OPPENHEIMER TOTAL RETURN FUND, INC.
Supplement dated November 17, 1994 to
the Prospectus dated April 1, 1994
The Prospectus is amended as follows:
1. The paragraph captioned "Purchasing Puts and Calls" on page 6 is
deleted and replaced with the following:
-- Purchasing Puts and Calls. The Fund may purchase put options
("puts") which relate to: (i) securities (whether or not held by
it); (ii) Stock Index Futures, whether or not it holds such Stock
Index Futures in its portfolio; or (iii) broadly-based stock
indices. The Fund may purchase calls as to securities, securities
indices or Stock Index Futures, or to effect a "closing purchase
transaction" to terminate its obligation as to a call it has
previously written. The Fund may also purchase "relative
performance call options." These are call options that have a cash
settlement based on the difference between the returns on two market
indices. These options are subject to the risk that the value of
the option may decline because of adverse movements in the market
indices. A call or put may be purchased only if, after such
purchase, the value of all put and call options held by the Fund
would not exceed 5% of the Fund's total assets.
2. The following is added on page 8 after the paragraph captioned
"Restricted and Illiquid Securities":
-- Derivative Investments. The Fund can invest in a number of
different kinds of "derivative investments." The Fund may use some
types of derivatives for hedging purposes, and may invest in others
because they offer the potential for increased income and principal
value. 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
or currency. In the broadest sense, derivative investments include
exchange-traded options and futures contracts (please refer to
"Writing Covered Calls" and "Hedging," above).
One risk of investing in derivative investments is that the
company issuing the instrument might not pay the amount due on the
maturity of the instrument. There is also the risk that the
underlying investment or security might not perform the way the
Manager expected it to perform. The performance of derivative
investments may also be influenced by interest rate changes in the
U.S. and abroad. All of these risks can mean that the Fund will
realize less income than expected from its investments, or that it
can lose part of the value of its investments, which will affect the
Fund's share price. Certain derivative investments held by the Fund
may trade in the over-the-counter markets and may be illiquid. If
that is the case, the Fund's investment in them will be limited, as
discussed in "Restricted and Illiquid Securities," above.
Another type of derivative the Fund may invest in is an "index-
linked" note. On the maturity of this type of debt security,
payment is made based on the performance of an underlying index,
rather than based on a set principal amount for a typical note.
Another derivative investment the Fund may invest in is a currency-
indexed security. These are typically short-term or intermediate-
term debt securities. Their value at maturity or the interest rates
at which they pay income are determined by the change in value of
the U.S. dollar against one or more foreign currencies or an index.
In some cases, these securities may pay an amount at maturity based
on a multiple of the amount of the relative currency movements.
This variety of index security offers the potential for greater
income but at a greater risk of loss.
Other derivative investments the Fund may invest in include "debt
exchangeable for common stock" of an issuer or "equity-linked debt
securities" of an issuer. At maturity, the debt security is
exchanged for common stock of the issuer or is payable in an amount
based on the price of the issuer's common stock at the time of
maturity. In either case there is a risk that the amount payable
at maturity will be less than the principal amount of the debt
(because the price of the issuer's common stock is not as high as
was expected).
November 17, 1994 PS420.1194
