATEMENT OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
MARKET VALUE
SHARES NOTE 1
- ----------------------------------------------------------------------
<S> <C> <C>
BEVERAGES (CONTINUED)
Scottish & Newcastle plc 12,000 $ 145,223
---------------
250,976
- ----------------------------------------------------------------------
FOOD - 1.8%
Colruyt SA 250 127,699
- ----------------------------------------------------------------------
Groupe Danone 650 116,151
- ----------------------------------------------------------------------
Jeronimo Martins & Filho SA 5,000 158,830
- ----------------------------------------------------------------------
Kroger Co.(1) 3,700 136,669
- ----------------------------------------------------------------------
Safeway, Inc.(1) 2,700 170,775
- ----------------------------------------------------------------------
Suiza Foods Corp.(1) 3,175 189,111
- ----------------------------------------------------------------------
United Natural Foods, Inc.(1) 1,500 39,000
- ----------------------------------------------------------------------
William Morrison Supermarkets plc 46,000 174,084
---------------
1,112,319
- ----------------------------------------------------------------------
HEALTHCARE/DRUGS - 3.5%
Dura Pharmaceuticals, Inc.(1) 3,100 142,212
- ----------------------------------------------------------------------
Gedeon Richter Ltd., GDR(2) 1,000 113,579
- ----------------------------------------------------------------------
Glaxo Wellcome plc, Sponsored ADR 5,300 253,737
- ----------------------------------------------------------------------
Incyte Pharmaceuticals, Inc.(1) 3,200 144,000
- ----------------------------------------------------------------------
Jones Medical Industries, Inc. 1,200 45,900
- ----------------------------------------------------------------------
Medicis Pharmaceutical Corp., Cl.
A(1) 5,000 255,625
- ----------------------------------------------------------------------
Novartis AG 100 162,490
- ----------------------------------------------------------------------
Novo-Nordisk AS, B Shares 1,200 171,749
- ----------------------------------------------------------------------
PharMerica, Inc.(1) 2,900 30,087
- ----------------------------------------------------------------------
Roche Holding AG 15 149,172
- ----------------------------------------------------------------------
Sanofi SA 1,100 122,509
- ----------------------------------------------------------------------
Schering AG 1,200 115,793
- ----------------------------------------------------------------------
SKW Trostberg AG 4,000 127,027
- ----------------------------------------------------------------------
Takeda Chemical Industries Ltd. 5,000 143,054
- ----------------------------------------------------------------------
Zeneca Group plc 4,000 140,649
---------------
2,117,583
- ----------------------------------------------------------------------
HEALTHCARE/SUPPLIES & SERVICES -
3.1%
Alternative Living Services,
Inc.(1) 5,700 168,506
- ----------------------------------------------------------------------
Concentra Managed Care, Inc.(1) 4,400 148,500
- ----------------------------------------------------------------------
FPA Medical Management, Inc.(1) 7,800 145,275
- ----------------------------------------------------------------------
HealthCare Financial Partners,
Inc.(1) 2,900 102,950
- ----------------------------------------------------------------------
Luxottica Group SpA, Sponsored ADR 1,600 100,000
- ----------------------------------------------------------------------
National Surgery Centers, Inc.(1) 9,900 259,875
- ----------------------------------------------------------------------
Pediatrix Medical Group, Inc.(1) 5,200 222,300
- ----------------------------------------------------------------------
Renal Treatment Centers, Inc.(1) 2,600 93,925
- ----------------------------------------------------------------------
Rural/Metro Corp.(1) 7,300 243,637
</TABLE>
<PAGE>
PANORAMA SERIES FUND, INC. - LIFESPAN CAPITAL APPRECIATION PORTFOLIO
STATEMENT OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
MARKET VALUE
SHARES NOTE 1
- ----------------------------------------------------------------------
<S> <C> <C>
HEALTHCARE/SUPPLIES & SERVICES
(CONTINUED)
SmithKline Beecham plc 14,592 $ 149,581
- ----------------------------------------------------------------------
Tenet Healthcare Corp.(1) 4,390 145,419
- ----------------------------------------------------------------------
Total Renal Care Holdings, Inc.(1) 3,700 101,750
- ----------------------------------------------------------------------
WellPoint Health Networks, Inc.(1) 500 21,125
---------------
1,902,843
- ----------------------------------------------------------------------
HOUSEHOLD GOODS - 1.1%
Blyth Industries, Inc.(1) 4,100 122,744
- ----------------------------------------------------------------------
Dial Corp. (The) 6,000 124,875
- ----------------------------------------------------------------------
L'OREAL 350 137,013
- ----------------------------------------------------------------------
Premark International, Inc. 5,600 162,400
- ----------------------------------------------------------------------
Reckitt & Colman plc 8,000 125,709
---------------
672,741
- ----------------------------------------------------------------------
ENERGY - 5.6%
- ----------------------------------------------------------------------
ENERGY SERVICES & PRODUCERS - 1.1%
Diamond Offshore Drilling, Inc. 3,700 178,062
- ----------------------------------------------------------------------
Global Marine, Inc.(1) 5,000 122,500
- ----------------------------------------------------------------------
Gulf Island Fabrication, Inc.(1) 3,400 68,000
- ----------------------------------------------------------------------
Oryx Energy Co.(1) 4,100 104,550
- ----------------------------------------------------------------------
Pool Energy Services Co.(1) 3,200 71,200
- ----------------------------------------------------------------------
Tidewater, Inc. 2,400 132,300
---------------
676,612
- ----------------------------------------------------------------------
OIL-INTEGRATED - 4.5%
Amoco Corp. 3,100 263,887
- ----------------------------------------------------------------------
Atlantic Richfield Co. 3,700 296,462
- ----------------------------------------------------------------------
Chevron Corp. 6,300 485,100
- ----------------------------------------------------------------------
Cliffs Drilling Co.(1) 2,000 99,750
- ----------------------------------------------------------------------
Exxon Corp. 5,600 342,650
- ----------------------------------------------------------------------
Mobil Corp. 5,300 382,594
- ----------------------------------------------------------------------
Occidental Petroleum Corp. 12,600 369,337
- ----------------------------------------------------------------------
Patterson Energy, Inc.(1) 3,000 116,062
- ----------------------------------------------------------------------
Quinenco SA, ADR(1) 2,800 32,200
- ----------------------------------------------------------------------
Shell Transport & Trading Co. plc 19,000 138,025
- ----------------------------------------------------------------------
Total SA, B Shares 1,400 152,430
- ----------------------------------------------------------------------
UTI Energy Corp.(1) 3,000 77,625
---------------
2,756,122
- ----------------------------------------------------------------------
FINANCIAL - 12.0%
- ----------------------------------------------------------------------
BANKS - 5.2%
Banco Popular Espanol SA 2,200 153,725
- ----------------------------------------------------------------------
Bank of Tokyo-Mitsubishi Ltd. 6,000 83,063
- ----------------------------------------------------------------------
BankAmerica Corp. 4,800 350,400
</TABLE>
<PAGE>
PANORAMA SERIES FUND, INC. - LIFESPAN CAPITAL APPRECIATION PORTFOLIO
STATEMENT OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
MARKET VALUE
SHARES NOTE 1
- ----------------------------------------------------------------------
<S> <C> <C>
BANKS (CONTINUED)
BankBoston Corp. 4,600 $ 432,112
- ----------------------------------------------------------------------
Bayerische Vereinsbank AG 1,950 125,803
- ----------------------------------------------------------------------
Credit Suisse Group 1,000 154,948
- ----------------------------------------------------------------------
Credito Italiano 48,000 148,100
- ----------------------------------------------------------------------
First Union Corp. 8,800 451,000
- ----------------------------------------------------------------------
Halifax plc(1) 10,000 124,310
- ----------------------------------------------------------------------
Lloyds TSB Group plc 18,000 233,088
- ----------------------------------------------------------------------
Mitsubishi Trust & Banking Corp. 10,000 100,753
- ----------------------------------------------------------------------
NationsBank Corp. 4,000 243,250
- ----------------------------------------------------------------------
Nordbanken Holding AB(1) 21,600 122,233
- ----------------------------------------------------------------------
Wells Fargo & Co. 1,400 475,212
---------------
3,197,997
- ----------------------------------------------------------------------
DIVERSIFIED FINANCIAL - 4.4%
Amresco, Inc. 9,700 293,425
- ----------------------------------------------------------------------
Camden Property Trust 7,200 223,200
- ----------------------------------------------------------------------
Capstone Capital Corp. 8,000 205,000
- ----------------------------------------------------------------------
Cattles plc 20,000 132,619
- ----------------------------------------------------------------------
Crescent Real Estate Equities, Inc. 9,800 385,875
- ----------------------------------------------------------------------
Franchise Mortgage Acceptance Co.
LLC(1) 3,800 69,825
- ----------------------------------------------------------------------
Haw Par Brothers International Ltd. 36,000 46,577
- ----------------------------------------------------------------------
Health & Retirement Properties
Trust 9,200 184,000
- ----------------------------------------------------------------------
ING Groep NV 3,000 126,380
- ----------------------------------------------------------------------
Lend Lease Corp. Ltd. 4,000 78,188
- ----------------------------------------------------------------------
Money Store, Inc. (The) 2,500 52,500
- ----------------------------------------------------------------------
Morgan Stanley, Dean Witter,
Discover & Co. 1,600 94,600
- ----------------------------------------------------------------------
Nichiei Co. Ltd. 1,000 106,906
- ----------------------------------------------------------------------
Northern Rock plc(1) 12,000 117,679
- ----------------------------------------------------------------------
Perlis Plantations Berhad 25,500 36,096
- ----------------------------------------------------------------------
Sirrom Capital Corp. 3,100 161,587
- ----------------------------------------------------------------------
Southcorp Holdings Ltd. 15,000 49,649
- ----------------------------------------------------------------------
Swire Pacific Ltd., Cl. B 89,500 90,675
- ----------------------------------------------------------------------
Travelers Group, Inc. 4,751 255,960
---------------
2,710,741
- ----------------------------------------------------------------------
INSURANCE - 2.4%
Allstate Corp. 1,800 163,575
- ----------------------------------------------------------------------
Chubb Corp. 2,400 181,500
- ----------------------------------------------------------------------
Conseco, Inc. 5,400 245,363
- ----------------------------------------------------------------------
Equitable Cos., Inc. 4,300 213,925
- ----------------------------------------------------------------------
HSB Group, Inc. 2,500 137,969
</TABLE>
<PAGE>
PANORAMA SERIES FUND, INC. - LIFESPAN CAPITAL APPRECIATION PORTFOLIO
STATEMENT OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
MARKET VALUE
SHARES NOTE 1
- ----------------------------------------------------------------------
<S> <C> <C>
INSURANCE (CONTINUED)
Pre-Paid Legal Services, Inc.(1) 5,400 $ 184,613
- ----------------------------------------------------------------------
Torchmark Corp. 3,900 164,044
- ----------------------------------------------------------------------
Travelers Property Casualty Corp.,
Cl. A 4,300 189,200
---------------
1,480,189
- ----------------------------------------------------------------------
INDUSTRIAL - 9.6%
- ----------------------------------------------------------------------
ELECTRICAL EQUIPMENT - 0.4%
Johnson Electric Holdings Ltd. 29,000 83,464
- ----------------------------------------------------------------------
Siebe plc 8,000 157,300
---------------
240,764
- ----------------------------------------------------------------------
INDUSTRIAL SERVICES - 4.2%
Adecco SA 300 87,107
- ----------------------------------------------------------------------
American Disposal Services, Inc.(1) 5,500 200,750
- ----------------------------------------------------------------------
Caribiner International, Inc.(1) 2,600 115,700
- ----------------------------------------------------------------------
Central Parking Corp. 2,700 122,344
- ----------------------------------------------------------------------
Computer Horizons Corp.(1) 7,050 317,250
- ----------------------------------------------------------------------
Computer Task Group, Inc. 9,200 327,175
- ----------------------------------------------------------------------
Corestaff, Inc.(1) 6,900 182,850
- ----------------------------------------------------------------------
Eastern Environmental Services,
Inc.(1) 7,900 173,800
- ----------------------------------------------------------------------
Guilbert SA 900 128,361
- ----------------------------------------------------------------------
Hays plc 9,000 120,246
- ----------------------------------------------------------------------
Helix Technology Corp. 4,900 95,550
- ----------------------------------------------------------------------
Kurita Water Industries Ltd. 5,000 51,146
- ----------------------------------------------------------------------
Lamar Advertising Co., Cl. A(1) 4,100 162,975
- ----------------------------------------------------------------------
Tetra Tech, Inc.(1) 7,500 150,000
- ----------------------------------------------------------------------
Transaction Systems Architects,
Inc., Cl. A(1) 5,600 212,800
- ----------------------------------------------------------------------
Viad Corp. 5,300 102,356
---------------
2,550,410
- ----------------------------------------------------------------------
MANUFACTURING - 3.9%
Aeroquip-Vickers, Inc. 2,200 107,938
- ----------------------------------------------------------------------
AGCO Corp. 4,100 119,925
- ----------------------------------------------------------------------
Canon Sales Co., Inc. 300 3,438
- ----------------------------------------------------------------------
Case Corp. 2,800 169,225
- ----------------------------------------------------------------------
Deere & Co. 4,100 239,081
- ----------------------------------------------------------------------
Halter Marine Group, Inc.(1) 2,950 85,181
- ----------------------------------------------------------------------
Ingersoll-Rand Co. 3,200 129,600
- ----------------------------------------------------------------------
Mannesmann AG 250 125,553
- ----------------------------------------------------------------------
NSK Ltd. 3,000 7,499
- ----------------------------------------------------------------------
PACCAR, Inc. 9,800 514,500
- ----------------------------------------------------------------------
Parker-Hannifin Corp. 2,750 126,156
</TABLE>
<PAGE>
PANORAMA SERIES FUND, INC. - LIFESPAN CAPITAL APPRECIATION PORTFOLIO
STATEMENT OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
MARKET VALUE
SHARES NOTE 1
- ----------------------------------------------------------------------
<S> <C> <C>
MANUFACTURING (CONTINUED)
Ricoh Co. Ltd. 11,000 $ 137,055
- ----------------------------------------------------------------------
SMC Corp. 100 8,845
- ----------------------------------------------------------------------
Smiths Industries plc 8,000 113,928
- ----------------------------------------------------------------------
Textron, Inc. 4,600 287,500
- ----------------------------------------------------------------------
U.S. Industries, Inc. 7,650 230,456
---------------
2,405,880
- ----------------------------------------------------------------------
TRANSPORTATION - 1.1%
Brambles Industries Ltd. 5,000 99,201
- ----------------------------------------------------------------------
Burlington Northern Santa Fe Corp. 1,300 120,819
- ----------------------------------------------------------------------
GATX Corp. 4,200 304,763
- ----------------------------------------------------------------------
Gulfmark Offshore, Inc.(1) 2,700 89,100
- ----------------------------------------------------------------------
MotivePower Industries, Inc.(1) 2,900 67,425
---------------
681,308
- ----------------------------------------------------------------------
TECHNOLOGY - 13.6%
- ----------------------------------------------------------------------
AEROSPACE/DEFENSE - 1.1%
General Dynamics Corp. 4,600 397,613
- ----------------------------------------------------------------------
Lockheed Martin Corp. 2,700 265,950
---------------
663,563
- ----------------------------------------------------------------------
COMPUTER HARDWARE - 2.4%
Apex PC Solutions, Inc.(1) 3,700 81,863
- ----------------------------------------------------------------------
CHS Electronics, Inc.(1) 1,050 17,981
- ----------------------------------------------------------------------
Compaq Computer Corp. 3,300 186,244
- ----------------------------------------------------------------------
Digital Lightwave, Inc.(1) 4,200 55,125
- ----------------------------------------------------------------------
Insight Enterprises, Inc.(1) 5,700 209,475
- ----------------------------------------------------------------------
International Business Machines
Corp. 2,300 240,494
- ----------------------------------------------------------------------
Lexmark International Group, Inc.,
Cl. A(1) 1,800 68,400
- ----------------------------------------------------------------------
Network Appliance, Inc.(1) 6,400 227,200
- ----------------------------------------------------------------------
Semtech Corp.(1) 2,500 97,813
- ----------------------------------------------------------------------
Storage Technology Corp. (New)(1) 4,700 291,106
---------------
1,475,701
- ----------------------------------------------------------------------
COMPUTER SOFTWARE/SERVICES - 3.7%
BEA Systems, Inc.(1) 8,600 148,888
- ----------------------------------------------------------------------
Electronic Data Systems Corp. 3,100 136,206
- ----------------------------------------------------------------------
HNC Software, Inc.(1) 3,500 150,500
- ----------------------------------------------------------------------
JDA Software Group, Inc.(1) 4,200 147,000
- ----------------------------------------------------------------------
Pegasystems, Inc.(1) 6,800 137,275
- ----------------------------------------------------------------------
Remedy Corp.(1) 2,300 48,300
- ----------------------------------------------------------------------
SAP AG, Preference 600 194,945
- ----------------------------------------------------------------------
Sapient Corp.(1) 3,100 189,875
- ----------------------------------------------------------------------
Security Dynamics Technologies,
Inc.(1) 4,700 168,025
</TABLE>
<PAGE>
PANORAMA SERIES FUND, INC. - LIFESPAN CAPITAL APPRECIATION PORTFOLIO
STATEMENT OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
MARKET VALUE
SHARES NOTE 1
- ----------------------------------------------------------------------
<S> <C> <C>
COMPUTER SOFTWARE/SERVICES
(CONTINUED)
Summit Design, Inc.(1) 6,100 $ 63,288
- ----------------------------------------------------------------------
Sykes Enterprises, Inc.(1) 4,400 85,800
- ----------------------------------------------------------------------
Symantec Corp.(1) 1,400 30,713
- ----------------------------------------------------------------------
Technology Solutions Co.(1) 6,350 167,481
- ----------------------------------------------------------------------
Veritas Software Corp.(1) 4,075 207,825
- ----------------------------------------------------------------------
Viasoft, Inc.(1) 3,400 143,650
- ----------------------------------------------------------------------
Visio Corp.(1) 3,200 122,800
- ----------------------------------------------------------------------
Wind River Systems, Inc.(1) 3,450 136,922
---------------
2,279,493
- ----------------------------------------------------------------------
ELECTRONICS - 3.4%
Bowthorpe plc 18,000 111,065
- ----------------------------------------------------------------------
Electrocomponents plc 17,000 126,712
- ----------------------------------------------------------------------
Getronics NV 3,300 105,158
- ----------------------------------------------------------------------
Hirose Electric Co. 2,000 102,599
- ----------------------------------------------------------------------
Keyence Corp. 660 97,969
- ----------------------------------------------------------------------
Matsushita Electric Industrial Co. 4,000 58,760
- ----------------------------------------------------------------------
National Semiconductor Corp.(1) 1,200 31,125
- ----------------------------------------------------------------------
Omron Corp. 5,000 78,449
- ----------------------------------------------------------------------
Philips Electronics NV 2,000 119,967
- ----------------------------------------------------------------------
Rohm Co. 1,000 102,291
- ----------------------------------------------------------------------
Samsung Electronics Co. Ltd.,
GDR(1)(2) 32 454
- ----------------------------------------------------------------------
Samsung Electronics, GDS(1) 1,950 10,969
- ----------------------------------------------------------------------
Sawtek, Inc.(1) 2,900 76,488
- ----------------------------------------------------------------------
SCI Systems, Inc.(1) 2,400 104,550
- ----------------------------------------------------------------------
Sony Corp. 1,600 142,746
- ----------------------------------------------------------------------
TDK Corp. 2,000 151,360
- ----------------------------------------------------------------------
Vitesse Semiconductor Corp.(1) 4,950 186,863
- ----------------------------------------------------------------------
VTech Holdings Ltd. 75,000 221,178
- ----------------------------------------------------------------------
Waters Corp.(1) 6,800 255,850
---------------
2,084,553
- ----------------------------------------------------------------------
TELECOMMUNICATIONS-TECHNOLOGY -
3.0%
Bay Networks, Inc.(1) 1,500 38,344
- ----------------------------------------------------------------------
British Sky Broadcasting Group plc 10,500 78,782
- ----------------------------------------------------------------------
Comverse Technology, Inc.(1) 4,900 191,100
- ----------------------------------------------------------------------
DSP Communications, Inc.(1) 4,500 54,000
- ----------------------------------------------------------------------
Dycom Industries, Inc.(1) 1,300 28,031
- ----------------------------------------------------------------------
Inter-Tel, Inc. 5,500 106,563
- ----------------------------------------------------------------------
Nextel Communications, Inc., Cl.
A(1) 77 2,002
- ----------------------------------------------------------------------
Nippon Telegraph & Telephone Corp. 17 146,438
</TABLE>
<PAGE>
PANORAMA SERIES FUND, INC. - LIFESPAN CAPITAL APPRECIATION PORTFOLIO
STATEMENT OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
MARKET VALUE
SHARES NOTE 1
- ----------------------------------------------------------------------
<S> <C> <C>
TELECOMMUNICATIONS-TECHNOLOGY
(CONTINUED)
P-COM, Inc.(1) 8,900 $ 153,525
- ----------------------------------------------------------------------
Pacific Gateway Exchange, Inc.(1) 4,000 215,250
- ----------------------------------------------------------------------
REMEC, Inc.(1) 3,100 69,750
- ----------------------------------------------------------------------
SK Telecommunications Co. Ltd., ADR 6,798 44,187
- ----------------------------------------------------------------------
Tekelec(1) 4,000 122,000
- ----------------------------------------------------------------------
Tel-Save Holdings, Inc.(1) 2,800 55,650
- ----------------------------------------------------------------------
Telecom Italia Mobile SpA 30,000 138,547
- ----------------------------------------------------------------------
Uniphase Corp.(1) 4,300 177,913
- ----------------------------------------------------------------------
Vodafone Group plc 22,000 160,542
- ----------------------------------------------------------------------
Yurie Systems, Inc.(1) 3,100 62,581
---------------
1,845,205
- ----------------------------------------------------------------------
UTILITIES - 7.7%
- ----------------------------------------------------------------------
ELECTRIC UTILITIES - 2.4%
Duke Energy Corp. 4,848 268,458
- ----------------------------------------------------------------------
FPL Group, Inc. 8,100 479,419
- ----------------------------------------------------------------------
Illinova Corp. 5,000 134,688
- ----------------------------------------------------------------------
Kansas City Power & Light Co. 6,600 195,113
- ----------------------------------------------------------------------
Veba AG 2,600 177,137
- ----------------------------------------------------------------------
Western Resources, Inc. 5,200 223,600
---------------
1,478,415
- ----------------------------------------------------------------------
GAS UTILITIES - 2.5%
Columbia Gas System, Inc. 5,000 392,813
- ----------------------------------------------------------------------
El Paso Natural Gas Co. 5,200 345,800
- ----------------------------------------------------------------------
MCN Energy Group, Inc. 5,000 201,875
- ----------------------------------------------------------------------
National Fuel Gas Co. 5,600 272,650
- ----------------------------------------------------------------------
Questar Corp. 5,400 240,975
- ----------------------------------------------------------------------
RWE AG, Preference 2,500 107,061
---------------
1,561,174
- ----------------------------------------------------------------------
TELEPHONE UTILITIES - 2.8%
Ameritech Corp. 3,000 241,500
- ----------------------------------------------------------------------
Bell Atlantic Corp. 5,680 516,880
- ----------------------------------------------------------------------
Century Telephone Enterprises, Inc. 1,000 49,813
- ----------------------------------------------------------------------
Frontier Corp. 10,000 240,625
- ----------------------------------------------------------------------
Telefonica de Espana 4,500 128,432
- ----------------------------------------------------------------------
U S West Communications Group 11,700 527,963
---------------
1,705,213
---------------
Total Common Stocks (Cost
$35,818,272) 43,083,057
- ----------------------------------------------------------------------
PREFERRED STOCKS - 0.6%
- ----------------------------------------------------------------------
Case Corp., $4.50 Cum. Cv., Series
A, Non-Vtg. 1,100 157,988
- ----------------------------------------------------------------------
Fresenius AG, Preferred 700 127,305
</TABLE>
<PAGE>
PANORAMA SERIES FUND, INC. - LIFESPAN CAPITAL APPRECIATION PORTFOLIO
STATEMENT OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
MARKET VALUE
SHARES NOTE 1
<S> <C> <C>
- ----------------------------------------------------------------------
PREFERRED STOCKS (CONTINUED)
- ----------------------------------------------------------------------
PRIMEDIA, Inc., 10% Preferred
Stock, Series D(3) 500 $ 52,750
---------------
Total Preferred Stocks (Cost
$283,556) 338,043
UNITS
- ----------------------------------------------------------------------
RIGHTS, WARRANTS AND CERTIFICATES -
0.0%
- ----------------------------------------------------------------------
American Communications Services,
Inc. Wts., Exp. 11/05(3) 100 9,550
- ----------------------------------------------------------------------
Australis Media Ltd. Wts., Exp.
10/01(3) 100 --
- ----------------------------------------------------------------------
Haw Par Brothers International Ltd.
Wts., Exp. 7/01 2,500 593
- ----------------------------------------------------------------------
In-Flight Phone Corp. Wts., Exp.
8/02 50 --
- ----------------------------------------------------------------------
Microcell Telecommunications, Inc.
Conditional Wts., Exp. 6/06(3) 200 125
- ----------------------------------------------------------------------
Microcell Telecommunications, Inc.
Wts., Exp. 6/06(3) 200 2,600
- ----------------------------------------------------------------------
Price Communications Corp. Wts.,
Exp. 8/07(3) 344 --
- ----------------------------------------------------------------------
UNIFI Communications, Inc. Wts.,
Exp. 3/07(3) 75 117
---------------
Total Rights, Warrants and
Certificates (Cost $4,457) 12,985
PRINCIPAL
AMOUNT
- ----------------------------------------------------------------------
ASSET-BACKED SECURITIES - 0.2%
- ----------------------------------------------------------------------
IROQUOIS Trust, Asset-Backed
Amortizing Nts., Series 1997-2, Cl.
A, 6.752%, 6/25/07(3) $ 50,000 50,178
- ----------------------------------------------------------------------
Olympic Automobile Receivables
Trust:
Receivables-Backed Nts., Series
1997-A, Cl. A5, 6.80%, 2/15/05 50,000 50,678
Series 1996-A, Cl. A4, 5.85%,
7/15/01 15,000 14,967
---------------
Total Asset-Backed Securities (Cost
$114,827) 115,823
- ----------------------------------------------------------------------
MORTGAGE-BACKED OBLIGATIONS - 1.6%
- ----------------------------------------------------------------------
Countrywide Funding Corp., Mtg.
Pass-Through Certificates, Series
1994-10, Cl. A3, 6%, 5/25/09 100,000 99,008
- ----------------------------------------------------------------------
Federal Home Loan Mortgage Corp.:
Collateralized Mtg. Obligations,
Gtd. Multiclass Mtg. Participation
Certificates, Series 1711, Cl. EA,
7%, 3/15/24 100,000 101,625
Gtd. Multiclass Mtg. Participation
Certificates, 6%, 3/1/09 16,228 16,111
Gtd. Multiclass Mtg. Participation
Certificates, Series 1574, Cl. PD,
5.55%, 3/15/13 66,469 66,282
Gtd. Multiclass Mtg. Participation
Certificates, Series 1843, Cl. VB,
7%, 4/15/03 15,000 15,389
Gtd. Multiclass Mtg. Participation
Certificates, Series 1849, Cl. VA,
6%, 12/15/10 23,788 23,670
Interest-Only Stripped Mtg.-Backed
Security, Series 1542, Cl. QC,
7.35%, 10/15/20(4) 300,000 62,724
Interest-Only Stripped Mtg.-Backed
Security, Series 1583, Cl. IC,
6.65%, 1/15/20(4) 250,000 37,598
- ----------------------------------------------------------------------
Federal National Mortgage Assn.:
6%, 12/1/03 43,831 43,576
6.50%, 4/1/26 46,380 45,895
7%, 4/1/00 56,104 56,498
Collateralized Mtg. Obligations,
Gtd. Real Estate Mtg. Investment
Conduit
Pass-Through Certificates, Trust
1993-181, Cl. C, 5.40%, 10/25/02 36,362 36,158
</TABLE>
<PAGE>
PANORAMA SERIES FUND, INC. - LIFESPAN CAPITAL APPRECIATION PORTFOLIO
STATEMENT OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL MARKET VALUE
AMOUNT NOTE 1
<S> <C> <C>
- ----------------------------------------------------------------------
MORTGAGE-BACKED OBLIGATIONS
(CONTINUED)
- ----------------------------------------------------------------------
Federal National Mortgage Assn.:
(Continued)
Collateralized Mtg. Obligations,
Gtd. Real Estate Mtg. Investment
Conduit
Pass-Through Certificates, Trust
1993-190, Cl. Z, 5.85%, 7/25/08 $ 38,258 $ 37,989
Medium-Term Nts., 6.56%, 11/13/01 75,000 75,070
Trust 1994-13, Cl. B, 6.50%,
2/25/09 75,000 74,765
- ----------------------------------------------------------------------
GE Capital Mortgage Services, Inc.,
Gtd. Real Estate Mtg. Investment
Conduit Pass-Through Certificates,
Series 1994-7, Cl. A18, 6%, 2/25/09 99,442 93,756
- ----------------------------------------------------------------------
PNC Mortgage Securities Corp.,
Commercial Mtg. Pass-Through
Certificates, Series 1995-2, Cl.
A3, 6.50%, 2/25/12 50,000 50,096
- ----------------------------------------------------------------------
Residential Accredit Loans, Inc.,
Mortgage Asset-Backed Pass-Through
Certificates, Series 1997-QS9, Cl.
A2, 6.75%, 9/25/27 50,000 49,930
---------------
Total Mortgage-Backed Obligations
(Cost $973,649) 986,140
- ----------------------------------------------------------------------
U.S. GOVERNMENT OBLIGATIONS - 3.9%
U.S. Treasury Bonds:
6%, 2/15/26 175,000 174,836
7.50%, 11/15/16 960,000 1,120,201
- ----------------------------------------------------------------------
U.S. Treasury Nts.:
6.50%, 8/15/05 875,000 913,282
6.75%, 6/30/99 100,000 101,594
7.50%, 11/15/01 100,000 106,094
---------------
Total U.S. Government Obligations
(Cost $2,303,220) 2,416,007
- ----------------------------------------------------------------------
NON-CONVERTIBLE CORPORATE BONDS AND
NOTES - 11.8%
- ----------------------------------------------------------------------
BASIC MATERIALS - 1.2%
- ----------------------------------------------------------------------
CHEMICALS - 0.7%
Du Pont (E.I.) De Nemours & Co.,
8.50% Debs., 2/15/03 30,000 31,883
- ----------------------------------------------------------------------
Laroche Industries, Inc., 9.50% Sr.
Sub. Nts., 9/15/07(2) 75,000 74,250
- ----------------------------------------------------------------------
Morton International, Inc., 9.25%
Credit Sensitive Nts., 6/1/20 15,000 19,536
- ----------------------------------------------------------------------
NL Industries, Inc., 0%/13% Sr.
Sec. Disc. Nts., 10/15/05(5) 75,000 75,000
- ----------------------------------------------------------------------
PPG Industries, Inc., 9% Debs.,
5/1/21 15,000 18,731
- ----------------------------------------------------------------------
Rexene Corp. (New), 11.75% Sr.
Nts., 12/1/04 50,000 56,625
- ----------------------------------------------------------------------
Sterling Chemicals Holdings, Inc.,
0%/13.50% Sr. Disc. Nts.,
8/15/08(5) 75,000 46,125
- ----------------------------------------------------------------------
Texas Petrochemical Corp., 11.125%
Sr. Sub. Nts., Series B, 7/1/06 75,000 81,000
---------------
403,150
- ----------------------------------------------------------------------
METALS - 0.3%
Alcan Aluminum Ltd., 9.625% Debs.,
7/15/19 35,000 37,886
- ----------------------------------------------------------------------
Gulf States Steel, Inc. (Alabama),
13.50% First Mtg. Nts., Series B,
4/15/03 75,000 74,625
- ----------------------------------------------------------------------
WCI Steel, Inc., 10% Sr. Nts.,
Series B, 12/1/04 75,000 76,875
---------------
189,386
</TABLE>
<PAGE>
PANORAMA SERIES FUND, INC. - LIFESPAN CAPITAL APPRECIATION PORTFOLIO
STATEMENT OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL MARKET VALUE
AMOUNT NOTE 1
<S> <C> <C>
- ----------------------------------------------------------------------
PAPER - 0.2%
Celulosa Arauco y Constitucion SA,
7.25% Debs., 6/11/98(3) $ 15,000 $ 14,906
- ----------------------------------------------------------------------
Gaylord Container Corp., 12.75% Sr.
Sub. Disc. Debs., 5/15/05 50,000 53,750
- ----------------------------------------------------------------------
Stone Container Corp., 9.875% Sr.
Nts., 2/1/01 50,000 50,187
---------------
118,843
- ----------------------------------------------------------------------
CONSUMER CYCLICALS - 4.2%
- ----------------------------------------------------------------------
AUTOS & HOUSING - 0.2%
Black & Decker Corp., 6.625% Nts.,
11/15/00 15,000 15,147
- ----------------------------------------------------------------------
Cambridge Industries, Inc., 10.25%
Sr. Sub. Nts., 7/15/07(2) 75,000 78,750
- ----------------------------------------------------------------------
First Industrial LP, 7.15% Bonds,
5/15/27 50,000 51,382
---------------
145,279
- ----------------------------------------------------------------------
LEISURE & ENTERTAINMENT - 1.7%
American Skiing Corp., 12% Sr. Sub.
Nts., Series B, 7/15/06(3) 50,000 55,750
- ----------------------------------------------------------------------
Ameristar Casinos, Inc., 10.50% Sr.
Sub. Nts., 8/1/04(2) 50,000 51,250
- ----------------------------------------------------------------------
Ascent Entertainment Group, Inc.,
0%/11.875% Sr. Sec. Disc. Nts.,
12/15/04(2)(5) 75,000 43,312
- ----------------------------------------------------------------------
Bally Total Fitness Holdings,
9.875% Sr. Sub. Nts., 10/15/07(2) 75,000 75,937
- ----------------------------------------------------------------------
Blockbuster Entertainment Corp.,
6.625% Sr. Nts., 2/15/98 15,000 15,005
- ----------------------------------------------------------------------
Casino America, Inc., 12.50% Sr.
Nts., 8/1/03 50,000 54,562
- ----------------------------------------------------------------------
Casino Magic of Louisiana Corp.,
13% First Mtg. Nts., Series B,
8/15/03 50,000 48,250
- ----------------------------------------------------------------------
Colorado Gaming & Entertainment
Co., 12% Sr. Nts., 6/1/03(3) 75,000 81,000
- ----------------------------------------------------------------------
Hilton Hotels Corp., 7.375% Nts.,
6/1/02 50,000 51,285
- ----------------------------------------------------------------------
HMH Properties, Inc., 8.875% Sr.
Nts., 7/15/07 50,000 52,875
- ----------------------------------------------------------------------
Hollywood Casino Corp., 12.75% Sr.
Sec. Gtd. Nts., 11/1/03 75,000 80,250
- ----------------------------------------------------------------------
Horseshoe Gaming LLC, 9.375% Sr.
Sub. Nts., 6/15/07 50,000 52,625
- ----------------------------------------------------------------------
Mohegan Tribal Gaming Authority
(Connecticut), 13.50% Sr. Sec.
Nts., Series B, 11/15/02 50,000 64,250
- ----------------------------------------------------------------------
Players International, Inc.,
10.875% Sr. Nts., 4/15/05 75,000 81,000
- ----------------------------------------------------------------------
Prime Hospitality Corp., 9.25%
First Mtg. Bonds, 1/15/06 75,000 79,125
- ----------------------------------------------------------------------
Rio Hotel & Casino, Inc., 10.625%
Sr. Sub. Nts., 7/15/05 50,000 54,250
- ----------------------------------------------------------------------
Showboat, Inc., 9.25% First Mtg.
Bonds, 5/1/08 50,000 53,500
- ----------------------------------------------------------------------
Wyndham Hotel Corp., 10.50% Sr.
Sub. Nts., 5/15/06 50,000 58,625
---------------
1,052,851
- ----------------------------------------------------------------------
MEDIA - 1.9%
Adelphia Communications Corp.,
10.50% Sr. Unsec. Nts., Series B,
7/15/04 75,000 81,187
- ----------------------------------------------------------------------
Argyle Television, Inc., 9.75% Sr.
Sub. Nts., 11/1/05 37,000 41,440
- ----------------------------------------------------------------------
Australis Holdings PTY Ltd., 0%/15%
Sr. Sec. Disc. Nts., 11/1/02(5) 100,000 58,000
- ----------------------------------------------------------------------
Cablevision Systems Corp., 9.875%
Sr. Sub. Nts., 5/15/06 50,000 55,125
- ----------------------------------------------------------------------
Century Communications Corp., 9.75%
Sr. Nts., 2/15/02 50,000 53,375
- ----------------------------------------------------------------------
Comcast Corp., 9.125% Sr. Sub.
Debs., 10/15/06 50,000 53,375
- ----------------------------------------------------------------------
EchoStar Satellite Broadcasting
Corp., 0%/13.125% Sr. Sec. Disc.
Nts., 3/15/04(5) 50,000 42,750
- ----------------------------------------------------------------------
Falcon Holdings Group LP, 11% Sr.
Sub. Nts., 9/15/03(6) 61,941 64,727
</TABLE>
<PAGE>
PANORAMA SERIES FUND, INC. - LIFESPAN CAPITAL APPRECIATION PORTFOLIO
STATEMENT OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL MARKET VALUE
AMOUNT NOTE 1
- ----------------------------------------------------------------------
<S> <C> <C>
MEDIA (CONTINUED)
Fox/Liberty Networks LLC, 8.875%
Sr. Nts., 8/15/07(2) $ 25,000 $ 25,125
- ----------------------------------------------------------------------
Hollinger International Publishing,
Inc., 9.25% Gtd. Sr. Sub. Nts.,
3/15/07 50,000 52,750
- ----------------------------------------------------------------------
Lamar Advertising Co., 8.625% Sr.
Sub. Nts., 9/15/07 75,000 77,437
- ----------------------------------------------------------------------
Marcus Cable Operating Co.
LP/Marcus Cable Capital Corp.,
0%/13.50% Gtd. Sr. Sub. Disc. Nts.,
Series II, 8/1/04(5) 75,000 69,750
- ----------------------------------------------------------------------
MDC Communications Corp., 10.50%
Sr. Sub. Nts., 12/1/06 75,000 79,687
- ----------------------------------------------------------------------
Sinclair Broadcast Group, Inc., 10%
Sr. Sub. Nts., 9/30/05 50,000 52,875
- ----------------------------------------------------------------------
Spanish Broadcasting Systems, Inc.,
11% Sr. Nts., 3/15/04 50,000 55,250
- ----------------------------------------------------------------------
TCI Satellite Entertainment, Inc.,
10.875% Sr. Sub. Nts., 2/15/07(2) 50,000 52,625
- ----------------------------------------------------------------------
Time Warner, Inc., 7.45% Nts.,
2/1/98 15,000 15,013
- ----------------------------------------------------------------------
TKR Cable I, Inc., 10.50% Sr.
Debs., 10/30/07 40,000 44,466
- ----------------------------------------------------------------------
United International Holdings,
Inc., Zero Coupon Sr. Sec. Disc.
Nts., Series B, 16.362%,
11/15/99(7) 100,000 83,500
- ----------------------------------------------------------------------
United International Holdings,
Inc., Zero Coupon Sr. Sec. Disc.
Nts., 11.657%, 11/15/99(7) 100,000 83,500
---------------
1,141,957
- ----------------------------------------------------------------------
RETAIL: GENERAL - 0.2%
Federated Department Stores, Inc.,
10% Sr. Nts., 2/15/01 5,000 5,516
- ----------------------------------------------------------------------
Price/Costco Cos., Inc., 7.125% Sr.
Nts., 6/15/05 40,000 40,979
- ----------------------------------------------------------------------
Sears Roebuck & Co., 8.39%
Medium-Term Nts., 3/23/99 30,000 30,808
- ----------------------------------------------------------------------
William Carter Co., 10.375% Sr.
Sub. Nts., Series A, 12/1/06 75,000 79,125
---------------
156,428
- ----------------------------------------------------------------------
RETAIL: SPECIALTY - 0.2%
K Mart Corp., 7.75% Debs., 10/1/12 50,000 48,250
- ----------------------------------------------------------------------
Pantry, Inc. (The), 10.25% Sr. Sub.
Nts., 10/15/07(3) 75,000 76,875
---------------
125,125
- ----------------------------------------------------------------------
CONSUMER NON-CYCLICALS - 1.1%
- ----------------------------------------------------------------------
FOOD - 0.4%
AmeriServe Food Distribution, Inc.,
8.875% Sr. Nts., 10/15/06 75,000 75,750
- ----------------------------------------------------------------------
Dole Food Distributing, Inc., 6.75%
Nts., 7/15/00 40,000 40,495
- ----------------------------------------------------------------------
Fresh Del Monte Produce NV, 10% Sr.
Nts., Series B, 5/1/03 28,000 29,260
- ----------------------------------------------------------------------
Great Atlantic & Pacific Tea Co.,
Inc., (The) 9.125% Debs., 1/15/98 15,000 15,011
- ----------------------------------------------------------------------
Jitney-Jungle Stores of America,
Inc., 10.375% Sr. Sub. Nts.,
9/15/07 50,000 52,125
- ----------------------------------------------------------------------
Van De Kamps, Inc., 12% Sr. Sub.
Nts., 9/15/05(3) 50,000 55,750
---------------
268,391
- ----------------------------------------------------------------------
HEALTHCARE/DRUGS - 0.1%
Integrated Health Services, Inc.,
9.25% Sr. Sub. Nts., 1/15/08(2) 50,000 51,125
- ----------------------------------------------------------------------
HEALTHCARE/SUPPLIES & SERVICES -
0.6%
Columbia/HCA Healthcare Corp.,
6.875% Nts., 7/15/01 30,000 30,070
- ----------------------------------------------------------------------
Dade International, Inc., 11.125%
Sr. Sub. Nts., 5/1/06 50,000 55,250
- ----------------------------------------------------------------------
Graphic Controls Corp., 12% Sr.
Sub. Nts., Series A, 9/15/05 50,000 56,000
</TABLE>
<PAGE>
PANORAMA SERIES FUND, INC. - LIFESPAN CAPITAL APPRECIATION PORTFOLIO
STATEMENT OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL MARKET VALUE
AMOUNT NOTE 1
- ----------------------------------------------------------------------
<S> <C> <C>
HEALTHCARE/SUPPLIES & SERVICES
(CONTINUED)
Kinetics Concepts, Inc., 9.625% Sr.
Sub. Nts., 11/1/07(2) $ 75,000 $ 76,594
- ----------------------------------------------------------------------
Paracelsus Healthcare Corp., 10%
Sr. Unsec. Sub. Nts., 8/15/06 50,000 51,250
- ----------------------------------------------------------------------
Playtex Products, Inc., 8.875% Sr.
Nts., 7/15/04 50,000 51,062
- ----------------------------------------------------------------------
Tenet Healthcare Corp., 8% Sr.
Nts., 1/15/05 50,000 51,250
---------------
371,476
- ----------------------------------------------------------------------
HOUSEHOLD GOODS - 0.0%
Kimberly-Clark Corp., 7.875% Debs.,
2/1/23 15,000 16,361
- ----------------------------------------------------------------------
ENERGY - 0.8%
- ----------------------------------------------------------------------
ENERGY SERVICES & PRODUCERS - 0.5%
Coastal Corp., 8.125% Sr. Nts.,
9/15/02 15,000 16,080
- ----------------------------------------------------------------------
Falcon Drilling Co., Inc., 9.75%
Sr. Nts., Series B, 1/15/01 25,000 26,219
- ----------------------------------------------------------------------
Forcenergy, Inc., 8.50% Sr. Sub.
Nts., Series B, 2/15/07 75,000 76,312
- ----------------------------------------------------------------------
Louisiana Land & Exploration Co.,
7.65% Debs., 12/1/23 15,000 16,399
- ----------------------------------------------------------------------
Southwest Royalties, Inc., 10.50%
Sr. Gtd. Nts., 10/15/04(2) 75,000 75,000
- ----------------------------------------------------------------------
Transamerican Energy Corp., 11.50%
Sr. Nts., 6/15/02(2) 50,000 49,250
- ----------------------------------------------------------------------
Williams Holdings of Delaware,
Inc., 6.25% Sr. Unsec. Debs.,
2/1/06 25,000 24,541
---------------
283,801
- ----------------------------------------------------------------------
OIL-INTEGRATED - 0.3%
Gulf Canada Resources Ltd., 8.25%
Sr. Nts., 3/15/17 50,000 55,171
- ----------------------------------------------------------------------
Norcen Energy Resources Ltd., 6.80%
Debs., 7/2/02 50,000 50,886
- ----------------------------------------------------------------------
Petroleum Geo-Services ASA, 7.50%
Nts., 3/31/07 50,000 53,352
- ----------------------------------------------------------------------
Standard Oil/British Petroleum Co.
plc, 9% Debs., 6/1/19 15,000 15,508
---------------
174,917
- ----------------------------------------------------------------------
FINANCIAL - 1.0%
- ----------------------------------------------------------------------
BANKS - 0.1%
Citicorp, 5.625% Sr. Nts., 2/15/01 15,000 14,719
- ----------------------------------------------------------------------
Fleet Mtg./Norstar Group, Inc.,
9.90% Sub. Nts., 6/15/01 15,000 16,684
- ----------------------------------------------------------------------
Integra Financial Corp., 6.50% Sub.
Nts., 4/15/00 15,000 15,140
---------------
46,543
- ----------------------------------------------------------------------
DIVERSIFIED FINANCIAL - 0.7%
American General Institutional
Capital B, 8.125% Bonds, Series B,
3/15/46(2) 50,000 55,464
- ----------------------------------------------------------------------
Beneficial Corp., 9.125% Debs.,
2/15/98 15,000 15,050
- ----------------------------------------------------------------------
Capital One Financial Corp., 6.83%
Sr. Nts., 5/17/99 10,000 10,073
- ----------------------------------------------------------------------
Capital One Financial Corp., 7.25%
Nts., 12/1/03 40,000 40,422
- ----------------------------------------------------------------------
Chelsea GCA Realty Partner, Inc.,
7.75% Gtd. Unsec. Unsub. Nts.,
1/26/01 30,000 30,781
- ----------------------------------------------------------------------
Commercial Credit Co., 5.55% Unsec.
Nts., 2/15/01 15,000 14,733
- ----------------------------------------------------------------------
Countrywide Home Loans, Inc., 6.05%
Gtd. Medium-Term Nts., Series D,
3/1/01 15,000 14,936
- ----------------------------------------------------------------------
Ford Motor Credit Co., 6.25% Unsub.
Nts., 2/26/98 15,000 15,047
- ----------------------------------------------------------------------
General Motors Acceptance Corp.,
5.625% Nts., 2/15/01 25,000 24,627
- ----------------------------------------------------------------------
Merrill Lynch & Co., Inc., 6.50%
Nts., 4/1/01 20,000 20,193
</TABLE>
<PAGE>
PANORAMA SERIES FUND, INC. - LIFESPAN CAPITAL APPRECIATION PORTFOLIO
STATEMENT OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL MARKET VALUE
AMOUNT NOTE 1
- ----------------------------------------------------------------------
<S> <C> <C>
DIVERSIFIED FINANCIAL (CONTINUED)
Olympic Financial Ltd., Units (each
unit consists of $1,000 principal
amount of 11.50% sr. nts., 3/15/07
and one warrant to purchase 6.84
shares of common stock)(8) $ 75,000 $ 74,625
- ----------------------------------------------------------------------
Salomon, Inc., 8.69% Sr.
Medium-Term Nts., Series D, 3/1/99 35,000 36,031
- ----------------------------------------------------------------------
Wilshire Financial Services Group,
Inc., 13% Nts., Series A,
8/15/04(2) 75,000 76,687
---------------
428,669
- ----------------------------------------------------------------------
INSURANCE - 0.2%
Cigna Corp., 7.90% Nts., 12/14/98 30,000 30,481
- ----------------------------------------------------------------------
Conseco Financing Trust III, 8.796%
Bonds, 4/1/27 50,000 56,325
- ----------------------------------------------------------------------
SunAmerica, Inc., 9% Sr. Nts.,
1/15/99 35,000 35,932
- ----------------------------------------------------------------------
Travelers Property Casualty Corp.,
6.75% Nts., 4/15/01 15,000 15,263
---------------
138,001
- ----------------------------------------------------------------------
INDUSTRIAL - 1.2%
- ----------------------------------------------------------------------
INDUSTRIAL MATERIALS - 0.2%
American Standard Cos., Inc.,
10.875% Sr. Nts., 5/15/99(3) 43,000 45,365
- ----------------------------------------------------------------------
Portola Packaging, Inc., 10.75% Sr.
Nts., 10/1/05(3) 50,000 53,125
---------------
98,490
- ----------------------------------------------------------------------
INDUSTRIAL SERVICES - 0.5%
Employee Solutions, Inc., 10% Sr.
Nts., 10/15/04(3) 75,000 72,375
- ----------------------------------------------------------------------
KSL Recreation Group, Inc., 10.25%
Sr. Sub. Nts., 5/1/07 50,000 53,375
- ----------------------------------------------------------------------
Production Resource Group, 11.50%
Sr. Sub. Nts., 1/15/08(2) 75,000 75,562
- ----------------------------------------------------------------------
Sun Co., Inc., 7.95% Debs.,
12/15/01 50,000 52,798
- ----------------------------------------------------------------------
USI American Holdings, Inc., 7.25%
Gtd. Sr. Nts., Series B, 12/1/06 40,000 40,926
---------------
295,036
- ----------------------------------------------------------------------
MANUFACTURING - 0.2%
Jordan Industries, Inc., 10.375%
Sr. Nts., Series B, 8/1/07 75,000 76,125
- ----------------------------------------------------------------------
Mark IV Industries, Inc., 8.75%
Sub. Nts., 4/1/03(3) 10,000 10,600
- ----------------------------------------------------------------------
Titan Wheel International, Inc.,
8.75% Sr. Sub. Nts., 4/1/07 50,000 52,625
---------------
139,350
- ----------------------------------------------------------------------
TRANSPORTATION - 0.3%
CSX Corp., 7.05% Debs., 5/1/02 75,000 76,789
- ----------------------------------------------------------------------
Federal Express Corp., 6.25% Nts.,
4/15/98 15,000 15,006
- ----------------------------------------------------------------------
Norfolk Southern Corp., 7.35% Nts.,
5/15/07 50,000 52,933
- ----------------------------------------------------------------------
Union Pacific Corp., 7% Nts.,
6/15/00 15,000 15,249
---------------
159,977
- ----------------------------------------------------------------------
TECHNOLOGY - 2.1%
- ----------------------------------------------------------------------
AEROSPACE/DEFENSE - 0.0%
GPA Delaware, Inc., 8.75% Gtd.
Nts., 12/15/98 25,000 25,500
- ----------------------------------------------------------------------
COMPUTER SOFTWARE/SERVICES - 0.1%
Celestica International, Inc.,
10.50% Gtd. Sr. Sub. Nts., 12/31/06 75,000 79,500
- ----------------------------------------------------------------------
TELECOMMUNICATIONS-TECHNOLOGY -
2.0%
American Communications Services,
Inc., 0%/13% Sr. Disc. Nts.,
11/1/05(5) 100,000 80,500
</TABLE>
<PAGE>
PANORAMA SERIES FUND, INC. - LIFESPAN CAPITAL APPRECIATION PORTFOLIO
STATEMENT OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL MARKET VALUE
AMOUNT NOTE 1
- ----------------------------------------------------------------------
<S> <C> <C>
TELECOMMUNICATIONS-TECHNOLOGY
(CONTINUED)
Brooks Fiber Properties, Inc.,
0%/11.875% Sr. Disc. Nts.,
11/1/06(5) $ 50,000 $ 40,250
- ----------------------------------------------------------------------
Comcast UK Cable Partner Ltd.,
0%/11.20% Sr. Disc. Debs.,
11/15/07(5) 50,000 40,750
- ----------------------------------------------------------------------
Diamond Cable Communications plc,
0%/10.75% Sr. Disc. Nts.,
2/15/07(5) 75,000 51,375
- ----------------------------------------------------------------------
ICG Holdings, Inc., 0%/11.625% Sr.
Disc. Nts., 3/15/07(5) 100,000 68,500
- ----------------------------------------------------------------------
International CableTel, Inc.,
0%/11.50% Sr. Deferred Coupon Nts.,
Series B, 2/1/06(5) 150,000 117,187
- ----------------------------------------------------------------------
Iridium LLC/Iridium Capital Corp.,
11.25% Sr. Nts., 7/15/05(2) 75,000 73,875
- ----------------------------------------------------------------------
IXC Communications, Inc., 12.50%
Sr. Nts., Series B, 10/1/05 75,000 86,813
- ----------------------------------------------------------------------
Microcell Telecommunications, Inc.,
0%/14% Sr. Disc. Nts., Series B,
6/1/06(5) 50,000 33,750
- ----------------------------------------------------------------------
Nextel Communications, Inc.,
0%/9.75% Sr. Disc. Nts., 8/15/04(5) 50,000 44,625
- ----------------------------------------------------------------------
Price Communications Cellular
Holdings, Inc., 0%/13.50% Sr. Disc.
Nts., Series A, 8/1/07(3)(5) 100,000 63,500
- ----------------------------------------------------------------------
PriCellular Wireless Corp.,
0%/12.25% Sr. Sub. Disc. Nts.,
10/1/03(5) 75,000 77,250
- ----------------------------------------------------------------------
Sprint Spectrum LP/Sprint Spectrum
Finance Corp., 11% Sr. Nts.,
8/15/06 75,000 84,750
- ----------------------------------------------------------------------
Talton Holdings, Inc., 11% Gtd. Sr.
Unsec. Bonds, 6/30/07(2) 75,000 81,750
- ----------------------------------------------------------------------
Teleport Communications Group,
Inc., 0%/11.125% Sr. Disc. Nts.,
7/1/07(5) 25,000 20,438
- ----------------------------------------------------------------------
Teleport Communications Group,
Inc., 9.875% Sr. Nts., 7/1/06 25,000 28,125
- ----------------------------------------------------------------------
Telewest Communications plc, 0%/11%
Sr. Disc. Debs., 10/1/07(5) 25,000 19,531
- ----------------------------------------------------------------------
Telewest Communications plc, 9.625%
Sr. Debs., 10/1/06 25,000 26,063
- ----------------------------------------------------------------------
U S West Capital Funding, Inc.,
6.85% Gtd. Nts., 1/15/02 50,000 50,876
- ----------------------------------------------------------------------
UNIFI Communications, Inc., 14% Sr.
Nts., 3/1/04 75,000 59,250
- ----------------------------------------------------------------------
Western Wireless Corp., 10.50% Sr.
Sub. Nts., 2/1/07 50,000 54,250
---------------
1,203,408
- ----------------------------------------------------------------------
UTILITIES - 0.2%
- ----------------------------------------------------------------------
ELECTRIC UTILITIES - 0.0%
Consumers Energy Co., 8.75% First
Mtg. Nts., 2/15/98 15,000 15,036
- ----------------------------------------------------------------------
El Paso Electric Co., 7.25% First
Mtg. Nts., Series A, 2/1/99(3) 10,000 10,100
---------------
25,136
- ----------------------------------------------------------------------
GAS UTILITIES - 0.2%
Northern Illinois Gas Co., 6.45%
First Mtg. Bonds, 8/1/01 50,000 50,679
- ----------------------------------------------------------------------
Tennessee Gas Pipeline Co., 7.50%
Bonds, 4/1/17 50,000 53,681
---------------
104,360
---------------
Total Non-Convertible Corporate
Bonds and Notes (Cost $6,925,054) 7,243,060
</TABLE>
<PAGE>
PANORAMA SERIES FUND, INC. - LIFESPAN CAPITAL APPRECIATION PORTFOLIO
STATEMENT OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL MARKET VALUE
AMOUNT NOTE 1
- ----------------------------------------------------------------------
<S> <C> <C>
REPURCHASE AGREEMENTS - 11.3%
- ----------------------------------------------------------------------
Repurchase agreement with Zion
First National Bank, 6.60%, dated
12/31/97, to be repurchased at
$6,945,546 on 1/2/98,
collateralized by U.S. Treasury
Nts., 8.25%, 7/15/98, with a value
of $7,090,169 (Cost $6,943,000) $ 6,943,000 $ 6,943,000
- ----------------------------------------------------------------------
TOTAL INVESTMENTS, AT VALUE (COST
$53,366,035) 99.6% 61,138,115
- ----------------------------------------------------------------------
OTHER ASSETS NET OF LIABILITIES 0.4 241,367
--------------- ---------------
NET ASSETS 100.0% $ 61,379,482
--------------- ---------------
--------------- ---------------
</TABLE>
1. Non-income producing security.
2. Represents securities sold under Rule 144A, which are exempt from
registration under the Securities Act of 1933, as amended. These securities have
been determined to be liquid under guidelines established by the Board of
Directors. These securities amount to $1,137,807 or 1.85% of the Fund's net
assets as of December 31, 1997.
3. Identifies issues considered to be illiquid or restricted - See Note 5 of
Notes to Financial Statements.
4. Interest-Only Strips represent the right to receive the monthly interest
payments on an underlying pool of mortgage loans. These securities typically
decline in price as interest rates decline. Most other fixed income securities
increase in price when interest rates decline. The principal amount of the
underlying pool represents the notional amount on which current interest is
calculated. The price of these securities is typically more sensitive to changes
in prepayment rates than traditional mortgage-backed securities (for example,
GNMA pass-throughs). Interest rates disclosed represent current yields based
upon the current cost basis and estimated timing and amount of future cash
flows.
5. Denotes a step bond: a zero coupon bond that converts to a fixed or variable
interest rate at a designated future date.
6. Interest or dividend is paid in kind.
7. For zero coupon bonds, the interest rate shown is the effective yield on the
date of purchase.
8. Units may be comprised of several components, such as debt and equity and/or
warrants to purchase equity at some point in the future. For units which
represent debt securities, principal amount disclosed represents total
underlying principal.
See accompanying Notes to Financial Statements.
<PAGE>
PANORAMA SERIES FUND, INC.
STATEMENTS OF ASSETS AND LIABILITIES
DECEMBER 31, 1997
<TABLE>
<CAPTION>
TOTAL GOVERNMENT
RETURN GROWTH SECURITIES
PORTFOLIO PORTFOLIO PORTFOLIO
<S> <C> <C> <C>
- --------------------------------------------------------------------------------------
ASSETS:
Investments, at value (cost *)
(including repurchase agreements
**) - see accompanying statements $ 1,275,542,304 $ 837,667,919 $ 23,295,802
- --------------------------------------------------------------------------------------
Cash -- 52,883 90,721
- --------------------------------------------------------------------------------------
Receivables:
Dividends, interest and principal
paydowns 8,040,786 887,672 345,875
Shares of capital stock sold 340,785 227,569 233
Investments sold 978,945 1,271,194 --
- --------------------------------------------------------------------------------------
Other 18,663 7,375 1,515
---------------- -------------- -------------
Total assets 1,284,921,483 840,114,612 23,734,146
- --------------------------------------------------------------------------------------
LIABILITIES:
Bank overdraft 181,431 -- --
- --------------------------------------------------------------------------------------
Unrealized depreciation on forward
foreign currency exchange contracts
- -see applicable note -- -- --
- --------------------------------------------------------------------------------------
Payables and other liabilities:
Investments purchased 5,159,278 8,599,768 --
Shares of capital stock redeemed 785,461 75,635 2,983
Custodian fees 19,990 9,030 1,180
Legal and auditing fees 20,910 15,193 7,569
Shareholder reports 5,303 3,845 3,379
Registration and filing fees 25,793 39,801 --
Other -- -- 15
---------------- -------------- -------------
Total liabilities 6,198,166 8,743,272 15,126
- --------------------------------------------------------------------------------------
NET ASSETS $ 1,278,723,317 $ 831,371,340 $ 23,719,020
---------------- -------------- -------------
---------------- -------------- -------------
- --------------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS:
Par value of shares of capital
stock $ 640,876 $ 240,667 $ 21,322
- --------------------------------------------------------------------------------------
Additional paid-in capital 999,878,481 553,844,604 22,206,033
- --------------------------------------------------------------------------------------
Undistributed net investment income 42,609,690 9,770,088 1,356,173
- --------------------------------------------------------------------------------------
Accumulated net realized gain
(loss) from investments and foreign
currency transactions 143,222,480 107,576,006 (476,924)
- --------------------------------------------------------------------------------------
Net unrealized appreciation on
investments and translation of
assets and liabilities denominated
in foreign currencies 92,371,790 159,939,975 612,416
---------------- -------------- -------------
Net Assets $ 1,278,723,317 $ 831,371,340 $ 23,719,020
---------------- -------------- -------------
---------------- -------------- -------------
- --------------------------------------------------------------------------------------
SHARES OF CAPITAL STOCK OUTSTANDING 640,875,962 240,666,941 21,321,672
- --------------------------------------------------------------------------------------
NET ASSET VALUE, REDEMPTION PRICE
AND OFFERING PRICE PER SHARE $ 2.00 $ 3.45 $ 1.11
* Cost $ 1,183,170,514 $ 677,727,944 $ 22,683,386
** Repurchase agreements $ 48,500,000 $ 31,100,000 $ 600,000
</TABLE>
See accompanying Notes to Financial Statements.
<PAGE>
PANORAMA SERIES FUND, INC.
STATEMENTS OF ASSETS AND LIABILITIES
DECEMBER 31, 1997 (CONTINUED)
<TABLE>
<CAPTION>
LIFESPAN LIFESPAN
INTERNATIONAL DIVERSIFIED LIFESPAN CAPITAL
EQUITY INCOME BALANCED APPRECIATION
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
<S> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------
ASSETS:
Investments, at value (cost *)
(including repurchase agreements
**) - see accompanying statements $ 82,925,486 $ 33,638,107 $ 68,322,127 $ 61,138,115
- --------------------------------------------------------------------------------------------------
Cash 92,896 38,915 211,675 346,371
- --------------------------------------------------------------------------------------------------
Receivables:
Dividends, interest and principal
paydowns 117,386 383,381 484,119 258,904
Shares of capital stock sold 14,463 6,656 6,094 16,851
Investments sold -- 82,475 169,801 197,075
- --------------------------------------------------------------------------------------------------
Other 3,386 2,406 3,048 3,087
------------- ------------- ------------- -------------
Total assets 83,153,617 34,151,940 69,196,864 61,960,403
- --------------------------------------------------------------------------------------------------
LIABILITIES:
Bank overdraft -- -- -- --
- --------------------------------------------------------------------------------------------------
Unrealized depreciation on forward
foreign currency exchange contracts
- -see applicable note 11,298 -- 2,800 2,949
- --------------------------------------------------------------------------------------------------
Payables and other liabilities:
Investments purchased 822,616 -- 435,179 539,656
Shares of capital stock redeemed 26,933 1,296 29,674 --
Custodian fees 18,168 20,666 18,044 20,127
Legal and auditing fees 7,975 7,468 9,086 9,257
Shareholder reports 4,477 4,677 4,601 4,619
Registration and filing fees 4,562 2,018 3,676 4,290
Other 140 -- 1,021 23
------------- ------------- ------------- -------------
Total liabilities 896,169 36,125 504,081 580,921
- --------------------------------------------------------------------------------------------------
NET ASSETS $ 82,257,448 $ 34,115,815 $ 68,692,783 $ 61,379,482
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
- --------------------------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS:
Par value of shares of capital
stock $ 60,378 $ 28,988 $ 53,491 $ 45,351
- --------------------------------------------------------------------------------------------------
Additional paid-in capital 68,239,720 29,823,374 56,785,059 49,938,747
- --------------------------------------------------------------------------------------------------
Undistributed net investment income 390,416 1,650,130 1,955,234 1,170,826
- --------------------------------------------------------------------------------------------------
Accumulated net realized gain
(loss) from investments and foreign
currency transactions 2,612,989 280,885 2,427,542 2,452,404
- --------------------------------------------------------------------------------------------------
Net unrealized appreciation on
investments and translation of
assets and liabilities denominated
in foreign currencies 10,953,945 2,332,438 7,471,457 7,772,154
------------- ------------- ------------- -------------
Net Assets $ 82,257,448 $ 34,115,815 $ 68,692,783 $ 61,379,482
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
- --------------------------------------------------------------------------------------------------
SHARES OF CAPITAL STOCK OUTSTANDING 60,378,390 28,987,734 53,490,749 45,351,184
- --------------------------------------------------------------------------------------------------
NET ASSET VALUE, REDEMPTION PRICE
AND OFFERING PRICE PER SHARE $ 1.36 $ 1.18 $ 1.28 $ 1.35
* Cost $ 71,972,123 $ 31,305,669 $ 60,850,786 $ 53,366,035
** Repurchase agreements $ 2,300,000 $ 4,273,000 $ 6,715,000 $ 6,943,000
</TABLE>
See accompanying Notes to Financial Statements.
<PAGE>
PANORAMA SERIES FUND, INC.
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1997
<TABLE>
<CAPTION>
TOTAL GOVERNMENT
RETURN GROWTH SECURITIES
PORTFOLIO PORTFOLIO PORTFOLIO
<S> <C> <C> <C>
- -----------------------------------------------------------------------------------
INVESTMENT INCOME:
Interest $ 40,056,780 $ 3,967,500 $ 1,524,193
- -----------------------------------------------------------------------------------
Dividends (net of withholding taxes
of *) 9,669,636 9,925,750 --
-------------- -------------- ------------
Total income 49,726,416 13,893,250 1,524,193
- -----------------------------------------------------------------------------------
EXPENSES:
Management fees - see applicable
note 6,482,637 3,818,977 120,922
- -----------------------------------------------------------------------------------
Custodian fees and expenses 1,499 -- 4,142
- -----------------------------------------------------------------------------------
Shareholder reports 6,904 5,100 3,814
- -----------------------------------------------------------------------------------
Accounting service fees - see
applicable note 15,000 15,000 15,000
- -----------------------------------------------------------------------------------
Legal and auditing fees 41,410 17,130 5,866
- -----------------------------------------------------------------------------------
Insurance expenses 17,475 6,088 1,860
- -----------------------------------------------------------------------------------
Directors' fees and expenses 30,256 2,809 608
- -----------------------------------------------------------------------------------
Registration and filing fees 26,587 39,355 --
- -----------------------------------------------------------------------------------
Other 648 164 1,373
-------------- -------------- ------------
Total expenses 6,622,416 3,904,623 153,585
Less expenses paid indirectly - see
applicable note -- -- (3,048)
-------------- -------------- ------------
Net expenses 6,622,416 3,904,623 150,537
- -----------------------------------------------------------------------------------
NET INVESTMENT INCOME 43,104,000 9,988,627 1,373,656
- -----------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN
(LOSS):
Net realized gain (loss) on:
Investments 144,786,846 108,263,083 (69,942)
Foreign currency transactions -- -- --
- -----------------------------------------------------------------------------------
Net change in unrealized
appreciation or depreciation on:
Investments 14,497,050 45,697,012 644,731
Translation of assets and
liabilities denominated in foreign
currencies -- -- --
-------------- -------------- ------------
Net realized and unrealized gain 159,283,896 153,960,095 574,789
- -----------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS $ 202,387,896 $ 163,948,722 $ 1,948,445
-------------- -------------- ------------
-------------- -------------- ------------
* Dividends $ 5,171 $ 5,022 $ --
</TABLE>
See accompanying Notes to Financial Statements.
<PAGE>
PANORAMA SERIES FUND, INC.
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1997 (CONTINUED)
<TABLE>
<CAPTION>
LIFESPAN LIFESPAN
INTERNATIONAL DIVERSIFIED LIFESPAN CAPITAL
EQUITY INCOME BALANCED APPRECIATION
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
<S> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------
INVESTMENT INCOME:
Interest $ 181,159 $ 1,669,274 $ 2,057,462 $ 1,094,102
- --------------------------------------------------------------------------------------------------
Dividends (net of withholding taxes
of *) 1,165,091 246,215 566,852 627,954
------------- ------------- ------------- -------------
Total income 1,346,250 1,915,489 2,624,314 1,722,056
- --------------------------------------------------------------------------------------------------
EXPENSES:
Management fees - see applicable
note 732,642 213,594 504,390 437,070
- --------------------------------------------------------------------------------------------------
Custodian fees and expenses 47,818 6,908 34,115 31,357
- --------------------------------------------------------------------------------------------------
Shareholder reports 6,104 2,059 5,683 5,701
- --------------------------------------------------------------------------------------------------
Accounting service fees - see
applicable note 15,000 15,000 15,000 15,000
- --------------------------------------------------------------------------------------------------
Legal and auditing fees 7,535 1,784 11,066 9,582
- --------------------------------------------------------------------------------------------------
Insurance expenses 3,010 2,145 2,783 2,660
- --------------------------------------------------------------------------------------------------
Directors' fees and expenses 2,231 1,695 2,350 2,067
- --------------------------------------------------------------------------------------------------
Registration and filing fees 4,416 1,985 3,569 4,236
- --------------------------------------------------------------------------------------------------
Other 63 118 45 15
------------- ------------- ------------- -------------
Total expenses 818,819 245,288 579,001 507,688
Less expenses paid indirectly - see
applicable note -- (5,572) -- --
------------- ------------- ------------- -------------
Net expenses 818,819 239,716 579,001 507,688
- --------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME 527,431 1,675,773 2,045,313 1,214,368
- --------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN
(LOSS):
Net realized gain (loss) on:
Investments 4,668,966 298,037 2,750,989 2,791,426
Foreign currency transactions (2,006,332) -- (235,863) (258,131)
- --------------------------------------------------------------------------------------------------
Net change in unrealized
appreciation or depreciation on:
Investments 5,127,249 1,310,516 2,766,401 3,036,784
Translation of assets and
liabilities denominated in foreign
currencies (2,536,134) -- (331,929) (371,086)
------------- ------------- ------------- -------------
Net realized and unrealized gain 5,253,749 1,608,553 4,949,598 5,198,993
- --------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS $ 5,781,180 $ 3,284,326 $ 6,994,911 $ 6,413,361
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
* Dividends $ 97,568 $ 591 $ 11,604 $ 15,252
</TABLE>
See accompanying Notes to Financial Statements.
<PAGE>
PANORAMA SERIES FUND, INC.
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1996
<TABLE>
<CAPTION>
TOTAL
RETURN GROWTH
PORTFOLIO PORTFOLIO
1997 1996 1997 1996
<S> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------
OPERATIONS:
Net investment income $ 43,104,000 $ 43,541,038 $ 9,988,627 $ 8,053,037
- -----------------------------------------------------------------------------------------------
Net realized gain (loss) 144,786,846 94,961,143 108,263,083 45,460,285
- -----------------------------------------------------------------------------------------------
Net change in unrealized
appreciation or depreciation 14,497,050 (35,958,926) 45,697,012 34,820,597
-------------- -------------- ------------ ------------
Net increase in net assets
resulting from operations 202,387,896 102,543,255 163,948,722 88,333,919
- -----------------------------------------------------------------------------------------------
DIVIDENDS AND DISTRIBUTIONS TO
SHAREHOLDERS:
Dividends from net investment
income (38,831,970) (5,852,700) (6,502,490) (1,827,903)
- -----------------------------------------------------------------------------------------------
Distributions from net realized
gain (95,341,180) (3,476,504) (46,127,035) (2,683,361)
- -----------------------------------------------------------------------------------------------
CAPITAL STOCK TRANSACTIONS:
Net increase (decrease) in net
assets resulting from capital stock
transactions - Note 2 88,432,903 34,935,466 133,829,865 96,464,501
- -----------------------------------------------------------------------------------------------
NET ASSETS:
Total increase (decrease) 156,647,649 128,149,517 245,149,062 180,287,156
- -----------------------------------------------------------------------------------------------
Beginning of period 1,122,075,668 993,926,151 586,222,278 405,935,122
-------------- -------------- ------------ ------------
End of period $1,278,723,317 $1,122,075,668 $831,371,340 $586,222,278
-------------- -------------- ------------ ------------
-------------- -------------- ------------ ------------
Undistributed net investment income $ 42,609,690 $ 38,224,047 $ 9,770,088 $ 6,282,780
</TABLE>
<TABLE>
<CAPTION>
GOVERNMENT INTERNATIONAL
SECURITIES EQUITY
PORTFOLIO PORTFOLIO
1997 1996 1997 1996
<S> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------
OPERATIONS:
Net investment income $ 1,373,656 $ 1,459,438 $ 527,431 $ 430,957
- ---------------------------------------------------------------------------------------
Net realized gain (loss) (69,942) 45,633 2,662,634 2,365,382
- ---------------------------------------------------------------------------------------
Net change in unrealized
appreciation or depreciation 644,731 (990,673) 2,591,115 3,976,250
----------- ----------- ----------- -----------
Net increase in net assets
resulting from operations 1,948,445 514,398 5,781,180 6,772,589
- ---------------------------------------------------------------------------------------
DIVIDENDS AND DISTRIBUTIONS TO
SHAREHOLDERS:
Dividends from net investment
income (1,463,333) (13,793) (407,257) (554,917)
- ---------------------------------------------------------------------------------------
Distributions from net realized
gain -- -- (1,170,863) --
- ---------------------------------------------------------------------------------------
CAPITAL STOCK TRANSACTIONS:
Net increase (decrease) in net
assets resulting from capital stock
transactions - Note 2 (1,670) (1,573,635) 15,468,927 10,593,270
- ---------------------------------------------------------------------------------------
NET ASSETS:
Total increase (decrease) 483,442 (1,073,030) 19,671,987 16,810,942
- ---------------------------------------------------------------------------------------
Beginning of period 23,235,578 24,308,608 62,585,461 45,774,519
----------- ----------- ----------- -----------
End of period $23,719,020 $23,235,578 $82,257,448 $62,585,461
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
Undistributed net investment income $ 1,356,173 $ 1,450,831 $ 390,416 $ 356,464
</TABLE>
See accompanying Notes to Financial Statements.
<PAGE>
PANORAMA SERIES FUND, INC.
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1996
<TABLE>
<CAPTION>
LIFESPAN LIFESPAN
DIVERSIFIED BALANCED
INCOME PORTFOLIO
PORTFOLIO PORTFOLIO
1997 1996 1997 1996
<S> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------
OPERATIONS:
Net investment income $ 1,675,773 $ 1,334,058 $ 2,045,313 $ 1,395,888
- ---------------------------------------------------------------------------------------
Net realized gain (loss) 298,037 34,119 2,515,126 713,856
- ---------------------------------------------------------------------------------------
Net change in unrealized
appreciation or depreciation 1,310,516 218,964 2,434,472 3,132,282
----------- ----------- ----------- -----------
Net increase in net assets
resulting from operations 3,284,326 1,587,141 6,994,911 5,242,026
- ---------------------------------------------------------------------------------------
DIVIDENDS AND DISTRIBUTIONS TO
SHAREHOLDERS:
Dividends from net investment
income (1,155,828) (218,759) (1,134,469) (364,414)
- ---------------------------------------------------------------------------------------
Distributions from net realized
gain (41,610) (30,626) (612,613) --
- ---------------------------------------------------------------------------------------
CAPITAL STOCK TRANSACTIONS:
Net increase (decrease) in net
assets resulting from capital stock
transactions - Note 2 6,754,828 2,760,428 12,108,631 10,991,482
- ---------------------------------------------------------------------------------------
NET ASSETS:
Total increase (decrease) 8,841,716 4,098,184 17,356,460 15,869,094
- ---------------------------------------------------------------------------------------
Beginning of period 25,274,099 21,175,915 51,336,323 35,467,229
----------- ----------- ----------- -----------
End of period $34,115,815 $25,274,099 $68,692,783 $51,336,323
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
Undistributed net investment income $ 1,650,130 $ 1,127,966 $ 1,955,234 $ 1,053,055
</TABLE>
<TABLE>
<CAPTION>
LIFESPAN
CAPITAL
APPRECIATION
1997 1996
<S> <C> <C>
- -------------------------------------------------------------
OPERATIONS:
Net investment income $ 1,214,368 $ 635,909
- -------------------------------------------------------------
Net realized gain (loss) 2,533,295 1,155,841
- -------------------------------------------------------------
Net change in unrealized
appreciation or depreciation 2,665,698 3,269,866
----------- -----------
Net increase in net assets
resulting from operations 6,413,361 5,061,616
- -------------------------------------------------------------
DIVIDENDS AND DISTRIBUTIONS TO
SHAREHOLDERS:
Dividends from net investment
income (402,394) (278,560)
- -------------------------------------------------------------
Distributions from net realized
gain (1,024,277) --
- -------------------------------------------------------------
CAPITAL STOCK TRANSACTIONS:
Net increase (decrease) in net
assets resulting from capital stock
transactions - Note 2 14,398,598 10,442,654
- -------------------------------------------------------------
NET ASSETS:
Total increase (decrease) 19,385,288 15,225,710
- -------------------------------------------------------------
Beginning of period 41,994,194 26,768,484
----------- -----------
End of period $61,379,482 $41,994,194
----------- -----------
----------- -----------
Undistributed net investment income $ 1,170,826 $ 371,899
</TABLE>
See accompanying Notes to Financial Statements.
<PAGE>
PANORAMA SERIES FUND, INC. - TOTAL RETURN PORTFOLIO
FINANCIAL HIGHLIGHTS
DECEMBER 31, 1997
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
----------------------------------------------------
1997 1996((1)) 1995 1994 1993
<S> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------
PER SHARE OPERATING DATA:
Net asset value, beginning of
period $1.91 $1.75 $1.51 $1.65 $1.56
- -----------------------------------------------------------------------------------------
INCOME (LOSS) FROM INVESTMENT
OPERATIONS:
Net investment income .07 .07 .07 .06 .06
Net realized and unrealized gain
(loss) .25 .11 .30 (.09) .20
- -----------------------------------------------------------------------------------------
Total income (loss) from investment
operations .32 .18 .37 (.03) .26
- -----------------------------------------------------------------------------------------
Dividends and distributions to
shareholders:
Dividends from net investment
income (.07) (.01) (.07) (.06) (.06)
Distributions from net realized
gain (.16) (.01) (.06) (.05) (.11)
- -----------------------------------------------------------------------------------------
Total dividends and distributions
to shareholders (.23) (.02) (.13) (.11) (.17)
- -----------------------------------------------------------------------------------------
Net asset value, end of period $2.00 $1.91 $1.75 $1.51 $1.65
-------- -------- ------ ------ ------
-------- -------- ------ ------ ------
- -----------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET
VALUE((2)) 18.81% 10.14% 24.66% (1.97)% 16.28%
- -----------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in
millions) $1,279 $1,122 $994 $742 $610
- -----------------------------------------------------------------------------------------
Average net assets (in millions) $1,208 $1,058 $864((3)) $687((3)) $502((3))
- -----------------------------------------------------------------------------------------
Ratios to average net assets:
Net investment income 3.57% 4.12% 4.48% 4.21% 3.90%
Expenses 0.55% 0.55% 0.59% 0.56% 0.60%
- -----------------------------------------------------------------------------------------
Portfolio turnover rate((4)) 103.5% 104.3% 62.3% 88.3% 161.6%
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.
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.
See accompanying Notes to Financial Statements.
<PAGE>
PANORAMA SERIES FUND, INC. - GROWTH PORTFOLIO
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
--------------------------------------------------------
1997 1996(1) 1995 1994 1993
<S> <C> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA:
Net asset value, beginning of
period $2.98 $2.53 $1.97 $2.08 $1.91
- ---------------------------------------------------------------------------------------------
Income (loss) from investment
operations:
Net investment income .04 .04 .04 .03 .04
Net realized and unrealized gain
(loss) .69 .43 .71 (.04) .36
- ---------------------------------------------------------------------------------------------
Total income (loss) from investment
operations .73 .47 .75 (.01) .40
- ---------------------------------------------------------------------------------------------
Dividends and distributions to
shareholders:
Dividends from net investment
income (.03) (.01) (.04) (.03) (.04)
Distributions from net realized
gain (.23) (.01) (.15) (.07) (.19)
- ---------------------------------------------------------------------------------------------
Total dividends and distributions
to shareholders (.26) (.02) (.19) (.10) (.23)
- ---------------------------------------------------------------------------------------------
Net asset value, end of period $3.45 $2.98 $2.53 $1.97 $2.08
-------- -------- -------- -------- --------
-------- -------- -------- -------- --------
- ---------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE(2) 26.37% 18.87% 38.06% (0.51)% 21.22%
- ---------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in
thousands) $831,371 $586,222 $405,935 $230,195 $165,775
- ---------------------------------------------------------------------------------------------
Average net assets (in thousands) $721,555 $494,281 $303,193(3) $198,879(3) $131,292(3)
- ---------------------------------------------------------------------------------------------
Ratios to average net assets:
Net investment income 1.38% 1.63% 2.01% 1.87% 2.30%
Expenses 0.54% 0.58% 0.66% 0.67% 0.69%
- ---------------------------------------------------------------------------------------------
Portfolio turnover rate(4) 91.8% 82.5% 69.3% 97.3% 97.6%
Average brokerage commission
rate(5) $ 0.0699 $ 0.0697 -- -- --
</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.
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.
See accompanying Notes to Financial Statements.
<PAGE>
PANORAMA SERIES FUND, INC. - GOVERNMENT SECURITIES PORTFOLIO
FINANCIAL HIGHLIGHTS
DECEMBER 31, 1997
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
---------------------------------------------------
1997 1996(1) 1995 1994 1993
<S> <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
- -----------------------------------------------------------------------------------------
Income (loss) from investment
operations:
Net investment income .07 .07 .06 .06 .04
Net realized and unrealized gain
(loss) .02 (.05) .12 (.11) .07
- -----------------------------------------------------------------------------------------
Total income (loss) from investment
operations .09 .02 .18 (.05) .11
- -----------------------------------------------------------------------------------------
Dividends and distributions to
shareholders:
Dividends from net investment
income (.07) --(2) (.06) (.06) (.04)
Distributions from net realized
gain -- -- -- -- (.02)
- -----------------------------------------------------------------------------------------
Total dividends and distributions
to shareholders (.07) -- (.06) (.06) (.06)
- -----------------------------------------------------------------------------------------
Net asset value, end of period $ 1.11 $ 1.09 $ 1.07 $ 0.95 $ 1.06
------- ------- ------- ------- -------
------- ------- ------- ------- -------
- -----------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE(3) 8.82% 1.93% 18.91% (4.89)% 10.98%
- -----------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in
thousands) $23,719 $23,236 $24,309 $18,784 $15,687
- -----------------------------------------------------------------------------------------
Average net assets (in thousands) $23,034 $23,880 $23,157(4) $17,589(4) $11,421(4)
- -----------------------------------------------------------------------------------------
Ratios to average net assets:
Net investment income 5.96% 6.11% 6.08% 6.04% 5.13%
Expenses 0.67%(5) 0.62% 0.71% 0.85% 0.93%
- -----------------------------------------------------------------------------------------
Portfolio turnover rate(6) 0.0% 6.0% 54.7% 102.3% 178.2%
</TABLE>
1. On March 1, 1996, OppenheimerFunds, Inc. became the investment advisor to the
Fund.
2. Less than $0.005 per share.
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. The expense ratio reflects the effect of expenses paid indirectly by the
Fund.
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 $0 and $2,350,000, respectively.
See accompanying Notes to Financial Statements.
<PAGE>
PANORAMA SERIES FUND, INC. - INTERNATIONAL EQUITY PORTFOLIO
FINANCIAL HIGHLIGHTS
DECEMBER 31, 1997
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
----------------------------------------------------------
1997 1996(1) 1995 1994 1993
<S> <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
- -----------------------------------------------------------------------------------------------
Income (loss) from investment
operations:
Net investment income (loss) .01 .02 .03 (.01) .00
Net realized and unrealized gain
(loss) .09 .13 .08 .03 .20
- -----------------------------------------------------------------------------------------------
Total income (loss) from investment
operations .10 .15 .11 .02 .20
- -----------------------------------------------------------------------------------------------
Dividends and distributions to
shareholders:
Dividends from net investment
income (.01) (.01) (.04) -- (.02)
Distributions from net realized
gain (.02) -- (.01) (.02) (.01)
- -----------------------------------------------------------------------------------------------
Total dividends and distributions
to shareholders (.03) (.01) (.05) (.02) (.03)
- -----------------------------------------------------------------------------------------------
Net asset value, end of period $1.36 $1.29 $1.15 $1.09 $1.09
-------- -------- -------- -------- --------
-------- -------- -------- -------- --------
- -----------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE(2) 8.11% 13.26% 10.30% 1.44% 21.80%
- -----------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in
thousands) $82,257 $62,585 $45,775 $31,603 $18,315
- -----------------------------------------------------------------------------------------------
Average net assets (in thousands) $73,318 $56,893 $37,474(3) $29,133(3) $13,328(3)
- -----------------------------------------------------------------------------------------------
Ratios to average net assets:
Net investment income 0.72% 0.76% 1.61% (1.85)% (0.31)%
Expenses 1.12% 1.21% 1.26% 1.28% 1.50%
- -----------------------------------------------------------------------------------------------
Portfolio turnover rate(4) 48.6% 53.7% 85.1% 76.5% 57.4%
Average brokerage commission
rate(5) $ 0.0232 $ 0.0019 -- -- --
</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.
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 $47,527,468 and $34,015,226, 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. 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.
See accompanying Notes to Financial Statements.
<PAGE>
PANORAMA SERIES FUND, INC. - LIFESPAN DIVERSIFIED INCOME PORTFOLIO
FINANCIAL HIGHLIGHTS
DECEMBER 31, 1997
<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 --(9) -- --
- -------------------------------------------------------------------
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(3) 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(4)
- -------------------------------------------------------------------
Ratios to average net assets:
Net investment income 5.88% 5.84% 5.11%(5)
Expenses 0.86%(6) 1.07% 1.50%(5)
- -------------------------------------------------------------------
Portfolio turnover rate(7) 34.0% 80.4% 41.2%(5)
Average brokerage commission
rate(8) $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. 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 expense ratio reflects the effect of expenses paid indirectly by the
Fund.
7. 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.
8. 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.
9. Less than $0.005 per share.
See accompanying Notes to Financial Statements.
<PAGE>
PANORAMA SERIES FUND, INC. - LIFESPAN BALANCED PORTFOLIO
FINANCIAL HIGHLIGHTS
DECEMBER 31, 1997
<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.
See accompanying Notes to Financial Statements.
<PAGE>
PANORAMA SERIES FUND, INC. - LIFESPAN CAPITAL APPRECIATION PORTFOLIO
FINANCIAL HIGHLIGHTS
DECEMBER 31, 1997
<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 lower per-share prices of many
non-U.S. securities.
See accompanying Notes to Financial Statements.
<PAGE>
PANORAMA SERIES FUND, INC. - TOTAL RETURN PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
Total Return Portfolio (the Fund) is a series of Panorama Series Fund, Inc. (the
Company) which is registered under the Investment Company Act of 1940, as
amended, as a diversified, open-end management investment company. The Fund's
investment objective is to seek maximum 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. The Fund's investment advisor is OppenheimerFunds,
Inc. (the Manager). Shares of the Fund are sold only to separate accounts of
life insurance companies, a majority of such shares are held by separate
accounts of Massachusetts Mutual Life Insurance Co., an affiliate of the
investment advisor. The following is a summary of significant accounting
policies consistently followed by the Fund.
- --------------------------------------------------------------------------------
INVESTMENT VALUATION. Portfolio securities are valued at the close of the New
York Stock Exchange on each trading day. Listed and unlisted securities for
which such information is regularly reported are valued at the last sale price
of the day or, in the absence of sales, at values based on the closing bid or
the last sale price on the prior trading day. Long-term and short-term
"non-money market" debt securities are valued by a portfolio pricing service
approved by the Board of Directors. Such securities which cannot be valued by an
approved portfolio pricing service are valued using dealer-supplied valuations
provided the Manager is satisfied that the firm rendering the quotes is reliable
and that the quotes reflect current market value, or are valued under
consistently applied procedures established by the Board of Directors to
determine fair value in good faith. Short-term "money market type" debt
securities having a remaining maturity of 60 days or less are valued at cost (or
last determined market value) adjusted for amortization to maturity of any
premium or discount.
- --------------------------------------------------------------------------------
FOREIGN CURRENCY TRANSLATION. The accounting records of the Fund are maintained
in U.S. dollars. Prices of securities purchased that are denominated in foreign
currencies are translated into U.S. dollars at the closing rates of exchange.
Amounts related to the purchase and sale of foreign securities and investment
income are translated at the rates of exchange prevailing on the respective
dates of such transactions.
The effect of changes in foreign currency exchange rates on investments is
separately identified from the fluctuations arising from changes in market
values of securities held and reported with all other foreign currency gains and
losses in the Fund's Statement of Operations.
- --------------------------------------------------------------------------------
REPURCHASE AGREEMENTS. The Fund requires the custodian to take possession, to
have legally segregated in the Federal Reserve Book Entry System or to have
segregated within the custodian's vault, all securities held as collateral for
repurchase agreements. The market value of the underlying securities is required
to be at least 102% of the resale price at the time of purchase. If the seller
of the agreement defaults and the value of the collateral declines, or if the
seller enters an insolvency proceeding, realization of the value of the
collateral by the Fund may be delayed or limited.
- --------------------------------------------------------------------------------
FEDERAL TAXES. The Company intends for the Fund to continue to comply with
provisions of the Internal Revenue Code applicable to regulated investment
companies and to distribute all of its taxable income, including any net
realized gain on investments not offset by loss carryovers, to shareholders.
Therefore, no federal income or excise tax provision is required.
- --------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS. Dividends and distributions to shareholders are
recorded on the ex-dividend date.
<PAGE>
PANORAMA SERIES FUND, INC. - TOTAL RETURN PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
CLASSIFICATION OF DISTRIBUTIONS TO SHAREHOLDERS. Net investment income (loss)
and net realized gain (loss) may differ for financial statement and tax
purposes. The character of the distributions made during the year from net
investment income or net realized gains may differ from its ultimate
characterization for federal income tax purposes. Also, due to timing of
dividend distributions, the fiscal year in which amounts are distributed may
differ from the fiscal year in which the income or realized gain was recorded by
the Fund.
The Fund adjusts the classification of distributions to shareholders to reflect
the differences between financial statement amounts and distributions determined
in accordance with income tax regulations. Accordingly, during the year ended
December 31, 1997, amounts have been reclassified to reflect an increase in
undistributed net investment income of $113,613, an increase in paid-in capital
of $350,756, and a decrease in accumulated net realized gain on investments at
$464,369.
- --------------------------------------------------------------------------------
OTHER. Investment transactions are accounted for on the date the investments are
purchased or sold (trade date) and dividend income is recorded on the
ex-dividend date. Discount on securities purchased is amortized over the life of
the respective securities, in accordance with federal income tax requirements.
Realized gains and losses on investments and unrealized appreciation and
depreciation are determined on an identified cost basis, which is the same basis
used for federal income tax purposes.
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of income and expenses during the reporting period. Actual
results could differ from those estimates.
- --------------------------------------------------------------------------------
2. SHARES OF CAPITAL STOCK
The Fund has authorized 950 million shares of $0.001 par value capital stock.
Transactions in shares of capital stock were as follows:
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
DECEMBER 31, 1997 DECEMBER 31, 1996
--------------------------------- ------------------------------
SHARES AMOUNT SHARES AMOUNT
<S> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------
Sold 71,391,082 $ 135,657,386 93,916,426 $ 168,995,348
Dividends and
distributions reinvested 78,007,645 134,173,150 5,232,785 9,329,203
Redeemed (95,125,453) (181,397,633) (79,306,418) (143,389,085)
-------------- ---------------- -------------- -------------
Net increase 54,273,274 $ 88,432,903 19,842,793 $ 34,935,466
-------------- ---------------- -------------- -------------
-------------- ---------------- -------------- -------------
</TABLE>
- --------------------------------------------------------------------------------
3. UNREALIZED GAINS AND LOSSES ON INVESTMENTS
At December 31, 1997, net unrealized appreciation on investments of $92,371,790
was composed of gross appreciation of $101,063,618, and gross depreciation of
$8,691,828.
- --------------------------------------------------------------------------------
4. MANAGEMENT FEES AND OTHER TRANSACTIONS WITH AFFILIATES
Management fees paid to the Manager were in accordance with the investment
advisory agreement with the Fund. The annual fees are 0.625% of the first $600
million of average daily net assets and 0.45% of average daily net assets in
excess of $600 million. The Manager acts as the accounting agent for the Fund at
an annual fee of $15,000, plus out-of-pocket costs and expenses reasonably
incurred.
<PAGE>
PANORAMA SERIES FUND, INC. - TOTAL RETURN PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
5. ILLIQUID AND RESTRICTED SECURITIES
At December 31, 1997, investments in securities included issues that are
illiquid or restricted. Restricted securities are often purchased in private
placement transactions, are not registered under the Securities Act of 1933, may
have contractual restrictions on resale, and are valued under methods approved
by the Board of Directors as reflecting fair value. A security may be considered
illiquid if it lacks a readily-available market or if its valuation has not
changed for a certain period of time. The Fund intends to invest no more than
10% of its net assets (determined at the time of purchase and reviewed
periodically) in illiquid or restricted securities. Certain restricted
securities, eligible for resale to qualified institutional investors, are not
subject to that limit. The aggregate value of illiquid or restricted securities
subject to this limitation at December 31, 1997 was $22,160,577, which
represents 1.73% of the Fund's net assets.
<PAGE>
PANORAMA SERIES FUND, INC. - GROWTH PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
Growth Portfolio (the Fund) is a series of Panorama Series Fund, Inc. (the
Company) which is registered under the Investment Company Act of 1940, as
amended, as a diversified, open-end management investment company. The Fund's
investment objective is to seek long-term growth of capital by investing
primarily in common stocks with low price-earnings ratios and
better-than-anticipated earnings. The Fund's investment advisor is
OppenheimerFunds, Inc. (the Manager). Shares of the Fund are sold only to
separate accounts of life insurance companies, a majority of such shares are
held by separate accounts of Massachusetts Mutual Life Insurance Co., an
affiliate of the investment advisor. The following is a summary of significant
accounting policies consistently followed by the Fund.
- --------------------------------------------------------------------------------
INVESTMENT VALUATION. Portfolio securities are valued at the close of the New
York Stock Exchange on each trading day. Listed and unlisted securities for
which such information is regularly reported are valued at the last sale price
of the day or, in the absence of sales, at values based on the closing bid or
the last sale price on the prior trading day. Long-term and short-term
"non-money market" debt securities are valued by a portfolio pricing service
approved by the Board of Directors. Such securities which cannot be valued by an
approved portfolio pricing service are valued using dealer-supplied valuations
provided the Manager is satisfied that the firm rendering the quotes is reliable
and that the quotes reflect current market value, or are valued under
consistently applied procedures established by the Board of Directors to
determine fair value in good faith. Short-term "money market type" debt
securities having a remaining maturity of 60 days or less are valued at cost (or
last determined market value) adjusted for amortization to maturity of any
premium or discount.
- --------------------------------------------------------------------------------
REPURCHASE AGREEMENTS. The Fund requires the custodian to take possession, to
have legally segregated in the Federal Reserve Book Entry System or to have
segregated within the custodian's vault, all securities held as collateral for
repurchase agreements. The market value of the underlying securities is required
to be at least 102% of the resale price at the time of purchase. If the seller
of the agreement defaults and the value of the collateral declines, or if the
seller enters an insolvency proceeding, realization of the value of the
collateral by the Fund may be delayed or limited.
- --------------------------------------------------------------------------------
FEDERAL TAXES. The Company intends for the Fund to continue to comply with
provisions of the Internal Revenue Code applicable to regulated investment
companies and to distribute all of its taxable income, including any net
realized gain on investments not offset by loss carryovers, to shareholders.
Therefore, no federal income or excise tax provision is required.
- --------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS. Dividends and distributions to shareholders are
recorded on the ex-dividend date.
- --------------------------------------------------------------------------------
CLASSIFICATION OF DISTRIBUTIONS TO SHAREHOLDERS. Net investment income and net
realized gain may differ for financial statement and tax purposes. The character
of the distributions made during the year from net investment income or net
realized gains may differ from its ultimate characterization for federal income
tax purposes. Also, due to timing of dividend distributions, the fiscal year in
which amounts are distributed may differ from the fiscal year in which the
income or realized gain was recorded by the Fund.
The Fund adjusts the classification of distributions to shareholders to reflect
the differences between financial statement amounts and distributions determined
in accordance with income tax regulations. Accordingly, during the year ended
December 31, 1997, amounts have been reclassified to reflect an increase in
undistributed net investment income of $1,171, a decrease in accumulated net
realized gain on investments of $372,018, and an increase in paid-in capital of
$370,847.
- --------------------------------------------------------------------------------
OTHER. Investment transactions are accounted for on the date the investments are
purchased or sold (trade date) and dividend income is recorded on the
ex-dividend date. Realized gains and losses on investments and unrealized
appreciation and depreciation are determined on an identified cost basis, which
is the same basis used for federal income tax purposes.
<PAGE>
PANORAMA SERIES FUND, INC. - GROWTH PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of income and expenses during the reporting period. Actual
results could differ from those estimates.
- --------------------------------------------------------------------------------
2. SHARES OF CAPITAL STOCK
The Fund has authorized 350 million shares of $0.001 par value capital stock.
Transactions in shares of capital stock were as follows:
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
DECEMBER 31, 1997 DECEMBER 31, 1996
--------------------------------- ------------------------------
SHARES AMOUNT SHARES AMOUNT
<S> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------
Sold 52,419,265 $ 167,124,059 55,608,996 $ 149,864,357
Dividends and
distributions reinvested 18,597,005 52,629,524 1,696,733 4,511,263
Redeemed (26,936,806) (85,923,718) (21,454,970) (57,911,119)
-------------- ---------------- -------------- -------------
Net increase 44,079,464 $ 133,829,865 35,850,759 $ 96,464,501
-------------- ---------------- -------------- -------------
-------------- ---------------- -------------- -------------
</TABLE>
- --------------------------------------------------------------------------------
3. UNREALIZED GAINS AND LOSSES ON INVESTMENTS
At December 31, 1997, net unrealized appreciation on investments of $159,939,975
was composed of gross appreciation of $164,736,754, and gross depreciation of
$4,796,779.
- --------------------------------------------------------------------------------
4. MANAGEMENT FEES AND OTHER TRANSACTIONS WITH AFFILIATES
Management fees paid to the Manager were in accordance with the investment
advisory agreement with the Fund. The annual fees are 0.625% of the first $300
million of average daily net assets, 0.50% of the next $100 million and 0.45% of
average daily net assets in excess of $400 million. The Manager acts as the
accounting agent for the Fund at an annual fee of $15,000, plus out-of-pocket
costs and expenses reasonably incurred.
<PAGE>
PANORAMA SERIES FUND, INC. - GOVERNMENT SECURITIES PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
Government Securities Portfolio (the Fund) is a series of Panorama Series Fund,
Inc. (the Company) which is registered under the Investment Company Act of 1940,
as amended, as a diversified, open-end management investment company. The Fund's
investment objective is to seek 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 Fund's investment advisor is
OppenheimerFunds, Inc. (the Manager). Shares of the Fund are sold only to
separate accounts of life insurance companies, a majority of such shares are
held by separate accounts of Massachusetts Mutual Life Insurance Co., an
affiliate of the investment advisor. The following is a summary of significant
accounting policies consistently followed by the Fund.
- --------------------------------------------------------------------------------
INVESTMENT VALUATION. Portfolio securities are valued at the close of the New
York Stock Exchange on each trading day. Listed and unlisted securities for
which such information is regularly reported are valued at the last sale price
of the day or, in the absence of sales, at values based on the closing bid or
the last sale price on the prior trading day. Long-term and short-term
"non-money market" debt securities are valued by a portfolio pricing service
approved by the Board of Directors. Such securities which cannot be valued by an
approved portfolio pricing service are valued using dealer-supplied valuations
provided the Manager is satisfied that the firm rendering the quotes is reliable
and that the quotes reflect current market value, or are valued under
consistently applied procedures established by the Board of Directors to
determine fair value in good faith. Short-term "money market type" debt
securities having a remaining maturity of 60 days or less are valued at cost (or
last determined market value) adjusted for amortization to maturity of any
premium or discount.
- --------------------------------------------------------------------------------
REPURCHASE AGREEMENTS. The Fund requires the custodian to take possession, to
have legally segregated in the Federal Reserve Book Entry System or to have
segregated within the custodian's vault, all securities held as collateral for
repurchase agreements. The market value of the underlying securities is required
to be at least 102% of the resale price at the time of purchase. If the seller
of the agreement defaults and the value of the collateral declines, or if the
seller enters an insolvency proceeding, realization of the value of the
collateral by the Fund may be delayed or limited.
- --------------------------------------------------------------------------------
FEDERAL TAXES. The Company intends for the Fund to continue to comply with
provisions of the Internal Revenue Code applicable to regulated investment
companies and to distribute all of its taxable income, including any net
realized gain on investments not offset by loss carryovers, to shareholders.
Therefore, no federal income or excise tax provision is required.
At December 31, 1997, the Fund had available for federal income tax purposes an
unused capital loss carryover of approximately $464,000, which expires between
2002 and 2005.
- --------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS. Dividends and distributions to shareholders are
recorded on the ex-dividend date.
- --------------------------------------------------------------------------------
CLASSIFICATION OF DISTRIBUTIONS TO SHAREHOLDERS. Net investment income (loss)
and net realized gain (loss) may differ for financial statement and tax
purposes. The character of the distributions made during the year from net
investment income or net realized gains may differ from its ultimate
characterization for federal income tax purposes. Also, due to timing of
dividend distributions, the fiscal year in which amounts are distributed may
differ from the fiscal year in which the income or realized gain was recorded by
the Fund.
The Fund adjusts the classification of distributions to shareholders to reflect
the differences between financial statement amounts and distributions determined
in accordance with income tax regulations. Accordingly, during the year ended
December 31, 1997, amounts have been reclassified to reflect an increase in
paid-in capital of $4,984, a decrease in undistributed net investment income of
$4,981, and an increase in accumulated net realized loss on investments of $3.
<PAGE>
PANORAMA SERIES FUND, INC. - GOVERNMENT SECURITIES PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
OTHER. Investment transactions are accounted for on the date the investments are
purchased or sold (trade date). Discount on securities purchased is amortized
over the life of the respective securities, in accordance with federal income
tax requirements. Realized gains and losses on investments and unrealized
appreciation and depreciation are determined on an identified cost basis, which
is the same basis used for federal income tax purposes.
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of income and expenses during the reporting period. Actual
results could differ from those estimates.
- --------------------------------------------------------------------------------
2. SHARES OF CAPITAL STOCK
The Fund has authorized 150 million shares of $0.001 par value capital stock.
Transactions in shares of capital stock were as follows:
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
DECEMBER 31, 1997 DECEMBER 31, 1996
------------------------------- ----------------------------
SHARES AMOUNT SHARES AMOUNT
<S> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------
Sold 2,834,687 $ 3,050,414 3,228,090 $ 3,411,359
Dividends and
distributions reinvested 1,434,641 1,463,333 13,298 13,793
Redeemed (4,214,703) (4,515,417) (4,728,604) (4,998,787)
-------------- -------------- -------------- -----------
Net increase (decrease) 54,625 $ (1,670) (1,487,216) $(1,573,635)
-------------- -------------- -------------- -----------
-------------- -------------- -------------- -----------
</TABLE>
- --------------------------------------------------------------------------------
3. UNREALIZED GAINS AND LOSSES ON INVESTMENTS
At December 31, 1997, net unrealized appreciation on investments of $612,416 was
composed of gross appreciation of $710,698, and gross depreciation of $98,282.
- --------------------------------------------------------------------------------
4. MANAGEMENT FEES AND OTHER TRANSACTIONS WITH AFFILIATES
Management fees paid to the Manager were in accordance with the investment
advisory agreement with the Fund. The annual fees are 0.525% of the first $300
million of average daily net assets, 0.50% of the next $100 million and 0.45% of
average daily net assets in excess of $400 million. The Manager acts as the
accounting agent for the Fund at an annual fee of $15,000, plus out-of-pocket
costs and expenses reasonably incurred.
Expenses paid indirectly represent a reduction of custodian fees for earnings on
cash balances maintained by the Fund.
<PAGE>
PANORAMA SERIES FUND, INC. - INTERNATIONAL EQUITY PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
International Equity Portfolio (the Fund) is a series of Panorama Series Fund,
Inc. (the Company) which is registered under the Investment Company Act of 1940,
as amended, as a diversified, open-end management investment company. The Fund's
investment objective is to seek 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. The Funds investment advisor is
OppenheimerFunds, Inc. (the Manager). Shares of the Fund are sold only to
separate accounts of life insurance companies, a majority of such shares are
held by separate accounts of Massachusetts Mutual Life Insurance Co., an
affiliate of the investment advisor. The following is a summary of significant
accounting policies consistently followed by the Fund.
- --------------------------------------------------------------------------------
INVESTMENT VALUATION. Portfolio securities are valued at the close of the New
York Stock Exchange on each trading day. Listed and unlisted securities for
which such information is regularly reported are valued at the last sale price
of the day or, in the absence of sales, at values based on the closing bid or
the last sale price on the prior trading day. Long-term and short-term
"non-money market" debt securities are valued by a portfolio pricing service
approved by the Board of Directors. Such securities which cannot be valued by an
approved portfolio pricing service are valued using dealer-supplied valuations
provided the Manager is satisfied that the firm rendering the quotes is reliable
and that the quotes reflect current market value, or are valued under
consistently applied procedures established by the Board of Directors to
determine fair value in good faith. Short-term "money market type" debt
securities having a remaining maturity of 60 days or less are valued at cost (or
last determined market value) adjusted for amortization to maturity of any
premium or discount. Forward foreign currency exchange contracts are valued
based on the closing prices of the forward currency contract rates in the London
foreign exchange markets on a daily basis as provided by a reliable bank or
dealer.
- --------------------------------------------------------------------------------
FOREIGN CURRENCY TRANSLATION. The accounting records of the Fund are maintained
in U.S. dollars. Prices of securities purchased that are denominated in foreign
currencies are translated into U.S. dollars at the closing rates of
exchange. Amounts related to the purchase and sale of foreign securities and
investment income are translated at the rates of exchange prevailing on the
respective dates of such transactions.
The effect of changes in foreign currency exchange rates on investments is
separately identified from the fluctuations arising from changes in market
values of securities held and reported with all other foreign currency gains and
losses in the Fund's Statement of Operations.
- --------------------------------------------------------------------------------
REPURCHASE AGREEMENTS. The Fund requires the custodian to take possession, to
have legally segregated in the Federal Reserve Book Entry System or to have
segregated within the custodian's vault, all securities held as collateral for
repurchase agreements. The market value of the underlying securities is required
to be at least 102% of the resale price at the time of purchase. If the seller
of the agreement defaults and the value of the collateral declines, or if the
seller enters an insolvency proceeding, realization of the value of the
collateral by the Fund may be delayed or limited.
- --------------------------------------------------------------------------------
FEDERAL TAXES. The Company intends for the Fund to continue to comply with
provisions of the Internal Revenue Code applicable to regulated investment
companies and to distribute all of its taxable income, including any net
realized gain on investments not offset by loss carryovers, to shareholders.
Therefore, no federal income or excise tax provision is required.
- --------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS. Dividends and distributions to shareholders are
recorded on the ex-dividend date.
- --------------------------------------------------------------------------------
CLASSIFICATION OF DISTRIBUTIONS TO SHAREHOLDERS. Net investment income (loss)
and net realized gain (loss) may differ for financial statement and tax
purposes. The character of the distributions made during the year from net
investment income or net realized gains may differ from its ultimate
characterization for federal income tax purposes. Also, due to timing of
dividend distributions, the fiscal year in which amounts are distributed may
differ from the fiscal year in which the income or realized gain was recorded by
the Fund.
<PAGE>
PANORAMA SERIES FUND, INC. - INTERNATIONAL EQUITY PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
CLASSIFICATION OF DISTRIBUTIONS TO SHAREHOLDERS (CONTINUED). The Fund adjusts
the classification of distributions to shareholders to reflect the differences
between financial statement amounts and distributions determined in accordance
with income tax regulations. Accordingly, during the year ended December 31,
1997, amounts have been reclassified to reflect a decrease in undistributed net
investment income of $86,222. Accumulated net realized gain was increased by the
same amount.
- --------------------------------------------------------------------------------
OTHER. Investment transactions are accounted for on the date the investments are
purchased or sold (trade date) and dividend income is recorded on the
ex-dividend date. Discount on securities purchased is amortized over the life of
the respective securities, in accordance with federal income tax requirements.
Realized gains and losses on investments and unrealized appreciation and
depreciation are determined on an identified cost basis, which is the same basis
used for federal income tax purposes.
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of income and expenses during the reporting period. Actual
results could differ from those estimates.
- --------------------------------------------------------------------------------
2. SHARES OF CAPITAL STOCK
The Fund has authorized 150 million shares of $0.001 par value capital stock.
Transactions in shares of capital stock were as follows:
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
DECEMBER 31, 1997 DECEMBER 31, 1996
------------------------------- -----------------------------
SHARES AMOUNT SHARES AMOUNT
<S> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------
Sold 17,133,067 $ 22,813,653 17,318,472 $ 21,135,395
Dividends and
distributions reinvested 1,293,541 1,578,120 447,471 554,916
Redeemed (6,693,102) (8,922,846) (8,899,447) (11,097,041)
-------------- -------------- -------------- ------------
Net increase 11,733,506 $ 15,468,927 8,866,496 $ 10,593,270
-------------- -------------- -------------- ------------
-------------- -------------- -------------- ------------
</TABLE>
- --------------------------------------------------------------------------------
3. UNREALIZED GAINS AND LOSSES ON INVESTMENTS
At December 31, 1997, net unrealized appreciation on investments of $10,953,363
was composed of gross appreciation of $16,794,611, and gross depreciation of
$5,841,248.
- --------------------------------------------------------------------------------
4. MANAGEMENT FEES AND OTHER TRANSACTIONS WITH AFFILIATES
Management fees paid to the Manager were in accordance with the investment
advisory agreement with the Fund. The annual fees are 1.00% of the first $250
million of average daily net assets and 0.90% of average daily net assets in
excess of $250 million. The Manager acts as the accounting agent for the Fund at
an annual fee of $15,000, plus out-of-pocket costs and expenses reasonably
incurred.
The Manager has a sub-advisory agreement with Babson-Stewart Ivory International
(the Sub-Advisor) to assist in the selection of portfolio investments for the
components of the Fund. For these services, the Manager pays Babson-Stewart
Ivory International negotiated fees.
- --------------------------------------------------------------------------------
5. FORWARD CONTRACTS
A forward foreign currency exchange contract (forward contract) is a commitment
to purchase or sell a foreign currency at a future date, at a negotiated rate.
<PAGE>
PANORAMA SERIES FUND, INC. - INTERNATIONAL EQUITY PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
5. FORWARD CONTRACTS (CONTINUED)
The Fund uses forward contracts to seek to manage foreign currency risks. They
may also be used to tactically shift portfolio currency risk. The Fund generally
enters into forward contracts as a hedge upon the purchase or sale of a security
denominated in a foreign currency. In addition, the Fund may enter into such
contracts as a hedge against changes in foreign currency exchange rates on
portfolio positions.
Forward contracts are valued based on the closing prices of the forward currency
contract rates in the London foreign exchange markets on a daily basis as
provided by a reliable bank or dealer. The Fund will realize a gain or loss upon
the closing or settlement of the forward transaction.
Securities held in designated accounts to cover net exposure on outstanding
forward contracts are noted in the Statement of Investments where applicable.
Unrealized appreciation or depreciation on forward contracts is reported in the
Statement of Assets and Liabilities. Realized gains and losses are reported with
all other foreign currency gains and losses in the Fund's Statement of
Operations.
Risks include the potential inability of the counterparty to meet the terms of
the contract and unanticipated movements in the value of a foreign currency
relative to the U.S. dollar.
At December 31, 1997, the Fund had outstanding forward contracts as follows:
<TABLE>
<CAPTION>
EXPIRATION CONTRACT AMOUNT VALUATION AS OF UNREALIZED
DATE (000S) DECEMBER 31, 1997 DEPRECIATION
<S> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------
CONTRACTS TO BUY
- -------------------------------------------
British Pound Sterling (GBP) 1/2/98 500 GBP $822,616 $11,298
</TABLE>
<PAGE>
PANORAMA SERIES FUND, INC. - LIFESPAN DIVERSIFIED INCOME PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
LifeSpan Diversified Income Portfolio (the Fund) is a series of Panorama Series
Fund, Inc. (the Company) which is registered under the Investment Company Act of
1940, as amended, as a diversified, open-end management investment company. The
Fund's investment objective is to seek high current income, with opportunities
for capital appreciation by investing in a strategically allocated portfolio
consisting primarily of bonds. The Fund's investment advisor is
OppenheimerFunds, Inc. (the Manager). Shares of the Fund are sold only to
separate accounts of life insurance companies, a majority of such shares are
held by separate accounts of Massachusetts Mutual Life Insurance Co., an
affiliate of the investment advisor. The following is a summary of significant
accounting policies consistently followed by the Fund.
- --------------------------------------------------------------------------------
INVESTMENT VALUATION. Portfolio securities are valued at the close of the New
York Stock Exchange on each trading day. Listed and unlisted securities for
which such information is regularly reported are valued at the last sale price
of the day or, in the absence of sales, at values based on the closing bid or
the last sale price on the prior trading day. Long-term and short-term
"non-money market" debt securities are valued by a portfolio pricing service
approved by the Board of Directors. Such securities which cannot be valued by an
approved portfolio pricing service are valued using dealer-supplied valuations
provided the Manager is satisfied that the firm rendering the quotes is reliable
and that the quotes reflect current market value, or are valued under
consistently applied procedures established by the Board of Directors to
determine fair value in good faith. Short-term "money market type" debt
securities having a remaining maturity of 60 days or less are valued at cost (or
last determined market value) adjusted for amortization to maturity of any
premium or discount.
- --------------------------------------------------------------------------------
REPURCHASE AGREEMENTS. The Fund requires the custodian to take possession, to
have legally segregated in the Federal Reserve Book Entry System or to have
segregated within the custodian's vault, all securities held as collateral for
repurchase agreements. The market value of the underlying securities is required
to be at least 102% of the resale price at the time of purchase. If the seller
of the agreement defaults and the value of the collateral declines, or if the
seller enters an insolvency proceeding, realization of the value of the
collateral by the Fund may be delayed or limited.
- --------------------------------------------------------------------------------
FEDERAL TAXES. The Company intends for the Fund to continue to comply with
provisions of the Internal Revenue Code applicable to regulated investment
companies and to distribute all of its taxable income, including any net
realized gain on investments not offset by loss carryovers, to shareholders.
Therefore, no federal income or excise tax provision is required.
- --------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS. Dividends and distributions to shareholders are
recorded on the ex-dividend date.
- --------------------------------------------------------------------------------
CLASSIFICATION OF DISTRIBUTIONS TO SHAREHOLDERS. Net investment income (loss)
and net realized gain (loss) may differ for financial statement and tax
purposes. The character of the distributions made during the year from net
investment income or net realized gains may differ from its ultimate
characterization for federal income tax purposes. Also, due to timing of
dividend distributions, the fiscal year in which amounts are distributed may
differ from the fiscal year in which the income or realized gain was recorded by
the Fund.
The Fund adjusts the classification of distributions to shareholders to reflect
the differences between financial statement amounts and distributions determined
in accordance with income tax regulations. Accordingly, during the year ended
December 31, 1997, amounts have been reclassified to reflect an increase in
undistributed net investment income of $2,219. Accumulated net realized gain was
decreased by the same amount.
- --------------------------------------------------------------------------------
OTHER. Investment transactions are accounted for on the date the investments are
purchased or sold (trade date) and dividend income is recorded on the
ex-dividend date. Discount on securities purchased is amortized over the life of
the respective securities, in accordance with federal income tax requirements.
Realized gains and losses on investments and unrealized appreciation and
depreciation are determined on an identified cost basis, which is the same basis
used for federal income tax purposes.
<PAGE>
PANORAMA SERIES FUND, INC. - LIFESPAN DIVERSIFIED INCOME PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of income and expenses during the reporting period. Actual
results could differ from those estimates.
- --------------------------------------------------------------------------------
2. SHARES OF CAPITAL STOCK
The Fund has authorized 200 million shares of $0.001 par value of capital stock.
Transactions in shares of capital stock were as follows:
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
DECEMBER 31, 1997 DECEMBER 31, 1996
------------------------------- ----------------------------
SHARES AMOUNT SHARES AMOUNT
<S> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------
Sold 5,816,319 $ 6,566,303 2,767,203 $ 2,918,049
Dividends and
distributions reinvested 1,129,658 1,197,438 239,497 249,385
Redeemed (905,515) (1,008,913) (383,462) (407,006)
-------------- -------------- -------------- -----------
Net increase 6,040,462 $ 6,754,828 2,623,238 $ 2,760,428
-------------- -------------- -------------- -----------
-------------- -------------- -------------- -----------
</TABLE>
- --------------------------------------------------------------------------------
3. UNREALIZED GAINS AND LOSSES ON INVESTMENTS
At December 31, 1997, net unrealized appreciation on investments of $2,332,438
was composed of gross appreciation of $2,596,062, and gross depreciation of
$263,624.
- --------------------------------------------------------------------------------
4. MANAGEMENT FEES AND OTHER TRANSACTIONS WITH AFFILIATES
Management fees paid to the Manager were in accordance with the investment
advisory agreement with the Fund. The annual fees are 0.75% of the first $250
million of average annual net assets and 0.65% of average annual net assets in
excess of $250 million. The Manager acts as the accounting agent for the Fund at
an annual fee of $15,000, plus out-of-pocket costs and expenses reasonably
incurred.
The Manager has a sub-advisory agreement with BEA Associates (the Sub-Advisor)
to assist in the selection of portfolio investments for the components of the
Fund. For these services, the Manager pays BEA Associates negotiated fees.
Expenses paid indirectly represent a reduction of custodian fees for earnings on
cash balances maintained by the Fund.
- --------------------------------------------------------------------------------
5. ILLIQUID AND RESTRICTED SECURITIES
At December 31, 1997, investments in securities included issues that are
illiquid or restricted. Restricted securities are often purchased in private
placement transactions, are not registered under the Securities Act of 1933, may
have contractual restrictions on resale, and are valued under methods approved
by the Board of Directors as reflecting fair value. A security may be considered
illiquid if it lacks a readily-available market or if its valuation has not
changed for a certain period of time. The Fund intends to invest no more than
10% of its net assets (determined at the time of purchase and reviewed
periodically) in illiquid or restricted securities. Certain restricted
securities, eligible for resale to qualified institutional investors, are not
subject to that limit. The aggregate value of illiquid or restricted securities
subject to this limitation at December 31, 1997 was $1,066,030, which represents
3.12% of the Fund's net assets.
<PAGE>
PANORAMA SERIES FUND, INC. - LIFESPAN BALANCED PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
LifeSpan Balanced Portfolio (the Fund) is a series of Panorama Series Fund, Inc.
(the Company) which is registered under the Investment Company Act of 1940, as
amended, as a diversified, open-end management investment company. The Fund's
investment objective is to seek 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. The Fund's investment advisor is
OppenheimerFunds, Inc. (the Manager). Shares of the Fund are sold only to
separate accounts of life insurance companies, a majority of such shares are
held by separate accounts of Massachusetts Mutual Life Insurance Co., an
affiliate of the investment advisor. The following is a summary of significant
accounting policies consistently followed by the Fund.
- --------------------------------------------------------------------------------
INVESTMENT VALUATION. Portfolio securities are valued at the close of the New
York Stock Exchange on each trading day. Listed and unlisted securities for
which such information is regularly reported are valued at the last sale price
of the day or, in the absence of sales, at values based on the closing bid or
the last sale price on the prior trading day. Long-term and short-term
"non-money market" debt securities are valued by a portfolio pricing service
approved by the Board of Directors. Such securities which cannot be valued by an
approved portfolio pricing service are valued using dealer-supplied valuations
provided the Manager is satisfied that the firm rendering the quotes is reliable
and that the quotes reflect current market value, or are valued under
consistently applied procedures established by the Board of Directors to
determine fair value in good faith. Short-term "money market type" debt
securities having a remaining maturity of 60 days or less are valued at cost (or
last determined market value) adjusted for amortization to maturity of any
premium or discount. Forward foreign currency exchange contracts are valued
based on the closing prices of the forward currency contract rates in the London
foreign exchange markets on a daily basis as provided by a reliable bank or
dealer.
- --------------------------------------------------------------------------------
FOREIGN CURRENCY TRANSLATION. The accounting records of the Fund are maintained
in U.S. dollars. Prices of securities purchased that are denominated in foreign
currencies are translated into U.S. dollars at the closing rates of exchange.
Amounts related to the purchase and sale of foreign securities and investment
income are translated at the rates of exchange prevailing on the respective
dates of such transactions.
The effect of changes in foreign currency exchange rates on investments is
separately identified from the fluctuations arising from changes in market
values of securities held and reported with all other foreign currency gains and
losses in the Fund's Statement of Operations.
- --------------------------------------------------------------------------------
REPURCHASE AGREEMENTS. The Fund requires the custodian to take possession, to
have legally segregated in the Federal Reserve Book Entry System or to have
segregated within the custodian's vault, all securities held as collateral for
repurchase agreements. The market value of the underlying securities is required
to be at least 102% of the resale price at the time of purchase. If the seller
of the agreement defaults and the value of the collateral declines, or if the
seller enters an insolvency proceeding, realization of the value of the
collateral by the Fund may be delayed or limited.
- --------------------------------------------------------------------------------
FEDERAL TAXES. The Company intends for the Fund to continue to comply with
provisions of the Internal Revenue Code applicable to regulated investment
companies and to distribute all of its taxable income, including any net
realized gain on investments not offset by loss carryovers, to shareholders.
Therefore, no federal income or excise tax provision is required.
- --------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS. Dividends and distributions to shareholders are
recorded on the ex-dividend date.
- --------------------------------------------------------------------------------
CLASSIFICATION OF DISTRIBUTIONS TO SHAREHOLDERS. Net investment income (loss)
and net realized gain (loss) may differ for financial statement and tax
purposes. The character of the distributions made during the year from net
investment income or net realized gains may differ from its ultimate
characterization for federal income tax purposes. Also, due to timing of
dividend distributions, the fiscal year in which amounts are distributed may
differ from the fiscal year in which the income or realized gain was recorded by
the Fund.
<PAGE>
PANORAMA SERIES FUND, INC. - LIFESPAN BALANCED PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
The Fund adjusts the classification of distributions to shareholders to reflect
the differences between financial statement amounts and distributions determined
in accordance with income tax regulations. Accordingly, during the year ended
December 31, 1997, amounts have been reclassified to reflect an increase in
accumulated net realized gain on investments of $8,665. Undistributed net
investment income was decreased by the same amount.
- --------------------------------------------------------------------------------
OTHER. Investment transactions are accounted for on the date the investments are
purchased or sold (trade date) and dividend income is recorded on the
ex-dividend date. Discount on securities purchased is amortized over the life of
the respective securities, in accordance with federal income tax requirements.
Realized gains and losses on investments and unrealized appreciation and
depreciation are determined on an identified cost basis, which is the same basis
used for federal income tax purposes.
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of income and expenses during the reporting period. Actual
results could differ from those estimates.
- --------------------------------------------------------------------------------
2. SHARES OF CAPITAL STOCK
The Fund has authorized 200 million shares of $0.001 par value capital stock.
Transactions in shares of capital stock were as follows:
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
DECEMBER 31, 1997 DECEMBER 31, 1996
------------------------------- ----------------------------
SHARES AMOUNT SHARES AMOUNT
<S> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------
Sold 11,659,128 $ 14,199,763 11,771,412 $13,270,683
Dividends and
distributions reinvested 1,559,895 1,747,083 324,756 364,414
Redeemed (3,199,617) (3,838,215) (2,368,019) (2,643,615)
-------------- -------------- -------------- -----------
Net increase 10,019,406 $ 12,108,631 9,728,149 $10,991,482
-------------- -------------- -------------- -----------
-------------- -------------- -------------- -----------
</TABLE>
- --------------------------------------------------------------------------------
3. UNREALIZED GAINS AND LOSSES ON INVESTMENTS
At December 31, 1997, net unrealized appreciation on investments of $7,471,341
was composed of gross appreciation of $8,999,645, and gross depreciation of
$1,528,304.
- --------------------------------------------------------------------------------
4. MANAGEMENT FEES AND OTHER TRANSACTIONS WITH AFFILIATES
Management fees paid to the Manager were in accordance with the investment
advisory agreement with the Fund. The annual fees are 0.85% of the first $250
million of average annual net assets and 0.75% of average annual net assets in
excess of $250 million. The Manager acts as the accounting agent for the Fund at
an annual fee of $15,000, plus out-of-pocket costs and expenses reasonably
incurred.
The Manager has sub-advisory agreements with three Sub-Advisors to assist in the
selection of portfolio investments for the components of the Fund. For those
services, the Manager pays Babson-Stewart Ivory International, BEA Associates
and Pilgrim Baxter & Associates (the Sub-Advisors) negotiated fees.
<PAGE>
PANORAMA SERIES FUND, INC. - LIFESPAN BALANCED PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
5. ILLIQUID AND RESTRICTED SECURITIES
At December 31, 1997, investments in securities included issues that are
illiquid or restricted. Restricted securities are often purchased in private
placement transactions, are not registered under the Securities Act of 1933, may
have contractual restrictions on resale, and are valued under methods approved
by the Board of Directors as reflecting fair value. A security may be considered
illiquid if it lacks a readily-available market or if its valuation has not
changed for a certain period of time. The Fund intends to invest no more than
10% of its net assets (determined at the time of purchase and reviewed
periodically) in illiquid or restricted securities. Certain restricted
securities, eligible for resale to qualified institutional investors, are not
subject to that limit. The aggregate value of illiquid or restricted securities
subject to this limitation at December 31, 1997 was $1,513,310, which represents
2.20% of the Fund's net assets.
- --------------------------------------------------------------------------------
6. FORWARD CONTRACTS
A forward foreign currency exchange contract (forward contract) is a commitment
to purchase or sell a foreign currency at a future date, at a negotiated rate.
The Fund uses forward contracts to seek to manage foreign currency risks. They
may also be used to tactically shift portfolio currency risk. The Fund generally
enters into forward contracts as a hedge upon the purchase or sale of a security
denominated in a foreign currency. In addition, the Fund may enter into such
contracts as a hedge against changes in foreign currency exchange rates on
portfolio positions.
Forward contracts are valued based on the closing prices of the forward currency
contract rates in the London foreign exchange markets on a daily basis as
provided by a reliable bank or dealer. The Fund will realize a gain or loss upon
the closing or settlement of the forward transaction.
Securities held in designated accounts to cover net exposure on outstanding
forward contracts are noted in the Statement of Investments where applicable.
Unrealized appreciation or depreciation on forward contracts is reported in the
Statement of Assets and Liabilities. Realized gains and losses are reported with
all other foreign currency gains and losses in the Fund's Statement of
Operations.
Risks include the potential inability of the counterparty to meet the terms of
the contract and unanticipated movements in the value of a foreign currency
relative to the U.S. dollar.
At December 31, 1997, the Fund had outstanding forward contracts as follows:
<TABLE>
<CAPTION>
CONTRACT
EXPIRATION AMOUNT VALUATION AS OF UNREALIZED
DATE (000S) DECEMBER 31, 1997 DEPRECIATION
<S> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------
CONTRACTS TO BUY
- -------------------------------------------------
British Pound Sterling (GBP) 1/2/98 124 GBP $203,888 $2,800
</TABLE>
<PAGE>
PANORAMA SERIES FUND, INC. - LIFESPAN CAPITAL APPRECIATION PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
LifeSpan Capital Appreciation Portfolio (the Fund) is a series of Panorama
Series Fund, Inc. (the Company) which is registered under the Investment Company
Act of 1940, as amended, as a diversified, open-end management investment
company. The Fund's investment objective is to seek long-term capital
appreciation by investing in a strategically allocated portfolio consisting
primarily of stocks. The Fund's investment advisor is OppenheimerFunds, Inc.
(the Manager). Shares of the Fund are sold only to separate accounts of life
insurance companies, a majority of such shares are held by separate accounts of
Massachusetts Mutual Life Insurance Co., an affiliate of the investment advisor.
The following is a summary of significant accounting policies consistently
followed by the Fund.
- --------------------------------------------------------------------------------
INVESTMENT VALUATION. Portfolio securities are valued at the close of the New
York Stock Exchange on each trading day. Listed and unlisted securities for
which such information is regularly reported are valued at the last sale price
of the day or, in the absence of sales, at values based on the closing bid or
the last sale price on the prior trading day. Long-term and short-term
"non-money market" debt securities are valued by a portfolio pricing service
approved by the Board of Directors. Such securities which cannot be valued by an
approved portfolio pricing service are valued using dealer-supplied valuations
provided the Manager is satisfied that the firm rendering the quotes is reliable
and that the quotes reflect current market value, or are valued under
consistently applied procedures established by the Board of Directors to
determine fair value in good faith. Short-term "money market type" debt
securities having a remaining maturity of 60 days or less are valued at cost (or
last determined market value) adjusted for amortization to maturity of any
premium or discount. Forward foreign currency exchange contracts are valued
based on the closing prices of the forward currency contract rates in the London
foreign exchange markets on a daily basis as provided by a reliable bank or
dealer.
- --------------------------------------------------------------------------------
FOREIGN CURRENCY TRANSLATION. The accounting records of the Fund are maintained
in U.S. dollars. Prices of securities purchased that are denominated in foreign
currencies are translated into U.S. dollars at the closing rates of exchange.
Amounts related to the purchase and sale of foreign securities and investment
income are translated at the rates of exchange prevailing on the respective
dates of such transactions.
The effect of changes in foreign currency exchange rates on investments is
separately identified from the fluctuations arising from changes in market
values of securities held and reported with all other foreign currency gains and
losses in the Fund's Statement of Operations.
- --------------------------------------------------------------------------------
REPURCHASE AGREEMENTS. The Fund requires the custodian to take possession, to
have legally segregated in the Federal Reserve Book Entry System or to have
segregated within the custodian's vault, all securities held as collateral for
repurchase agreements. The market value of the underlying securities is required
to be at least 102% of the resale price at the time of purchase. If the seller
of the agreement defaults and the value of the collateral declines, or if the
seller enters an insolvency proceeding, realization of the value of the
collateral by the Fund may be delayed or limited.
- --------------------------------------------------------------------------------
FEDERAL TAXES. The Company intends for the Fund to continue to comply with
provisions of the Internal Revenue Code applicable to regulated investment
companies and to distribute all of its taxable income, including any net
realized gain on investments not offset by loss carryovers, to shareholders.
Therefore, no federal income or excise tax provision is required.
- --------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS. Dividends and distributions to shareholders are
recorded on the ex-dividend date.
- --------------------------------------------------------------------------------
CLASSIFICATION OF DISTRIBUTIONS TO SHAREHOLDERS. Net investment income (loss)
and net realized gain (loss) may differ for financial statement and tax
purposes. The character of the distributions made during the year from net
investment income or net realized gains may differ from its ultimate
characterization for federal income tax purposes. Also, due to timing of
dividend distributions, the fiscal year in which amounts are distributed may
differ from the fiscal year in which the income or realized gain was recorded by
the Fund.
<PAGE>
PANORAMA SERIES FUND, INC. - LIFESPAN CAPITAL APPRECIATION PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
The Fund adjusts the classification of distributions to shareholders to reflect
the differences between financial statement amounts and distributions determined
in accordance with income tax regulations. Accordingly, during the year ended
December 31, 1997, amounts have been reclassified to reflect an increase in
accumulated net realized gain on investments of $13,047. Undistributed net
investment income was decreased by the same amount.
- --------------------------------------------------------------------------------
OTHER. Investment transactions are accounted for on the date the investments are
purchased or sold (trade date) and dividend income is recorded on the
ex-dividend date. Realized gains and losses on investments and unrealized
appreciation and depreciation are determined on an identified cost basis, which
is the same basis used for federal income tax purposes.
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of income and expenses during the reporting period. Actual
results could differ from those estimates.
- --------------------------------------------------------------------------------
2. SHARES OF CAPITAL STOCK
The Fund has authorized 200 million shares of $0.001 par value capital stock.
Transactions in shares of capital stock were as follows:
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
DECEMBER 31, 1997 DECEMBER 31, 1996
------------------------------- ----------------------------
SHARES AMOUNT SHARES AMOUNT
<S> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------
Sold 11,969,510 $ 15,271,181 12,599,280 $14,877,614
Dividends and
distributions reinvested 1,229,889 1,426,671 236,570 278,563
Redeemed (1,803,689) (2,299,254) (4,035,039) (4,713,523)
-------------- -------------- -------------- -----------
Net increase 11,395,710 $ 14,398,598 8,800,811 $10,442,654
-------------- -------------- -------------- -----------
-------------- -------------- -------------- -----------
</TABLE>
- --------------------------------------------------------------------------------
3. UNREALIZED GAINS AND LOSSES ON INVESTMENTS
At December 31, 1997, net unrealized appreciation on investments of $7,772,080
was composed of gross appreciation of $9,413,843, and gross depreciation of
$1,641,763.
- --------------------------------------------------------------------------------
4. MANAGEMENT FEES AND OTHER TRANSACTIONS WITH AFFILIATES
Management fees paid to the Manager were in accordance with the investment
advisory agreement with the Fund. The annual fees are 0.85% of the first $250
million of average annual net assets and 0.75% of average annual net assets in
excess of $250 million. The Manager acts as the accounting agent for the Fund at
an annual fee of $15,000, plus out-of-pocket costs and expenses reasonably
incurred.
The Manager has sub-advisory agreements with three Sub-Advisors to assist in the
selection of portfolio investments for the components of the Fund. For these
services, the Manager pays Babson-Stewart Ivory International, BEA Associates
and Pilgrim Baxter & Associates (the Sub-Advisors) negotiated fees.
<PAGE>
PANORAMA SERIES FUND, INC. - LIFESPAN CAPITAL APPRECIATION PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
5. ILLIQUID AND RESTRICTED SECURITIES
At December 31, 1997, investments in securities included issues that are
illiquid or restricted. Restricted securities are often purchased in private
placement transactions, are not registered under the Securities Act of 1933, may
have contractual restrictions on resale, and are valued under methods approved
by the Board of Directors as reflecting fair value. A security may be considered
illiquid if it lacks a readily-available market or if its valuation has not
changed for a certain period of time. The Fund intends to invest no more than
10% of its net assets (determined at the time of purchase and reviewed
periodically) in illiquid or restricted securities. Certain restricted
securities, eligible for resale to qualified institutional investors, are not
subject to that limit. The aggregate value of illiquid or restricted securities
subject to this limitation at December 31, 1997 was $654,666, which represents
1.07% of the Fund's net assets.
- --------------------------------------------------------------------------------
6. FORWARD CONTRACTS
A forward foreign currency exchange contract (forward contract) is a commitment
to purchase or sell a foreign currency at a future date, at a negotiated rate.
The Fund uses forward contracts to seek to manage foreign currency risks. They
may also be used to tactically shift portfolio currency risk. The Fund generally
enters into forward contracts as a hedge upon the purchase or sale of a security
denominated in a foreign currency. In addition, the Fund may enter into such
contracts as a hedge against changes in foreign currency exchange rates on
portfolio positions.
Forward contracts are valued based on the closing prices of the forward currency
contract rates in the London foreign exchange markets on a daily basis as
provided by a reliable bank or dealer. The Fund will realize a gain or loss upon
the closing or settlement of the forward transaction.
Securities held in designated accounts to cover net exposure on outstanding
forward contracts are noted in the Statement of Investments where applicable.
Unrealized appreciation or depreciation on forward contracts is reported in the
Statement of Assets and Liabilities. Realized gains and losses are reported with
all other foreign currency gains and losses in the Fund's Statement of
Operations.
Risks include the potential inability of the counterparty to meet the terms of
the contract and unanticipated movements in the value of a foreign currency
relative to the U.S. dollar.
At December 31, 1997, the Fund had outstanding forward contracts as follows:
<TABLE>
<CAPTION>
EXPIRATION CONTRACT VALUATION AS OF UNREALIZED
DATE AMOUNT (000S) DECEMBER 31, 1997 DEPRECIATION
<S> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------
CONTRACTS TO BUY
British Pound Sterling (GBP) 1/2/98 130 GBP $214,722 $2,949
</TABLE>
<PAGE>
<PAGE>
Appendix A
Industry Classifications
Aerospace/Defense Food
Air Transportation Gas Utilities*
Auto Parts Distribution Gold
Automotive Health Care/Drugs
Bank Holding Companies Health Care/Supplies & Services
Banks Homebuilders/Real Estate
Beverages Hotel/Gaming
Broadcasting Industrial Services
Broker-Dealers Information Technology
Building Materials Insurance
Cable Television Leasing & Factoring
Chemicals Leisure
Commercial Finance Manufacturing
Computer Hardware Metals/Mining
Computer Software Nondurable Household Goods
Conglomerates Oil - Integrated
Consumer Finance Paper
Containers Publishing/Printing
Convenience Stores Railroads
Department Stores Restaurants
Diversified Financial Savings & Loans
Diversified Media Shipping
Drug Stores Special Purpose Financial
Drug Wholesalers Specialty Retailing
Durable Household Goods Steel
Education Supermarkets
Electric Utilities Telecommunications - Technology
Electrical Equipment Telephone - Utility
Electronics Textile/Apparel
Energy Services & Producers Tobacco
Entertainment/Film Toys
Environmental Trucking
Wireless Services
- ---------------------
*For purposes of a Portfolio's investment policy not to concentrate in
securities of issuers in the
same industry, utilities are divided into "industries" according to their
services (e.g., gas utilities,
gas transmission utilities, electric utilities and telephone utilities are
each considered a separate
industry).
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
The Bank of New York
90 Washington Street
New York, NY
INDEPENDENT AUDITORS
Deloitte & Touche, LLP
555 Seventeenth Street
Denver, Colorado 80202
LEGAL COUNSEL
Myer, Swanson, Adams & Wolf, P.C.
1600 Broadway
Denver, Colorado 80202
SAI.98
A-1
<PAGE>
PANORAMA SERIES FUND, INC.
PART C -- OTHER INFORMATION
ITEM 24. Financial Statements and Exhibits.
(a) Financial Statements:
(1) Financial Highlights
(i) for Total Return Portfolio - Filed herewith.
(ii) for Growth Portfolio - Filed herewith.
(iii) for International Equity Portfolio -
Filed
herewith.
(iv) for LifeSpan Capital Appreciation Portfolio
-Filed herewith.
(v) for LifeSpan Balanced Portfolio - Filed
herewith.
(vi) for LifeSpan Diversified Income Portfolio
-Filed herewith.
(vii) for Government Securities Portfolio -
Filed
herewith.
(2) Independent Auditors' Report
(i) for Total Return Portfolio - Filed herewith.
(ii) for Growth Portfolio - Filed herewith.
(iii) for International Equity Portfolio - Filed
herewith.
(iv) for LifeSpan Capital Appreciation Portfolio
- -
Filed herewith.
(v) for LifeSpan Balanced Portfolio - Filed
herewith.
(vi) for LifeSpan Diversified Income Portfolio
-Filed herewith.
(vii) for Government Securities Portfolio -
Filed
herewith.
(3) Statements of Investment
(i) for Total Return Portfolio - Filed herewith.
(ii) for Growth Portfolio - Filed herewith.
(iii) for International Equity Portfolio - Filed
herewith.
(iv) for LifeSpan Capital Appreciation Portfolio
- -
Filed herewith.
(v) for LifeSpan Balanced Portfolio - Filed herewith. (vi) for
LifeSpan Diversified Income Portfolio Filed herewith.
(vii) for Government Securities Portfolio -
Filed
herewith.
(4) Statement of Net Assets and Liabilities
(i) for Total Return Portfolio - Filed herewith.
(ii) for Growth Portfolio - Filed herewith.
(iii) for International Equity Portfolio - Filed
herewith.
(iv) for LifeSpan Capital Appreciation Portfolio
- -
Filed herewith.
(v) for LifeSpan Balanced Portfolio - Filed
herewith.
(vi) for LifeSpan Diversified Income Portfolio -
Filed herewith.
(vii) for Government Securities Portfolio -
Filed
herewith.
(5) Statement of Operations
(i) for Total Return Portfolio - Filed herewith.
(ii) for Growth Portfolio - Filed herewith.
(iii) for International Equity Portfolio - Filed
herewith.
(iv) for LifeSpan Capital Appreciation Portfolio
- -
Filed herewith.
(v) for LifeSpan Balanced Portfolio - Filed
herewith.
(vi) for LifeSpan Diversified Income Portfolio -
Filed herewith.
(vii) for Government Securities Portfolio -
Filed
herewith.
(6) Statement of Changes in Net Assets
(i) for Total Return Portfolio - Filed herewith.
(ii) for Growth Portfolio - Filed herewith.
(iii) for International Equity Portfolio - Filed
herewith.
(iv) for LifeSpan Capital Appreciation Portfolio
- -
Filed herewith.
(v) for LifeSpan Balanced Portfolio - Filed
herewith.
(vi) for LifeSpan Diversified Income Portfolio -
Filed herewith.
(vii) for Government Securities Portfolio -
Filed
herewith.
C-1
<PAGE>
(7) Notes to Financial Statements
(i) for Total Return Portfolio - Filed herewith.
(ii) for Growth Portfolio - Filed herewith.
(iii) for International Equity Portfolio - Filed
herewith.
(iv) for LifeSpan Capital Appreciation Portfolio
- -
Filed herewith.
(v) for LifeSpan Balanced Portfolio - Filed
herewith.
(vi) for LifeSpan Diversified Income Portfolio -
Filed herewith.
(vii) for Government Securities Portfolio -
Filed
herewith.
(b) Exhibits
1. Amended and Restated Articles of Incorporation
dated May, 1995: Filed with Registrant's Post-Effective
Amendment No.
23, 3/1/96, and incorporated herein by reference.
1.1 Articles Supplementary dated August 29, 1996:
Filed with Registrant's Post-Effective Amendment No. 25,
4/25/97, and
incorporated herein by reference.
2. By-Laws: Filed with Registrant's Post-Effective
Amendment No. 23, 3/1/96, and incorporated herein by reference.
3. Not Applicable
4. Not Applicable
5. Investment Advisory Agreement between the
Registrant, on behalf of Total Return Portfolio: Filed with
Registrant's Post-Effective Amendment No. 24, 4/30/96, and
incorporated herein by reference.
5.1 Investment Subadvisory Agreement between
OppenheimerFunds, Inc. and Pilgrim, Baxter & Associates, Ltd.
(for
LifeSpan Balanced Portfolio) and schedule of omitted
substantially
similar documents: Filed with Registrant's Post-Effective
Amendment No. 24, 4/30/96, and incorporated herein by reference.
5.2 Investment Subadvisory Agreement between
OppenheimerFunds, Inc. and BEA Associates (for LifeSpan Capital
Appreciation Portfolio) and schedule of omitted substantially
similar documents: Filed with Registrant's Post-Effective
Amendment No. 24, 4/30/96, and incorporated herein by reference.
5.3 Investment Subadvisory Agreement between
OppenheimerFunds, Inc. and Babson-Stewart Ivory International
(for
LifeSpan Balanced Portfolio)and schedule of omitted
substantially
similar documents: Filed with Registrant's Post-Effective
Amendment No. 24, 4/30/96, and incorporated herein by reference.
6. Not Applicable
7. Not Applicable
8. Master Custodian Agreement between Registrant, on behalf of each
series of the Registrant, and Bank of New York Company: Filed herewith.
9. Service Contract between Registrant and
OppenheimerFunds Services: Filed with Registrant's
Post-Effective
Amendments No.24, 4/30/96, and incorporated herein by reference.
10. Opinion and Consent of Counsel: Previously filed
with Registrant's Post-Effective Amendment No. 25, 4/25/97 and incorporated
herein by reference.
11. Consent of Independent Auditors: Filed herewith.
12. Not applicable.
13. Not Applicable.
14. Not Applicable.
15. Not Applicable
16. Performance Data Computation Schedule: Filed
herewith.
17(a) Financial Data Schedule for Total Return
Portfolio:
Filed herewith.
17(b) Financial Data Schedule for Growth Portfolio:
Filed
herewith.
17(c) Financial Data Schedule for International Equity
Portfolio: Filed herewith.
17(d) Financial Data Schedule for LifeSpan Capital
Appreciation Portfolio: Filed herewith.
17(e) Financial Data Schedule for LifeSpan Balanced
Portfolio: Filed herewith.
17(f) Financial Data Schedule for LifeSpan Diversified
Income Portfolio: Filed herewith.
17(g) Financial Data Schedule for Government
Securities
Portfolio: Filed herewith.
--Powers of Attorney for George C. Bowen - Filed
herewith. (Powers of Attorney for James C. Swain, Robert G.
Avis,
William A. Baker, Charles Conrad, Jr., Sam Freedman, Raymond J.
Kalinowski, C. Howard Kast, Robert M. Kirchner and Ned M. Steel
were previously filed with Registrant's Post-Effective Amendment
No. 25 (4/25/97), and incorporated herein by reference.)
18. Not Applicable
ITEM 25. Persons controlled by Or Under Common Control with
Registrant.
None
ITEM 26. Number of Holders of Securities.
As of April 1, 1998 all outstanding shares of the Portfolios then existing were
owned by Mass Mutual Life Insurance Company or its
affiliates.
ITEM 27. Indemnification.
Reference is made to Article VI of Registrant's By-laws
filed
with Registrant's Post-Effective Amendment Number 23.
ITEM 28. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER
(a) OppenheimerFunds, Inc. is the investment adviser of the Registrant; it and
certain subsidiaries and affiliates act in the same capacity to other registered
investment companies as described in Parts A and B hereof and listed in Item
28(b) below.
(b) There is set forth below information as to any other business, profession,
vocation or employment of a substantial nature in which each officer and
director of OppenheimerFunds, Inc. is, or at any time during the past two fiscal
years has been, engaged for his/her own account or in the capacity of director,
officer, employee, partner or trustee.
NAME AND CURRENT POSITION WITH OTHER BUSINESS AND CONNECTIONS
OPPENHEIMERFUNDS, INC.("OFI") DURING THE PAST TWO YEARS
Mark J.P. Anson,
Vice President Vice President of Oppenheimer Real
Asset Management, Inc. ("ORAMI");
formerly Vice President of Equity
Derivatives at Salomon Brothers, Inc.
Peter M. Antos,
Senior Vice President An officer and/or portfolio manager of
certain Oppenheimer funds; a Chartered
Financial Analyst; Senior Vice
President of
HarbourView Asset Management Corporation
("HarbourView"); prior to March, 1996
he was the senior equity
portfolio manager for the Panorama
Series Fund, Inc. (the
"Company") and other mutual funds and
pension funds managed
by G.R. Phelps & Co. Inc. ("G.R.
Phelps"), the Company's
former investment adviser, which was a
subsidiary of
Connecticut Mutual Life Insurance
Company; was also
responsible for managing the common
stock department and
common stock investments of Connecticut
Mutual Life Insurance
Co.
Lawrence Apolito,
Vice President None.
Victor Babin,
Senior Vice President None.
Bruce Bartlett,
Vice President An officer and/or portfolio
manager of certain Oppenheimer funds.
Formerly a Vice President and Senior
Portfolio Manager at First of America
Investment Corp.
Beichert, Kathleen
Vice President None.
Rajeev Bhaman,
Vice President Formerly Vice President (January
1992 - February, 1996) of Asian Equities
for Barclays de Zoete Wedd, Inc.
Robert J. Bishop,
Vice President Vice President of Mutual Fund
Accounting (since May 1996); an officer
of other Oppenheimer funds; formerly
an Assistant
Vice President of OFI/Mutual Fund
Accounting (April 1994-
May 1996), and a Fund Controller for
OFI.
George C. Bowen,
Senior Vice President & Treasurer Vice President (since June 1983) and
Treasurer (since March 1985) of
OppenheimerFunds Distributor, Inc. (the
"Distributor"); Vice President (since
October 1989) and
Treasurer (since April 1986) of
HarbourView; Senior Vice
President (since February 1992),
Treasurer (since July 1991)and
a director (since December 1991) of
Centennial; President,
Treasurer and a director of Centennial
Capital Corporation
(since June 1989); Vice President and
Treasurer (since August
1978) and Secretary (since April 1981)
of Shareholder
Services, Inc. ("SSI"); Vice President,
Treasurer and Secretary
of Shareholder Financial Services, Inc.
("SFSI") (since November 1989);
Treasurer of Oppenheimer Acquisition
Corp.
("OAC") (since June 1990); Treasurer of
Oppenheimer
Partnership Holdings, Inc. (since
November 1989); Vice
President and Treasurer of ORAMI
(since July 1996); Chief
Executive Officer, Treasurer and a
director of MultiSource
Services, Inc., a broker-dealer (since
December 1995); an
officer of other Oppenheimer funds.
Scott Brooks,
Vice President None.
Susan Burton,
Assistant Vice President None.
Adele Campbell,
Assistant Vice President & Assistant
Treasurer: Rochester Division Formerly Assistant Vice President of
Rochester Fund Services, Inc.
Michael Carbuto,
Vice President An officer and/or portfolio
manager of certain Oppenheimer funds; Vice
President of Centennial.
Ruxandra Chivu,
Assistant Vice President None.
H.D. Digby Clements,
Assistant Vice President:
Rochester Division None.
O. Leonard Darling,
Executive Vice President Trustee (1993 - present) of Awhtolia
College - Greece.
Robert A. Dense,
Senior Vice President None.
Sheri Devereux,
Assistant Vice President None.
Robert Doll, Jr.,
Executive Vice President & Director An officer
and/or portfolio manager of certain
Oppenheimer funds.
John Doney,
Vice President An officer and/or portfolio
manager of certain Oppenheimer funds.
Andrew J. Donohue,
Executive Vice President,
General Counsel and Director Executive Vice President (since
September 1993), and a director (since
January 1992) of the Distributor;
Executive Vice
President, General Counsel and a
director of HarbourView, SSI, SFSI and
Oppenheimer Partnership Holdings, Inc.
since
(September 1995) and MultiSource
Services, Inc. (a broker-
dealer) (since December 1995);
President and a director of
Centennial (since September 1995);
President and a director of
ORAMI (since July 1996); General
Counsel (since May 1996)
and Secretary (since April 1997) of
OAC; Vice President of
OppenheimerFunds International, Ltd.
("OFIL") and
Oppenheimer Millennium Funds plc (since
October 1997); an
officer of other Oppenheimer funds.
George Evans,
Vice President An officer and/or portfolio
manager of certain Oppenheimer funds.
Edward Everett,
Assistant Vice President None.
Scott Farrar,
Vice President Assistant Treasurer of Oppenheimer
Millennium Funds plc (since October
1997); an officer of other Oppenheimer
funds;
formerly an Assistant Vice President
of OFI/Mutual Fund
Accounting (April 1994-May 1996), and a
Fund Controller for
OFI.
Leslie A. Falconio,
Assistant Vice President None.
Katherine P. Feld,
Vice President and Secretary Vice President and Secretary of the
Distributor; Secretary of HarbourView ,
MultiSource and Centennial ;
Secretary, Vice
President and Director of Centennial
Capital Corporation; Vice
President and Secretary of ORAMI.
Ronald H. Fielding,
Senior Vice President; Chairman:
Rochester Division An officer, Director and/or portfolio
manager of certain Oppenheimer funds;
Presently he holds the following other
positions: Director (since 1995) of ICI
Mutual Insurance
Company; Governor (since 1994) of St.
John's College; Director
(since 1994 - present) of International
Museum of Photography
at George Eastman House; Director
(since 1986) of GeVa
Theatre. Formerly he held the following
positions: formerly,
Chairman of the Board and Director of
Rochester Fund
Distributors, Inc. ("RFD"); President
and Director of Fielding
Management Company, Inc. ("FMC");
President and Director of
Rochester Capital Advisors, Inc.
("RCAI"); Managing Partner of
Rochester Capital Advisors, L.P.,
President and Director of
Rochester Fund Services, Inc. ("RFS");
President and Director
of Rochester Tax Managed Fund, Inc.;
Director (1993 - 1997)
of VehiCare Corp.; Director (1993 -
1996) of VoiceMode.
John Fortuna,
Vice President None.
Patricia Foster,
Vice President Formerly she held the following
positions: An officer of certain
former Rochester funds (May, 1993 -
January, 1996); Secretary
of Rochester Capital Advisors, Inc.
and General Counsel (June,
1993 - January 1996) of Rochester
Capital Advisors, L.P.
Jennifer Foxson,
Assistant Vice President None.
Paula C. Gabriele,
Executive Vice President Formerly, Managing Director (1990-1996)
for Bankers Trust Co.
Robert G. Galli,
Vice Chairman Trustee of the New York-based
Oppenheimer Funds. Formerly Vice
President and General Counsel of
Oppenheimer
Acquisition Corp.
Linda Gardner,
Vice President None.
Alan Gilston,
Vice President Formerly Vice President for Schroder
Capital Management International.
Jill Glazerman,
Assistant Vice President None.
Jeremy Griffiths,
Chief Financial Officer Currently a Member and Fellow of the
Institute of Chartered Accountants;
formerly an accountant for Arthur Young
(London,
U.K.).
Robert Grill,
Vice President Formerly Marketing Vice President for
Bankers Trust Company (1993-1996);
Steering Committee Member, Subcommittee
Chairman for American Savings Education
Council (1995-
1996).
Caryn Halbrecht,
Vice President An officer and/or portfolio
manager of certain Oppenheimer funds;
formerly Vice President of Fixed Income
Portfolio Management at Bankers Trust.
Elaine T. Hamann,
Vice President Formerly Vice President (September,
1989 - January, 1997) of Bankers Trust
Company.
Glenna Hale,
Director of Investor Marketing Formerly, Vice President (1994-1997) of
Retirement Plans Services for
OppenheimerFunds Services.
Thomas B. Hayes,
Vice President None.
Barbara Hennigar,
Executive Vice President and
Chief Executive Officer of
OppenheimerFunds Services,
a division of the Manager President and Director of SFSI;
President and Chief executive Officer
of SSI.
Dorothy Hirshman, None.
Assistant Vice President
Alan Hoden,
Vice President None.
Merryl Hoffman,
Vice President None.
Nicholas Horsley,
Vice President Formerly a Senior Vice President and
Portfolio Manager for Warburg, Pincus
Counsellors, Inc. (1993-1997),
Co-manager of
Warburg, Pincus Emerging Markets Fund
(12/94 - 10/97), Co-
manager Warburg, Pincus Institutional
Emerging Markets Fund
- Emerging Markets Portfolio (8/96 -
10/97), Warburg Pincus
Japan OTC Fund, Associate Portfolio
Manager of Warburg
Pincus International Equity Fund,
Warburg Pincus Institutional
Fund - Intermediate Equity Portfolio,
and Warburg Pincus EAFE
Fund.
Scott T. Huebl,
Assistant Vice President None.
Richard Hymes,
Assistant Vice President None.
Jane Ingalls,
Vice President None.
Byron Ingram,
Assistant Vice President None.
Ronald Jamison,
Vice President Formerly Vice President and Associate
General Counsel at Prudential
Securities, Inc.
Frank Jennings,
Vice President An officer and/or portfolio manager of
certain Oppenheimer funds; formerly, a
Managing Director of Global Equities at
Paine Webber's Mitchell Hutchins
division.
Thomas W. Keffer,
Senior Vice President Formerly Senior Managing Director (1994
- 1996) of Van Eck Global.
Avram Kornberg,
Vice President None.
Joseph Krist,
Assistant Vice President None.
Paul LaRocco,
Vice President An officer and/or portfolio
manager of certain Oppenheimer funds;
formerly, a Securities Analyst for
Columbus Circle
Investors.
Michael Levine,
Assistant Vice President None.
Shanquan Li,
Vice President Director of Board (since 2/96), Chinese
Finance Society; formerly, Chairman
(11/94-2/96), Chinese Finance Society;
and
Director (6/94-6/95), Greater China
Business Networks.
Stephen F. Libera,
Vice President An officer and/or portfolio manager
for certain Oppenheimer funds; a
Chartered Financial Analyst; a Vice
President of
HarbourView; prior to March 1996 , the
senior bond portfolio
manager for Panorama Series Fund Inc.,
other mutual funds and
pension accounts managed by G.R.
Phelps; also responsible for
managing the public fixed-income
securities department at
Connecticut Mutual Life Insurance Co.
Mitchell J. Lindauer,
Vice President None.
David Mabry,
Assistant Vice President None.
Steve Macchia,
Assistant Vice President None.
Bridget Macaskill,
President, Chief Executive Officer
and Director Chief Executive Officer (since
September 1995); President and director
(since June 1991) of HarbourView;
Chairman and a
director of SSI (since August 1994),
and SFSI (September
1995); President (since September
1995) and a director (since
October 1990) of OAC; President
(since September 1995) and
a director (since November 1989) of
Oppenheimer Partnership
Holdings, Inc., a holding company
subsidiary of OFI; a director of ORAMI
(since July 1996) ; President and a
director (since
October 1997) of OFIL, an offshore fund
manager subsidiary of
OFI and Oppenheimer Millennium Funds
plc (since October
1997); President and a director of
other Oppenheimer funds; a
director of the NASDAQ Stock Market,
Inc. and of Hillsdown
Holdings plc (a U.K. food company);
formerly an Executive
Vice President of OFI.
Wesley Mayer,
Vice President Formerly Vice President (January, 1995
- June, 1996) of Manufacturers Life
Insurance Company.
Loretta McCarthy,
Executive Vice President None.
Tanya Mrva,
Assistant Vice President None.
Lisa Migan,
Assistant Vice President None.
Robert J. Milnamow,
Vice President An officer and/or portfolio
manager of certain Oppenheimer funds;
formerly a Portfolio Manager (August, 1989
August, 1995) with Phoenix Securities
Group.
Denis R. Molleur,
Vice President None.
Linda Moore,
Vice President Formerly, Marketing Manager (July
1995-November 1996) for Chase
Investment Services Corp.
Tanya Mrva,
Assistant Vice President None.
Kenneth Nadler,
Vice President None.
David Negri,
Vice President An officer and/or portfolio
manager of certain Oppenheimer funds.
Barbara Niederbrach,
Assistant Vice President None.
Robert A. Nowaczyk,
Vice President None.
Richard M. O'Shaugnessy,
Assistant Vice President:
Rochester Division None.
Gina M. Palmieri,
Assistant Vice President None.
Robert E. Patterson,
Senior Vice President An officer and/or portfolio
manager of certain Oppenheimer funds.
John Pirie,
Assistant Vice President Formerly, a Vice President with Cohane
Rafferty Securities, Inc.
Jane Putnam,
Vice President An officer and/or portfolio
manager of certain Oppenheimer funds.
Russell Read,
Senior Vice President Vice President of Oppenheimer Real
Asset Management, Inc. (since March,
1995); formerly director of
Quantitative Research
for the Manager. Prior to that he was
a lecturer at Stamford
University, an investment manager for
The Prudential, and
Associate Economist for the First
National Bank of Chicago.
Thomas Reedy,
Vice President An officer and/or portfolio
manager of certain Oppenheimer funds;
formerly, a Securities Analyst for the
Manager.
Adam Rochlin,
Vice President None.
Michael S. Rosen
Vice President; President,
Rochester Division An officer and/or portfolio manager of
certain Oppenheimer funds; Formerly,
Vice President (June, 1983 - January,
1996) of
RFS, President and Director of RFD;
Vice President and
Director of FMC; Vice President and
director of RCAI; General
Partner of RCA; Vice President and
Director of Rochester Tax
Managed Fund Inc.
Richard H. Rubinstein,
Senior Vice President An officer and/or portfolio manager of
certain Oppenheimer funds; formerly
Vice President and Portfolio
Manager/Security
Analyst for Oppenheimer Capital Corp.,
an investment adviser.
Lawrence Rudnick,
Assistant Vice President None.
James Ruff,
Executive Vice President None.
Valerie Sanders,
Vice President None.
Ellen Schoenfeld,
Assistant Vice President None.
Stephanie Seminara,
Vice President Formerly, Vice President of Citicorp
Investment Services.
Richard Soper,
Vice President None.
Nancy Sperte,
Executive Vice President None.
Donald W. Spiro,
Chairman Emeritus and Director Vice Chairman and Trustee of the New
York-based Oppenheimer Funds; formerly
Chairman of the Manager and the
Distributor.
Richard A. Stein,
Vice President: Rochester Division Assistant Vice President (since 1995)
of Rochester Capitol Advisors, L.P.
Arthur Steinmetz,
Senior Vice President An officer and/or portfolio
manager of certain Oppenheimer funds.
Ralph Stellmacher,
Senior Vice President An officer and/or portfolio
manager of certain Oppenheimer funds.
John Stoma,
Senior Vice President, Director
Retirement Plans Formerly Vice President of U.S. Group
Pension Strategy and Marketing for
Manulife Financial.
Michael C. Strathearn,
Vice President An officer and/or portfolio manager of
certain Oppenheimer funds; a Chartered
Financial Analyst; a Vice President of
HarbourView; prior to March 1996 , an
equity portfolio manager
for Panorama Series Fund, Inc. and
other mutual funds and
pension accounts managed by G.R. Phelps.
James C. Swain,
Vice Chairman of the Board Chairman, CEO and Trustee, Director or
Managing Partner of the Denver-based
Oppenheimer Funds; President and a
Director
of Centennial; formerly President and
Director of OAMC, and
Chairman of the Board of SSI.
James Tobin,
Vice President None.
Jay Tracey,
Vice President An officer and/or portfolio
manager of certain Oppenheimer funds;
formerly Managing Director of Buckingham
Capital
Management.
Gary Tyc,
Vice President, Assistant
Secretary and Assistant Treasurer Assistant Treasurer of the Distributor
and SFSI.
Ashwin Vasan,
Vice President An officer and/or portfolio
manager of certain Oppenheimer funds.
Dorothy Warmack,
Vice President An officer and/or portfolio
manager of certain Oppenheimer funds.
Jerry Webman,
Senior Vice President Director of New York-based tax-exempt
fixed income Oppenheimer funds;
Formerly, Managing Director and Chief
Fixed Income Strategist at Prudential
Mutual Funds.
Christine Wells,
Vice President None.
Joseph Welsh,
Assistant Vice President None.
Kenneth B. White,
Vice President An officer and/or portfolio manager of
certain Oppenheimer funds; a Chartered
Financial Analyst; Vice President of
HarbourView; prior to March 1996 , an
equity portfolio manager
for Panorama Series Fund, Inc. and
other mutual funds and
pension funds managed by G.R. Phelps.
William L. Wilby,
Senior Vice President An officer and/or portfolio
manager of certain Oppenheimer funds; Vice
President of HarbourView.
Carol Wolf,
Vice President An officer and/or portfolio manager of
certain Oppenheimer funds; Vice
President of Centennial; Vice
President, Finance and
Accounting and member of the Board of
Directors of the Junior
League of Denver, Inc.; Point of
Contact: Finance Supporters of
Children; Member of the Oncology
Advisory Board of the
Childrens Hospital; Member of the Board
of Directors of the
Colorado Museum of Contemporary Art.
Caleb Wong,
Assistant Vice President None.
Robert G. Zack,
Senior Vice President and
Assistant Secretary, Associate
General Counsel Assistant Secretary of SSI (since May
1985), and SFSI (since November 1989);
Assistant Secretary of Oppenheimer
Millennium Funds plc (since October 1997);
an officer of other Oppenheimer funds.
Jill Zachman,
Assistant Vice President:
Rochester Division None.
Arthur J. Zimmer,
Senior Vice President An officer and/or portfolio
manager of certain Oppenheimer funds; Vice
President of Centennial.
The Oppenheimer Funds include the New York-based Oppenheimer Funds, the
Denver-based Oppenheimer Funds and the Oppenheimer/Quest Rochester Funds, as
set forth below:
NEW YORK-BASED OPPENHEIMER FUNDS
Oppenheimer California Municipal Fund
Oppenheimer Capital Appreciation Fund
Oppenheimer Developing Markets Fund
Oppenheimer Discovery Fund
Oppenheimer Enterprise Fund
Oppenheimer Global Fund
Oppenheimer Global Growth & Income Fund
Oppenheimer Gold & Special Minerals Fund
Oppenheimer Growth Fund
Oppenheimer International Growth Fund
Oppenheimer International Small Company Fund
Oppenheimer Money Market Fund, Inc.
Oppenheimer Multi-Sector Income Trust
Oppenheimer Multi-State Municipal Trust
Oppenheimer Multiple Strategies Fund
Oppenheimer Municipal Bond Fund
Oppenheimer New York Municipal Fund
Oppenheimer Series Fund, Inc.
Oppenheimer U.S. Government Trust
Oppenheimer World Bond Fund
QUEST/ROCHESTER FUNDS
Limited Term New York Municipal Fund
Oppenheimer Bond Fund For Growth
Oppenheimer MidCap Fund
Oppenheimer Quest Capital Value Fund, Inc.
Oppenheimer Quest For Value Funds
Oppenheimer Quest Global Value Fund, Inc.
Oppenheimer Quest Value Fund, Inc.
Rochester Fund Municipals
DENVER-BASED OPPENHEIMER FUNDS
Centennial America Fund, L.P.
Centennial California Tax Exempt Trust
Centennial Government Trust
Centennial Money Market Trust
Centennial New York Tax Exempt Trust
Centennial Tax Exempt Trust
Oppenheimer Cash Reserves
Oppenheimer Champion Income Fund
Oppenheimer Equity Income Fund
Oppenheimer High Yield Fund
Oppenheimer Integrity Funds
Oppenheimer International Bond Fund
Oppenheimer Limited-Term Government Fund
Oppenheimer Main Street Funds, Inc.
Oppenheimer Municipal Fund
Oppenheimer Real Asset Fund
Oppenheimer Strategic Income Fund
Oppenheimer Total Return Fund, Inc.
Oppenheimer Variable Account Funds
Panorama Series Fund, Inc.
The New York Tax-Exempt Income Fund, Inc.
The address of OppenheimerFunds, Inc., the New York-based Oppenheimer
Funds, the Quest
Funds, OppenheimerFunds Distributor, Inc., HarbourView Asset Management
Corp., Oppenheimer
Partnership Holdings, Inc., and Oppenheimer Acquisition Corp. is Two World
Trade Center, New
York, New York 10048-0203.
The address of the Denver-based Oppenheimer Funds, Shareholder
Financial Services, Inc.,
Shareholder Services, Inc., OppenheimerFunds Services, Centennial Asset
Management Corporation,
Centennial Capital Corp., and Oppenheimer Real Asset Management, Inc. is 6803
South Tucson
Way, Englewood, Colorado 80012.
The address of MultiSource Services, Inc. is 1700 Lincoln Street,
Denver, Colorado 80203.
The address of the Rochester-based funds is 350 Linden Oaks,
Rochester, New York 14625-
2807.
ITEM 29. PRINCIPAL UNDERWRITER
Not applicable.
ITEM 30. LOCATION OF PORTFOLIOS AND RECORDS
The accounts, books and other documents required to be maintained by the
Registrant pursuant to Section 31(a) of the Investment Company Act of 1940 and
rules promulgated thereunder are in the possession of OppenheimerFunds, Inc. At
its offices at 6803 South
Tuscon Way, Englewood,
Colorado 80112.
ITEM 31. MANAGEMENT SERVICES
Not applicable.
ITEM 32. UNDERTAKINGS
(a) Not applicable.
(b) Not applicable.
(c) The Company will furnish each person to whom a prospectus is delivered
with a copy of the
Company's latest annual report to shareholders, upon request and without
charge.
C-2
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and/or the
Investment Company Act of 1940, the Registrant certifies that it meets all of
the requirements for effectiveness of this Registration Statement pursuant to
Rule 485(b) under the Securities Act of 1933 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the County of Arapahoe and State of Colorado on the 27th day
of April, 1998.
PANORAMA SERIES FUND, INC.
by: /s/ James C. Swain *
--------------------
James C. Swain, Chairman
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed below by the following persons in the capacities
and on the dates indicated:
Signatures: Title Date
- ----------- ----------------- --------------
/s/ James C. Swain* Chairman of the Board April 27, 1998
- --------------------- of Directors and
James C. Swain Principal Executive
Officer
/s/ George Bowen* Director, April 27, 1998
- ---------------------- Treasurer and
George Bowen Principal Financial
and Accounting Officer
/s/ Robert G. Avis* Director April 27, 1998
- ----------------------
Robert G. Avis
/s/ William A. Baker* Director April 27, 1998
- ----------------------
William A. Baker
/s/ Charles Conrad, Jr.* Director April 27, 1998
- ----------------------
Charles Conrad, Jr.
/s Jon S. Fossel Director April 27, 1998
- ------------------
Jon S. Fossel
/s/ Sam Freedman* Director April 27, 1998
- ----------------------
Sam Freedman
/s/ Raymond J. Kalinowski* Director April 27, 1998
- ----------------------
Raymond J. Kalinowski
/s/ C. Howard Kast* Director April 27, 1998
- ----------------------
C. Howard Kast
/s/ Robert M. Kirchner* Director April 27, 1998
- ----------------------
Robert M. Kirchner
/s/ Ned M. Steel* Director April 27, 1998
- -----------------------
Ned M. Steel
*By: /s/ Robert G. Zack
-------------------------------------
Robert G. Zack, Attorney-in-Fact
C-3
<PAGE>
PANORAMA SERIES FUND, INC.
Registration No.
Post-Effective Amendment No. 27
Index to Exhibits
-----------------
Exhibit No. Description
- ----------- -----------
24(b)(8) Master Custodian Agreement
24(b)(11) Independent Auditors' Consent
24(b)(16) Performance Data Computation Schedule
24(b)(17)(a) Total Return Portfolio - Financial Data Schedule
24(b)(17)(b) Growth Portfolio - Financial Data Schedule
24(b)(17)(c) International Equity Portfolio - Financial Data
Schedule
24(b)(17)(d) LifeSpan Capital Appreciation Portfolio -
Financial Data Schedule
24(b)(17)(e) LifeSpan Balanced Portfolio- Financial Data
Schedule
24(b)(17)(f) LifeSpan Diversified Income Portfolio-
Financial Data Schedule
24(b)(17)(g) Government Securities Portfolio - Financial
Data Schedule
--- Powers of Attorney for George C. Bowen - Filed
herewith.
N1A\PANORAMA\PART-C.98
INDEPENDENT AUDITORS' CONSENT
We consent to the use in this Post-Effective Amendment No. 27 to
Registration Statement No. 2-73969 of Panorama Series Fund, Inc. of our
report dated January 23, 1998 appearing in the Annual Report which is
incorporated by reference within the Statement of Additional Information,
which is a part of such Registration Statement, and to the reference to
us under the heading "Financial Highlights" appearing in the Prospectus,
which is also a part of such Registration Statement.
/s/ Deloitte & Touche LLP
- -------------------------
DELOITTE & TOUCHE LLP
Denver, Colorado
April 27, 1998
N1A\PANORAMA\FORMLTR.CON
PANORAMA SERIES FUND, INC.
CUSTODY AGREEMENT
Agreement made as of this 11th day of June, 1997, between PANORAMA SERIES
FUND, INC. a corporation organized and existing under the laws of the State of
Maryland, having its principal office and place of business at 6803 South Tucson
Way,
Englewood, Colorado 80112
(hereinafter called the "Fund"), and THE BANK OF NEW YORK, a New York
corporation authorized to do a banking business, having its principal office and
place of business at 48 Wall Street, New York, New York 10286 (hereinafter
called the
"Custodian").
WITNESSETH, that for and in consideration of the mutual promises
hereinafter set forth, the Fund and the Custodian agree as follows:
DEFINITIONS
Whenever used in this Agreement, the following words and phrases, shall
have the following meanings:
1. "Agreement" shall mean this Custody Agreement and all
Appendices and
Certifications described in the Exhibits delivered in connection
herewith.
2. "Authorized Person" shall mean any person, whether or not such person
is an Officer or employee of the Fund, duly authorized by the Board of Directors
of the Fund to give Oral Instructions and Written Instructions on behalf of the
Fund and listed in the Certificate annexed hereto as Appendix A or such other
Certificate as may be received by the Custodian from time to time, provided that
each person who is designated in any such Certificate as an "Officer of OSS"
shall be an Authorized Person only for purposes of Articles XII and XIII hereof.
3. "Book-Entry System" shall mean the Federal Reserve/Treasury book-entry
system for United States and federal agency securities, its successor or
successors and its nominee or nominees.
4. "Call Option" shall mean an exchange traded Option with respect to
Securities other than Index, Futures Contracts, and Futures Contract Options
entitling the holder, upon timely exercise and payment of the exercise price, as
specified therein, to purchase from the writer thereof the specified underlying
instruments, currency, or Securities.
5. "Certificate" shall mean any notice, instruction, or other instrument
in writing, authorized or required by this Agreement to be given to the
Custodian which is actually received (irrespective of constructive receipt) by
the Custodian and signed on behalf of the Fund by any two Officers. The term
Certificate shall also include instructions by the Fund to the Custodian
1
<PAGE>
communicated by a Terminal Link.
6. "Clearing Member" shall mean a registered broker-dealer which is a
clearing member under the rules of O.C.C. and a member of a national securities
exchange qualified to act as a custodian for an investment company, or any
broker-dealer reasonably believed by the Custodian to be such a clearing member.
7. "Collateral Account" shall mean a segregated account so denominated
which is specifically allocated to a Series and pledged to the Custodian as
security for, and in consideration of, the Custodian's issuance of any Put
Option guarantee letter or similar document described in paragraph 8 of Article
V herein.
8. "Covered Call Option" shall mean an exchange traded Option entitling
the holder, upon timely exercise and payment of the exercise price, as specified
therein, to purchase from the writer thereof the specified underlying
instruments, currency, or Securities (excluding Futures Contracts) which are
owned by the writer thereof.
9. "Depository" shall mean The Depository Trust Company ("DTC"), a
clearing agency registered with the Securities and Exchange Commission, its
successor or successors and its nominee or nominees. The term "Depository" shall
further mean and include any other person authorized to act as a depository
under the Investment Company Act of 1940, its successor or successors and its
nominee or nominees, specifically identified in a certified copy of a resolution
of the Fund's Board of Directors specifically approving deposits therein by the
Custodian, including, without limitation, a Foreign Depository.
10. "Financial Futures Contract" shall mean the firm commitment to buy or
sell financial instruments on a U.S. commodities exchange or board of trade at a
specified future time at an agreed upon price.
11. "Foreign Subcustodian" shall mean an "Eligible Foreign Custodian" as
defined in Rule 17-5 which is appointed by the Custodian to perform or
coordinate the receipt, custody and delivery of Foreign Property of the Fund
outside the United States in a manner consistent with the provisions of this
Agreement and whose written contract is approved by the Board of Directors of
the Fund in accordance with Rule 17f-5. References to the Custodian herein
shall, when appropriate, include reference to its Foreign Subcustodians.
12. "Foreign Depository" shall mean an entity organized under the laws of
a foreign country which operates a system outside the United States in general
use by foreign banks and securities brokers for the central or transnational
handling of securities or equivalent book-entries which is regulated by a
foreign government or agency thereof and which is an "Eligible Foreign
Custodian" as defined in Rule 17f-5.
13. "Foreign Securities" shall mean securities and/or short term paper as
defined in Rule 17f-5 under the Act, whether issued in registered or bearer
form.
2
<PAGE>
14. "Foreign Property" shall mean Foreign Securities and money of any
currency which is held outside of the United States.
15. "Futures Contract" shall mean a Financial Futures
Contract and/or Index Futures
Contracts.
16. "Futures Contract Option" shall mean an Option with respect to a
Futures Contract.
17. "Investment Company Act of 1940" shall mean the Investment Company Act
of 1940, as amended, and the rules and regulations thereunder.
18. "Index Futures Contract" shall mean a bilateral agreement pursuant to
which the parties agree to take or make delivery of an amount of cash equal to a
specified dollar amount times the difference between the value of a particular
index at the close of the last business day of the contract and the price at
which the futures contract is originally struck.
19. "Index Option" shall mean an exchange traded Option entitling the
holder, upon timely exercise, to receive an amount of cash determined by
reference to the difference between the exercise price and the value of the
index on the date of exercise.
20. "Margin Account" shall mean a segregated account in the name of a
broker, dealer, futures commission merchant, or a Clearing Member, or in the
name of the Fund for the benefit of a broker, dealer, futures commission
merchant, or Clearing Member, or otherwise, in accordance with an agreement
between the Fund, the Custodian and a broker, dealer, futures commission
merchant or a Clearing Member (a "Margin Account Agreement"), separate and
distinct from the custody account, in which certain Securities and/or money of
the Fund shall be deposited and withdrawn from time to time in connection with
such transactions as the Fund may from time to time determine. Securities held
in the Book-Entry System or a Depository shall be deemed to have been deposited
in, or withdrawn from, a Margin Account upon the Custodian's effecting an
appropriate entry in its books and records.
21. "Money Market Security" shall mean all instruments and obligations
commonly known as a money market instruments, where the purchase and sale of
such securities normally requires settlement in federal funds on the same day as
such purchase or sale, including, without limitation, certain Reverse Repurchase
Agreements, debt obligations issued or guaranteed as to interest and/or
principal by the government of the United States or agencies or
instrumentalities thereof, any tax, bond or revenue anticipation note issued by
any state or municipal government or public authority, commercial paper,
certificates of deposit and bankers' acceptances, repurchase agreements with
respect to Securities and bank time deposits.
22. "Nominee" shall mean, in addition to the name of the registered
nominee of the Custodian, (i) a partnership or other entity of a Foreign
Subcustodian which is used solely for the assets of its customers other than the
Custodian and the Foreign Subcustodian, if any, by which it was appointed; or
(ii) the nominee of a Foreign Depository which is used for the securities and
other assets of its customers, members or participants.
3
<PAGE>
23. "O.C.C." shall mean the Options Clearing Corporation, a clearing
agency registered under Section 17A of the Securities Exchange Act of 1934, its
successor or successors, and its nominee or nominees.
24. "Officers" shall mean the President, any Vice President, the
Secretary, the Treasurer, the Controller, any Assistant Secretary, any Assistant
Treasurer, and any other person or persons, whether or not any such other person
is an officer or employee of the Fund, but in each case only if duly authorized
by the Board of Directors of the Fund to execute any Certificate, instruction,
notice or other instrument on behalf of the Fund and listed in the Certificate
annexed hereto as Appendix A or such other Certificate as may be received by the
Custodian from time to time; provided that each person who is designated in any
such Certificate as holding the position of "Officer of OSS" shall be an Officer
only for purposes of Articles XII and XIII hereof.
25. "Option" shall mean a Call Option, Covered Call Option,
Index Option and/or a Put
Option.
26. "Oral Instructions" shall mean verbal instructions actually received
(irrespective of constructive receipt) by the Custodian from an Authorized
Person or from a person reasonably believed by the Custodian to be an Authorized
Person.
27. "Put Option" shall mean an exchange traded Option with respect to
instruments, currency, or Securities other than Index Options, Futures
Contracts, and Futures Contract Options entitling the holder, upon timely
exercise and tender of the specified underlying instruments, currency, or
Securities, to sell such instruments, currency, or Securities to the writer
thereof for the exercise price.
28. "Repurchase Agreement" shall mean an agreement pursuant to which the
Fund buys Securities and agrees to resell such Securities at a described or
specified date and price.
29. "Reverse Repurchase Agreement" shall mean an agreement pursuant to
which the Fund sells Securities and agrees to repurchase such Securities at a
described or specified date and price.
30. "Rule 17f-5" shall mean Rule 17f-5 (Reg. Section 270.17f-5)
promulgated by the Securities and Exchange Commission under the Investment
Company
Act of 1940, as amended.
31. "Security" shall be deemed to include, without limitation, Money
Market Securities, Call Options, Put Options, Index Options, Index Futures
Contracts, Index Futures Contract Options, Financial Futures Contracts,
Financial Futures Contract Options, Reverse Repurchase Agreements, over the
counter Options on Securities, common stocks and other securities having
characteristics similar to common stocks, preferred stocks, debt obligations
issued by state or municipal governments and by public authorities, (including,
without limitation, general obligation bonds, revenue bonds, industrial bonds
and industrial development bonds), bonds, debentures, notes, mortgages or other
obligations, and any certificates, receipts, warrants or other instruments
representing rights to receive, purchase, sell or subscribe for the same, or
evidencing or representing
4
<PAGE>
any other rights or interest therein, or rights to any property or
assets.
32. "Senior Security Account" shall mean an account maintained and
specifically allocated to a Series under the terms of this Agreement as a
segregated account, by recordation or otherwise, within the custody account in
which certain Securities and/or other assets of the Fund specifically allocated
to such Series shall be deposited and withdrawn from time to time in accordance
with Certificates received by the Custodian in connection with such transactions
as the Fund may from time to time determine.
33. "Series" shall mean the various portfolios, if any, of the Fund as
described from time to time in the current and effective prospectus for the
Fund, except that if the Fund does not have more than one portfolio, "Series"
shall mean the Fund or be ignored where a requirement would be imposed on the
Fund or the Custodian which is unnecessary if there is only one portfolio.
34. "Shares" shall mean the shares of beneficial interest of the Fund and
its Series.
35. "Terminal Link" shall mean an electronic data transmission link
between the Fund and the Custodian requiring in connection with each use of the
Terminal Link the use of an authorization code provided by the Custodian and at
least two access codes established by the Fund, provided, that the Fund shall
have delivered to the Custodian a Certificate substantially in the form of
Appendix B.
36. "Transfer Agent" shall mean Oppenheimer Shareholder Services, a
division of Oppenheimer Management Corporation, its successors and assigns.
37. "Transfer Agent Account" shall mean any account in the name of the
Fund, or the Transfer Agent, as agent for the Fund, maintained with United
Missouri Bank or such other Bank
designated by the Fund in a Certificate.
38. "Written Instructions" shall mean written communications actually
received (irrespective of constructive receipt) by the Custodian from an
Authorized Person or from a person reasonably believed by the Custodian to be an
Authorized Person by telex or any other such system whereby the receiver of such
communications is able to verify by codes or otherwise with a reasonable degree
of certainty the identity of the sender of such communication.
ARTICLE I
APPOINTMENT OF CUSTODIAN
1. The Fund hereby constitutes and appoints the Custodian as custodian of
the Securities and moneys at any time owned or held by the Fund during the
period of this Agreement.
2. The Custodian hereby accepts appointment as such custodian and agrees
to perform the duties thereof as hereinafter set forth.
5
<PAGE>
ARTICLE II
CUSTODY OF CASH AND SECURITIES
1. Except for monies received and maintained in the Transfer Agent
Account, or as otherwise provided in paragraph 7 of this Article or in Article
VIII or XV, the Fund will deliver or
cause to be delivered to the Custodian all Securities and all moneys owned by
it, at any time during the period of this Agreement, and shall specify with
respect to such Securities and money the Series to which the same are
specifically allocated, and the Custodian shall not be responsible for any
Securities or money not so delivered. Except for assets held at DTC, the
Custodian shall physically segregate, keep and maintain the Securities of the
Series separate and apart from each other Series and from other assets held by
the Custodian. Except as otherwise expressly provided in this Agreement, the
Custodian will not be responsible for any Securities and moneys not actually
received by it, unless the Custodian has been negligent or has engaged in
willful misconduct with respect thereto. The Custodian will be entitled to
reverse any credit of money made on the Fund's behalf where such credits have
been previously made and moneys are not finally collected, unless the Custodian
has been negligent or has engaged in willful misconduct with respect thereto;
provided that if such reversal is thirty (30) days or more after the credit was
issued, the Custodian will give five (5) days' prior notice of such reversal.
The Fund shall deliver to the Custodian a certified resolution of the Board of
Directors of the Fund, substantially in the form of Exhibit A hereto, approving,
authorizing and instructing the Custodian on a continuous and on-going basis to
deposit in the Book-Entry System all Securities eligible for deposit therein,
regardless of the Series to which the same are specifically allocated and to
utilize the Book-Entry System to the extent possible in connection with its
performance hereunder, including, without limitation, in connection with
settlements of purchases and sales of Securities, loans of Securities and
deliveries and returns of Securities collateral. Prior to a deposit of
Securities specifically allocated to a Series in any Depository, the Fund shall
deliver to the Custodian a certified resolution of the Board of Directors of the
Fund, substantially in the form of Exhibit B hereto, approving, authorizing and
instructing the Custodian on a continuous and ongoing basis until instructed to
the contrary by a Certificate to deposit in such Depository all Securities
specifically allocated to such Series eligible for deposit therein, and to
utilize such Depository to the extent possible with respect to such Securities
in connection with its performance hereunder, including, without limitation, in
connection with settlements of purchases and sales of Securities, loans of
Securities, and deliveries and returns of Securities collateral. Securities and
moneys deposited in either the Book-Entry System or a Depository will be
represented in accounts which include only assets held by the Custodian for
customers, including, but not limited to, accounts in which the Custodian acts
in a fiduciary or representative capacity and will be specifically allocated on
the Custodian's books to the separate account for the applicable Series. Prior
to the Custodian's accepting, utilizing and acting with respect to Clearing
Member confirmations for Options and transactions in Options for a Series as
provided in this Agreement, the Custodian shall have received a certified
resolution of the Fund's Board of Directors, substantially in the form of
Exhibit C hereto, approving, authorizing and instructing the Custodian on a
continuous and on-going basis, until instructed to the contrary by a Certificate
to accept, utilize and act in accordance with such confirmations as provided in
this Agreement with respect to such Series. All Securities are to be held or
disposed of by the Custodian for, and subject at all times to the instructions
of, the Fund pursuant to the terms of this Agreement.
6
<PAGE>
The Custodian shall have no power or authority to assign, hypothecate, pledge or
otherwise dispose of any Securities except as provided by the terms of this
Agreement, and shall have the sole power to release and deliver Securities held
pursuant to this Agreement.
2. The Custodian shall establish and maintain separate accounts, in the
name of each Series, and shall credit to the separate account for each Series
all moneys received by it for the account of the Fund with respect to such
Series. Money credited to a separate account for a Series shall be subject only
to drafts, orders, or charges of the Custodian pursuant to this Agreement and
shall be disbursed by the Custodian only:
(a) As hereinafter provided;
(b) Pursuant to Certificates or Resolutions of the Fund's Board
of Directors certified by an Officer and by the Secretary or Assistant Secretary
of the Fund setting forth the name and address of the person to whom the payment
is to be made, the Series account from which payment is to be made, the purpose
for which payment is to be made, and declaring such purpose to be a proper
corporate purpose; provided, however, that amounts representing dividends,
distributions, or redemptions proceeds with respect to Shares shall be paid only
to the Transfer Agent Account;
(c) In payment of the fees and in reimbursement of the expenses
and liabilities of the Custodian attributable to such Series and authorized by
this Agreement; or
(d) Pursuant to Certificates to pay interest, taxes, management
fees or operating expenses (including, without limitation thereto, Board of
Directors' fees and expenses, and fees for legal accounting and auditing
services), which Certificates set forth the name and address of the person to
whom payment is to be made, state the purpose of such payment and designate the
Series for whose account the payment is to be made.
3. Promptly after the close of business on each day, the Custodian shall
furnish the Fund with confirmations and a summary, on a per Series basis, of all
transfers to or from the account of the Fund for a Series, either hereunder or
with any co-custodian or Subcustodian appointed in accordance with this
Agreement during said day. Where Securities are transferred to the account of
the Fund for a Series but held in a Depository, the Custodian shall upon such
transfer also by book-entry or otherwise identify such Securities as belonging
to such Series in a fungible bulk of Securities registered in the name of the
Custodian (or its nominee) or shown on the Custodian's account on the books of
the Book-Entry System or the Depository. At least monthly and from time to time,
the Custodian shall furnish the Fund with a detailed statement, on a per Series
basis, of the Securities and moneys held under this Agreement for the Fund.
4. Except as otherwise provided in paragraph 7 of this Article and in
Article VIII, all Securities held by the Custodian hereunder, which are issued
or issuable only in bearer form, except such Securities as are held in the
Book-Entry System, shall be held by the Custodian in that form; all other
Securities held hereunder may be registered in the name of the Fund, in the name
of any duly appointed registered nominee of the Custodian as the Custodian may
from time to time
7
<PAGE>
determine, or in the name of the Book-Entry System or a Depository or their
successor or successors, or their nominee or nominees. The Fund agrees to
furnish to the Custodian appropriate instruments to enable the Custodian to hold
or deliver in proper form for transfer, or to register in the name of its
registered nominee or in the name of the Book-Entry System or a Depository any
Securities which it may hold hereunder and which may from time to time be
registered in the name of the Fund. The Custodian shall hold all such Securities
specifically allocated to a Series which are not held in the Book-Entry System
or in a Depository in a separate account in the name of such Series physically
segregated at all times from those of any other person or persons.
5. Except as otherwise provided in this Agreement and unless otherwise
instructed to the contrary by a Certificate, the Custodian by itself, or through
the use of the Book-Entry System or a Depository with respect to Securities held
hereunder and therein deposited, shall with respect to all Securities held for
the Fund hereunder in accordance with preceding paragraph 4:
(a) Promptly collect all income, dividends and
distributions due or payable;
(b) Promptly give notice to the Fund and promptly present for
payment and collect the amount of money or other consideration payable upon such
Securities which are called, but only if either (i) the Custodian receives a
written notice of such call, or (ii) notice of such call appears in one or more
of the publications listed in Appendix C annexed hereto, which may be amended at
any time by the Custodian without the prior consent of the Fund, provided the
Custodian gives prior notice of such amendment to the Fund;
(c) Promptly present for payment and collect for the Fund's
account the amount payable upon all Securities which mature;
(d) Promptly surrender Securities in temporary form in exchange
for definitive Securities;
(e) Promptly execute, as custodian, any necessary declarations
or certificates of ownership under the Federal Income Tax Laws or the laws or
regulations of any other taxing authority now or hereafter in effect;
(f) Hold directly, or through the Book-Entry System or the
Depository with respect to Securities therein deposited, for the account of a
Series, all rights and similar securities issued with respect to any Securities
held by the Custodian for such Series hereunder; and
(g) Promptly deliver to the Fund all notices, proxies, proxy
soliciting materials, consents and other written information (including, without
limitation, notices of tender offers and exchange offers, pendency of calls,
maturities of Securities and expiration of rights) relating to Securities held
pursuant to this Agreement which are actually received by the Custodian, such
proxies and other similar materials to be executed by the registered holder (if
Securities are registered otherwise than in the name of the Fund), but without
indicating the manner in which proxies or consents are to be voted.
8
<PAGE>
6. Upon receipt of a Certificate and not otherwise, the Custodian,
directly or through the use of the Book-Entry System or the Depository, shall:
(a) Promptly execute and deliver to such persons as may be
designated in such Certificate proxies, consents, authorizations, and any other
instruments whereby the authority of the Fund as owner of any Securities held
hereunder for the Series specified in such Certificate may be exercised;
(b) Promptly deliver any Securities held hereunder for the
Series specified in such Certificate in exchange for other Securities or cash
issued or paid in connection with the liquidation, reorganization, refinancing,
merger, consolidation or recapitalization of any corporation, or the exercise of
any right, warrant or conversion privilege and receive and hold hereunder
specifically allocated to such Series any cash or other Securities received in
exchange;
(c) Promptly deliver any Securities held hereunder for the
Series specified in such Certificate to any protective committee, reorganization
committee or other person in connection with the reorganization, refinancing,
merger, consolidation, recapitalization or sale of assets of any corporation,
and receive and hold hereunder specifically allocated to such Series in exchange
therefor such certificates of deposit, interim receipts or other instruments or
documents as may be issued to it to evidence such delivery or such Securities as
may be issued upon such delivery; and
(d) Promptly present for payment and collect the amount payable
upon Securities which may be called as specified in the Certificate.
7. Notwithstanding any provision elsewhere contained herein, the Custodian
shall not be required to obtain possession of any instrument or certificate
representing any Futures Contract, any Option, or any Futures Contract Option
until after it shall have determined, or shall have received a Certificate from
the Fund stating, that any such instruments or certificates are available. The
Fund shall deliver to the Custodian such a Certificate no later than the
business day preceding the availability of any such instrument or certificate.
Prior to such availability, the Custodian shall comply with Section 17(f) of the
Investment Company Act of 1940 in connection with the purchase, sale,
settlement, closing out or writing of Futures Contracts, Options, or Futures
Contract Options by making payments or deliveries specified in Certificates in
connection with any such purchase, sale, writing, settlement or closing out upon
its receipt from a broker, dealer, or futures commission merchant of a statement
or confirmation reasonably believed by the Custodian to be in the form
customarily used by brokers, dealers, or future commission merchants with
respect to such Futures Contracts, Options, or Futures Contract Options, as the
case may be, confirming that such Security is held by such broker, dealer or
futures commission merchant, in book-entry form or otherwise in the name the
Custodian (or any nominee of the Custodian) as custodian for the Fund; provided,
however, that notwithstanding the foregoing, payments to or deliveries from the
Margin Account and payments with respect to Securities to which a Margin Account
relates, shall be made in accordance with the terms and conditions of the Margin
Account Agreement. Whenever any such instruments or certificates are available,
the Custodian shall, notwithstanding any provision in this Agreement to the
contrary, make payment for any Futures Contract, Option, or Futures Contract
9
<PAGE>
Option for which such instruments or such certificates are available only
against the delivery to the Custodian of such instrument or such certificate,
and deliver any Futures Contract, Option or Futures Contract Option for which
such instruments or such certificates are available only against receipt by the
Custodian of payment therefor. Any such instrument or certificate delivered to
the Custodian shall be held by the Custodian hereunder in accordance with, and
subject to, the provisions of this Agreement.
ARTICLE III
PURCHASE AND SALE OF INVESTMENTS OF THE FUND
OTHER THAN OPTIONS, FUTURES CONTRACTS,
FUTURES CONTRACT OPTIONS, REPURCHASE AGREEMENTS,
REVERSE REPURCHASE AGREEMENTS AND SHORT SALES
1. Promptly after each execution of a purchase of Securities by the Fund,
other than a purchase of an Option, a Futures Contract, a Futures Contract
Option, a Repurchase Agreement, a Reverse Repurchase Agreement or a Short Sale,
the Fund shall deliver to the Custodian (i) with respect to each purchase of
Securities which are not Money Market Securities, a Certificate, and (ii) with
respect to each purchase of Money Market Securities, a Certificate, oral
Instructions or Written Instructions, specifying with respect to each such
purchase: (a) the Series to which such Securities are to be specifically
allocated; (b) the name of the issuer and the title of the Securities; (c) the
number of shares or the principal amount purchased and accrued interest, if any;
(d) the date of purchase and settlement; (e) the purchase price per unit; (f)
the total amount payable upon such purchase; (g) the name of the person from
whom or the broker through whom the purchase was made, and the name of the
clearing broker, if any; and (h) the name of the broker or other party to whom
payment is to be made. Custodian shall, upon receipt of such Securities
purchased by or for the Fund, pay to the broker specified in the Certificate out
of the moneys held for the account of such Series the total amount payable upon
such purchase, provided that the same conforms to the total amount payable as
set forth in such Certificate, oral Instructions or Written Instructions.
2. Promptly after each execution of a sale of Securities by the Fund,
other than a sale of any Option, Futures Contract, Futures Contract Option,
Repurchase Agreement, Reverse Repurchase Agreement or Short Sale, the Fund shall
deliver such to the Custodian (i) with respect to each sale of Securities which
are not Money Market Securities, a Certificate, and (ii) with respect to each
sale of Money Market Securities, a Certificate, Oral Instructions or Written
Instructions, specifying with respect to each such sale: (a) the Series to which
such Securities were specifically allocated; (b) the name of the issuer and the
title of the Security; (c) the number of shares or principal amount sold, and
accrued interest, if any; (d) the date of sale and settlement; (e) the sale
price per unit; (f) the total amount payable to the Fund upon such sale; (g) the
name of the broker through whom or the person to whom the sale was made, and the
name of the clearing broker, if any; and (h) the name of the broker to whom the
Securities are to be delivered. On the settlement date, the Custodian shall
deliver the Securities specifically allocated to such Series to the broker in
accordance with generally accepted street practices and as specified in the
Certificate upon receipt of the total amount payable to the Fund upon such sale,
provided that the same conforms to the total amount payable as set forth in such
Certificate, oral Instructions or Written Instructions.
10
<PAGE>
ARTICLE IV
OPTIONS
1. Promptly after each execution of a purchase of any Option by the Fund
other than a closing purchase transaction, the Fund shall deliver to the
Custodian a Certificate specifying with respect to each Option purchased: (a)
the Series to which such
Option is specifically allocated; (b)
the type of Option (put or call); (c) the instrument, currency, or Security
underlying such Option and the number of Options, or the name of the in the case
of an Index Option, the index to which such Option relates and the number of
Index Options purchased; (d) the expiration date; (e) the exercise price; (f)
the dates of purchase and settlement; (g) the total amount payable by the Fund
in connection with such purchase; and (h) the name of the Clearing Member
through whom such Option was purchased. The Custodian shall pay, upon receipt of
a Clearing Member's written statement confirming the purchase of such Option
held by such Clearing Member for the account of the Custodian (or any duly
appointed and registered nominee of the Custodian) as Custodian for the Fund,
out of moneys held for the account of the Series to which such Option is to be
specifically allocated, the total amount payable upon such purchase to the
Clearing Member through whom the purchase was made, provided that the same
conforms to the amount payable as set forth in such Certificate.
2. Promptly after the execution of a sale of any Option purchased by the
Fund, other than a closing sale transaction, pursuant to paragraph 1 hereof, the
Fund shall deliver to the Custodian a Certificate specifying with respect to
each such sale:
(a) the Series to which such
Option was specifically allocated; (b) the type of Option (put or call); (c) the
instrument, currency, or Security underlying such Option and the number of
Options, or the name of the issuer and the title and number of shares subject to
such Option or, in the case of a Index Option, the index to which such Option
relates and the number of Index Options sold; (d) the date of sale; (e) the sale
price; (f) the date of settlement; (g) the total amount payable to the Fund upon
such sale; and (h) the name of the Clearing Member through whom the sale was
made. The Custodian shall consent to the delivery of the Option sold by the
Clearing Member which previously supplied the confirmation described in
preceding paragraph of this Article with respect to such Option upon receipt by
the Custodian of the total amount payable to the Fund, provided that the same
conforms to the total amount payable as set forth in such Certificate.
3. Promptly after the exercise by the Fund of any Call Option purchased by
the Fund pursuant to paragraph 1 hereof, the Fund shall deliver to the Custodian
a Certificate specifying with respect to such Call Option: (a) the Series to
which such Call
Option was specifically allocated; (b)
the name of the issuer and the title and number of shares subject to the Call
Option; (c) the expiration date; (d) the date of exercise and settlement; (e)
the exercise price per share; (f) the total amount to be paid by the Fund upon
such exercise; and (g) the name of the Clearing Member through whom such Call
Option was exercised. The Custodian shall, upon receipt of the Securities
underlying the Call Option which was exercised, pay out of the moneys held for
the account of the Series to which such Call Option was specifically allocated
the total amount payable to the Clearing Member through whom the Call Option was
exercised, provided that the same conforms to the total
11
<PAGE>
amount payable as set forth in such Certificate.
4. Promptly after the exercise by the Fund of any Put Option purchased by
the Fund pursuant to paragraph 1 hereof, the Fund shall deliver to the Custodian
a Certificate specifying with respect to such Put Option: (a) the Series to
which such Put
Option was specifically allocated; (b)
the name of the issuer and the title and number of shares subject to the Put
Option; (c) the expiration date; (d) the date of exercise and settlement; (e)
the exercise price per share; (f) the total amount to be paid to the Fund upon
such exercise; and (g) the name of the Clearing Member through whom such Put
Option was exercised. The Custodian shall, upon receipt of the amount payable
upon the exercise of the Put Option, deliver or direct a Depository to deliver
the Securities specifically allocated to such Series, provided the same conforms
to the amount payable to the Fund as set forth in such Certificate.
5. Promptly after the exercise by the Fund of any Index Option purchased
by the Fund pursuant to paragraph 1 hereof, the Fund shall deliver to the
Custodian a Certificate specifying with respect to such Index Option: (a) the
Series to which such Index
Option was specifically allocated;
(b) the type of Index Option (put or call) (c) the number of Options being
exercised; (d) the index to which such Option relates; (e) the expiration date;
(f) the exercise price; (g) the total amount to be received by the Fund in
connection with such exercise; and (h) the Clearing Member from whom such
payment is to be received.
6. Whenever the Fund writes a Covered Call Option, the Fund shall promptly
deliver to the Custodian a Certificate specifying with respect to such Covered
Call Option: (a) the Series for which such Covered Call Option was written; (b)
the name of
the issuer and the title and number
of shares for which the Covered Call Option was written and which underlie the
same; (c) the expiration date; (d) the exercise price; (e) the premium to be
received by the Fund; (f) the date such Covered Call Option was written; and (g)
the name of the Clearing Member through whom the premium is to be received. The
Custodian shall deliver or cause to be delivered, upon receipt of the premium
specified in the Certificate with respect to such Covered Call Option, such
receipts as are required in accordance with the customs prevailing among
Clearing Members dealing in Covered Call Options and shall impose, or direct a
Depository to impose, upon the underlying Securities specified in the
Certificate specifically allocated to such Series such restrictions as may be
required by such receipts. Notwithstanding the foregoing, the Custodian has the
right, upon prior written notification to the Fund, at any time to refuse to
issue any receipts for Securities in the possession of the Custodian and not
deposited with a Depository underlying a Covered Call Option.
7. Whenever a Covered Call Option written by the Fund and described in the
preceding paragraph of this Article is exercised, the Fund shall promptly
deliver to the Custodian a Certificate instructing the Custodian to deliver, or
to direct the Depository to deliver, the Securities subject to such Covered Call
Option and specifying: (a) the Series for which such Covered Call Option was
written; (b) the name of the issuer and the title and number of shares subject
to the Covered Call Option; (c) the Clearing Member to whom the underlying
Securities are to be delivered; and (d) the total amount payable to the Fund
upon such delivery. Upon the return and/or cancellation of any receipts
delivered pursuant to paragraph 6 of this Article, the Custodian shall deliver,
or direct a Depository to deliver, the underlying Securities as specified in the
Certificate upon payment of the
12
<PAGE>
amount to be received as set forth in such Certificate.
8. Whenever the Fund writes a Put Option, the Fund shall promptly deliver
to the Custodian a Certificate specifying with respect to such Put Option: (a)
the Series for which such Put Option was written; (b) the name of the issuer and
the title and number of shares for which the Put Option is written and which
underlie the same; (c) the expiration date; (d) the exercise price; (e) the
premium to be received by the Fund; (f) the date such Put Option is written; (g)
the name of the Clearing Member through whom the premium is to be received and
to whom a Put Option guarantee letter is to be delivered; (h) the amount of
cash, and/or the amount and kind of Securities, if any, specifically allocated
to such Series to be deposited in the Senior Security Account for such Series;
and (i) the amount of cash and/or the amount and kind of Securities specifically
allocated to such Series to be deposited into the Collateral Account for such
Series. The Custodian shall, after making the deposits into the Collateral
Account specified in the Certificate, issue a Put Option guarantee letter
substantially in the form utilized by the Custodian on the date hereof, and
deliver the same to the Clearing Member specified in the Certificate upon
receipt of the premium specified in said Certificate. Notwithstanding the
foregoing, the Custodian shall be under no obligation to issue any Put Option
guarantee letter or similar document if it is unable to make any of the
representations contained therein.
9. Whenever a Put Option written by the Fund and described in the
preceding paragraph is exercised, the Fund shall promptly deliver to the
Custodian a Certificate specifying: (a) the Series to which such Put Option was
written; (b) the name of the issuer and title and number of shares subject to
the Put Option; (c) the Clearing Member from whom the underlying Securities are
to be received; (d) the total amount payable by the Fund upon such delivery; (e)
the amount of cash and/or the amount and kind of Securities specifically
allocated to such Series to be withdrawn from the Collateral Account for such
Series and (f) the amount of cash and/or the amount and kind of Securities,
specifically allocated to such series, if any, to be withdrawn from the Senior
Security Account. Upon the return and/or cancellation of any Put Option
guarantee letter or similar document issued by the Custodian in connection with
such Put Option, the Custodian shall pay out of the moneys held for the account
of the series to which such Put Option was specifically allocated the total
amount payable to the Clearing Member specified in the Certificate as set forth
in such Certificate, upon delivery of such Securities, and shall make the
withdrawals specified in such Certificate.
10. Whenever the Fund writes an Index Option, the Fund shall promptly
deliver to the Custodian a Certificate specifying with respect to such Index
Option: (a) the Series for which such Index Option was written; (b) whether such
Index Option is a put or a call; (c) the number of Options written; (d) the
index to which such Option relates; (e) the expiration date; (f) the exercise
price; (g) the Clearing Member through whom such Option was written; (h) the
premium to be received by the Fund; (i) the amount of cash and/or the amount and
kind of Securities, if any, specifically allocated to such Series to be
deposited in the Senior Security Account for such Series; (j) the amount of cash
and/or the amount and kind of Securities, if any, specifically allocated to such
Series to be deposited in the Collateral Account for such Series; and (k) the
amount of cash and/or the amount and kind of Securities, if any, specifically
allocated to such Series to be deposited in a Margin Account, and the name in
which such account is to be or has been established. The
13
<PAGE>
Custodian shall, upon receipt of the premium specified in the Certificate, make
the deposits, if any, into the Senior Security Account specified in the
Certificate, and either (1) deliver such receipts, if any, which the Custodian
has specifically agreed to issue, which are in accordance with the customs
prevailing among Clearing Members in Index Options and make the deposits into
the Collateral Account specified in the Certificate, or (2) make the deposits
into the Margin Account specified in the Certificate.
11. Whenever an Index Option written by the Fund and described in the
preceding paragraph of this Article is exercised, the Fund shall promptly
deliver to the Custodian a Certificate specifying with respect to such Index
Option: (a) the Series for which such Index Option was written; (b) such
information as may be necessary to identify the Index Option being exercised;
(c) the Clearing Member through whom such Index Option is being exercised; (d)
the total amount payable upon such exercise, and whether such amount is to be
paid by or to the Fund; (e) the amount of cash and/or amount and kind of
Securities, if any, to be withdrawn from the Margin Account; and (f) the amount
of cash and/or amount and kind of Securities, if any, to be withdrawn from the
Senior Security Account for such Series; and the amount of cash and/or the
amount and kind of Securities, if any, to be withdrawn from the Collateral
Account for such Series. Upon the return and/or cancellation of the receipt, if
any, delivered pursuant to the preceding paragraph of this Article, the
Custodian shall pay out of the moneys held for the account of the Series to
which such Stock Index Option was specifically allocated to the Clearing Member
specified in the Certificate the total amount payable, if any, as specified
therein.
12. Promptly after the execution of a purchase or sale by the Fund of any
Option identical to a previously written Option described in paragraphs, 6, 8 or
10 of this Article in a transaction expressly designated as a "Closing Purchase
Transaction" or a "Closing Sale Transaction", the Fund shall promptly deliver to
the Custodian a Certificate specifying with respect to the Option being
purchased: (a) that the transaction is a Closing Purchase Transaction or a
Closing Sale Transaction; (b) the Series for which the Option was written; (c)
the instrument, currency, or Security subject to the Option, or, in the case of
an Index Option, the index to which such Option relates and the number of
Options held; (d) the exercise price; (e) the premium to be paid by or the
amount to be paid to the Fund; (f) the expiration date; (g) the type of Option
(put or call); (h) the date of such purchase or sale; (i) the name of the
Clearing Member to whom the premium is to be paid or from whom the amount is to
be received; and (j) the amount of cash and/or the amount and kind of
Securities, if any, to be withdrawn from the Collateral Account, a specified
Margin Account, or the Senior Security Account for such Series. Upon the
Custodian's payment of the premium or receipt of the amount, as the case may be,
specified in the Certificate and the return and/or cancellation of any receipt
issued pursuant to paragraphs 6, 8 or 10 of this Article with respect to the
Option being liquidated through the Closing Purchase Transaction or the Closing
Sale Transaction, the Custodian shall remove, or direct a Depository to remove,
the previously imposed restrictions on the Securities underlying the Call
Option.
13. Upon the expiration, exercise or consummation of a Closing Purchase
Transaction with respect to any Option purchased or written by the Fund and
described in this Article, the Custodian shall delete such Option from the
statements delivered to the Fund pursuant to paragraph 3 Article III herein, and
upon the return and/or cancellation of any receipts issued by the Custodian,
14
<PAGE>
shall make such withdrawals from the Collateral Account, and the Margin Account
and/or the Senior Security Account as may be specified in a Certificate received
in connection with such expiration,
exercise, or consummation.
14. Securities acquired by the Fund through the exercise of an Option
described in this Article shall be subject to Article IV hereof.
ARTICLE V
FUTURES CONTRACTS
1. Whenever the Fund shall enter into a Futures Contract, the Fund shall
deliver to the Custodian a Certificate specifying with respect to such Futures
Contract, (or with respect to any number of identical Futures Contract (s)): (a)
the Series for which the Futures Contract is being entered; (b) the category of
Futures Contract (the name of the underlying index or financial instrument); (c)
the number of identical Futures Contracts entered into; (d) the delivery or
settlement date of the Futures Contract(s); (e) the date the Futures Contract(s)
was (were) entered into and the maturity date; (f) whether the Fund is buying
(going long) or selling (going short) such Futures Contract(s); (g) the amount
of cash and/or the amount and kind of Securities, if any, to be deposited in the
Senior Security Account for such Series; (h) the name of the broker, dealer, or
futures commission merchant through whom the Futures Contract was entered into;
and (i) the amount of fee or commission, if any, to be paid and the name of the
broker, dealer, or futures commission merchant to whom such amount is to be
paid. The Custodian shall make the deposits, if any, to the Margin Account in
accordance with the terms and conditions of the Margin Account Agreement. The
Custodian shall make payment out of the moneys specifically allocated to such
Series of the fee or commission, if any, specified in the Certificate and
deposit in the Senior Security Account for such Series the amount of cash and/or
the amount and kind of Securities specified in said Certificate.
2. (a) Any variation margin payment or similar payment required to be made
by the Fund to a broker, dealer, or futures commission merchant with respect to
an outstanding Futures Contract shall be made by the Custodian in accordance
with the terms and conditions of the Margin Account Agreement.
(b) Any variation margin payment or similar payment from a
broker, dealer, or futures commission merchant to the Fund with respect to an
outstanding Futures Contract shall be received and dealt with by the Custodian
in accordance with the terms and conditions of the Margin Account Agreement.
3. Whenever a Futures Contract held by the Custodian hereunder is retained
by the Fund until delivery or settlement is made on such Futures Contract, the
Fund shall deliver to the Custodian prior to the delivery or settlement date a
Certificate specifying: (a) the Futures Contract and the Series to which the
same relates; (b) with respect to an Index Futures Contract, the total cash
settlement amount to be paid or received, and with respect to a Financial
Futures Contract, the Securities and/or amount of cash to be delivered or
received; (c) the broker, dealer, or futures
15
<PAGE>
commission merchant to or from whom payment or delivery is to be made or
received; and (d) the amount of cash and/or Securities to be withdrawn from the
Senior Security Account for such Series. The Custodian shall make the payment or
delivery specified in the Certificate, and delete such Futures Contract from the
statements delivered to the Fund pursuant to paragraph 3 of Article III herein.
4. Whenever the Fund shall enter into a Futures Contract to offset a
Futures Contract held by the Custodian hereunder, the Fund shall deliver to the
Custodian a Certificate specifying: (a) the items of information required in a
Certificate described in paragraph 1 of this Article, and (b) the Futures
Contract being offset. The Custodian shall make payment out of the money
specifically allocated to such Series of the fee or commission, if any,
specified in the Certificate and delete the Futures Contract being offset from
the statements delivered to the Fund pursuant to paragraph 3 of Article III
herein, and make such withdrawals from the Senior Security Account for such
Series as may be specified in the Certificate. The withdrawals, if any, to be
made from the Margin Account shall be made by the Custodian in accordance with
the terms and conditions of the Margin Account Agreement.
ARTICLE VI
FUTURES CONTRACT OPTIONS
1. Promptly after the execution of a purchase of any Futures Contract
Option by the Fund, the Fund shall deliver to the Custodian a Certificate
specifying with respect to such Futures Contract Option: (a) the Series to which
such Option is specifically allocated; (b) the type of Futures Contract Option
(put or call); (c) the type of Futures Contract and such other information as
may be necessary to identify the Futures Contract underlying the Futures
Contract Option purchased; (d) the expiration date; (e) the exercise price; (f)
the dates of purchase and settlement; (g) the amount of premium to be paid by
the Fund upon such purchase; (h) the name of the broker or futures commission
merchant through whom such Option was purchased; and (i) the name of the broker,
or futures commission merchant, to whom payment is to be made. The Custodian
shall pay out of the moneys specifically allocated to such Series the total
amount to be paid upon such purchase to the broker or futures commissions
merchant through whom the purchase was made, provided that the same conforms to
the amount set forth in such Certificate.
2. Promptly after the execution of a sale of any Futures Contract Option
purchased by the Fund pursuant to paragraph 1 hereof, the Fund shall deliver to
the Custodian a Certificate specifying with respect to each such sale: (a)
Series to which such Futures Contract Option was specifically allocated; (b) the
type of Future Contract Option (put or call); (c) the type of Futures Contract
and such other information as may be necessary to identify the Futures Contract
underlying the Futures Contract Option; (d) the date of sale; (e) the sale
price; (f) the date of settlement; (g) the total amount payable to the Fund upon
such sale; and (h) the name of the broker of futures commission merchant through
whom the sale was made. The Custodian shall consent to the cancellation of the
Futures Contract Option being closed against payment to the Custodian of the
16
<PAGE>
total amount payable to the Fund, provided the same conforms to the total amount
payable as set forth in such Certificate.
3. Whenever a Futures Contract Option purchased by the Fund pursuant to
paragraph 1 is exercised by the Fund, the Fund shall promptly deliver to the
Custodian a Certificate specifying: (a) the Series to which such Futures
Contract Option was specifically allocated; (b) the particular Futures Contract
Option (put or call) being exercised; (c) the type of Futures Contract
underlying the Futures Contract Option; (d) the date of exercise; (e) the name
of the broker or futures commission merchant through whom the Futures Contract
Option is exercised; (f) the net total amount, if any, payable by the Fund; (g)
the amount, if any, to be received by the Fund; and (h) the amount of cash
and/or the amount and kind of Securities to be deposited in the Senior Security
Account for such Series. The Custodian shall make, out of the moneys and
Securities specifically allocated to such Series, the payments of money, if any,
and the deposits of Securities, if any, into the Senior Security Account as
specified in the Certificate. The deposits, if any, to be made to the Margin
Account shall be made by the Custodian in accordance with the terms and
conditions of the Margin Account Agreement.
4. Whenever the Fund writes a Futures Contract Option, the Fund shall
promptly deliver to the Custodian a Certificate specifying with respect to such
Futures Contract Option: (a) the Series for which such Futures Contract Option
was written; (b) the type of Futures Contract Option (put or call); (c) the type
of Futures Contract and such other information as may be necessary to identify
the Futures Contract underlying the Futures Contract Option; (d) the expiration
date; (e) the exercise price; (f) the premium to be received by the Fund; (g)
the name of the broker or futures commission merchant through whom the premium
is to be received; and (h) the amount of cash and/or the amount and kind of
Securities, if any, to be deposited in the Senior Security Account for such
Series. The Custodian shall, upon receipt of the premium specified in the
Certificate, make out of the moneys and Securities specifically allocated to
such Series the deposits into the Senior Security Account, if any, as specified
in the Certificate. The deposits, if any, to be made to the Margin Account shall
be made by the Custodian in accordance with the terms and conditions of the
Margin Account Agreement.
5. Whenever a Futures Contract Option written by the Fund which is a call
is exercised, the Fund shall promptly deliver to the Custodian a Certificate
specifying: (a) the Series to which such Futures Contract Option was
specifically allocated; (b) the particular Futures Contract Option exercised;
(c) the type of Futures Contract underlying the Futures Contract Option; (d) the
name of the broker or futures commission merchant through whom such Futures
Contract Option was exercised; (e) the net total amount, if any, payable to the
Fund upon such exercise; (f) the net total amount, if any, payable by the Fund
upon such exercise; and (g) the amount of cash and/or the amount and kind of
Securities to be deposited in the Senior Security Account for such Series. The
Custodian shall, upon its receipt of the net total amount payable to the Fund,
if any, specified in such Certificate make the payments, if any, and the
deposits, if any, into the Senior Security Account as specified in the
Certificate. The deposits, if any, to be made to the Margin Account shall be
made by the Custodian in accordance with the terms and conditions of the Margin
Account Agreement.
6. Whenever a Futures Contract Option which is written by the Fund and
which is a put
17
<PAGE>
is exercised, the Fund shall promptly deliver to the Custodian a Certificate
specifying: (a) the Series to which such Option was specifically allocated; (b)
the particular Futures Contract Option exercised; (c) the type of Futures
Contract underlying such Futures Contract Option; (d) the name of the broker or
futures commission merchant through whom such Futures Contract Option is
exercised; (e) the net total amount, if any, payable to the Fund upon such
exercise; (f) the net total amount, if any, payable by the Fund upon such
exercise; and (g) the amount and kind of Securities and/or cash to be withdrawn
from or deposited in, the Senior Security Account for such Series, if any. The
Custodian shall, upon its receipt of the net total amount payable to the Fund,
if any, specified in the Certificate, make out of the moneys and Securities
specifically allocated to such Series, the payments, if any, and the deposits,
if any, into the Senior Security Account as specified in the Certificate. The
deposits to and/or withdrawals from the Margin Account, if any, shall be made by
the Custodian in accordance with the terms and conditions of the Margin Account
Agreement.
7. Promptly after the execution by the Fund of a purchase of any Futures
Contract Option identical to a previously written Futures Contract Option
described in this Article in order to liquidate its position as a writer of such
Futures Contract
Option, the Fund shall deliver to the
Custodian a Certificate specifying with respect to the Futures Contract Option
being purchased: (a) the Series to which such Option is specifically allocated;
(b) that the transaction is a closing transaction; (c) the type of Future
Contract and such other information as may be necessary to identify the Futures
Contract underlying the Futures Option Contract; (d) the exercise price; (e) the
premium to be paid by the Fund; (f) the expiration date; (g) the name of the
broker or futures commission merchant to whom the premium is to be paid; and (h)
the amount of cash and/or the amount and kind of Securities, if any, to be
withdrawn from the Senior Security Account for such Series. The Custodian shall
effect the withdrawals from the Senior Security Account specified in the
Certificate. The withdrawals, if any, to be made from the Margin Account shall
be made by the Custodian in accordance with the terms and conditions of the
Margin Account Agreement.
8. Upon the expiration, exercise, or consummation of a closing transaction
with respect to, any Futures Contract Option written or purchased by the Fund
and described in this Article, the Custodian shall (a) delete such Futures
Contract Option from the statements delivered to the Fund pursuant to paragraph
3 of Article III herein and (b) make such withdrawals from and/or in the case of
an exercise such deposits into the Senior Security Account as may be specified
in a Certificate. The deposits to and/or withdrawals from the Margin Account, if
any, shall be made by the Custodian in accordance with the terms and conditions
of the Margin Account Agreement.
9. Futures Contracts acquired by the Fund through the exercise of a
Futures Contract Option described in this Article shall be subject to Article VI
hereof.
ARTICLE VII
SHORT SALES
18
<PAGE>
1. Promptly after the execution of any short sales of Securities by any
Series of the Fund, the Fund shall deliver to the Custodian a Certificate
specifying: (a) the Series for which such short sale was made; (b) the name of
the issuer-and the title of the Security; (c) the number of shares or principal
amount sold, and accrued interest or dividends, if any; (d) the dates of the
sale and settlement; (e) the sale price per unit; (f) the total amount credited
to the Fund upon such sale, if any, (g) the amount of cash and/or the amount and
kind of Securities, if any, which are to be deposited in a Margin Account and
the name in which such Margin Account has been or is to be established; (h) the
amount of cash and/or the amount and kind of Securities, if any, to be deposited
in a Senior Security Account, and (i) the name of the broker through whom such
short sale was made. The Custodian shall upon its receipt of a statement from
such broker confirming such sale and that the total amount credited to the Fund
upon such sale, if any, as specified in the Certificate is held by such broker
for the account of the Custodian (or any nominee of the Custodian) as custodian
of the Fund, issue a receipt or make the deposits into the Margin Account and
the Senior Security Account specified in the Certificate.
2. Promptly after the execution of a purchase to close-out any short sale
of Securities, the Fund shall promptly deliver to the Custodian a Certificate
specifying with respect to each such closing out: (a) the Series for which such
transaction is being made; (b) the name of the issuer and the title of the
Security; (c) the number of shares or the principal amount, and accrued interest
or dividends, if any, required to effect such closing-out to be delivered to the
broker; (d) the dates of closing-out and settlement; (e) the purchase price per
unit; (f) the net total amount payable to the Fund upon such closing-out; (g)
the net total amount payable to the broker upon such closing-out; (h) the amount
of cash and the amount and kind of Securities to be withdrawn, if any, from the
Margin Account; (i) the amount of cash and/or the amount and kind of Securities,
if any, to be withdrawn from the Senior Security Account; and (j) the name of
the broker through whom the Fund is effecting such closing-out. The Custodian
shall, upon receipt of the net total amount payable to the Fund upon such
closing-out, and the return and/or cancellation of the receipts, if any, issued
by the Custodian with respect to the short sale being closed-out, pay out of the
moneys held for the account of the Fund to the broker the net total amount
payable to the broker, and make the withdrawals from the Margin Account and the
Senior Security Account, as the same are specified in the Certificate.
ARTICLE VIII
REPURCHASE AND REVERSE REPURCHASE AGREEMENTS
1. Promptly after the Fund enters a Repurchase Agreement or a Reverse
Repurchase Agreement with respect to Securities and money held by the Custodian
hereunder, the Fund shall deliver to the Custodian a Certificate, or in the
event such Repurchase Agreement or Reverse Repurchase Agreement is a Money
Market Security, a Certificate, Oral Instructions, or Written Instructions
specifying: (a) the Series for which the Repurchase Agreement or Reverse
Repurchase Agreement is entered; (b) the total amount payable to or by the Fund
in connection with such Repurchase Agreement or Reverse Repurchase Agreement and
specifically allocated to such Series;
19
<PAGE>
(c) the broker, dealer, or financial institution with whom the Repurchase
Agreement or Reverse Repurchase Agreement is entered; (d) the amount and kind of
Securities to be delivered or received by the Fund to or from such broker,
dealer, or financial
institution; (e) the date of such Repurchase
Agreement or Reverse Repurchase Agreement; and (f) the amount of cash and/or the
amount and kind of Securities, if any, specifically allocated to such Series to
be deposited in a Senior Security Account for such Series in connection with
such Reverse Repurchase Agreement. The Custodian shall, upon receipt of the
total amount payable to or by the Fund specified in the Certificate, Oral
Instructions, or Written Instructions make or accept the delivery to or from the
broker, dealer, or financial institution and the deposits, if any, to the Senior
Security Account, specified in such Certificate, Oral Instructions, or Written
Instructions.
2. Upon the termination of a Repurchase Agreement or a Reverse Repurchase
Agreement described in preceding paragraph 1 of this Article, the Fund shall
promptly deliver a Certificate or, in the event such Repurchase Agreement or
Reverse Repurchase Agreement is a Money Market Security, a Certificate, Oral
Instructions, or Written Instructions to the Custodian specifying: (a) the
Repurchase Agreement or Reverse Repurchase Agreement being terminated and the
Series for which same was entered; (b) the total amount payable to or by the
Fund in connection with such termination; (c) the amount and kind of Securities
to be received or delivered by the Fund and specifically allocated to such
Series in connection with such termination; (d) the date of termination; (e) the
name of the broker, dealer, or financial institution with whom the Repurchase
Agreement or Reverse Repurchase Agreement is to be terminated; and (f) the
amount of cash and/or the amount and kind of Securities, if any, to be withdrawn
from the Senior Securities Account for such Series. The Custodian shall, upon
receipt or delivery of the amount and kind of Securities or cash to be received
or delivered by the Fund specified in the Certificate, Oral Instructions, or
Written Instructions, make or receive the payment to or from the broker, dealer,
or financial institution and make the withdrawals, if any, from the Senior
Security Account, specified in such Certificate, Oral Instructions, or Written
Instructions.
3. The Certificates, Oral Instructions, or Written Instructions described
in paragraphs 1 and 2 of this Article may with respect to any particular
Repurchase Agreement or Reverse Repurchase Agreement be combined and delivered
to the Custodian at the time of entering into such Repurchase Agreement or
Reverse Repurchase Agreement.
ARTICLE IX
LOANS OF PORTFOLIO SECURITIES OF THE FUND
1. Promptly after each loan of portfolio Securities specifically allocated
to a Series held by the Custodian hereunder, the Fund shall deliver or cause to
be delivered to the Custodian a Certificate specifying with respect to each such
loan: (a) the Series to which the loaned Securities are specifically allocated;
(b) the name of the issuer and the title of the Securities, (c) the number of
shares or the principal amount loaned, (d) the date of loan and delivery, (e)
the total amount to be delivered to the Custodian against the loan of the
Securities, including the amount of cash
20
<PAGE>
collateral and the premium, if any, separately identified, and (f) the name of
the broker, dealer, or financial institution to which the loan was made. The
Custodian shall deliver the Securities thus designated to the broker, dealer or
financial institution to which the loan was made upon receipt of the total
amount designated in the Certificate as to be delivered against the loan of
Securities. The Custodian may accept payment in connection with a delivery
otherwise than through the Book-Entry System or a Depository only in the form of
a certified or bank cashier's check payable to the order of the Fund or the
Custodian drawn on New York Clearing House funds.
2. In connection with each termination of a loan of Securities by the
Fund, the Fund shall deliver or cause to be delivered to the Custodian a
Certificate specifying with respect to each such loan termination and return of
Securities: (a) the Series to which the loaned Securities are specifically
allocated; (b) the name of the issuer and the title of the Securities to be
returned, (c) the number of shares or the principal amount to be returned, (d)
the date of termination, (e) the total amount to be delivered by the Custodian
(including the cash collateral for such Securities minus any offsetting credits
as described in said Certificate), and (f) the name of the broker, dealer, or
financial institution from which the Securities will be returned. The Custodian
shall receive all Securities returned from the broker, dealer, or financial
institution to which such Securities were loaned and upon receipt thereof shall
pay, out of the moneys held for the account of the Fund, the total amount
payable upon such return of Securities as set forth in the Certificate.
ARTICLE X
CONCERNING MARGIN ACCOUNTS, SENIOR SECURITY
ACCOUNTS, AND COLLATERAL ACCOUNTS
1. The Custodian shall establish a Senior Security Account and from time
to time make such deposits thereto, or withdrawals therefrom, as specified in a
Certificate. Such Certificate shall specify the Series for which such deposit or
withdrawal is to be
made and the amount of cash and/or
the amount and kind of Securities specifically allocated to such
Series to be deposited in, or
withdrawn from, such Senior Security Account for such Series. In
the event that the Fund fails to
specify in a Certificate the Series, the name of the issuer, the title and the
number of shares or the principal amount of any particular Securities to be
deposited by the Custodian into, or withdrawn from, a Senior Securities Account,
the Custodian shall be under no obligation to make any such deposit or
withdrawal and shall promptly notify the Fund that no such deposit has been
made.
2. The Custodian shall make deliveries or payments from a Margin Account
to the broker, dealer, futures commission merchant or Clearing Member in whose
name, or for whose benefit, the account was established as specified in the
Margin
Account Agreement.
3. Amounts received by the Custodian as payments or distributions with
respect to Securities deposited in any Margin Account shall be dealt with in
accordance with the terms and conditions of the Margin Account Agreement.
21
<PAGE>
4. The Custodian shall to the extent permitted by the Fund's Articles of
Incorporation, investment restrictions and the Investment Company Act of 1940
have a continuing lien and security interest in and to any property at any time
held by the Custodian in any Collateral Account described herein. In accordance
with applicable law the Custodian may enforce its lien and realize on any such
property whenever the Custodian has made payment or delivery pursuant to any Put
Option guarantee letter or similar document or any receipt issued hereunder by
the Custodian; provided, however, that the Custodian shall not be required to
issue any Put Option guarantee letter unless it shall have received an opinion
of counsel to the Fund or its investment adviser that the issuance of such
letters is authorized by the Fund and that the Custodian's continuing lien and
security interest is valid, enforceable and not limited by the Articles of
Incorporation, any investment restrictions or the Investment Company Act of
1940. In the event the Custodian should realize on any such property net
proceeds which are less than the Custodian's obligations under any Put Option
guarantee letter or similar document or any receipt, such deficiency shall be a
debt owed the Custodian by the Fund within the scope of Article XIV herein.
5. On each business day the Custodian shall furnish the Fund with a
statement with respect to each Margin Account in which money or Securities are
held specifying as of the close of business on the previous business day: (a)
the name of the Margin Account; (b) the amount and kind of Securities held
therein; and (c) the amount of money held therein. The Custodian shall make
available upon request to any broker, dealer, or futures commission merchant
specified in the name of a Margin Account a copy of the statement furnished the
Fund with respect to such Margin Account.
6. The Custodian shall establish a Collateral Account and from time to
time shall make such deposits thereto as may be specified in a Certificate.
Promptly after the close of business on
each business day in which cash and/or Securities are maintained in a Collateral
Account for any Series, the Custodian shall furnish the Fund with a statement
with respect to such Collateral Account specifying the amount of cash and/or the
amount and kind of Securities held therein. No later than the close of business
next succeeding the delivery to the Fund of such statement, the Fund shall
furnish to the Custodian a Certificate or Written Instructions specifying the
then market value of the Securities described in such statement. In the event
such then market value is indicated to be less than the Custodian's obligation
with respect to any outstanding Put Option guarantee letter or similar document,
the Fund shall promptly specify in a Certificate the additional cash and/or
Securities to be deposited in such Collateral Account to eliminate such
deficiency.
ARTICLE XI
PAYMENT OF DIVIDENDS OR DISTRIBUTIONS
1. The Fund shall furnish to the Custodian a copy of the resolution of the
Board of Directors of the Fund, certified by the Secretary or any Assistant
Secretary, either (i) setting forth with respect to the Series specified therein
the date of the declaration of a dividend or distribution, the date of payment
thereof, the record date as of which shareholders entitled to payment shall be
22
<PAGE>
determined, the amount payable per Share of such Series to the shareholders of
record as of that date and the total amount payable to the Transfer Agent
Account and any sub-dividend agent or co- dividend agent of the Fund on the
payment date, or (ii) authorizing with respect to the Series specified therein
and the declaration of dividends and distributions thereon the Custodian to rely
on Oral Instructions, Written Instructions, or a Certificate setting forth the
date of the declaration of such dividend or distribution, the date of payment
thereof, the record date as of which shareholders entitled to payment shall be
determined, the amount payable per Share of such Series to the shareholders of
record as of that date and the total amount payable to the Transfer Agent
Account on the payment date.
2. Upon the payment date specified in such resolution, Oral Instructions,
Written Instructions, or Certificate, as the case may be, the Custodian shall
pay to the Transfer Agent Account out of the moneys held for the account of the
Series specified therein the total amount payable to the Transfer Agent Account
and with respect to such Series.
ARTICLE XII
SALE AND REDEMPTION OF SHARES
1. Whenever the Fund shall sell any Shares, it shall deliver or cause to
be delivered, to the Custodian a Certificate duly specifying:
(a) The Series, the number of Shares sold, trade
date, and price; and
(b) The amount of money to be received by the Custodian for the
sale of such Shares and specifically allocated to the separate account in the
name of such Series.
2. Upon receipt of such money from the Fund's General Distributor, the
Custodian shall credit such money to the separate account in the name of the
Series for which such money was
received.
3. Upon issuance of any Shares of any Series the Custodian shall pay, out
of the money held for the account of such Series, all original issue or other
taxes required to be paid by the Fund in connection with such issuance upon the
receipt of a Certificate specifying the amount to be paid.
4. Except as provided hereinafter, whenever the Fund desires the Custodian
to make payment out of the money held by the Custodian hereunder in connection
with a redemption of any Shares, it shall furnish, or cause to be furnished, to
the Custodian a Certificate specifying:
(a) The number and Series of Shares redeemed; and
(b) The amount to be paid for such Shares.
5. Upon receipt of an advice from an Authorized Person setting forth the
Series and
23
<PAGE>
number of Shares received by the Transfer Agent for redemption and that such
Shares are in good form for redemption, the Custodian shall make payment to the
Transfer Agent Account out of the moneys held in the separate account in the
name of the Series the total amount specified in the Certificate issued pursuant
to the foregoing paragraph 4 of this Article.
ARTICLE XIII
OVERDRAFTS OR INDEBTEDNESS
1. If the Custodian should in its sole discretion advance funds on behalf
of any Series which results in an overdraft because the moneys held by the
Custodian in the separate account for such Series shall be insufficient to pay
the total amount payable upon a purchase of Securities specifically allocated to
such Series, as set forth in a Certificate, Oral Instructions, or Written
Instructions or which results in an overdraft in the separate account of such
Series for some other reason, or if the Fund is for any other reason indebted to
the Custodian with respect to a Series, (except a borrowing for investment or
for temporary or emergency purposes using Securities as collateral pursuant to a
separate agreement and subject to the provisions of paragraph 2 of this
Article), such overdraft or indebtedness shall be deemed to be a loan made by
the Custodian to the Fund for such Series payable on demand and shall bear
interest from the date incurred at a rate per annum (based on a 360-day year for
the actual number of days involved) equal to the Federal Funds Rate plus 1/2%,
such rate to be adjusted on the effective date of any change in such Federal
Funds Rate but in no event to be less than 6% per annum. In addition, unless the
Fund has given a Certificate that the Custodian shall not impose a lien and
security interest to secure such overdrafts (in which event it shall not do so),
the Custodian shall have a continuing lien and security interest in the
aggregate amount of such overdrafts and indebtedness as may from time to time
exist in and to any property specifically allocated to such Series at any time
held by it for the benefit of such Series or in which the Fund may have an
interest which is then in the Custodian's possession or control or in possession
or control of any third party acting in the Custodian's behalf. The Fund
authorizes the Custodian, in its sole discretion, at any time to charge any such
overdraft or indebtedness together with interest due thereon against any money
balance in an account standing in the name of such Series' credit on the
Custodian's books. In addition, the Fund hereby covenants that on each Business
Day on which either it intends to enter a Reverse Repurchase Agreement and/or
otherwise borrow from a third party, or which next succeeds a Business Day on
which at the close of business the Fund had outstanding a Reverse Repurchase
Agreement or such a borrowing, it shall prior to 9 a.m., New York City time,
advise the Custodian, in writing, of each such borrowing, shall specify the
Series to which the same relates, and shall not incur any indebtedness,
including pursuant to any Reverse Repurchase Agreement, not so specified other
than from the Custodian.
2. The Fund will cause to be delivered to the Custodian by any bank
(including, if the borrowing is pursuant to a separate agreement, the Custodian)
from which it borrows money for investment or for temporary or emergency
purposes using Securities held by the Custodian hereunder as collateral for such
borrowings, a notice or undertaking in the form currently employed
24
<PAGE>
by any such bank setting forth the amount which such bank will loan to the Fund
against delivery of a stated amount of collateral. The Fund shall promptly
deliver to the Custodian a Certificate specifying with respect to each such
borrowing: (a) the Series to which such borrowing relates; (b) the name of the
bank, (c) the amount and terms of the borrowing, which may be set forth by
incorporating by reference an attached promissory note, duly endorsed by the
Fund, or other loan agreement, (d) the time and date, if known, on which the
loan is to be entered into, (e) the date on which the loan becomes due and
payable, (f) the total amount payable to the Fund on the borrowing date, (g) the
market value of Securities to be delivered as collateral for such loan,
including the name of the issuer, the title and the number of shares or the
principal amount of any particular Securities, and (h) a statement specifying
whether such loan is for investment purposes or for temporary or emergency
purposes and that such loan is in conformance with the Investment Company Act of
1940 and the Fund's prospectus and Statement of Additional Information. The
Custodian shall deliver on the borrowing date specified in a Certificate the
specified collateral and the executed promissory note, if any, against delivery
by the lending bank of the total amount of the loan payable, provided that the
same conforms to the total amount payable as set forth in the Certificate. The
Custodian may, at the option of the lending bank, keep such collateral in its
possession, but such collateral shall be subject to all rights therein given the
lending bank by virtue of any promissory note or loan agreement. The Custodian
shall deliver such Securities as additional collateral as may be specified in a
Certificate to collateralize further any transaction described in this
paragraph. The Fund shall cause all Securities released from collateral status
to be returned directly to the Custodian, and the Custodian shall receive from
time to time such return of collateral as may be tendered to it. In the event
that the Fund fails to specify in a Certificate the Series, the name of the
issuer, the title and number of shares or the principal amount of any particular
Securities to be delivered as collateral by the Custodian, to any such bank, the
Custodian shall not be under any obligation to deliver any Securities.
ARTICLE XIV
CUSTODY OF ASSETS OUTSIDE THE U.S.
1. The Custodian is authorized and instructed to employ, as its agent, as
subcustodians for the securities and other assets of the Fund maintained outside
of the United States the Foreign Subcustodians and Foreign Depositories
designated on Schedule A hereto. Except as provided in Schedule A, the Custodian
shall employ no other Foreign Custodian or Foreign Depository. The Custodian and
the Fund may amend Schedule A hereto from time to time to agree to designate any
additional Foreign Subcustodian or Foreign Depository with which the Custodian
has an agreement for such entity to act as the Custodian's agent, as
subcustodian, and which the Custodian in its absolute discretion proposes to
utilize to hold any of the Fund's Foreign Property. Upon receipt of a
Certificate or Written Instructions from the Fund, the Custodian shall cease the
employment of any one or more of such subcustodians for maintaining custody of
the Fund's assets and such custodian shall be deemed deleted from Schedule A.
2. The Custodian shall limit the securities and other assets maintained in
the custody
25
<PAGE>
of the Foreign Subcustodians to: (a) "foreign securities," as defined in
paragraph (c)(1) of Rule 17f- 5 under the Investment Company Act of 1940, and
(b) cash and cash equivalents in such amounts as the Fund may determine to be
reasonably necessary to effect the foreign securities transactions of the Fund.
3. The Custodian shall identify on its books as belonging to the Fund, the
Foreign
Securities held by each Foreign Subcustodian.
4. Each agreement pursuant to which the Custodian employs a Foreign
Subcustodian shall be substantially in the form reviewed and approved by the
Fund and will not be amended in
a way that materially affects the Fund without the Fund's prior written consent
and shall:
(a) require that such institution establish custody account(s) for
the Custodian on behalf of the Fund and physically segregate in each such
account securities and other assets of the fund, and, in the event that such
institution deposits the securities of the Fund in a Foreign Depository, that it
shall identify on its books as belonging to the Fund or the Custodian, as agent
for the Fund, the securities so deposited;
(b) provide that:
(1) the assets of the Fund will not be subject to any right,
charge, security interest, lien or claim of any kind in favor of the Foreign
Subcustodian or its creditors, except a claim of payment for their safe custody
or administration;
(2) beneficial ownership for the assets of the Fund will be
freely transferable without the payment of money or value other than for custody
or administration;
(3) adequate records will be maintained identifying the assets
as belonging to the Fund;
(4) the independent public accountants for the Fund will be
given access to the books and records of the Foreign Subcustodian relating to
its actions under its agreement with the Custodian or confirmation of the
contents of those records;
(5) the Fund will receive periodic reports with respect to the
safekeeping of the Fund's assets, including, but not necessarily limited to,
notification of any transfer to or from the custody account(s); and
(6) assets of the Fund held by the Foreign Subcustodian will be
subject only to the instructions of the Custodian or its agents.
(c) Require the institution to exercise reasonable care in the
performance of its duties and to indemnify, and hold harmless, the Custodian
from and against any loss, damage, cost, expense, liability or claim arising out
of or in connection with the institution's performance of such obligations, with
the exception of any such losses, damages, costs, expenses, liabilities or
claims arising as a result of an act of God. At the election of the Fund, it
shall be entitled to be subrogated
26
<PAGE>
to the rights of the Custodian with respect to any claims against a Foreign
Subcustodian as a consequence of any such loss, damage, cost, expense, liability
or
claim of or to the Fund, if and to
the extent that the Fund has not been made whole for any such loss, damage,
cost, expense, liability or claim.
5. Upon receipt of a Certificate or Written Instructions, which may be
continuing instructions when deemed appropriate by the parties, the Custodian
shall on behalf of the Fund make or cause its Foreign Subcustodian to transfer,
exchange or deliver securities owned by the Fund, except to the extent
explicitly prohibited therein. Upon receipt of a Certificate or Written
Instructions, which may be continuing instructions when deemed appropriate by
the parties, the Custodian shall on behalf of the fund pay out or cause its
Foreign Subcustodians to pay out monies of the Fund. The Custodian shall use all
means reasonably available to it, including, if specifically authorized by the
Fund in a Certificate, any necessary litigation at the cost and expense of the
Fund (except as to matters for which the Custodian is responsible hereunder) to
require or compel each Foreign Subcustodian or Foreign Depository to perform the
services required of it by the agreement between it and the Custodian authorized
pursuant to this Agreement.
6. The Custodian shall maintain all books and records as shall be
necessary to enable the Custodian readily to perform the services required of it
hereunder with respect to the Fund's Foreign Properties. The Custodians shall
supply to the Fund from time to time, as mutually agreed upon, statements in
respect of the Foreign Securities and other Foreign Properties of the Fund held
by Foreign Subcustodians, directly or through Foreign Depositories, including
but not limited to an identification of entities having possession of the Fund's
Foreign Securities and other assets, an advice or other notification of any
transfers of securities to or from each custodial account maintained for the
Fund or the Custodian on behalf of the Fund indicating, as to securities
acquired for the Fund, the identity of the entity having physical possession of
such securities. The Custodian shall promptly and faithfully transmit all
reports and information received pertaining to the Foreign Property of the Fund,
including, without limitation, notices or reports of corporate action, proxies
and proxy soliciting materials.
7. Upon request of the Fund, the Custodian shall use reasonable efforts to
arrange for the independent accountants of the Fund to be afforded access to the
books and records of any Foreign Subcustodian, or confirmation of the contents
thereof, insofar as such books and records relate to the Foreign Property of the
Fund or the performance of such Foreign Subcustodian under its agreement with
the Custodian; provided that any litigation to afford such access shall be at
the sole cost and expense of the Fund.
8. The Custodian recognizes that employment of a Foreign Subcustodian or
Foreign Depository for the Fund's Foreign Securities and Foreign Property is
permitted by Section 17(f) of the Investment Company Act of 1940 only upon
compliance with
Section (a) of Rule 17f-5
promulgated thereunder. With respect to the Foreign Subcustodians and Foreign
Depositories identified on Schedule A, the Custodian represents that it has
furnished the Fund with certain materials prepared by the Custodian and with
such other information in the possession of the Custodian as the Fund advised
the Custodian was reasonably necessary to assist the Board of
27
<PAGE>
Directors of the Fund in making the determinations required of the Board of
Directors by Rule 17f- 5, including, without limitation, consideration of the
matters set forth in the Notes to Rule 17f-5. If the Custodian recommends any
additional Foreign Subcustodian or Foreign Depository, the Custodian shall
supply information similar in kind and scope to that furnished pursuant to the
preceding sentence. Further, the Custodian shall furnish annually to the Fund,
at such time as the Fund and Custodian shall mutually agree, information
concerning each Foreign Subcustodian and Foreign Depository then identified on
Schedule A similar in kind and scope to that furnished pursuant to the preceding
two sentences.
9. The Custodian's employment of any Foreign Subcustodian or Foreign
Depository shall constitute a representation that the Custodian believes in good
faith that such Foreign Subcustodian or Foreign Depository provides a reasonable
level of safeguards for maintaining the Fund's assets in light of prevailing
settlement and securities handling practices, procedures and controls in the
relevant market. In addition, the Custodian shall monitor the financial
condition and general operational performance of the Foreign Subcustodians and
Foreign Depositories and shall promptly inform the Fund in the event that the
Custodian has actual knowledge of a material adverse change in the financial
condition thereof or that there appears to be a substantial likelihood that the
shareholders' equity of any Foreign Subcustodian will decline below $200 million
(U.S. dollars or the equivalent thereof) or that its shareholders' equity has
declined below $200 million , or that the Foreign Subcustodian or Foreign
Depository has breached the agreement between it and the Custodian in a way that
the Custodian believes adversely affects the Fund. Further, the Custodian shall
advise the Fund if it believes that there is a material adverse change in the
operating environment of any Foreign Subcustodian or Foreign Depository.
ARTICLE XV
CONCERNING THE CUSTODIAN
1. The Custodian shall use reasonable care in the performance of its
duties hereunder, and, except as hereinafter provided, neither the Custodian nor
its nominee shall be liable for any loss or damage, including counsel fees,
resulting from its action or omission to act or otherwise, either hereunder or
under any Margin Account Agreement, except for any such loss or damage arising
out of its own negligence, bad faith, or willful misconduct or that of the
subcustodians or co-custodians appointed by the Custodian or of the officers,
employees, or agents of any of them. The Custodian may, with respect to
questions of law arising hereunder or under any Margin Account Agreement, apply
for and obtain the advice and opinion of counsel to the Fund, at the expense of
the Fund, or of its own counsel, at its own expense, and shall be fully
protected with respect to anything done or omitted by it in good faith in
conformity with such advice or opinion. The Custodian shall be liable to the
Fund for any loss or damage resulting from the use of the Book-Entry System or
any Depository arising by reason of any negligence, bad faith or willful
misconduct on the part of the Custodian or any of its employees or agents.
2. Notwithstanding the foregoing, the Custodian shall be under no
obligation to inquire into, and shall not be liable for:
28
<PAGE>
(a) The validity (but not the authenticity) of the issue of any
Securities purchased, sold, or written by or for the Fund, the legality of the
purchase, sale or writing thereof, or the propriety of the amount paid or
received therefor, as specified in a Certificate, Oral Instructions, or Written
Instructions;
(b) The legality of the sale or redemption of any Shares, or the
propriety of the amount to be received or paid therefor, as specified in a
Certificate;
(c) The legality of the declaration or payment of any dividend by the
Fund, as specified in a resolution, Certificate, Oral Instructions, or Written
Instructions;
(d) The legality of any borrowing by the Fund using Securities as
collateral;
(e) The legality of any loan of portfolio Securities, nor shall the
Custodian be under any duty or obligation to see to it that the cash collateral
delivered to it by a broker, dealer, or financial institution or held by it at
any time as a result of such loan of portfolio Securities of the Fund is
adequate collateral for the Fund against any loss it might sustain as a result
of such loan, except that this subparagraph shall not excuse any liability the
Custodian may have for failing to act in accordance with Article X hereof or any
Certificate, Oral Instructions or Written Instructions given in accordance with
this Agreement. The Custodian specifically, but not by way of limitation, shall
not be under any duty or obligation periodically to check or notify the Fund
that the amount of such cash collateral held by it for the Fund is sufficient
collateral for the Fund, but such duty or obligation shall be the sole
responsibility of the Fund. In addition, the Custodian shall be under no duty or
obligation to see that any broker, dealer or financial institution to which
portfolio Securities of the Fund are lent pursuant to Article X of this
Agreement makes payment to it of any dividends or interest which are payable to
or for the account of the Fund during the period of such loan or at the
termination of such loan, provided, however, that the Custodian shall promptly
notify the Fund in the event that such dividends or interest are not paid and
received when due; or
(f) The sufficiency or value of any amounts of money and/or
Securities held in any Margin Account, Senior Security Account or Collateral
Account in connection with transactions by the Fund, except that this
subparagraph shall not excuse any liability the Custodian may have for failing
to establish, maintain, make deposits to or withdrawals from such accounts in
accordance with this Agreement. In addition, the Custodian shall be under no
duty or obligation to see that any broker, dealer, futures commission merchant
or Clearing Member makes payment to the Fund of any variation margin payment or
similar payment which the Fund may be entitled to receive from such broker,
dealer, futures commission merchant or Clearing Member, to see that any payment
received by the Custodian from any broker, dealer, futures commission merchant
or Clearing Member is the amount the Fund is entitled to receive, or to notify
the Fund of the Custodian's receipt or non-receipt of any such payment.
3. The Custodian shall not be liable for, or considered to be the
Custodian of, any money, whether or not represented by any check, draft, or
other instrument for the payment of money, received by it on behalf of the Fund
until the Custodian actually receives such money directly or by the final
crediting of the account representing the Fund's interest at the Book-Entry
29
<PAGE>
System or
the Depository.
4. With respect to Securities held in a Depository, except as otherwise
provided in paragraph 5(b) of Article III hereof, the Custodian shall have no
responsibility and shall not be liable for ascertaining or acting upon any
calls, conversions, exchange offers, tenders, interest rate changes or similar
matters relating to such Securities, unless the Custodian shall have actually
received timely notice from the Depository in which such Securities are held. In
no event shall the Custodian have any responsibility or liability for the
failure of a Depository to collect, or for the late collection or late crediting
by a Depository of any amount payable upon Securities deposited in a Depository
which may mature or be redeemed, retired, called or otherwise become payable.
However, upon receipt of a Certificate from the Fund of an overdue amount on
Securities held in a Depository the Custodian shall make a claim against the
Depository on behalf of the Fund, except that the Custodian shall not be under
any obligation to appear in, prosecute or defend any action suit or proceeding
in respect to any Securities held by a Depository which in its opinion may
involve it in expense or liability, unless indemnity satisfactory to it against
all expense and liability be furnished as often as may be required, or
alternatively, the Fund shall be subrogated to the rights of the Custodian with
respect to such claim against the Depository should it so request in a
Certificate. This paragraph shall not, however, excuse any failure by the
Custodian to act in accordance with a Certificate, Oral Instructions, or Written
Instructions given in accordance with this Agreement.
5. The Custodian shall not be under any duty or obligation to take action
to effect collection of any amount due the Fund from the Transfer Agent of the
Fund nor to take any action to effect payment or distribution by the Transfer
Agent of the Fund of any amount paid by the Custodian to the Transfer Agent of
the Fund in accordance with this Agreement.
6. The Custodian shall not be under any duty or obligation to take action
to effect collection of any amount if the Securities upon which such amount is
payable are in default, or if payment is refused after the Custodian has timely
and properly, in accordance with this Agreement, made due demand or
presentation, unless and until (i) it shall be directed to take such action by a
Certificate and (ii) it shall be assured to its satisfaction of reimbursement of
its costs and expenses in connection with any such action, but the Custodian
shall have such a duty if the Securities were not in default on the payable date
and the Custodian failed to timely and properly make such demand for payment and
such failure is the reason for the non-receipt of payment.
30
<PAGE>
7. The Custodian may, with the prior approval of the Board of Directors of
the Fund, appoint one or more banking institutions as subcustodian or
subcustodians, or as co-Custodian or co- Custodians, of Securities and moneys at
any time owned by the Fund, upon such terms and conditions as may be approved in
a Certificate or contained in an agreement executed by the Custodian, the Fund
and the appointed institution; provided, however, that appointment of any
foreign banking institution or depository shall be subject to the provisions of
Article XV hereof.
8. The Custodian agrees to indemnify the Fund against and save the Fund
harmless from all liability, claims, losses and demands whatsoever, including
attorney's fees, howsoever arising or incurred because of the negligence, bad
faith or willful misconduct of any subcustodian of the Securities and moneys
owned by the Fund.
9. The Custodian shall not be under any duty or obligation (a) to
ascertain whether any Securities at any time delivered to, or held by it, for
the account of the Fund and specifically allocated to a Series are such as
properly may be held by the Fund or such Series under the provisions of its then
current prospectus, or (b) to ascertain whether any transactions by the Fund,
whether or not involving the Custodian, are such transactions as may properly be
engaged in by the Fund.
10. The Custodian shall be entitled to receive and the Fund agrees to pay
to the Custodian all reasonable out-of-pocket expenses and such compensation as
may be agreed upon in writing from time to time between the Custodian and the
Fund. The Custodian may charge such compensation, and any such expenses with
respect to a Series incurred by the Custodian in the performance of its duties
under this Agreement against any money specifically allocated to such Series.
The Custodian shall also be entitled to charge against any money held by it for
the account of a Series the amount of any loss, damage, liability or expense,
including counsel fees, for which it shall be entitled to reimbursement under
the provisions of this Agreement attributable to, or arising out of, its serving
as Custodian for such Series. The expenses for which the Custodian shall be
entitled to reimbursement hereunder shall include, but are not limited to, the
expenses of subcustodians and foreign branches of the Custodian incurred in
settling outside of New York City transactions involving the purchase and sale
of Securities of the Fund. Notwithstanding the foregoing or anything else
contained in this Agreement to the contrary, the Custodian shall, prior to
effecting any charge for compensation, expenses, or any overdraft or
indebtedness or interest thereon, submit an invoice therefor to the Fund.
11. The Custodian shall be entitled to rely upon any Certificate, notice
or other instrument in writing, Oral Instructions, or Written Instructions
received by the Custodian and reasonably believed by the Custodian to be
genuine. The Fund agrees to forward to the Custodian a Certificate or facsimile
thereof confirming Oral Instructions or Written Instructions in such manner so
that such Certificate or facsimile thereof is received by the Custodian, whether
by hand delivery, telecopier or other similar device, or otherwise, by the close
of business of the same day that such Oral Instructions or Written Instructions
are given to the Custodian. The Fund agrees that the fact that such confirming
instructions are not received by the Custodian shall in no way affect the
validity of the transactions or enforceability of the transactions thereby
authorized by the Fund. The Fund agrees that the Custodian shall incur no
liability to the Fund in acting upon Oral Instructions or Written Instructions
given to the Custodian hereunder concerning such transactions provided such
instructions reasonably appear to have been received from an Authorized Person.
31
<PAGE>
12. The Custodian shall be entitled to rely upon any instrument,
instruction or notice received by the Custodian and reasonably believed by the
Custodian to be given in accordance with the terms and conditions of any Margin
Account Agreement. Without limiting the generality of the foregoing, the
Custodian shall be under no duty to inquire into, and shall not be liable for,
the accuracy of any statements or representations contained in any such
instrument or other notice including, without limitation, any specification of
any amount to be paid to a broker, dealer, futures commission merchant or
Clearing Member. This paragraph shall not excuse any failure by the Custodian to
have acted in accordance with any Margin Agreement it has executed or any
Certificate, Oral Instructions, or Written Instructions given in accordance with
this Agreement.
13. The books and records pertaining to the Fund, as described in Appendix
D hereto, which are in the possession of the Custodian shall be the property of
the Fund. Such books and records shall be prepared and maintained by the
Custodian as required by the Investment Company Act of 1940, as amended, and
other applicable Securities laws and rules and regulations. The Fund, or the
Fund's authorized representatives, shall have access to such books and records
during the Custodian's normal business hours. Upon the reasonable request of the
Fund, copies of any such books and records shall be provided by the Custodian to
the Fund or the Fund's authorized representative, and the Fund shall reimburse
the Custodian its expenses of providing such copies. Upon reasonable request of
the Fund, the Custodian shall provide in hard copy or on micro-film, whichever
the Custodian elects, any records included in any such delivery which are
maintained by the Custodian on a computer disc, or are similarly maintained, and
the Fund shall reimburse the Custodian for its expenses of providing such hard
copy or micro-film.
14. The Custodian shall provide the Fund with any report obtained by the
Custodian on the system of internal accounting control of the Book-Entry system,
each Depository or O.C.C., and with such reports on its own systems of internal
accounting control as the Fund may reasonably request from time to time.
15. The Custodian shall furnish upon request annually to the Fund a letter
prepared by the Custodian's accountants with respect to the Custodian's internal
systems and controls in the form generally provided by the Custodian to other
investment companies for which the Custodian acts as custodian.
16. The Fund agrees to indemnify the Custodian against and save the
Custodian harmless from all liability, claims, losses and demands whatsoever,
including attorney's fees, howsoever arising out of, or related to, the
Custodian's performance of its obligations under this Agreement, except for any
such liability, claim, loss and demand arising out of the negligence, bad faith,
or willful misconduct of the Custodian, any co-Custodian or subcustodian
appointed by the Custodian, or that of the officers, employees, or agents of any
of them.
17. Subject to the foregoing provisions of this Agreement, the Custodian
shall deliver and receive Securities, and receipts with respect to such
Securities, and shall make and receive payments only in accordance with the
customs prevailing from time to time among brokers or dealers in such Securities
and, except as may otherwise be provided by this Agreement or as may be in
accordance with such customs, shall make payment for Securities only against
delivery thereof and deliveries of Securities only against payment therefor.
32
<PAGE>
18. The Custodian will comply with the procedures, guidelines or
restrictions ("Procedures") adopted by the Fund from time to time for particular
types of investments or transactions, e.g., Repurchase Agreements and Reverse
Repurchase Agreements, provided that the Custodian has received from the Fund a
copy of such Procedures.
If within ten days after receipt of
any such Procedures, the Custodian determines in good faith that it is
unreasonable for it to comply with any new procedures, guidelines or
restrictions set forth therein, it may within such ten day period send notice to
the Fund that it does not intend to comply with those new procedures, guidelines
or restrictions which it identifies with particularity in such notice, in which
event the Custodian shall not be required to comply with such identified
procedures, guidelines or restrictions; provided, however, that, anything to the
contrary set forth herein or in any other agreement with the Fund, if the
Custodian identifies procedures, guidelines or restrictions with which it does
not intend to comply, the Fund shall be entitled to terminate this Agreement
without cost or penalty to the Fund upon thirty days' written notice.
19. Whenever the Custodian has the authority to deduct monies from the
account for a series without a Certificate, it shall notify the Fund within one
business day of such deduction and the reason for it. Whenever the Custodian has
the authority to sell Securities or any other property of the Fund on behalf of
any Series without a Certificate, the Custodian will notify the Fund of its
intention to do so and afford the Fund the reasonable opportunity to select
which Securities or other property it wishes to sell on behalf of such Series.
If the Fund does not promptly sell sufficient Securities or Deposited Property
on behalf of the Series, then, after notice, the Custodian may proceed with the
intended sale.
20. The Custodian shall have no duties or responsibilities whatsoever
except such duties and responsibilities as are specifically set forth or
referred to in this Agreement, and no covenant or obligation shall be implied in
this Agreement against the Custodian.
ARTICLE XVI
TERMINATION
1. Except as provided in paragraph 3 of this Article, this Agreement shall
continue until terminated by either the Custodian giving to the Fund, or the
Fund giving to the Custodian, a notice in writing specifying the date of such
termination, which date shall be not less than 60 days after the date of the
giving of such notice. In the event such notice or a notice pursuant to
paragraph 3 of this Article is given by the Fund, it shall be accompanied by a
copy of a resolution of the Board of Directors of the Fund, certified by an
Officer and the Secretary or an Assistant Secretary of the Fund, electing to
terminate this Agreement and designating a successor custodian or custodians,
each of which shall be eligible to serve as a custodian for the Securities of a
management investment company under the Investment Company Act of 1940. In the
event such notice is given by the Custodian, the Fund shall, on or before the
termination date, deliver to the Custodian a copy of a resolution of the Board
of Directors of the Fund, certified by the Secretary or any Assistant Secretary,
designating a successor custodian or custodians. In the absence of such
designation by the Fund, the Custodian may designate a successor custodian which
shall be a bank or trust company eligible to serve as a custodian for Securities
of a management investment company under the Investment Company Act of 1940 and
which is acceptable to the Fund. Upon the date set forth in such notice this
Agreement
33
<PAGE>
shall terminate, and the Custodian shall upon receipt of a notice of acceptance
by the successor custodian on that date deliver directly to the successor
custodian all Securities and moneys then owned by the Fund and held by it as
Custodian, after deducting all fees, expenses and other amounts for the payment
or reimbursement of which it shall then be entitled.
2. If a successor custodian is not designated by the Fund or the Custodian
in accordance with the preceding paragraph, the Fund shall upon the date
specified in the notice of termination of this Agreement and upon the delivery
by the Custodian of all Securities (other than Securities held in the Book-Entry
System which cannot be delivered to the Fund) and moneys then owned by the Fund
be deemed to be its own custodian and the Custodian shall thereby be relieved of
all duties and responsibilities pursuant to this Agreement arising thereafter,
other than the duty with respect to Securities held in the Book Entry System
which cannot be delivered to the Fund to hold such Securities hereunder in
accordance with this Agreement.
3. Notwithstanding the foregoing, the Fund may terminate this Agreement
upon the date specified in a written notice in the event of the "Bankruptcy" of
The Bank of New York. As used in this sub-paragraph, the term "Bankruptcy" shall
mean The Bank of New York's making a general assignment, arrangement or
composition with or for the benefit of its creditors, or instituting or having
instituted against it a proceeding seeking a judgment of insolvency or
bankruptcy or the entry of a order for relief under any applicable bankruptcy
law or any other relief under any bankruptcy or insolvency law or other similar
law affecting creditors rights, or if a petition is presented for the winding up
or liquidation of the party or a resolution is passed for its winding up or
liquidation, or it seeks, or becomes subject to, the appointment of an
administrator, receiver, trustee, custodian or other similar official for it or
for all or substantially all of its assets or its taking any action in
furtherance of, or indicating its consent to approval of, or acquiescence in,
any of the foregoing.
ARTICLE XVII
TERMINAL LINK
1. At no time and under no circumstances shall the Fund be obligated to
have or utilize the Terminal Link, and the provisions of this Article shall
apply if, but only if, the Fund in its sole and absolute discretion elects to
utilize the Terminal Link to transmit Certificates to the Custodian.
2. The Terminal Link shall be utilized only for the purpose of the Fund
providing Certificates to the Custodian and the Custodian providing notices to
the Fund
and only after the Fund shall have
established access codes and internal safekeeping procedures to safeguard and
protect the confidentiality and availability of such access codes. Each use of
the Terminal Link by the Fund shall constitute a representation and warranty
that at least two officers have each utilized an access code that such internal
safekeeping procedures have been established by the Fund, and that such use does
not contravene the Investment Company Act of 1940 and the rules and regulations
thereunder.
3. Each party shall obtain and maintain at its own cost and expense all
equipment and services, including, but not limited to communications services,
necessary for it to utilize the Terminal
34
<PAGE>
Link, and the other party shall not be responsible for the reliability or
availability of any such equipment or services, except that the Custodian shall
not pay any communications costs of any line leased by the Fund, even if such
line is also used by the Custodian.
4. The Fund acknowledges that any data bases made available as part of, or
through the Terminal Link and any proprietary data, software, processes,
information and documentation (other than any such which are or become part of
the public domain or are legally required to be made available to the public)
(collectively, the "Information"), are the exclusive and confidential property
of the Custodian. The Fund shall, and shall cause others to which it discloses
the Information, to keep the Information confidential by using the same care and
discretion it uses with respect to its own confidential property and trade
secrets, and shall neither make nor permit any disclosure without the express
prior written consent of the Custodian.
5. Upon termination of this Agreement for any reason, each Fund shall
return to the Custodian any and all copies of the Information which are in the
Fund's possession or under its control, or which the Fund distributed to third
parties. The provisions of this Article shall not affect the copyright status of
any of the Information which may be copyrighted and shall apply to all
Information whether or not copyrighted.
6. The Custodian reserves the right to modify the Terminal Link from time
to time without notice to the Fund, except that the Custodian shall give the
Fund notice not less than 75 days in advance of any modification which would
materially adversely affect the Fund's operation, and the Fund agrees not to
modify or attempt to modify the Terminal Link without the Custodian's prior
written consent. The Fund acknowledges that any software provided by the
Custodian as part of the Terminal Link is the property of the Custodian and,
accordingly, the Fund agrees that any modifications to the same, whether by the
Fund or the Custodian and whether with or without the Custodian's consent, shall
become the property of the Custodian.
7. Neither the Custodian nor any manufacturers and suppliers it utilizes
or the Fund utilizes in connection with the Terminal Link makes any warranties
or representations, express or implied, in fact or in law, including but not
limited to warranties of merchantability and fitness for a particular purpose.
8. Each party will cause its officers and employees to treat the
authorization codes and the access codes applicable to Terminal Link with
extreme care, and irrevocably authorizes the other to act in accordance with and
rely on Certificates and notices received by it through the Terminal Link. Each
party acknowledges that it is its responsibility to assure that only its
authorized persons use the Terminal Link on its behalf, and that a party shall
not be responsible nor liable for use of the Terminal Link on behalf of the
other party by unauthorized persons of such other party.
9. Notwithstanding anything else in this Agreement to the contrary,
neither party shall have any liability to the other for any losses, damages,
injuries, claims, costs or expenses arising as a result of a delay, omission or
error in the transmission of a Certificate or notice by use of the Terminal Link
except for money damages for those suffered as the result of the negligence, bad
faith or willful misconduct of such party or its officers, employees or agents
in an amount not exceeding for any incident $100,000; provided, however, that a
party shall have no liability under this Section 9 if the
35
<PAGE>
other party fails to comply with the provisions of Section 11.
10. Without limiting the generality of the foregoing, in no event shall
either party or any manufacturer or supplier of its computer equipment, software
or services relating to the Terminal Link be responsible for any special,
indirect, incidental or consequential damages which the other party may incur or
experience by reason of its use of the Terminal Link even if such party,
manufacturer or supplier has been advised of the possibility of such damages,
nor with respect to the use of the Terminal Link shall either party or any such
manufacturer or supplier be liable for acts of God, or with respect to the
following to the extent beyond such person's reasonable control: machine or
computer breakdown or malfunction, interruption or malfunction of communication
facilities, labor difficulties or any other similar or dissimilar cause.
11. The Fund shall notify the Custodian of any errors, omissions or
interruptions in, or delay or unavailability of, the Terminal Link as promptly
as practicable, and in any event within 24 hours after the earliest of (i)
discovery thereof, and (ii) in the case of any error, the date of actual receipt
of the earliest notice which reflects such error, it being agreed that discovery
and receipt of notice may only occur on a business day. The Custodian shall
promptly advise the Fund whenever the Custodian learns of any errors, omissions
or interruption in, or delay or unavailability of, the Terminal Link.
12. Each party shall, as soon as practicable after its receipt of a
Certificate or a notice transmitted by the Terminal Link, verify to the other
party by use of the Terminal Link its receipt of such Certificate or notice, and
in the absence of such verification the party to which the Certificate or notice
is sent shall not be liable for any failure to act in accordance with such
Certificate or notice and the sending party may not claim that such Certificate
or notice was received by the other party.
ARTICLE XVIII
MISCELLANEOUS
1. Annexed hereto as Appendix A is a Certificate signed by two of the
present Officers of the Fund under its seal, setting forth the names and the
signatures of the present Authorized Persons. The Fund agrees to furnish to the
Custodian a new Certificate in similar form in the event that any such present
Authorized Person ceases to be an Authorized Person or in the event that other
or additional Authorized Persons are elected or appointed. Until such new
Certificate shall be received, the Custodian shall be entitled to rely and to
act upon Oral Instructions, Written Instructions, or signatures of the present
Authorized Persons as set forth in the last delivered Certificate to the extent
provided by this Agreement.
2. Annexed hereto as Appendix A is a Certificate signed by two of the
present Officers of the Fund under its seal, setting forth the names and the
signatures of the present Officers of the Fund. The Fund agrees to furnish to
the Custodian a new Certificate in similar form in the event any such present
officer ceases to be an officer of the Fund, or in the event that other or
additional officers are elected or appointed. Until such new Certificate shall
be received, the Custodian shall be entitled to
36
<PAGE>
rely and to act upon the signatures of the officers as set forth
in the last delivered Certificate to the
extent provided by this Agreement.
3. Any notice or other instrument in writing, authorized or required by
this Agreement to be given to the Custodian, other than any Certificate or
Written Instructions, shall be sufficiently given if addressed to the Custodian
and mailed or delivered to it at its offices at 90 Washington Street, New York,
New York 10286, or at such other place as the Custodian may from time to time
designate in writing.
4. Any notice or other instrument in writing, authorized or rehired by
this Agreement to be given to the Fund shall be sufficiently given if addressed
to the Fund and mailed or delivered to it at its office at the address for the
Fund first above written, or at such other place as the Fund may from time to
time designate in writing.
5. This Agreement constitutes the entire agreement between the parties,
replaces all prior agreements and may not be amended or modified in any manner
except by a written agreement executed by both parties with the same formality
as this Agreement and approved by a resolution of the Board of Directors of the
Fund, except that Appendices A and B may be amended unilaterally by the Fund
without such an approving resolution.
6. This Agreement shall extend to and shall be binding upon the parties
hereto, and their respective successors and assigns; provided, however, that
this Agreement shall not be assignable by the Fund without the written consent
of the Custodian, or by the Custodian or The Bank of New York without the
written consent of the Fund, authorized or approved by a resolution of the
Fund's Board of Directors. For purposes of this paragraph, no merger,
consolidation, or amalgamation of the Custodian, The Bank of New York, or the
Fund shall be deemed to constitute an assignment of this Agreement.
7. This Agreement shall be construed in accordance with the laws of the
State of New York without giving effect to conflict of laws principles thereof.
Each party hereby consents to the
jurisdiction of a state or federal court situated in New York City, New York in
connection with any dispute arising hereunder and hereby waives its right to
trial by jury.
8. This Agreement may be executed in any number of counterparts, each of
which shall be deemed to be an original, but such counterparts shall, together,
constitute only one instrument.
9. A copy of the Articles of Incorporation of the Fund is on file with the
Secretary of the State of Maryland, and notice is hereby given that this
instrument is executed on behalf of the Board of Directors of the Fund as
Directors and not individually and that the obligations of the instrument are
not binding upon any of the Directors or shareholders individually but are
binding upon the assets and property of the Fund; provided, however, that the
Articles of Incorporation of the Fund provides that the assets of a particular
series of the Fund shall under no circumstances be charges with liabilities
attributable to any other series of the Fund and that all persons extending
credit to, or contracting with or having any claim against a particular series
of the Fund shall look only to the assets of that particular series for payment
of such credit, contract or claim.
37
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective Officers, thereunto duly authorized and their
respective seals to be hereunto affixed, as of the day and year first above
written.
PANORAMA SERIES FUND, INC.
By:
Andrew J. Donohue
Vice President & Secretary
[SEAL]
Attest:
By:
Robert G. Zack
Assistant Secretary
THE BANK OF NEW YORK
[SEAL] By:
Jorge Ramos, Vice President
Attest:
38
<PAGE>
APPENDIX A
I, Andrew J. Donohue, Secretary, and I, Robert G. Zack, Assistant
Secretary, of Panorama Series Fund, Inc.,
a Maryland corporation (the "Fund"), do hereby certify that:
The following individuals for whom a position other than "Officer of OSS" is
specified serve in the following positions with the Fund and each has been duly
elected or appointed by the Board of Directorss of the Fund to each such
position and qualified therefor in conformity with the Fund's Articles of
Incorporation and ByLaws. With respect to the following individuals for whom a
position of "Officer of OSS" is specified, each such individual has been
designated by a resolution of the Board of Directors of the Fund to be an
Officer for purposes of the Fund's Custody Agreement with The Bank of New York,
but only for purposes of Articles XII and XIII thereof and a certified copy of
such resolution is attached hereto. The signatures of each individual below set
forth opposite their respective names are their true and correct signatures:
Name Position Signature
Andrew J. Donohue Secretary & Vice Pres
George C. Bowen Treasurer
Robert G. Zack Assistant Secretary
Robert Bishop Assistant Treasurer
Scott Farrar Assistant Treasurer
Stephen F. Libera Vice President
David P. Negri Vice President
David A. Rosenberg Vice President
Michael Strathhearn Vice President
Kenneth B. White Vice President
Arthur Zimmer Vice President
Peter M. Antos Senior Vice President
Victor Babin Senior Vice President
Larry Apolito Vice President OFI
Katherine P. Feld Vice President OFI
<PAGE>
Name Position Signature
Mitchell J. Lindauer Vice President OFI
Ken Nadler Vice President OFI
Dorothy G. Warmack Vice President OFI
Carol Wolf Vice President OFI
Leslie Falconio Assistant Vice Presid
Gina Palmeri Assistant Vice Presid
James W. Burns Portoflio Manager
Michael D. Jones Portoflio Manager
John F. Force Portfolio Manager
Richard J. Lindquist Portoflio Manager
Gary L. Pilgrim Portoflio Manager
John G.L. Wright Portoflio Manager
Daniel Baxter Securities Trader
Mark Binning Securities Trader
Donna Compert Securities Trader
David Falicia Securities Trader
Patrick Heeb Securities Trader
Chang Lee Securities Trader
Suzanne Lopata Securities Trader
William Linden Securities Trader
Michael Mon Securities Trader
Richard Misko Securities Trader
Eleni Poullas Securities Trader
Rohit Sah Securities Trader
<PAGE>
IN WITNESS WHEREOF, I hereunto set my hand in the seal of Panorama
Series Fund, Inc., as
of the ____ day of _______, 1997.
Andrew J. Donohue
Secretary
Robert G. Zack, Assistant Secretary
<PAGE>
APPENDIX B
The undersigned, Andrew J. Donohue, hereby certifies that he is the duly
elected and acting Secretary of Panorama Series Fund, Inc. (the "Fund"), further
certifies that the following resolutions were adopted by the Board of Directors
of the Fund at a meeting duly held on February 25, 1997 at which a quorum was at
all times present and that such resolutions have not been modified or rescinded
and are in full force and effect as of the date hereof.
RESOLVED, that The Bank of New York, as Custodian pursuant to a Custody
Agreement between The Bank of New York and the Fund (the "Custody
Agreement") is authorized and instructed on a continuous and ongoing basis
to act in accordance with, and to rely on instructions by the Fund to the
Custodian communicated by a Terminal Link as defined in the Custody
Agreement.
RESOLVED, that the Fund shall establish access codes and grant use of such
access codes only to officers of the Fund as defined in the Custody
Agreement, and shall establish internal safekeeping procedures to safeguard
and protect the confidentiality and availability of such access codes.
RESOLVED, that Officers of the Fund as defined in the Custody Agreement
shall, following the establishment of such access codes and such internal
safekeeping procedures, advise the Custodian that the same have been
established by delivering a Certificate, as defined in the Custody
Agreement, and the Custodian shall be entitled to rely upon such advice.
IN WITNESS WHEREOF, I hereunto set my hand in the seal of Panorama
Series Fund, Inc. as
of the _____ day of ___________, 1997.
---------------------------------
Andrew J. Donohue, Secretary
<PAGE>
APPENDIX C
I, Jorge Ramos, a Vice President with THE BANK OF NEW YORK, do hereby
designate the following publications pursuant to Article II, Section 5(b) of
this Agreement:
The Bond Buyer Depository Trust Company Notices Financial Daily Card Service JJ
Kenney Municipal Bond Service London Financial Times New York Times Standard &
Poor's Called Bond Record Wall Street Journal
IN WITNESS WHEREOF, I hereunto set my hand in the seal of The Bank of New York,
as of the 11th day of June, 1997.
--------------------------------
Jorge Ramos, Vice President
<PAGE>
APPENDIX D
The following books and records pertaining to Fund shall be prepared and
maintained by the Custodian and shall be the property of the Fund:
None.
<PAGE>
EXHIBIT A
CERTIFICATION
The undersigned, Robert G. Zack, hereby certifies that he is the duly
elected and acting Assistant Secretary of Panorama Series Fund, Inc., a Maryland
corporation (the "Fund"), and further certifies that the following resolution
was adopted by the Board of
Directors of the Fund at a meeting duly
held on February 25, 1997, at which a quorum was at all times present and that
such resolution has not been modified or rescinded and is in full force and
effect as of the date hereof.
RESOLVED, that The Bank of New York, as Custodian pursuant to a
Custody Agreement between The Bank of New York and the Fund (the
"Custody Agreement") is authorized and instructed on a continuous and
ongoing basis to deposit in the Book-Entry System, as defined in the
Custody Agreement, all Securities eligible for deposit therein,
regardless of the Series to which the same are specifically
allocated, and to utilize the Book-Entry System to the extent
possible in connection with its performance thereunder, including,
without limitation, in connection with settlements of purchases and
sales of Securities, loans of Securities, and deliveries and returns
of Securities collateral.
IN WITNESS WHEREOF, I have hereunto set my hand and the seal
of Panorama Series Fund
Inc., as of the ______ day of ________, 1997.
----------------------------------
Robert G. Zack, Assistant Secretary
[SEAL]
<PAGE>
EXHIBIT B
The undersigned, Andrew J. Donohue, hereby certifies that he is the duly
elected and acting Secretary of Panorama Series Fund, Inc., a Maryland
corporation (the "Fund"), and further certifies that the following resolution
was adopted by the Board of
Directors of the Fund at a meeting duly
held on February 25, 1997, at which a quorum was at all times present and that
such resolution has not been modified or rescinded and is in full force and
effect as of the date hereof.
RESOLVED, that The Bank of New York, as Custodian pursuant to a
Custody Agreement between The Bank of New York and the Fund (the
"Custody Agreement") is authorized and instructed on a continuous and
ongoing basis until such time as it receives a Certificate, as
defined in the Custody Agreement, to the contrary to deposit in The
Depository Trust Company ("DTC") as a "Depository" as defined in the
Custody Agreement, all Securities eligible for deposit therein,
regardless of the Series to which the same are specifically
allocated, and to utilize DTC to the extent possible in connection
with its performance thereunder, including, without limitation, in
connection with settlements of purchases and sales of Securities,
loans of Securities, and deliveries and returns of Securities
collateral.
IN WITNESS WHEREOF, I have hereunto set my hand and the seal of Panorama
Series Fund, Inc. as of the _______ day of _______, 1997.
----------------------------------
Andrew J. Donohue, Secretary
[SEAL]
<PAGE>
EXHIBIT B-1
CERTIFICATION
The undersigned, Andrew J. Donohue, hereby certifies that he is the duly
elected and acting Secretary of Panorama Series Fund, Inc., a Maryland (the
"Fund"), and further certifies that the following resolution was adopted by the
Board of Directors of the Fund at a meeting duly held on February 25, 1997, at
which a quorum was at all times present and that such resolution has not been
modified or rescinded and is in full force and effect as of the date hereof.
RESOLVED, that The Bank of New York, as Custodian pursuant to a
Custody Agreement between The Bank of New York and the Fund (the
"Custody Agreement") is authorized and instructed on a continuous and
ongoing basis until such time as it receives a Certificate, as
defined in the Custody Agreement, to the contrary to deposit in the
Participants Trust Company as a Depository, as defined in the Custody
Agreement, all Securities eligible for deposit therein, regardless of
the Series to which the same are specifically allocated, and to
utilize the Participants Trust Company to the extent possible in
connection with its performance thereunder, including, without
limitation, in connection with settlements of purchases and sales of
Securities, loans of Securities, and deliveries and return of
Securities collateral.
IN WITNESS WHEREOF, I have hereunto set my hand and the seal of Panorama
Series Fund, Inc. as of the ______ day of _______, 1997.
---------------------------------
Andrew J. Donohue, Secretary
[SEAL]
<PAGE>
EXHIBIT C
CERTIFICATION
The undersigned, Andrew J. Donohue, hereby certifies that he is duly elected
and acting Secretary of Panorama Series Fund, Inc., a Maryland corporation (the
"Fund") and further certifies that the following resolution was adopted by the
Board of
Directors of the Fund at a meeting duly
held on February 25, 1997, at which a quorum was at all times present and that
such resolution has not been modified or rescinded and is in full force and
effect as of the date hereof.
RESOLVED, that The Bank of New York, as Custodian pursuant to a
Custody Agreement between The Bank of New York and the Fund (the
"Custody Agreement") is authorized and instructed on a continuous and
ongoing basis until such time as it receives a Certificate, as
defined in the Custody Agreement, to the contrary, to accept, utilize
and act with respect to Clearing Member confirmations for Options and
transactions in Options, regardless of the Series to which the same
are specifically allocated, as such terms are defined in the Custody
Agreement, as provided in the Custody Agreement.
IN WITNESS WHEREOF, I have hereunto set my hand and the seal of Panorama
Series Fund, Inc., as of the _____ day of _______, 1997.
-----------------------------------
Andrew J. Donohue, Secretary
[SEAL]
<PAGE>
EXHIBIT D
[THE FORM OF FOREIGN SUBCUSTODIAN AGREEMENT VARIES DEPENDING ON
THE
COUNTRY. PLEASE CONTACT OPPENHEIMERFUNDS, INC FOR A SPECIFIC FORM
OF
FOREIGN SUBCUSTODIAN AGREEMENT]
I:\GROUPS\LEGAL\CUSTODY\PANORAMA.WPD
<PAGE>
Panorama Series Fund, Inc.
Exhibit 24(b)(16) to Form N-1A
Performance Data Computation Schedule
The Fund's average annual total returns and total returns are calculated as
described below, on the basis of the Fund's distributions, for the past 10 years
which are as follows:
Distribution Amount From Amount From
Reinvestment Investment Long or Short-Term
Reinvestment
(Ex)Date Income Capital Gains Price
Growth Portfolio
12/31/87 0.0352126 0.2243063 1.220
12/30/88 0.0363978 0.0000000 1.360
08/14/89 0.0001306 0.0000000 1.760
12/29/89 0.0670265 0.1297860 1.650
08/15/90 0.0012833 0.0110943 1.590
12/31/90 0.0479550 0.0000000 1.460
08/09/91 0.0001684 0.0000000 1.780
12/31/91 0.0374164 0.1003146 1.870
08/14/92 0.0000822 0.0000000 1.900
12/31/92 0.0392363 0.1518530 1.910
08/05/93 0.0000201 0.0267043 2.160
12/30/93 0.0417154 0.1652846 2.080
08/09/94 0.0000152 0.0177824 2.080
12/29/94 0.0334335 0.0488525 1.980
08/22/95 0.0000284 0.0084328 2.450
12/28/95 0.0410949 0.1379031 2.510
06/28/96 0.0100000 0.0145300 2.660
03/21/97 0.0320000 0.2270000 2.830
Total Return Portfolio
12/31/87 0.0547573 0.1315766 1.200
08/15/88 0.0007119 0.0000000 1.260
12/30/88 0.0689259 0.0000000 1.270
08/14/89 0.0009692 0.0000000 1.500
12/29/89 0.0875188 0.0633398 1.410
08/15/90 0.0017051 0.0077066 1.410
12/31/90 0.0776847 0.0000000 1.330
08/09/91 0.0010890 0.0000000 1.540
12/31/91 0.0660506 0.0756638 1.570
08/14/92 0.0000092 0.0000000 1.630
12/31/92 0.0645683 0.1056527 1.560
08/05/93 0.0000517 0.0115227 1.720
12/30/93 0.0572656 0.0945967 1.650
08/09/94 0.0000888 0.0095649 1.620
12/29/94 0.0626554 0.0359307 1.520
08/22/95 0.0003783 0.0012618 1.750
12/28/95 0.0727680 0.0578799 1.750
06/28/96 0.0100000 0.0063400 1.780
03/21/97 0.0670000 0.1645000 1.720
Government Securities Portfolio:
12/31/92 0.0561466 0.0000000 1.010
08/05/93 0.0000174 0.0000000 1.100
12/30/93 0.0608593 0.0000000 1.060
08/09/94 0.0013863 0.0000000 1.010
12/29/94 0.0568324 0.0000000 0.950
<PAGE>
Panorama Series Fund, Inc.
Page 2
Distribution Amount From Amount From
Reinvestment Investment Long or Short-Term
Reinvestment
Ex)Date Income Capital Gains Price
Government Securities Portfolio (Continued):
08/22/95 0.0003916 0.0000000 1.050
12/28/95 0.0592154 0.0000000 1.070
04/23/96 0.0005927 0.0000000 1.040
03/21/97 0.0700000 0.0000000 1.020
International Equity Portfolio
12/31/92 0.0238311 0.0129209 0.920
08/05/93 0.0004676 0.0122928 1.070
12/30/93 0.0173915 0.0000000 1.090
08/09/94 0.0000000 0.0006346 1.140
12/29/94 0.0000000 0.0151248 1.090
08/22/95 0.0000000 0.0095459 1.150
12/28/95 0.0423314 0.0000000 1.150
06/28/96 0.0120000 0.0000000 1.240
03/21/97 0.0080000 0.0230000 1.220
LifeSpan Diversified Income Portfolio
12/28/95 0.0168553 0.0000000 1.040
06/28/96 0.0100000 0.0014000 1.040
03/21/97 0.0500000 0.0018000 1.060
LifeSpan Balanced Portfolio
12/28/95 0.0107582 0.0000000 1.050
06/28/96 0.0100000 0.0000000 1.120
03/21/97 0.0250000 0.0135000 1.120
LifeSpan Capital Appreciation Portfolio
12/28/95 0.0065493 0.0000000 1.060
06/28/96 0.0100000 0.0000000 1.180
03/21/97 0.0110000 0.0280000 1.160
<PAGE>
Panorama Series Fund, Inc.
Page 3
1. Average Annual Total Returns for the Periods Ended 12/31/97:
The formula for calculating average annual total return is as follows:
1/number of years = n {(ERV/P)^n} - 1 = average annual total
return
Where: ERV = ending redeemable value of a hypothetical $1,000 payment
made at the beginning of the period
P = hypothetical initial investment of $1,000
Growth Portfolio
Examples at NAV:
One Year
{($1,263.67/$1,000)^ 1} - 1 = 26.37%
Five Year
{($2,501.17/$1,000)^.2} - 1 = 20.12%
Ten Year
{($5,533.47/$1,000)^.1} - 1 = 18.66%
Total Return Portfolio:
One Year
{($1,188.05/$1,000)^ 1} - 1 = 18.81%
Five Year
{($1,859.57/$1,000)^.2} - 1 = 13.21%
Ten Year
{($3,642.01/$1,000)^.1} - 1 = 13.80%
Government Securities Portfolio:
One Year
{($1,088.24/$1,000)^ 1} - 1 = 8.82%
Five Year
{($1,392.23/$1,000)^.2} - 1 = 6.84%
Inception
{($1,484.33/$1,000)^.1775}-1 = 7.26%
<PAGE>
Panorama Series Fund, Inc.
Page 4
1. Average Annual Total Returns for the Periods Ended 12/31/97
(Continued):
International Equity Portfolio:
Examples at NAV:
One Year
{($1,081.05/$1,000)^ 1} - 1 = 8.11%
Five Year
{($1,668.67/$1,000)^.2} - 1 = 10.78%
Inception
{($1,596.50/$1,000)^.1775}-1 = 8.66%
LifeSpan Diversified Income Portfolio:
One Year
{($1,125.15/$1,000)^ 1} - 1 = 12.52%
Inception
{($1,271.51/$1,000)^.4286}-1 = 10.84%
LifeSpan Balanced Portfolio:
One Year
{($1,122.03/$1,000)^ 1} - 1 = 12.20%
Inception
{($1,349.51/$1,000)^.4286}-1 = 13.71%
LifeSpan Capital Appreciation Portfolio:
One Year
{($1,125.31/$1,000)^ 1} - 1 = 12.53%
Inception
{($1,415.91/$1,000)^.4286}-1 = 16.07%
<PAGE>
Panorama Series Fund, Inc.
Page 5
2. Cumulative Total Returns for the Periods Ended 12/31/97:
The formula for calculating cumulative total return is as follows:
(ERV - P) / P = Cumulative Total Return
Growth Portfolio
Examples at NAV:
One Year
$1,263.67 - $1,000/$1,000 = 26.37%
Five Year
$2,501.17 - $1,000/$1,000 = 150.12%
Ten Year
$5,533.47 - $1,000/$1,000 = 453.35%
Total Return Portfolio:
One Year
$1,188.05 - $1,000/$1,000 = 18.81%
Five Year
$1,859.57 - $1,000/$1,000 = 85.96%
Ten Year
$3,642.01 - $1,000/$1,000 = 264.20%
Government Securities Portfolio:
One Year
$1,088.24 - $1,000/$1,000 = 8.82%
Five Year
$1,392.23 - $1,000/$1,000 = 39.22%
Inception
$1,484.33 - $1,000/$1,000 = 48.43%
<PAGE>
Panorama Series Fund, Inc.
Page 6
2. Cumulative Total Returns for the Periods Ended 12/31/97 (Continued):
International Equity Portfolio:
Examples at NAV:
One Year
$1,081.05 - $1,000/$1,000 = 8.11%
Five Year
$1,668.67 - $1,000/$1,000 = 66.87%
Inception
$1,596.50 - $1,000/$1,000 = 59.65%
LifeSpan Diversified Income Portfolio:
One Year
$1,125.15 - $1,000/$1,000 = 12.52%
Inception
$1,271.51 - $1,000/$1,000 = 27.15%
LifeSpan Balanced Portfolio:
One Year
$1,122.03 - $1,000/$1,000 = 12.20%
Inception
$1,349.51 - $1,000/$1,000 = 34.95%
LifeSpan Capital Appreciation Portfolio:
One Year
$1,125.31 - $1,000/$1,000 = 12.53%
Inception
$1,415.91 - $1,000/$1,000 = 41.59%
<PAGE>
Panorama Series Fund, Inc.
Page 7
3. Standardized Yield for the 30-Day Period Ended 12/31/97:
The Fund's standardized yields are calculated using the following
formula set
forth in the SEC rules:
a - b 6
Yield = 2 { (------ + 1 ) - 1 }
cd
The symbols above represent the following factors:
a = Dividends and interest earned during the 30-day period.
b = Expenses accrued for the period (net of any expense
reimbursements).
c = The average daily number of Fund shares outstanding during the 30-day
period that were entitled to receive dividends.
d = The Fund's net asset value (excluding contingent deferred sales
charge) per share on the last day of the period.
Government Securities Portfolio
$118,833.67 - $11,846.87 6
2{(------------------------- + 1) - 1} = 5.47%
21,397,698 x $1.11
4. DIVIDEND YIELDS FOR THE 30-DAY PERIOD ENDED 12/31/97:
The Fund's dividend yields are calculated using the following formula:
Dividend Yield = a / b
The symbols above represent the following factors:
a = The last declared dividend during the period. b = The Fund's net asset
value (excluding sales charge) per share
on the last day of the period.
Example:
Government Securities Portfolio: $0.0700000 / $1.02 = 6.86%
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 355411
<NAME> TOTAL RETURN PORTFOLIO
<SERIES>
<NUMBER> 5
<NAME> PANORAMA SERIES FUND, INC.
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> DEC-31-1997
<INVESTMENTS-AT-COST> 1,183,170,514
<INVESTMENTS-AT-VALUE> 1,275,542,304
<RECEIVABLES> 9,360,516
<ASSETS-OTHER> 18,663
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 1,284,921,483
<PAYABLE-FOR-SECURITIES> 5,159,278
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1,038,888
<TOTAL-LIABILITIES> 6,198,166
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 1,000,519,357
<SHARES-COMMON-STOCK> 640,875,962
<SHARES-COMMON-PRIOR> 586,602,688
<ACCUMULATED-NII-CURRENT> 42,609,690
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 143,222,480
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 92,371,790
<NET-ASSETS> 1,278,723,317
<DIVIDEND-INCOME> 9,669,636
<INTEREST-INCOME> 40,056,780
<OTHER-INCOME> 0
<EXPENSES-NET> 6,622,416
<NET-INVESTMENT-INCOME> 43,104,000
<REALIZED-GAINS-CURRENT> 144,786,846
<APPREC-INCREASE-CURRENT> 14,497,050
<NET-CHANGE-FROM-OPS> 202,387,896
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 38,831,970
<DISTRIBUTIONS-OF-GAINS> 95,341,180
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 71,391,082
<NUMBER-OF-SHARES-REDEEMED> 95,125,453
<SHARES-REINVESTED> 78,007,645
<NET-CHANGE-IN-ASSETS> 156,647,649
<ACCUMULATED-NII-PRIOR> 38,224,047
<ACCUMULATED-GAINS-PRIOR> 94,241,183
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 6,482,637
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 6,622,416
<AVERAGE-NET-ASSETS> 1,207,681,987
<PER-SHARE-NAV-BEGIN> 1.91
<PER-SHARE-NII> 0.07
<PER-SHARE-GAIN-APPREC> 0.25
<PER-SHARE-DIVIDEND> 0.07
<PER-SHARE-DISTRIBUTIONS> 0.16
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 2.00
<EXPENSE-RATIO> 0.55
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.00
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 355411
<NAME> Growth Portfolio
<SERIES>
<NUMBER> 3
<NAME> Panorama Series Fund, Inc.
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> DEC-31-1997
<INVESTMENTS-AT-COST> 677,727,944
<INVESTMENTS-AT-VALUE> 837,667,919
<RECEIVABLES> 2,386,435
<ASSETS-OTHER> 7,375
<OTHER-ITEMS-ASSETS> 52,883
<TOTAL-ASSETS> 840,114,612
<PAYABLE-FOR-SECURITIES> 8,599,768
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 143,504
<TOTAL-LIABILITIES> 8,743,272
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 554,085,271
<SHARES-COMMON-STOCK> 240,666,941
<SHARES-COMMON-PRIOR> 196,587,477
<ACCUMULATED-NII-CURRENT> 9,770,088
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 107,576,006
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 159,939,975
<NET-ASSETS> 831,371,340
<DIVIDEND-INCOME> 9,925,750
<INTEREST-INCOME> 3,967,500
<OTHER-INCOME> 0
<EXPENSES-NET> 3,904,623
<NET-INVESTMENT-INCOME> 9,988,627
<REALIZED-GAINS-CURRENT> 108,263,083
<APPREC-INCREASE-CURRENT> 45,697,012
<NET-CHANGE-FROM-OPS> 163,948,722
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 6,502,490
<DISTRIBUTIONS-OF-GAINS> 46,127,035
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 52,419,265
<NUMBER-OF-SHARES-REDEEMED> 26,936,806
<SHARES-REINVESTED> 18,597,005
<NET-CHANGE-IN-ASSETS> 245,149,062
<ACCUMULATED-NII-PRIOR> 6,282,780
<ACCUMULATED-GAINS-PRIOR> 45,811,976
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 3,818,977
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 3,904,623
<AVERAGE-NET-ASSETS> 721,554,524
<PER-SHARE-NAV-BEGIN> 2.98
<PER-SHARE-NII> 0.04
<PER-SHARE-GAIN-APPREC> 0.69
<PER-SHARE-DIVIDEND> 0.03
<PER-SHARE-DISTRIBUTIONS> 0.23
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 3.45
<EXPENSE-RATIO> 0.54
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.00
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 355411
<NAME> International Equity Portfolio
<SERIES>
<NUMBER> 7
<NAME> Panorama Series Fund, Inc.
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> DEC-31-1997
<INVESTMENTS-AT-COST> 71,972,123
<INVESTMENTS-AT-VALUE> 82,925,486
<RECEIVABLES> 131,849
<ASSETS-OTHER> 3,386
<OTHER-ITEMS-ASSETS> 92,896
<TOTAL-ASSETS> 83,153,617
<PAYABLE-FOR-SECURITIES> 822,616
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 73,553
<TOTAL-LIABILITIES> 896,169
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 68,300,098
<SHARES-COMMON-STOCK> 60,378,390
<SHARES-COMMON-PRIOR> 48,644,884
<ACCUMULATED-NII-CURRENT> 390,416
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 2,612,989
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 10,953,945
<NET-ASSETS> 82,257,448
<DIVIDEND-INCOME> 1,165,091
<INTEREST-INCOME> 181,159
<OTHER-INCOME> 0
<EXPENSES-NET> 818,819
<NET-INVESTMENT-INCOME> 527,431
<REALIZED-GAINS-CURRENT> 2,662,634
<APPREC-INCREASE-CURRENT> 2,591,115
<NET-CHANGE-FROM-OPS> 5,781,180
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 407,257
<DISTRIBUTIONS-OF-GAINS> 1,170,863
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 17,133,067
<NUMBER-OF-SHARES-REDEEMED> 6,693,102
<SHARES-REINVESTED> 1,293,541
<NET-CHANGE-IN-ASSETS> 19,671,987
<ACCUMULATED-NII-PRIOR> 356,464
<ACCUMULATED-GAINS-PRIOR> 1,034,996
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 732,642
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 818,819
<AVERAGE-NET-ASSETS> 73,318,161
<PER-SHARE-NAV-BEGIN> 1.29
<PER-SHARE-NII> 0.01
<PER-SHARE-GAIN-APPREC> 0.09
<PER-SHARE-DIVIDEND> 0.01
<PER-SHARE-DISTRIBUTIONS> 0.02
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 1.36
<EXPENSE-RATIO> 1.12
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 355411
<NAME> LifeSpan Capital Appreciation Portfolio
<SERIES>
<NUMBER> 10
<NAME> Panorama Series Fund, Inc.
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> DEC-31-1997
<INVESTMENTS-AT-COST> 53,366,035
<INVESTMENTS-AT-VALUE> 61,138,115
<RECEIVABLES> 472,830
<ASSETS-OTHER> 3,087
<OTHER-ITEMS-ASSETS> 346,371
<TOTAL-ASSETS> 61,960,403
<PAYABLE-FOR-SECURITIES> 539,656
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 41,265
<TOTAL-LIABILITIES> 580,921
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 49,984,098
<SHARES-COMMON-STOCK> 45,351,184
<SHARES-COMMON-PRIOR> 33,955,474
<ACCUMULATED-NII-CURRENT> 1,170,826
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 2,452,404
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 7,772,154
<NET-ASSETS> 61,379,482
<DIVIDEND-INCOME> 627,954
<INTEREST-INCOME> 1,094,102
<OTHER-INCOME> 0
<EXPENSES-NET> 507,688
<NET-INVESTMENT-INCOME> 1,214,368
<REALIZED-GAINS-CURRENT> 2,533,295
<APPREC-INCREASE-CURRENT> 2,665,698
<NET-CHANGE-FROM-OPS> 6,413,361
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 402,394
<DISTRIBUTIONS-OF-GAINS> 1,024,277
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 11,969,510
<NUMBER-OF-SHARES-REDEEMED> 1,803,689
<SHARES-REINVESTED> 1,229,889
<NET-CHANGE-IN-ASSETS> 19,385,288
<ACCUMULATED-NII-PRIOR> 371,899
<ACCUMULATED-GAINS-PRIOR> 930,339
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 437,070
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 507,688
<AVERAGE-NET-ASSETS> 51,473,096
<PER-SHARE-NAV-BEGIN> 1.24
<PER-SHARE-NII> 0.03
<PER-SHARE-GAIN-APPREC> 0.12
<PER-SHARE-DIVIDEND> 0.01
<PER-SHARE-DISTRIBUTIONS> 0.03
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 1.35
<EXPENSE-RATIO> 0.99
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.00
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 355411
<NAME> LifeSpan Balanced Portfolio
<SERIES>
<NUMBER> 9
<NAME> Panorama Series Fund, Inc.
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> DEC-31-1997
<INVESTMENTS-AT-COST> 60,850,786
<INVESTMENTS-AT-VALUE> 68,322,127
<RECEIVABLES> 660,014
<ASSETS-OTHER> 3,048
<OTHER-ITEMS-ASSETS> 211,675
<TOTAL-ASSETS> 69,196,864
<PAYABLE-FOR-SECURITIES> 435,179
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 68,902
<TOTAL-LIABILITIES> 504,081
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 56,838,550
<SHARES-COMMON-STOCK> 53,490,749
<SHARES-COMMON-PRIOR> 43,471,343
<ACCUMULATED-NII-CURRENT> 1,955,234
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 2,427,542
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 7,471,457
<NET-ASSETS> 68,692,783
<DIVIDEND-INCOME> 566,852
<INTEREST-INCOME> 2,057,462
<OTHER-INCOME> 0
<EXPENSES-NET> 579,001
<NET-INVESTMENT-INCOME> 2,045,313
<REALIZED-GAINS-CURRENT> 2,515,126
<APPREC-INCREASE-CURRENT> 2,434,472
<NET-CHANGE-FROM-OPS> 6,994,911
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 1,134,469
<DISTRIBUTIONS-OF-GAINS> 612,613
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 11,659,128
<NUMBER-OF-SHARES-REDEEMED> 3,199,617
<SHARES-REINVESTED> 1,559,895
<NET-CHANGE-IN-ASSETS> 17,356,460
<ACCUMULATED-NII-PRIOR> 1,053,055
<ACCUMULATED-GAINS-PRIOR> 516,364
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 504,390
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 579,001
<AVERAGE-NET-ASSETS> 59,387,615
<PER-SHARE-NAV-BEGIN> 1.18
<PER-SHARE-NII> 0.04
<PER-SHARE-GAIN-APPREC> 0.10
<PER-SHARE-DIVIDEND> 0.03
<PER-SHARE-DISTRIBUTIONS> 0.01
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 1.28
<EXPENSE-RATIO> 0.97
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 355411
<NAME> LifeSpan Diversified Income Portfolio
<SERIES>
<NUMBER> 8
<NAME> Panorama Series Fund, Inc.
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> DEC-31-1997
<INVESTMENTS-AT-COST> 31,305,669
<INVESTMENTS-AT-VALUE> 33,638,107
<RECEIVABLES> 472,512
<ASSETS-OTHER> 2,406
<OTHER-ITEMS-ASSETS> 38,915
<TOTAL-ASSETS> 34,151,940
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 36,125
<TOTAL-LIABILITIES> 36,125
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 29,852,362
<SHARES-COMMON-STOCK> 28,987,734
<SHARES-COMMON-PRIOR> 22,947,272
<ACCUMULATED-NII-CURRENT> 1,650,130
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 280,885
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 2,332,438
<NET-ASSETS> 34,115,815
<DIVIDEND-INCOME> 246,215
<INTEREST-INCOME> 1,669,274
<OTHER-INCOME> 0
<EXPENSES-NET> 239,716
<NET-INVESTMENT-INCOME> 1,675,773
<REALIZED-GAINS-CURRENT> 298,037
<APPREC-INCREASE-CURRENT> 1,310,516
<NET-CHANGE-FROM-OPS> 3,284,326
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 1,155,828
<DISTRIBUTIONS-OF-GAINS> 41,610
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 5,816,319
<NUMBER-OF-SHARES-REDEEMED> 905,515
<SHARES-REINVESTED> 1,129,658
<NET-CHANGE-IN-ASSETS> 8,841,716
<ACCUMULATED-NII-PRIOR> 1,127,966
<ACCUMULATED-GAINS-PRIOR> 26,677
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 213,594
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 245,288
<AVERAGE-NET-ASSETS> 28,503,480
<PER-SHARE-NAV-BEGIN> 1.10
<PER-SHARE-NII> 0.06
<PER-SHARE-GAIN-APPREC> 0.07
<PER-SHARE-DIVIDEND> 0.05
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 1.18
<EXPENSE-RATIO> 0.86
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 355411
<NAME> Government Securities Portfolio
<SERIES>
<NUMBER> 6
<NAME> Panorama Series Fund, Inc.
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> DEC-31-1997
<INVESTMENTS-AT-COST> 22,683,386
<INVESTMENTS-AT-VALUE> 23,295,802
<RECEIVABLES> 346,108
<ASSETS-OTHER> 1,515
<OTHER-ITEMS-ASSETS> 90,721
<TOTAL-ASSETS> 23,734,146
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 15,126
<TOTAL-LIABILITIES> 15,126
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 22,227,355
<SHARES-COMMON-STOCK> 21,321,672
<SHARES-COMMON-PRIOR> 21,267,047
<ACCUMULATED-NII-CURRENT> 1,356,173
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (476,924)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 612,416
<NET-ASSETS> 23,719,020
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 1,524,193
<OTHER-INCOME> 0
<EXPENSES-NET> 150,537
<NET-INVESTMENT-INCOME> 1,373,656
<REALIZED-GAINS-CURRENT> (69,942)
<APPREC-INCREASE-CURRENT> 644,731
<NET-CHANGE-FROM-OPS> 1,948,445
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 1,463,333
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 2,834,687
<NUMBER-OF-SHARES-REDEEMED> 4,214,703
<SHARES-REINVESTED> 1,434,641
<NET-CHANGE-IN-ASSETS> 483,442
<ACCUMULATED-NII-PRIOR> 1,450,831
<ACCUMULATED-GAINS-PRIOR> (406,979)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 120,922
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 153,585
<AVERAGE-NET-ASSETS> 23,034,191
<PER-SHARE-NAV-BEGIN> 1.09
<PER-SHARE-NII> 0.07
<PER-SHARE-GAIN-APPREC> 0.02
<PER-SHARE-DIVIDEND> 0.07
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 1.11
<EXPENSE-RATIO> 0.67
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.00
</TABLE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned constitutes and
appoints Andrew J. Donohue or Robert G. Zack, and each of them, his true and
lawful attorneys-in-fact and agents, with full power of substitution and
resubstitution, for him and in his capacity as Director and/or as Treasurer
(Principal Financial and Accounting Officer) of OPPENHEIMER PANORAMA SERIES
FUND, INC., a Maryland corporation (the "Fund"), to sign on his behalf any and
all Registration Statements (including any post-effective amendments to
Registration Statements) under the Securities Act of 1933, the Investment
Company Act of 1940 and any amendments and supplements thereto, and other
documents in connection thereunder, and to file the same, with all exhibits
thereto, and other documents in connection therewith, with the Securities and
Exchange Commission, granting unto said attorneys-in-fact and agents, and each
of them, full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as fully as to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, and each of them, may
lawfully do or cause to be done by virtue hereof.
Dated this 16th day of December, 1997.
/s/ George C. Bowen
-------------------
George C. Bowen
