OPPENHEIMER VARIABLE ACCOUNT FUNDS, 497, 1994-10-27

OPPENHEIMER VARIABLE ACCOUNT FUNDS
497, 1994-10-27

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Investors are advised to read and retain this Prospectus for future
reference.

OPPENHEIMER VARIABLE ACCOUNT FUNDS
3410 South Galena Street
Denver, Colorado 80231
1-800-525-7048

OPPENHEIMER VARIABLE ACCOUNT FUNDS (the "Trust") is a diversified
open-end investment company consisting of eight separate funds
(collectively, the "Funds"):

OPPENHEIMER MONEY FUND ("Money Fund") seeks the maximum current
income from investments in "money market" securities consistent
with low capital risk and the maintenance of liquidity. Its shares
are neither insured nor guaranteed by the U.S. government, and
there is no assurance that this Fund will be able to maintain a
stable net asset value of $1.00 per share.

OPPENHEIMER HIGH INCOME FUND ("High Income Fund") seeks a high
level of current income from investment in high yield fixed-income
securities. High Income Fund's investments include unrated
securities or high risk securities in the lower rating categories,
commonly known as "junk bonds," which are subject to a greater risk
of loss of principal and nonpayment of interest than higher-rated
securities. These securities may be considered to be speculative.

OPPENHEIMER BOND FUND ("Bond Fund") primarily seeks a high level of
current income from investment in high yield fixed-income securi-
ties rated "Baa" or better by Moody's or "BBB" or better by
Standard & Poor's. Secondarily, this Fund seeks capital growth
when consistent with its primary objective.

OPPENHEIMER CAPITAL APPRECIATION FUND ("Capital Appreciation Fund")
seeks to achieve capital appreciation by investing in "growth-type"
companies.

OPPENHEIMER GROWTH FUND ("Growth Fund") seeks to achieve capital
appreciation by investing in securities of well-known established
companies.

OPPENHEIMER MULTIPLE STRATEGIES FUND ("Multiple Strategies Fund")
seeks a total investment return (which includes current income and
capital appreciation in the value of its shares) from investments
in common stocks and other equity securities, bonds and other debt
securities, and "money market" securities.

OPPENHEIMER GLOBAL SECURITIES FUND ("Global Securities Fund") seeks
long-term capital appreciation by investing a substantial portion
of assets in securities of foreign issuers, "growth-type" compa-
nies, cyclical industries and special situations which are
considered to have appreciation possibilities. Current income is
not an objective. These securities may be considered to be
speculative.

OPPENHEIMER STRATEGIC BOND FUND ("Strategic Bond Fund") seeks a
high level of current income principally derived from interest on
debt securities and seeks to enhance such income by writing covered
call options on debt securities. The Fund intends to invest
principally in: (i) foreign government and corporate debt securi-
ties, (ii) U.S. Government securities, and (iii) lower-rated high
yield domestic debt securities, commonly known as "junk bonds",
which are subject to a greater risk of loss of principal and
nonpayment of interest than higher-rated securities. These
securities may be considered to be speculative.
Shares of the Funds are sold only to provide benefits under
variable life insurance policies and variable annuity contracts
(collectively, the "Accounts"). The Accounts invest in shares of
one or more of the Funds in accordance with allocation instructions
received from Account owners. Such allocation rights are further
described in the accompanying Account Prospectus. Shares are
redeemed to the extent necessary to provide benefits under an
Account.

This Prospectus sets forth concisely information about the Trust
and the Funds that prospective investors should know before
investing. A Statement of Additional Information about the Trust
and the Funds (the "Additional Statement") dated May 1, 1994, has
been filed with the Securities and Exchange Commission ("SEC") and
is available without charge upon request to Oppenheimer Shareholder
Services (the "Transfer Agent"), P.O. Box 5270, Denver, Colorado
80217, or by calling the toll-free number shown above. The
Statement of Additional Information (which is incorporated in its
entirety by reference in this Prospectus) contains more detailed
information about the Trust, the Funds and their management.

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

This Prospectus is effective May 1, 1994, as revised October 14,
1994.
<PAGE>
Table Of Contents
Page
Financial Highlights 3
Performance Information 10
The Funds and Their Investment Policies 10
Introduction 10
Investment Policies - Money Fund 10
Investment Policies - High Income Fund, Bond Fund
and Strategic Bond Fund 11
High Income Fund 11
Bond Fund 11
Strategic Bond Fund 12
Risk Factors 13
Investment Policies - Capital Appreciation Fund,
Growth Fund, Multiple Strategies Fund and Global
Securities Fund 13
Capital Appreciation Fund 13
Growth Fund 13
Multiple Strategies Fund 13
Global Securities Fund 14
Special Investment Methods 14
Borrowing 14
Small, Unseasoned Companies 14
Participation Interests 14
Foreign Securities 14
Warrants and Rights 15
Repurchase Agreements 15
Restricted and Illiquid Securities 15
Loans of Portfolio Securities 15
When Issued Securities 16
Writing Covered Calls 16
Hedging 16
Interest Rate Futures 16
Bond Index Futures 16
Stock Index Futures 16
Purchasing Calls on Securities and Futures 16
Puts on Securities and Futures 17
Foreign Currency Options 17
Forward Contracts 17
Interest Rate Swap Transactions 17
Risk of Options and Futures Trading 17
Derivative Investments 17
Portfolio Turnover 18
Short Sales Against-the-Box 18
Investment Restrictions 18
Management of the Funds 18
Management's Discussion of Performance 18
Indices 22
Purchase of Shares 22
Redemption of Shares 23
Dividends, Distributions and Taxes 23
Dividends of the Money Fund 23
Dividends and Distributions of High Income Fund,
Bond Fund, Strategic Bond Fund and Multiple
Strategies Fund 23
Dividends and Distributions of Capital Appreciation
Fund, Growth Fund and Global Securities Fund 23
Dividends and Distributions: General 23
Tax Treatment to the Account as Shareholder 23
Tax Status of the Funds 23
Additional Information 23
Description of the Trust and its Shares 23
Shareholder Inquires 24
The Custodian and the Transfer Agent 24
Appendix A - Description of Terms A-1
Appendix B - Description of Securities Rating B-1

<PAGE>

<PAGE>
Financial Highlights
Selected data for a share of beneficial interest outstanding
throughout each period

The information in the following tables has been audited by
Deloitte & Touche, independent auditors, whose report on the
financial statements of the Funds for the fiscal year ended
December 31, 1993, is included in the Statement of Additional
Information.

<TABLE>
<CAPTION>
Oppenheimer
Money
Fund
1993(2) 1992(2) 1991(2) 1990(2) 1989(2) 1988(2) 1987(2) 1986(2) 1985(1)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING DATA:
Net asset value, beginning
of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
Income from investment
operations-net
investment income and
net realized gain on
investments .03 .04 .06 .08 .09 .07 .06 .06 .05
Dividends and
distributions to
shareholders (.03) (.04) (.06) (.08) (.09) (.07) (.06) (.06) (.05)
Net asset value, end of
period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(in thousands) $61,221 $58,266 $58,709 $89,143 $68,440 $69,468 $42,538 $28,218 $2,506
Average net assets (in
thousands) $57,654 $61,317 $75,747 $82,966 $67,586 $60,241 $35,138 $12,914 $2,080
Number of shares
outstanding at end of
period (in thousands) 61,221 58,266 58,703 89,141 68,439 69,468 42,538 28,218 2,506
Ratios to average net
assets:
Net investment income 3.12% 3.76% 5.97% 7.80% 8.82% 7.31% 6.33% 5.68% 7.25%(3)
Expenses .43% .50% .49% .51% .53% .55% .59% .75% .75%(3)

1. For the period from April 3, 1985 (commencement of operations) to December
31, 1985.

2. For the year ended December 31.

3. Annualized.
</TABLE>

<TABLE>
<CAPTION>
Oppenheimer
High Income
Fund
1993(2) 1992(2) 1991(2) 1990(2) 1989(2) 1988(2) 1987(2) 1986(1)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING DATA:
Net asset value, beginning
of period $ 9.74 $ 9.40 $ 7.90 $ 8.59 $ 9.30 $ 9.14 $ 10.04 $ 10.00
Income from investment
operations:
Net investment income .82 1.19 1.28 1.21 1.09 1.12 1.30 .72
Net realized and
unrealized gain (loss)
on investments and
foreign currency
transactions 1.65 .43 1.30 (.82) (.65) .23 (.51) (.24)
Total income from
investment operations 2.47 1.62 2.58 .39 .44 1.35 .79 .48
Dividends and
distributions to
shareholders:
Dividends from net
investment income (1.19) (1.28) (1.08) (1.08) (1.08) (1.07) (1.55) (.44)
Distributions from net
realized gain on
investments - - - - (.07) (.12) (.14) -
Total dividends and
distributions to
shareholders (1.19) (1.28) (1.08) (1.08) (1.15) (1.19) (1.69) (.44)
Net asset value, end of
period $ 11.02 $ 9.74 $ 9.40 $ 7.90 $ 8.59 $ 9.30 $ 9.14 $ 10.04
TOTAL RETURN, AT NET ASSET
VALUE(3) 26.34% 17.92% 33.91% 4.65% 4.84% 15.58% 8.07% 4.73%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(in thousands) $93,011 $40,817 $27,308 $19,172 $23,698 $25,551 $21,768 $14,833
Average net assets (in
thousands) $67,000 $36,861 $23,663 $21,493 $26,040 $24,530 $20,637 $ 8,036
Number of shares
outstanding at end of
period (in thousands) 8,443 4,189 2,905 2,427 2,760 2,746 2,382 1,478
Ratios to average net
assets:
Net investment income 10.50% 12.08% 14.26% 14.32% 11.52% 11.94% 13.13% 11.18%(4)

Expenses .68% .73% .75% .75% .75% .75% .75% .75%(4)
Portfolio turnover rate(5) 135.7% 144.2% 108.0% 95.1% 78.7% 57.9% 42.1% 18.3%

1. For the period from April 30, 1986 (commencement of operations) to
December 31, 1986.

2. For the year ended December 31.

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 additionalshares on the reinvestment date, and redemption at the net asset
value calculated on the last business day of the fiscal period.

4. Annualized.

5. 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 periodSecurities with a maturity or expiration date at the
time of acquisition of one year or less are excluded from the calculation.
</TABLE>

<TABLE>
<CAPTION>
Oppenheimer
Bond
Fund
1993(2) 1992(2) 1991(2) 1990(2) 1989(2) 1988(2) 1987(2) 1986(2) 1985(1)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING DATA:
Net asset value, beginning
of period $ 10.99 $ 11.15 $ 10.33 $ 10.49 $ 10.15 $ 10.19 $ 11.15 $11.27 $10.00
Income from investment
operations:
Net investment income .65 .87 .95 .97 .98 .94 .97 .97 .86
Net realized and
unrealized gain (loss)
on investments and
foreign currency
transactions .76 (.17) .80 (.18) .32 (.05) (.71) .09 .99
Total income from
investment operations 1.41 .70 1.75 .79 1.30 .89 .26 1.06 1.85
Dividends and
distributions to
shareholders:
Dividends from net
investment income (.75) (.86) (.93) (.95) (.96) (.93) (1.17) (1.03) (.58)
Distributions from net
realized gain on
investments - - - - - - (.05) (.15) -
Total dividends and
distributions to
shareholders (.75) (.86) (.93) (.95) (.96) (.93) (1.22) (1.18) (.58)
Net asset value, end of
period $ 11.65 $ 10.99 $ 11.15 $ 10.33 $ 10.49 $ 10.15 $ 10.19 $11.15 $11.27
TOTAL RETURN, AT NET ASSET
VALUE(3) 13.04% 6.50% 17.63% 7.92% 13.32% 8.97% 2.53% 10.12% 18.82%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(in thousands) $111,846 $63,354 $32,762 $16,576 $13,422 $ 9,989 $10,415 $7,377 $2,725
Average net assets (in
thousands) $ 87,215 $45,687 $22,169 $15,088 $11,167 $11,028 $ 8,748 $4,647 $1,614
Number of shares
outstanding at end
ofperiod (in thousands) 9,602 5,766 2,939 1,604 1,280 984 1,022 662 242
Ratios to average net
assets:
Net investment income 7.20% 7.81% 8.73% 9.30% 9.34% 9.08% 9.17% 8.71% 10.52%(4)

Expenses .46% .56% .64% .61% .64% .70% .75% .75% .75%(4)
Portfolio turnover rate(5) 36.3% 41.3% 7.6% 7.4% 5.4% 36.3% 5.9% 27.7% 101.3%

1. For the period from April 3, 1985 (commencement of operations) to December
31, 1985.

2. For the year ended December 31.

4. Annualized.

5. 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.
</TABLE>

<TABLE>
<CAPTION>
Oppenheimer
Capital Appreciation
Fund
1993(2) 1992(3) 1991(3) 1990(3) 1989(3) 1988(3) 1987(3) 1986(2) 1986(1)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING DATA:
Net asset value, beginning
of period $ 26.04 $ 23.24 $ 15.24 $ 20.40 $ 16.31 $ 14.39 $13.12 $16.21 $13.71
Income (loss) from
investment operations:
Net investment income .05 .06 .08 .32 .50 .33 .21 .12 .09
Net realized and
unrealized gain (loss)
on investments 6.71 3.43 8.18 (3.54) 3.93 1.60 1.67 (1.24) 3.40
Total income (loss) from
investment operations 6.76 3.49 8.26 (3.22) 4.43 1.93 1.88 (1.12) 3.49
Dividends and
distributions to
shareholders:
Dividends from net
investment income (.06) (.14) (.26) (.53) (.34) - (.34) (.21) (.20)
Distributions from net
realized gain on
investments (1.10) (.55) - (1.41) - (.01) (.27) (1.76) (.79)
Total dividends and
distributions to
shareholders (1.16) (.69) (.26) (1.94) (.34) (.01) (.61) (1.97) (.99)
Net asset value, end of
period $ 31.64 $ 26.04 $ 23.24 $ 15.24 $ 20.40 $ 16.31 $14.39 $13.12 $16.21
TOTAL RETURN, AT NET ASSET
VALUE(4) 27.32% 15.42% 54.72% (16.82)% 27.57% 13.41% 14.34% (1.65)% N/A
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(in thousands) $136,885 $83,335 $49,371 $23,295 $27,523 $13,667 $9,692 $4,549 $3,852
Average net assets (in
thousands) $ 98,228 $56,371 $34,887 $24,774 $21,307 $13,239 $8,598 $3,099 $2,292
Number of shares
outstanding at end of
period (in thousands) 4,326 3,201 2,125 1,528 1,349 838 674 347 238
Ratios to average net
assets:
Net investment income .23% .30% .81% 1.93% 3.27% 2.13% 1.68% 2.36%(5) 2.27%
Expenses .47% .54% .63% .71% .68% .73% .75% 1.01%(5) 2.17%
Portfolio turnover rate(6) 122.8% 78.9% 122.3% 222.0% 130.5% 128.7% 138.7% 100.1% 464.8%

1. For the year ended June 30, 1986Operating results were achieved by
Centennial Capital Appreciation Fund, a separate investment company acquired
by OCAP on August14, 1986.

2. For the six months ended December 31, 1986Operating results prior to
August 15, 1986 were achieved by Centennial Capital Appreciation Fund, a
separate investmentcompany acquired by OCAP on August 14, 1986.

3. For the year ended December 31.

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 additionalshares on the reinvestment date, and redemption at the net asset
value calculated on the last business day of the fiscal period.

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.
</TABLE>

<TABLE>
<CAPTION>
Oppenheimer
Growth
Fund
1993(2) 1992(2) 1991(2) 1990(2) 1989(2) 1988(2) 1987(2) 1986(2) 1985(1)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING DATA:
Net asset value, beginning
of period $ 16.96 $ 15.17 $ 12.54 $ 16.38 $ 13.64 $ 11.21 $ 12.53 $10.95 $10.00
Income (loss) from
investment operations:
Net investment income .46 .16 .30 .56 .66 .29 .20 .13 .16
Net realized and
unrealized gain (loss)
on investments .74 1.99 2.82 (1.79) 2.50 2.19 .24 1.76 .79
Total income (loss) from
investment operations 1.20 2.15 3.12 (1.23) 3.16 2.48 .44 1.89 .95
Dividends and
distributions to
shareholders:
Dividends from net
investment income (.14) (.36) (.49) (.62) (.35) - (.34) (.15) -
Distributions from net
realized gain on
investments (.32) - - (1.99) (.07) (.05) (1.42) (.16) -
Total dividends and
distributions to
shareholders (.46) (.36) (.49) (2.61) (.42) (.05) (1.76) (.31) -
Net asset value, end of
period $ 17.70 $ 16.96 $ 15.17 $ 12.54 $ 16.38 $ 13.64 $ 11.21 $12.53 $10.95
TOTAL RETURN, AT NET ASSET
VALUE(3) 7.25% 14.53% 25.54% (8.21)% 23.59% 22.09% 3.32% 17.76% 9.50%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(in thousands) $56,701 $36,494 $22,032 $15,895 $19,301 $17,746 $14,692 $8,287 $ 820
Average net assets (in
thousands) $46,389 $25,750 $18,810 $17,235 $18,596 $15,585 $15,121 $3,744 $ 388
Number of shares
outstanding at end of
period (in thousands) 3,203 2,152 1,453 1,267 1,179 1,301 1,311 661 75
Ratios to average net
assets:
Net investment income 1.13% 1.36% 2.82% 4.09% 3.72% 2.39% 1.56% 2.62% 4.25%(4)

Expenses .50% .61% .70% .71% .70% .70% .75% .75% .75%(4)
Portfolio turnover rate(5) 12.6% 48.7% 133.9% 267.9% 148.0% 132.5% 191.0% 100.9% 132.9%

1. For the period from April 3, 1985 (commencement of operations) to December
31, 1985.

2. For the year ended December 31.

4. Annualized.

<TABLE>
<CAPTION>
Oppenheimer
Multiple Strategies
Fund
1993(2) 1992(2) 1991(2) 1990(2) 1989(2) 1988(2) 1987(1)
<S> <C> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING DATA:
Net asset value, beginning
of period $ 12.47 $ 11.96 $ 10.90 $ 12.30 $ 11.58 $ 10.04 $ 10.00
Income (loss) from
investment operations:
Net investment income .55 .55 .69 .73 .73 .66 .44
Net realized and
unrealized gain (loss)
on investments and
options written 1.41 .50 1.15 (.97) 1.04 1.53 .07
Total income (loss) from
investment operations 1.96 1.05 1.84 (.24) 1.77 2.19 .51
Dividends and
distributions to
shareholders:
Dividends from net
investment income (.55) (.54) (.78) (.70) (.68) (.65) (.43)
Distributions from net
realized gain on
investments and options
written - - - (.46) (.37) - (.04)
Total dividends and
distributions to
shareholders (.55) (.54) (.78) (1.16) (1.05) (.65) (.47)
Net asset value, end of
period $ 13.88 $ 12.47 $ 11.96 $ 10.90 $ 12.30 $ 11.58 $ 10.04
TOTAL RETURN, AT NET ASSET
VALUE(3) 15.95% 8.99% 17.48% (1.91)% 15.76% 22.15% 3.97%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(in thousands) $250,290 $159,464 $124,634 $118,888 $121,286 $78,386 $53,291
Average net assets (in
thousands) $199,954 $139,011 $117,000 $123,231 $101,057 $64,298 $34,256
Number of shares
outstanding at end of
period (in thousands) 18,026 12,792 10,421 10,908 9,860 6,766 5,306
Ratios to average net
assets:
Net investment income 4.44% 4.63% 5.95% 6.53% 6.36% 6.18% 6.12%(4)
Expenses .48% .55% .54% .55% .57% .58% .65%(4)
Portfolio turnover rate(5) 32.4% 57.8% 80.3% 99.2% 66.9% 110.0% 46.9%

1. For the period from February 9, 1987 (commencement of operations) to
December 31, 1987.

2. For the year ended December 31.

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.

4. Annualized.

<TABLE>
<CAPTION>
Oppenheimer
Global Securities
Fund
1993(2) 1992(2) 1991(2) 1990(1)
<S> <C> <C> <C> <C>
PER SHARE OPERATING DATA:
Net asset value, beginning of period $ 9.57 $ 10.38 $10.04 $10.00
Income (loss) from investment operations:
Net investment income (.02) .07 .04 -
Net realized and unrealized gain (loss) on
investments 6.75 (.80) .30 .04
Total income (loss) from investment operations 6.73 (.73) .34 .04
Dividends and distributions to shareholders:
Dividends from net investment income - (.04) - -
Distributions from net realized gain on investments - (.04) - -
Total dividends and distributions to shareholders - (.08) - -
Net asset value, end of period $ 16.30 $ 9.57 $10.38 $10.04
TOTAL RETURN, AT NET ASSET VALUE(3) 70.32% (7.11)% 3.39% .40%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $96,425 $13,537 $7,339 $ 432
Average net assets (in thousands) $31,696 $11,181 $3,990 $ 263
Number of shares outstanding at end of period (in
thousands) 5,917 1,415 707 43
Ratios to average net assets:
Net investment income .72% 1.04% .75% .08%(4)
Expenses .92% 1.06% 1.32% 6.84%(4)
Portfolio turnover rate(5) 65.1% 34.1% 29.5% 0.0%

1. For the period from November 12, 1990 (commencement of operations) to
December 31, 1990.

2. For the year ended December 31.

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.

4. Annualized.

<TABLE>
<CAPTION>
Oppenheimer
Strategic Bond
Fund
1993(1)
<S> <C>
PER SHARE OPERATING DATA:
Net asset value, beginning of period $ 5.00
Income from investment operations:
Net investment income .10
Net realized and unrealized gain on investments and foreign
currency transactions .11
Total income from investment operations .21
Dividends and distributions to shareholders:
Dividends from net investment income (.09)
Distributions from net realized gain on investments -
Total dividends and distributions to shareholders (.09)
Net asset value, end of period $ 5.12
TOTAL RETURN, AT NET ASSET VALUE(2) 4.25%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $9,887
Average net assets (in thousands) $4,259
Number of shares outstanding at end of period (in thousands) 1,930
Ratios to average net assets:
Net investment income 5.67%(3)
Expenses .96%(3)
Portfolio turnover rate(4) 10.9%

1. For the period from May 3, 1993 (commencement of operations) to December
31, 1993.

2. Assumes a hypothetical initial investment on the business day before the
first day of the fiscal period, with all dividends and distributions reinvested
inadditional shares on the reinvestment date, and redemption at the net asset
value calculated on the last business day of the fiscal period.

3. Annualized.

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 theperiodof acquisition of one year or less are excluded from
the calculation.
</TABLE>

<PAGE>
<PAGE>
Performance Information

From time to time the "yield" and compounded "effective yield" of
Money Fund may be advertised. Money Fund's "yield" is the income
generated by an investment in that Fund over a seven-day period,
which is then "annualized." In annualizing, the amount of income
generated by the investment during that seven days is assumed to be
generated each week over a 52-week period, and is shown as a
percentage of the investment. The compounded "effective yield" is
calculated similarly, but the annualized income earned by an
investment in Money Fund is assumed to be reinvested. The
compounded effective yield will therefore be slightly higher than
the yield because of the effect of the assumed reinvestment.

From time to time, the yield of High Income Fund, Strategic Bond
Fund or Bond Fund may be advertised. Yield for these Funds will be
computed in a standardized manner for mutual funds, by dividing
that Fund's net investment income per share earned during a 30-day
base period by the maximum offering price (equal to the net asset
value) per share on the last day of the period. This yield
calculation is compounded on a semi-annual basis, and multiplied by
2 to provide an annualized yield. The Statement of Additional
Information describes a dividend yield and a distribution return
that may also be quoted for these Funds.

From time to time the "total return" and "average annual total
return" for any of the Funds other than Money Fund may be adver-
tised. Each such Fund's "average annual total return" for a
particular period is computed by determining the average annual
compounded rate of return over the period, using the initial amount
invested at the beginning of the period and the redeemable value of
the investment at the end of the period. "Total return" for a
particular period is a cumulative rate of return over the entire
period, also using the initial amount invested and the redeemable
value at the end of the period. The redeemable value of the
investment assumes that all dividends and capital gains distribu-
tions have been reinvested at net asset value without sales charge.
Each such Fund's "total return" and "average annual total return"
indicate the investment results an investor would have experienced
over the stated period from changes in share price and reinvestment
of dividends and distributions.

All such performance information is based on historical per share
earnings and is not intended to indicate future performance.
"Performance and Tax Information" in the Statement of Additional
Information contains more detailed information about calculating
yield and total return information and other investment returns.

The Funds And Their Investment Policies

Introduction. The Trust is an open-end, diversified management
investment company organized as a Massachusetts business trust in
1984. It consists of eight separate Funds - Money Fund, Bond Fund
and Growth Fund, all organized in 1984, High Income Fund, Capital
Appreciation Fund and Multiple Strategies Fund, all organized in
1986, Global Securities Fund, organized in 1990 and Strategic Bond
Fund, organized in 1993.

Each Fund is a separate series of the Trust and has separate assets
and liabilities and a separate net asset value per share, and an
investor's interest is limited to the Fund in which shares are
held. Since market risks are inherent in all securities to varying
degrees, assurance cannot be given that the investment objective of
any of the Funds will be met. The investment policies and
practices described below for each Fund are not "fundamental"
policies unless a particular policy is identified as fundamental.
"Fundamental" policies are those that cannot be changed without the
approval of a "majority," as defined in the Investment Company Act
of 1940 (the "Investment Company Act"), of the Fund's outstanding
voting securities. The Fund's Board of Trustees may change
non-fundamental policies without shareholder approval.

Investment Policies - Money Fund. SEC Rule 2a-7 ("Rule 2a-7") of
the Investment Company Act of 1940 (the "Investment Company Act")
places restrictions on a money market fund's investments. Under
Rule 2a-7, Money Fund may purchase only "Eligible Securities," as
defined below, that the Trust's Board of Trustees has determined
have minimal credit risk. An "Eligible Security" is (a) a security
that has received a rating in one of the two highest short-term
rating categories by any two "nationally-recognized statistical
rating organizations" as defined in Rule 2a-7 ("Rating Organiza-
tions"), or, if only one Rating Organization has rated that
security, by that Rating Organization, or (b) an unrated security
that is judged by the Trust's investment adviser, Oppenheimer
Management Corporation (the "Manager") to be of comparable quality
to investments that are "Eligible Securities" rated by Rating
Organizations. Rule 2a-7 permits Money Fund to purchase "First
Tier Securities," which are Eligible Securities rated in the
highest category for short-term debt obligations by at least two
Rating Organizations, or, if only one Rating Organization has rated
a particular security, by that Rating Organization, or comparable
unrated securities. Under Rule 2a-7, Money Fund may invest only up
to 5% of its assets in "Second Tier Securities," which are Eligible
Securities that are not "First Tier Securities." In addition to
the overall 5% limit on Second Tier Securities, Money Fund may not
invest (i) more than 5% of its total assets in the securities of
any one issuer (other than the U.S. Government, its agencies or
instrumentalities) or (ii) more than 1% of its total assets or $1
million (whichever is greater) in Second Tier Securities of any one
issuer. The Trust's Board must approve or ratify the purchase of
Eligible Securities that are unrated or are rated by only one
Rating Organization. Additionally, under Rule 2a-7, Money Fund
must maintain a dollar-weighted average portfolio maturity of no
more than 90 days, and the maturity of any single portfolio
investment may not exceed 397 days. The Trust's Board has adopted
procedures under Rule 2a-7 pursuant to which the Board has
delegated to the Manager the responsibility of conforming Money
Fund's investments with the requirements of Rule 2a-7 and those
Procedures.

Ratings at the time of purchase will determine whether securities
may be acquired under the above restrictions. The rating restric-
tions described in this Prospectus do not apply to banks in which
the Trust's cash is kept. Subsequent downgrades in ratings may
require reassessments of the credit risk presented by a security
and may require their sale. See "Investment Objective and Policies
- -- Money Fund" in the Statement of Additional Information for
further details.

The Trust intends to exercise due care in the selection of
portfolio securities. However, a risk may exist that the issuers
of Money Fund's portfolio securities may not be able to meet their
duties and obligations on interest or principal payments at the
time called for by the instrument. There is also the risk that
because of a redemption demand greater than anticipated by
management, some of Money Fund's portfolio may have to be liquidat-
ed prior to maturity at prices less than the original cost or
maturity value. Any of these risks, if encountered, could cause a
reduction in the net asset value of Money Fund's shares.

The types of instruments that will form the major part of Money
Fund's investments are certificates of deposit, bankers' acceptan-
ces, commercial paper, U.S. Treasury bills, securities of U.S.
government agencies or instrumentalities and other debt instruments
(including bonds) issued by corporations, including variable and
floating rate instruments, and variable rate master demand notes.
Some of such instruments may be supported by letters of credit or
may be subject to repurchase transactions (described below).
Except as described below, Money Fund will purchase certificates of
deposit or bankers' acceptances only if issued or guaranteed by a
domestic bank subject to regulation by the U.S. Government or of a
foreign bank having total assets at least equal to U.S. $1 billion.
Money Fund may invest in certificates of deposit of up to $100,000
of a domestic bank if such certificates of deposit are fully
insured as to principal by the Federal Deposit Insurance Corpora-
tion. For purposes of this section, the term "bank" includes
commercial banks, savings banks, and savings and loan associations
and the term "foreign bank" includes foreign branches of U.S. banks
(issuers of "Eurodollar" instruments), U.S. branches and agencies
of foreign banks (issuers of "Yankee dollar" instruments) and
foreign branches of foreign banks. Money Fund also may purchase
obligations issued by other entities if they are: (i) guaranteed as
to principal and interest by a bank or corporation whose certifi-
cates of deposit or commercial paper may otherwise be purchased by
Money Fund, or (ii) subject to repurchase agreements (explained
below), if the collateral for the agreement complies with Rule
2a-7. In addition, the Fund may also invest in other types of
securities described above in accordance with the requirements of
the rule. For further information, see "Foreign Securities" and
"Investment Restrictions" below. See Appendix A below and
"Investment Objectives and Policies" in the Statement of Additional
Information for further information on the investments which Money
Fund may make. See Appendix B below for a description of the
rating categories of the Rating Organizations.

Investment Policies - High Income Fund, Bond Fund and Strategic
Bond Fund.

High Income Fund. The objective of High Income Fund is to earn a
high level of current income by investing primarily in a diversi-
fied portfolio of high yield, fixed-income securities (long-term
debt and preferred stock issues, including convertible securities)
believed by the Manager not to involve undue risk. The Fund may
also acquire participation interests in loans that are made to
corporations (see Participation Interests," below). High Income
Fund's investment policy is to assume certain risks (discussed
below) in seeking high yield, which is ordinarily associated with
high risk securities, commonly known as "junk bonds," in the lower
rating categories of the established securities ratings services
(i.e., securities rated "Baa" or lower by Moody's Investor Service,
Inc. ("Moody's") or "BBB" or lower by Standard & Poor's Corporation
("Standard & Poor's")), and unrated securities. The investments in
which High Income Fund will invest principally will be in the lower
rating categories; it may invest in securities rated as low as "C"
by Moody's or "D" by Standard & Poor's. Such ratings indicate that
the obligations are speculative in a high degree and may be in
default. Appendix B of this Prospectus describes these rating
categories.

High Income Fund is not obligated to dispose of securities whose
issuers subsequently are in default or if the rating is subsequent-
ly downgraded. High Income Fund may invest, without limit, in
unrated securities if such securities offer, in the opinion of the
Manager, yields and risks comparable to rated securities. Risks of
high yield securities are discussed under "Risk Factors" below.
High Income Fund's portfolio at December 31, 1993 contained
domestic and foreign corporate bonds in the following rating
categories as rated by Standard & Poor's (the percentages relate to
the weighted average value of the bonds in each rating category as
a percentage of that Fund's total assets): AAA, 2.75%; A, 2.73%;
BBB, 1.85%; BB, 9.48%; B, 30.50%; CCC, 9.26%; CC, 1.28%; and
unrated, 14.74%. If a bond was not rated by Standard & Poor's but
was rated by Moody's, it is included in the comparable category.
The Manager will not rely principally on the ratings assigned by
rating services. The Manager's analysis may include consideration
of the financial strength of the issuer, including its historic and
current financial condition, the trading activity in its securi-
ties, present and anticipated cash flow, estimated current value of
assets in relation to historical cost, the issuer's experience and
managerial expertise, responsiveness to changes in interest rates
and business conditions, debt maturity schedules, current and
future borrowing requirements, and any change in the financial
condition of the issuer and the issuer's continuing ability to meet
its future obligations. The Manager also may consider anticipated
changes in business conditions, levels of interest rates of bonds
as contrasted with levels of cash dividends, industry and regional
prospects, the availability of new investment opportunities and the
general economic, legislative and monetary outlook for specific
industries, the nation and the world.

Bond Fund. Bond Fund's primary objective is also to earn a high
level of current income by investing primarily in a diversified
portfolio of high yield fixed-income securities. As a secondary
objective, Bond Fund seeks capital growth when consistent with its
primary objective. As a matter of non-fundamental policy, Bond
Fund will, under normal market conditions, invest at least 65% of
its total assets in bonds. Bond Fund will invest only in securi-
ties rated "Baa" or better by Moody's or "BBB" or better by
Standard & Poor's. However, Bond Fund is not obligated to dispose
of securities if the rating is reduced, and therefore will from
time to time hold securities rated lower than "Baa" by Moody's or
"BBB" by Standard & Poor's.

Strategic Bond Fund. The investment objective of Strategic Bond
Fund is to seek a high level of current income principally derived
from interest on debt securities and to enhance such income by
writing covered call options on debt securities. Although the
premiums received by Strategic Bond Fund from writing covered calls
are a form of capital gain, the Fund will not make investments in
securities with the objective of seeking capital appreciation.

The Fund intends to invest principally in: (i) lower-rated high
yield domestic debt securities; (ii) U.S. Government securities,
and (iii) foreign government and corporate debt securities. Under
normal circumstances, the Fund's assets will be invested in each of
these three sectors. However, Strategic Bond Fund may from time to
time invest up to 100% of its total assets in any one sector if, in
the judgment of the Manager, the Fund has the opportunity of
seeking a high level of current income without undue risk to
principal. Accordingly, the Fund's investments should be consid-
ered speculative. Distributable income will fluctuate as the Fund
assets are shifted among the three sectors.

High Yield Securities. The higher yields and high income sought by
Strategic Bond Fund are generally obtainable from securities in the
lower rating categories of the established rating services,
commonly known as "junk bonds." Such securities are rated "Baa" or
lower by Moody's or "BBB" or lower by Standard & Poor's. Strategic
Bond Fund may invest in securities rated as low as "C" by Moody's
or "D" by Standard & Poor's. Such ratings indicate that the
obligations are speculative in a high degree and may be in default.
Risks of high yield, high risk securities are discussed under "Risk
Factors" below. Strategic Bond Fund's portfolio at December 31,
1993, contained securities in the following rating categories as
rated by Standard & Poor's (the percentages relate to the weighted
average of the bonds in each rating category as a percentage of
that Fund's total assets): AAA, 35.51%; BB, 7.57%; B, 27.51%, CCC,
2.07%; and unrated 21.18%. Strategic Bond Fund is not obligated to
dispose of securities whose issuers subsequently are in default or
if the rating of such securities is reduced. Appendix B of this
Prospectus describes these rating categories. Strategic Bond Fund
may also invest in unrated securities which, in the opinion of the
Manager, offer yields and risks comparable to those of securities
which are rated.

International Securities. The Fund may invest in foreign govern-
ment and foreign corporate debt securities (which may be denominat-
ed in U.S. dollars or in non-U.S. currencies) issued or guaranteed
by foreign corporations, certain supranational entities (such as
the World Bank) and foreign governments (including political
subdivisions having taxing authority) or their agencies or
instrumentalities. These investments may include (i) U.S.
dollar-denominated debt obligations known as "Brady Bonds," which
are issued for the exchange of existing commercial bank loans to
foreign entities for new obligations that are generally collateral-
ized by zero coupon Treasury securities having the same maturity,
(ii) debt obligations such as bonds (including sinking fund and
callable bonds), (iii) debentures and notes (including variable
rate and floating rate instruments), and (iv) preferred stocks and
zero coupon securities. Further information about investments in
foreign securities is set forth below under "Special Investment
Methods - Foreign Securities."

U.S. Government Securities. U.S. Government Securities are debt
obligations issued by or guaranteed by the United States Government
or one of its agencies or instrumentalities. Although U.S.
Government Securities are considered among the most creditworthy of
fixed-income investments and their yields are generally lower than
the yields available from corporate debt securities, the values of
U.S. Government Securities (and of fixed-income securities
generally) will vary inversely to changes in prevailing interest
rates. To compensate for the lower yields available on U.S.
Government securities, Strategic Bond Fund will attempt to augment
these yields by writing covered call options against them. See
"Writing Covered Calls," below. Certain of these obligations,
including U.S. Treasury notes and bonds, and mortgage-backed
securities guaranteed by the Government National Mortgage Associa-
tion ("Ginnie Maes"), are supported by the full faith and credit of
the United States. Certain 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. These latter securities may 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 ("Freddie Macs"), and obligations supported by the
credit of the instrumentality, such as Federal National Mortgage
Association bonds ("Fannie Maes"). U.S. Government Securities in
which the Fund may invest include zero coupon U.S. Treasury
securities, mortgage-backed securities and money market instru-
ments.

Zero coupon Treasury securities are: (i) U.S. Treasury notes and
bonds which have been stripped of their unmatured interest coupons
and receipts; or (ii) certificates representing interests in such
stripped debt obligations or coupons. Because a zero coupon
security pays no interest to its holder during its life or for a
substantial period of time, it usually trades at a deep discount
from its face or par value and will be subject to greater
fluctuations of market value in response to changing interest rates
than debt obligations of comparable maturities which make current
distributions of interest. Because the Fund accrues taxable income
from these securities without receiving cash, the Fund may be
required to sell portfolio securities in order to pay cash
dividends or to meet redemptions. The Fund may invest up to 50% of
its total assets at the time of purchase in zero coupon securities
issued by either corporations or the U.S. Treasury.

Domestic Securities. The Fund's investments in domestic securities
may include preferred stocks, participation interests and zero
coupon securities. Domestic investments include fixed-income
securities and dividend-paying common stocks issued by domestic
corporations in any industry which may be denominated in U.S.
dollars or non-U.S. currencies.

The Fund's investments may include securities which represent
participation interests in loans made to corporations (see
"Participation Interests," below) and in pools of residential
mortgage loans which may be guaranteed by agencies or instrumental-
ities of the U.S. Government (e.g. Ginnie Maes, Freddie Macs and
Fannie Maes), including collateralized mortgage-backed obligations
("CMOs"), or which may not be guaranteed. Such securities differ
from conventional debt securities which provide for periodic
payment of interest in fixed amounts (usually semi-annually) with
principal payments at maturity or specified call dates. Mortgage--
backed securities provide monthly payments which are, in effect, a
"pass-through" of the monthly interest and principal payments
(including any prepayments) made by the individual borrowers on the
pooled mortgage loans. The Fund's reinvestment of scheduled
principal payments and unscheduled prepayments it receives may
occur at lower rates than the original investment, thus reducing
the yield of the Fund. CMOs in which the Fund may invest are
securities issued by a U.S. Government instrumentality or private
corporation that are collateralized by a portfolio of mortgages or
mortgage-backed securities which may or may not be guaranteed by
the U.S. Government. The issuer's obligation to make interest and
principal payments is secured by the underlying portfolio of
mortgages or mortgage-backed securities. Mortgage-backed securi-
ties may be less effective than debt obligations of similar
maturity at maintaining yields during periods of declining interest
rates.

The Fund may invest in CMOs that are "stripped"; that is, the
security is divided into two parts, one of which receives some or
all of the principal payments and the other which receives some or
all of the interest. Stripped securities that receive interest only
are subject to increased volatility due to interest rate changes,
and have the additional risk that if the principal underlying the
CMO is prepaid, which is more likely to happen if interest rates
fall, the Fund will lose the anticipated cash flow from the
interest on the mortgages that were prepaid. See "Mortgage-Backed
Securities" in the Statement of Additional Information for more
details.

The Fund may also invest in asset-backed securities, which are
securities that represent fractional undivided interests in pools
of consumer loans and trade receivables, similar in structure to
the mortgage-backed securities in which the Fund may invest,
described above. Payments of principal and interest are passed
through to holders of asset-backed securities and are typically
supported by some form of credit enhancement, such as a letter of
credit, surety bond, limited guarantee by another entity or having
a priority to certain of the borrower's other securities. The
degree of credit enhancement varies, and generally applies to only
a fraction of the asset-backed security's par value until exhaust-
ed.

Risk Factors. The securities in which High Income Fund and
Strategic Bond Fund principally invest are considered speculative
and involve greater risk than lower yielding, higher rated
fixed-income securities, while providing higher yield than such
securities. Lower rated securities may be less liquid, and
significant losses could be experienced if a substantial number of
other holders of such securities decide to sell at the same time.
Other risks may involve the default of the issuer or price changes
in the issuer's securities due to changes in the issuer's financial
strength or economic conditions. Issuers of lower rated or unrated
securities are generally not as financially secure or creditworthy
as issuers of higher-rated securities. These Funds are not
obligated to dispose of securities when issuers are in default or
if the rating of the security is reduced. These risks are
discussed in more detail in the Statement of Additional Informa-
tion.

Investment Policies - Capital Appreciation Fund, Growth Fund,
Multiple Strategies Fund and Global Securities Fund.

Capital Appreciation Fund. In seeking its objective of capital
appreciation, Capital Appreciation Fund will emphasize investments
in securities of "growth-type" companies. Such companies are
believed to have relatively favorable long-term prospects for
increasing demand for their goods or services, or to be developing
new products, services or markets, and normally retain a relatively
larger portion of their earnings for research, development and
investment in capital assets. "Growth-type" companies may also
include companies developing applications for recent scientific
advances. Capital Appreciation Fund may also invest in cyclical
industries and in "special situations" that the Manager believes
present opportunities for capital growth. "Special situations" are
anticipated acquisitions, mergers or other unusual developments
which, in the opinion of the Manager, will increase the value of an
issuer's securities, regardless of general business conditions or
market movements. An additional risk is present in this type of
investment since the price of the security may be expected to
decline if the anticipated development fails to occur.

Growth Fund. In seeking its objective of capital appreciation,
Growth Fund will emphasize investments in securities of well-known
and established companies. Such securities generally have a history
of earnings and dividends and are issued by seasoned companies
(having an operating history of at least five years, including
predecessors). Current income is a secondary consideration in the
selection of Growth Fund's portfolio securities.

Multiple Strategies Fund. The objective of Multiple Strategies
Fund is to seek a high total investment return, which includes
current income as well as capital appreciation in the value of its
shares. In seeking that objective, Multiple Strategies Fund may
invest in equity securities (including common stocks, preferred
stocks, convertible securities and warrants), debt securities
(including bonds, participation interest, asset-backed securities,
private-label mortgage-backed securities and CMO's, zero coupon
securities and U.S. government obligations) and cash and cash
equivalents (identified above as the types of instruments in which
the Money Fund may invest). Multiple Strategies Fund currently
intends to invest no more than 5% of its net assets in participa-
tion interests of the same issuing bank, which shall be participa-
tion interests in senior, fully-secured floating rate loans that
are made primarily to U.S. companies. Multiple Strategies Fund may
purchase only those participation interests that mature in one year
or less, or, if maturing in more than one year, that have a
floating rate that is automatically adjusted at least once each
year according to a specified rate for such investments, such as a
percentage of a bank's prime rate.

The composition of Multiple Strategies Fund's portfolio among the
different types of permitted investments will vary from time to
time based upon the Manager's evaluation of economic and market
trends and perceived relative total anticipated return from such
types of securities. Accordingly, there is neither a minimum nor
a maximum percentage of Multiple Strategies Fund's assets that may,
at any given time, be invested in any of the types of investments
identified above. In the event future economic or financial
conditions adversely affect equity securities, it is expected that
Multiple Strategies Fund would assume a defensive position by
investing in debt securities (with an emphasis on securities
maturing in one year or less from the date of purchase), or cash
and cash equivalents.

Global Securities Fund. The objective of the Global Securities
Fund is to seek long-term capital appreciation. Current income is
not an objective. In seeking its objective, the Fund will invest
a substantial portion of its invested assets in securities of
foreign issuers, "growth-type" companies (those which, in the
opinion of the Manager, have relatively favorable long-term
prospects for increasing demand or which develop new products and
retain a significant part of earnings for research and develop-
ment), cyclical industries (e.g. base metals, paper and chemicals)
and special investment situations which are considered to have
appreciation possibilities (e.g., private placements of start-up
companies). The Fund may invest without limit in "foreign
securities" (as defined below in "Special Investment Methods -
Foreign Securities") and thus the relative amount of such invest-
ments will change from time to time. It is currently anticipated
that Global Securities Fund may invest as much as 80% or more of
its total assets in foreign securities. Under normal market
conditions, the Fund will invest its total assets in securities of
issuers traded in markets of at least three countries (which may
include the United States). See "Special Investment Methods
- -Foreign Securities," below, for further discussion as to the
possible rewards and risks of investing in foreign securities and
as to additional diversification requirements for the Fund's
foreign investments.

Special Investment Methods

Borrowing. From time to time, Capital Appreciation Fund, Strategic
Bond Fund, Growth Fund, Multiple Strategies Fund and Global
Securities Fund may each increase their ownership of securities by
borrowing from banks and investing the borrowed funds (on which
that Fund will pay interest). Capital Appreciation Fund, Strategic
Bond Fund, and Multiple Strategies Fund may each borrow, subject to
the 300% asset coverage requirement of the Investment Company Act.
Growth Fund may borrow only up to 5% of the value of its total
assets and Global Securities Fund may borrow up to 10% of the value
of its total assets. Global Securities Fund will not borrow, if as
a result of such borrowing more than 25% of its total assets would
consist of investments in when-issued or delayed delivery securi-
ties or borrowed funds. Purchasing securities with borrowed funds
is a speculative investment method known as "leverage," which may
subject a Fund to relatively greater risks and costs than funds
that do not use leverage, including possible reduction of income
and increased fluctuation of net asset value per share. For
further discussion of such risks and other details, see "Investment
Objectives and Policies - Borrowing" in the Statement of Additional
Information.

Pursuant to an undertaking by Capital Appreciation Fund, Strategic
Bond Fund, Multiple Strategies Fund and Global Securities Fund,
borrowing by each such Fund is limited to 25% of the value of its
net assets, which is further limited to 10% if the borrowing is for
a purpose other than to facilitate redemptions. Neither percentage
limitation is a fundamental policy.

Small, Unseasoned Companies. Money Fund, Capital Appreciation
Fund, Multiple Strategies Fund, Growth Fund, Global Securities Fund
and Strategic Bond Fund may each invest in securities of small,
unseasoned companies as well as those of large, well-known
companies. It is not currently intended that investments in
securities of companies (including predecessors) that have operated
less than three years will exceed 5% of the net assets of either
Growth Fund or Multiple Strategies Fund. Money Fund, Capital
Appreciation Fund, Global Securities Fund and Strategic Bond Fund
are not subject to this restriction. Securities of small,
unseasoned companies may have a limited trading market and volatile
price movements, which may adversely affect their disposition and
can result in their being priced lower than might otherwise be the
case.

Participation Interests. Strategic Bond Fund, Global Securities
Fund, High Income Fund and Multiple Strategies Fund may acquire
participation interests in U.S. dollar-denominated loans that are
made to U.S. or foreign companies (the "borrower"). They may be
interests in, or assignments of, the loan, and are acquired from
banks or brokers that have made the loan or are members of the
lending syndicate. The Manager has set certain creditworthiness
standards for issuers of loan participations, and monitors their
creditworthiness. Some borrowers may have senior securities rated
as low as "C" by Moody's or "D" by Standard & Poor's, but may be
deemed acceptable credit risks. Participation interests are
considered investments in illiquid securities (see "Restricted and
Illiquid Securities,"below). Their value primarily depends upon
the creditworthiness of the borrower, and its ability to pay
interest and principal. Borrowers may have difficulty making
payments. If a borrower fails to make scheduled interest or
principal payments, the Funds could experience a reduction in their
respective income and a decline in the net asset value of their
respective shares. Further details are set forth in the Statement
of Additional Information under "Investment Objective and Poli-
cies."

Foreign Securities. Each Fund may purchase "foreign securities"
that is, securities of companies organized under the laws of
countries other than the United States that are traded on foreign
securities exchanges or in the foreign over-the-counter markets.
Securities of foreign issuers that are represented by American
Depository Receipts ("ADRs"), or that are listed on a U.S.
securities exchange or are traded in the United States over-the-co-
unter markets are not considered "foreign securities" for this
purpose because they are not subject to many of the special
considerations and risks (discussed below and in the Statement of
Additional Information) that apply to foreign securities traded and
held abroad. If a Fund's securities are held abroad, the countries
in which such securities may be held and the sub-custodians holding
them must be approved by the Fund's Board of Trustees under
applicable SEC rules. Each Fund may also invest in debt obliga-
tions issued or guaranteed by foreign corporations, certain
supranational entities (such as the World Bank) and foreign
governments (including political subdivisions having taxing
authority) or their agencies or instrumentalities, subject to the
investment policies described above. Foreign securities which the
Funds may purchase may be denominated in U.S. dollars or in
non-U.S. currencies. The Funds may convert U.S. dollars into
foreign currency, but only to effect securities transactions and
not to hold such currency as an investment.

It is currently intended that each Fund (other than Global
Securities Fund, Multiple Strategies Fund or Strategic Bond Fund)
will invest no more than 25% of its total assets in foreign
securities or in government securities of any foreign country or in
obligations of foreign banks. Multiple Strategies Fund will invest
no more than 35% of its total assets in foreign securities or in
government securities of any foreign country or in obligations of
foreign banks. Neither Global Securities Fund nor Strategic Bond
Fund has any restrictions on the amount of its assets that may be
invested in foreign securities. Investments in securities of
issuers in non-industrialized countries generally involve more risk
and may be considered highly speculative.

The Funds have undertaken to comply with the foreign country
diversification guidelines of Section 10506 of the California
Insurance Code, as follows: Whenever a Fund's investment in foreign
securities exceeds 25% of its net assets, it will invest its assets
in securities of issuers located in a minimum of two different
foreign countries; this minimum is increased to three foreign
countries if foreign investments comprise 40% or more of a Fund's
net assets, to four if 60% or more and to five if 80% or more. In
addition, no such Fund will have more than 20% of its net assets
invested in securities of issuers located in any one foreign
country; that limit is increased to 35% for Australia, Canada,
France, Japan, the United Kingdom or Germany.

The percentage of each Fund's assets that will be allocated to
foreign securities will vary depending on the relative yields of
foreign and U.S. securities, the economies of foreign countries,
the condition of their financial markets, the interest rate climate
of such countries, and the relationship of such countries' currency
to the U.S. dollar. These factors are judged on the basis of
fundamental economic criteria (e.g., relative inflation levels and
trends, growth rate forecasts, balance of payments status, and
economic policies) as well as technical and political data.
Subsequent foreign currency losses may result in a Fund having
previously distributed more income in a particular period than was
available from investment income, which could result in a return of
capital to shareholders. Each such Fund's portfolio of foreign
securities may include those of a number of foreign countries or,
depending upon market conditions and subject to the above diversi-
fication requirements those of a single country. In summary,
foreign securities markets may be less liquid and more volatile
than the markets in the U.S. Risks of foreign securities investing
may include foreign withholding taxation, changes in currency rates
or currency blockage, currency exchange costs, difficulty in
obtaining and enforcing judgments against foreign issuers,
relatively greater brokerage and custodial costs, risk of expropri-
ation or nationalization of assets, less publicly available
information, and differences between domestic and foreign legal,
auditing, brokerage and economic standards. See "Investment
Objectives and Policies - Foreign Securities" in the Statement of
Additional Information for further details.

Warrants and Rights. Each of the Funds (except Money Fund) may
invest up to 5% of its total assets in warrants and rights other
than those that have been acquired in units or attached to other
securities. No more than 2% of each such Fund's total assets may
be invested in warrants that are not listed on either the New York
or American Stock Exchanges. For further details, see "Warrants
and Rights" in the Statement of Additional Information.

Repurchase Agreements. Each Fund may acquire securities that are
subject to repurchase agreements to generate income while providing
liquidity. There is no limit on the amount of any Fund's net
assets that may be subject to repurchase agreements having a
maturity of seven days or less. No Fund will enter into repurchase
agreements which will cause more than 15% of its net assets (10% of
net assets for Money Fund) to be invested in repurchase agreements
having a maturity beyond seven days. Repurchase agreements must be
fully collateralized. However, if the vendor fails to pay the
resale price on the delivery date, the Fund may experience costs in
disposing of the collateral, and losses if there is any delay in
doing so.

Restricted and Illiquid Securities. Under the supervision of the
Board of Trustees, the Manager determines the liquidity of a Fund's
investments. Investments may be illiquid because of the absence of
a 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 resale or cannot be sold
publicly until it is registered under the Securities Act of 1933.
No Fund will purchase or otherwise acquire any security if, as a
result, more than 15% (10% for Money Fund) of its net assets (taken
at current value) would be invested in securities that are illiquid
by virtue of the absence of a readily available market or because
of legal or contractual restrictions on resale ("restricted
securities"). This policy applies to participation interests, bank
time deposits, master demand notes and repurchase transactions
maturing in more than seven days, over-the-counter ("OTC") options
held by any Fund and that portion of assets used to cover such OTC
options [High Income, Global Securities and Strategic Bond Funds].
This policy is not a fundamental policy and does not limit
purchases of restricted securities eligible for resale to qualified
institutional purchasers pursuant to Rule 144A under the Securities
Act of 1933 that are determined to be liquid by the Board of
Trustees or by the Manager under Board-approved guidelines. Such
guidelines take into account trading activity for such securities
and the availability of reliable pricing information, among other
factors. If there is a lack of trading interest in particular Rule
144A securities, a Fund's holdings of those securities may be
illiquid. There may be undesirable delays in selling such
securities at a price representing their fair value. None of the
Funds presently intend to invest more than 10% of its net assets in
illiquid or restricted securities; restricted securities eligible
for resale pursuant to Rule 144A are not included within this
limitation.

Loans of Portfolio Securities. To attempt to increase income, each
Fund may lend its portfolio securities if the loan is collateral-
ized in accordance with applicable regulatory requirements and if
after any loan, the value of the securities loaned does not exceed
25% of the value of that Fund's total assets. In connection with
securities lending, a Fund might experience risks of delay in
receiving additional collateral, or risks of delay in recovery of
the securities, or loss of rights in the collateral should the
borrower fail financially. The Funds presently do not intend that
the value of securities loaned will exceed 5% of each Fund's total
assets. See "Loans of Portfolio Securities" in the Statement of
Additional Information for further information on securities loans.

When-Issued Securities. Each Fund may from time to time purchase
securities on a "when-issued" basis, and may purchase or sell
securities on a "delayed delivery" basis. Debt securities are
often issued on this basis. In those transactions, a Fund
obligates itself to purchase or sell securities with delivery and
payment to occur at a later date to secure what is considered to be
an advantageous price and yield at the time the obligation is
entered into. The price, which is generally expressed in yield
terms, is fixed at the time the commitment to purchase is made, but
delivery and payment for when-issued securities take place at a
later date (normally within 45 days of purchase). During the
period between purchase and settlement, no payment is made by the
Fund to the issuer and no interest accrues to the Fund from the
investment. Although the Fund is subject to the risk of adverse
market fluctuation during that period, the Manager does not believe
that the net asset value or income of a Fund will be significantly
adversely affected by its purchase of securities on a "when-issued"
basis. See "When-Issued and Delayed Delivery Transactions" in the
Statement of Additional Information Statement for further details.

Writing Covered Calls. Each Fund except Money Fund may write
(i.e., sell) call options ("calls") that are traded on a domestic
securities exchange or quoted on NASDAQ, that are traded on foreign
securities exchanges and domestic over-the-counter markets or that
are traded on foreign over-the-counter markets. All such calls
written by these Funds must be "covered" while the call is
outstanding (i.e., the Fund must own the securities subject to the
call or other securities acceptable for applicable escrow require-
ments). Calls on Futures (see "Hedging," below) must be covered by
deliverable securities or by liquid assets segregated to satisfy
the Futures contract. Covered call writing is an attempt to
enhance income through the receipt of premiums from expired calls
and any net profits from closing purchase transactions. After any
such sale, up to 100% of each such Funds may be subject to calls.

If a call written by a Fund is exercised, the Fund forgoes any
possible profit from an increase in the market price of the
underlying security over the exercise price less the commissions
paid on the sale. In addition, the Fund could experience capital
losses which might cause previously distributed short-term capital
gains to be recharacterized as non-taxable return of capital to
shareholders.

Hedging. For hedging purposes as a temporary defensive maneuver,
Global Securities Fund, Capital Appreciation Fund, Growth Fund,
Multiple Strategies Fund and Strategic Bond Fund may use Stock
Index Futures; Bond Fund, Global Securities Fund, Strategic Bond
Fund and High Income Fund may use Interest Rate Futures and Bond
Index Futures (together with Stock Index Futures, referred to as
"Futures"); each Fund may enter into Forward Contracts (defined
below), and may also buy and sell call and put options on securi-
ties, Futures (as applicable), broadly-based indices and foreign
currencies; Bond Fund, High Income Fund and Strategic Bond Fund may
also enter into Interest Rate Swap transactions (all of the
foregoing are referred to as "Hedging Instruments"). Hedging
Instruments may be used to attempt to: (i) protect against declines
in the market value of a Fund's portfolio securities or Futures,
and thus protect that Fund's net asset value per share against
downward market trends, (ii) protect a Fund's unrealized gains in
the value of its securities which have appreciated, (iii) facili-
tate selling portfolio securities for investment reasons, (iv)
establish a position in the securities markets as a temporary
substitute for purchasing particular securities, or (v) reduce the
risk of adverse currency fluctuations. A call or put may be
purchased only if, after such purchase, the value of all call and
put options held by that Fund would not exceed 5% of its total
assets. The Funds will not use Futures and options on Futures for
speculation. The Hedging Instruments which Funds may use are
described below.

Interest Rate Futures. Bond Fund, Global Securities Fund,
Strategic Bond Fund and High Income Fund may buy and sell futures
contracts that relate to debt securities ("Interest Rate Futures").
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.

Bond Index Futures. Bond Fund, Global Securities Fund, Strategic
Bond Fund and High Income Fund may buy and sell futures contracts
that relate to bond indices ("Bond Index Futures"). A bond index
assigns relative values to the bonds included in that index and is
used as a basis for trading long-term Bond Index Futures contracts.
Bond Index Futures reflect the price movements of bonds included in
the index. They differ from Interest Rate Futures in that
settlement is made in cash rather than by delivery.

Stock Index Futures. Capital Appreciation Fund, Growth Fund,
Multiple Strategies Fund and Global Securities Fund and Strategic
Bond Fund may buy and sell futures contracts that relate to
broadly-based stock indices ("Stock Index Futures"). A stock index
is "broadly-based" if it includes stocks that are not limited to
issuers in any particular industry or group of industries. Stock
Index Futures obligate one party to accept, and the other party to
make, delivery of cash equal to the difference between the stock
index value at the close of trading of the contract and the
exercise price of the futures contract times a specified multiple
(the "multiplier") which determines the total dollar value for each
point of difference. No physical delivery of the underlying stocks
in the index is made. Generally, contracts are closed out prior to
the expiration date of the contract.

Purchasing Calls on Securities and Futures. Each Fund may purchase
calls on securities or on Futures that are traded on U.S. and
foreign securities or commodities exchanges, the U.S. over-the-cou-
nter markets or foreign over-the-counter markets in order to
protect against the possibility that its portfolio will not fully
participate in an anticipated rise in value of the long-term
securities market. The value of debt securities underlying calls
will not exceed the value of the portion of the Fund's portfolio
invested in cash or cash equivalents (i.e. securities with
maturities of less than one year).

Puts on Securities and Futures. Each Fund, other than Money Fund,
may purchase put options (``puts'') which relate to securities
(whether or not it holds such securities in its portfolio) or
Futures. They may also write puts on securities, securities
indices or Futures only if such puts are covered by segregated
liquid assets. None of the Funds will write puts if, as a result,
more than 50% of its net assets would be required to be segregated
liquid assets. In writing puts, there is the risk that a Fund may
be required to buy the underlying securities at a discounted price.

Foreign Currency Options. Each Fund may purchase and write puts
and calls on foreign currencies that are traded on a securities or
commodities exchange or quoted by major recognized dealers in such
options, for the purpose of protecting against declines in the
dollar value of foreign securities owned by such Fund or in the
dollar value of payments on such securities and against increases
in the dollar cost of foreign securities to be acquired. If a rise
is anticipated in the dollar value of a foreign currency in which
securities to be acquired are denominated, the increased cost of
such securities may be partially offset by purchasing calls or
writing puts on that foreign currency. If a decline in the dollar
value of a foreign currency is anticipated, the decline in value of
portfolio securities denominated in that currency may be partially
offset by writing calls or purchasing puts on that foreign
currency. However, in the event of currency rate fluctuations
adverse to a Fund's position, it would lose the premium it paid and
transactions costs.

Forward Contracts. Each Fund, other than Money Fund, may enter
into foreign currency exchange contracts (``Forward Contracts''),
which obligate the seller to deliver and the purchaser to take a
specific amount of foreign currency at a specific future date for
a fixed price. The Funds may enter into a Forward Contract in
order to ``lock in'' the U.S. dollar price of a security denominat-
ed in a foreign currency which it has purchased or sold but which
has not yet settled, or to protect against a possible loss
resulting from an adverse change in the relationship between the
U.S. dollar and a foreign currency. There is a risk that use of
Forward Contracts may reduce gain that would otherwise result from
a change in the relationship between the U.S. dollar and a foreign
currency.

Interest Rate Swap Transactions. Bond Fund, High Income Fund and
Strategic Bond Fund may enter into interest rate swaps. Interest
rate swaps are subject to interest rate risks, in that the Fund
could be obligated to pay more under its swap agreements than it
receives, as a result of interest rate changes. In an interest
rate swap, the Fund and another party exchange their respective
commitments to pay or receive interest on a security (e.g., an
exchange of floating rate payments for fixed rate payments). These
Funds will not use interest rate swaps for leverage. Swap
transactions will be entered into only as to security positions
held by the Fund. The Funds may not enter into swap transactions
with respect to more than 50% of its total assets.

The Funds will segregate liquid assets (e.g., cash, U.S. Government
securities or other appropriate high grade debt obligations) equal
to the net excess, if any, of its obligations over its entitlements
under the swap and will mark to market that amount daily. There is
a risk of loss on a swap equal to the net amount of interest
payments that the Funds are contractually obligated to make. The
credit risk of an interest rate swap depends on the counterparty's
ability to perform. The value of the swap may decline if the
counterparty's creditworthiness deteriorates. If the counterparty
defaults, the Fund risks the loss of the net amount of interest
payments that it is contractually entitled to receive. The Fund
may be able to reduce or eliminate its exposure to losses under
swap agreements either by assigning them to another party, or by
entering into an offsetting swap agreement with the same counterpa-
rty or another creditworthy counterparty. See "Hedging" - Interest
Rate Swap Transactions in the Statement of Additional Information
for further details.

Risks of Options and Futures Trading. The Statement of Additional
Information contains more information about options and Futures,
Forward Contracts, segregation arrangements for Forward Contracts
and Futures, the payment of premiums for option trades, the tax
effects, risks and possible benefits to the Funds from options
trading and information as to the Fund's other limitations on
investments in Futures and options thereon. These limitations and
the restrictions described in the preceding paragraph on cross
hedging are not fundamental policies of the Funds. There are
certain risks in writing calls. If a call written by a Fund is
exercised, the Fund foregoes any profit from any increase in the
market price above the call price of the underlying investment on
which the call was written. In addition, the Fund could experience
capital losses that might cause previously distributed short-term
capital gains to be re-characterized as non-taxable return of
capital to shareholders. In writing puts, there is the risk that
the Fund may be required to buy the underlying security at a
disadvantageous price. The principal risks of Futures trading are:
(a) possible imperfect correlation between the prices of the
Futures and the market value of the debt securities in the Fund's
portfolio; (b) possible lack of a liquid secondary market for
closing out a Futures position; (c) the need for additional skills
and techniques beyond those required for normal portfolio manage-
ment; and (d) losses on Futures resulting from interest rate
movements not anticipated by the Manager.

Derivative Investments. Each Fund, other than Money Fund, can
invest in a number of different kinds of ``derivative invest-
ments.'' 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 (see ``Writing
Covered Calls'' and ``Hedging''), as well as the investments
discussed in this section. The risks of investing in derivative
investments include not only the ability of the company issuing the
instrument to pay the amount due on the maturity of the instrument,
but 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 this can mean
that the Funds will realize less principal and/or income than
expected. Certain derivative investments held by the Fund may
trade in the over-the-counter market and may be illiquid. See
``Restricted and Illiquid Securities.''
Examples of derivative investments the Funds may invest in include,
among others, ``index-linked'' notes. These are debt securities of
companies that call for 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. The payment on
maturity of an index-linked note depends on the performance of one
or more market indices, such as the S&P 500 Index. Further
examples of derivative investments the Fund may invest in include
``debt exchangeable for common stock'' of an issuer or ``equity-li-
nked 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
principal amount of the debt.

Other examples of derivative investments the Funds may invest in
are currency-indexed securities. These are typically short-term
debt securities whose maturity values or interest rates are
determined by reference to one or more specified foreign curren-
cies. Certain currency-indexed securities purchased by the Fund
may have a payout factor tied to a multiple of the movement of the
U.S. dollar (or the foreign currency in which the security is
denominated) against the movement in the U.S. dollar, the foreign
currency, another currency, or an index. Such securities may be
subject to increased principal risk and increased volatility than
comparable securities without a payout factor in excess of one, but
the Manager believes the increased yield justifies the increased
risk.

Portfolio Turnover. The Funds may engage frequently in short-term
trading. High turnover and short-term trading involve correspond-
ingly greater commission expenses and transaction costs for Capital
Appreciation Fund, Growth Fund, Multiple Strategies Fund and Global
Securities Fund and to a lesser extent, higher transaction costs
for Money Fund, Bond Fund, Strategic Bond Fund and High Income
Fund. Portfolio turnover rates are set forth under "Financial
Highlights" for each Fund. If any Fund derives 30% or more of its
gross income from the sale of securities held less than three
months, it may fail to qualify under the tax laws as a regulated
investment company (see "Dividends, Distributions and Taxes,"
below).

Short Sales Against-the-Box. Each Fund, except Money Fund may sell
securities short in "short sales against-the-box." No more than
15% of any Fund's net assets will be held as collateral for such
short sales at any one time. See "Investment Objectives and
Policies - Short Sales Against-the-Box" in the Statement of
Additional Information for further information.

Investment Restrictions

Each of the Funds has certain investment restrictions which,
together with its investment objective, are fundamental policies,
that is, subject to change only by approval of a majority of the
outstanding voting securities of the appropriate Fund. Under some
of those restrictions, each Fund cannot: (1) with respect to 75% of
its total assets, invest in securities (except those of the U.S.
Government or its agencies or instrumentalities) of any issuer if
immediately thereafter, either (a) more than 5% of that Fund's
total assets would be invested in securities of that issuer, or (b)
that Fund would then own more than 10% of that issuer's voting
securities or 10% in principal amount of the outstanding debt
securities of that issuer (the latter limitation on debt securities
does not apply to Strategic Bond Fund); (2) lend money except in
connection with the acquisition of debt securities which a Fund's
investment policies and restrictions permit it to purchase; the
Funds may also make loans of portfolio securities (see "Loans of
Portfolio Securities"); (3) pledge, mortgage or hypothecate any
assets to secure a debt; the escrow arrangements which are involved
in options trading are not considered to involve such a mortgage,
hypothecation or pledge; (4) concentrate investments in any
particular industry, other than securities of the U.S. Government
or its agencies or instrumentalities [Money Fund, Bond Fund and
High Income Fund, only]; therefore these Funds will not purchase
the securities of issuers primarily engaged in the same industry if
more than 25% of the total value of that Fund's assets would (in
the absence of special circumstances) consist of securities of
companies in a single industry; however, there is no limitation as
to concentration of investments by Money Fund in obligations issued
by domestic banks, foreign branches of domestic banks (if guaran-
teed by the domestic parent), savings and loan associations or in
obligations issued by the federal government and its agencies and
instrumentalities; and (5) deviate from the percentage requirements
and other restrictions listed under "Warrants and Rights," and the
first paragraph under "Borrowing". None of the percentage limita-
tions and restrictions described above and in the Statement of
Additional Information for the Funds with respect to writing
covered calls, Hedging, short sales and derivatives is a fundamen-
tal policy.

The percentage restrictions described above and in the Statement of
Additional Information, other than those described under "Special
Investment Methods -- Borrowing," apply only at the time of
investment and require no action by a Fund as a result of subse-
quent changes in value of the investment or the size of that Fund.
Money Fund has separately undertaken to exclude savings and loan
associations from the exception to the concentration limitation set
forth under investment restriction (4), above. A supplementary
list of investment restrictions is contained in the Statement of
Additional Information, which also contains further information
regarding the Funds' investment policies. The Trustees of the
Trust are required to monitor events to identify any irreconcilable
conflicts which may arise between the variable life insurance
policies and variable annuity contracts that invest in the Funds.
Should any conflict arise which ultimately requires that any
substantial amount of assets be withdrawn from any Fund, its
operating expenses could increase.

Management Of The Funds

The Board of Trustees has overall responsibility for the management
of each Fund under the laws of Massachusetts governing the
responsibilities of trustees of business trusts. Subject to the
authority of the Board of Trustees, the Manager is responsible for
the day-to-day management of the Funds' business, supervises the
investment operations of each Fund and the composition of its
portfolio and furnishes advice and recommendations with respect to
investments, investment policies and the purchase and sale of
securities, pursuant to an investment advisory agreement with each
Fund (the "Agreements").

Effective September 1, 1994, the monthly management fee payable to
the Manager is computed separately on the net assets of each Fund
as of the close of business each day. The management fee rates
that became effective that day are as follows (i) for Money Fund:
0.450% of the first $500 million of net assets, 0.425% of the next
$500 million, 0.400% of the next $500 million, and 0.375% of net
assets over $1.5 billion; (ii) for Capital Appreciation Fund,
Growth Fund, Multiple Strategies Fund, and Global Securities Fund:
0.75% of the first $200 million of net assets, 0.72% of the next
$200 million, 0.69% of the next $200 million, 0.66% of the next
$200 million, and 0.60% of net assets over $800 million; and (iii)
for High Income Fund, Bond Fund and Strategic Bond Fund: 0.75% of
the first $200 million of net assets, 0.72% of the next $200
million, 0.69% of the next $200 million, 0.66% of the next $200
million, 0.60% of the next $200 million, and 0.50% of net assets
over $1 billion. The management fee rates in effect during the
Funds' fiscal year ended December 31, 1993 are in Note 6 to the
financial statements included in the Trust's Statement of Addition-
al Information.

During the fiscal year ended December 31, 1993, the management fee
(computed on an annualized basis as a percentage of the net assets
of all the Funds as of the close of business each day) and the
total operating expenses as a percentage of average net assets of
each Fund, when restated to reflect the current management fee
rates described above and the current limitation on expenses
described in the Statement of Additional Information, were as
follows:

Management Total Operating
Fund Fees Expenses
- -------------------------- ---------- ---------------
Money Fund .45% .51%
High Income Fund .75 .86
Bond Fund .75 .80
Capital Appreciation Fund .75 .80
Growth Fund .75 .83
Multiple Strategies Fund .75 .81
Global Securities Fund .75 .96
Strategic Bond Fund(1) .75 1.00

(1) Annualized. Total Operating Expenses would have been 1.06% in
the absence of the Manager's voluntary expense limitation.

The Manager is authorized by the Agreements to employ such brokers
or dealers as may in its best judgment, based on all relevant
factors, implement the policy of the Funds to obtain, at reasonable
expense, the "best execution" (prompt and reliable execution at the
most favorable price obtainable) of the Funds' portfolio transac-
tions. Subject to the Agreements, the Manager may also consider
sales of shares of the Funds and other funds advised by the Manager
or its affiliates as a factor in the selection of broker-dealers
for portfolio transactions. As most purchases by Money Fund, High
Income Fund, Bond Fund and Strategic Bond Fund are principal
transactions at net prices, these Funds incur little or no
brokerage costs, and the mark-up (the difference or spread between
the dealer's purchase and sale price) that they pay on principal
transactions is smaller than that paid by most individual inves-
tors. "Investment Management Services" in the Statement of
Additional Information contains additional information about the
Agreements, including a description of expense arrangements,
exculpation provisions, and brokerage practices of the Funds.

Mr. David Negri is a Vice President of the Manager who serves as a
Portfolio Manager of High Income Fund, Bond Fund, Multiple
Strategies Fund and Strategic Bond Fund. Since July, 1989, January
1990, July, 1989 and May 1993 respectively, he has been the person
principally responsible for the day-to-day management portfolios of
those Funds. During the past five years, he has also served as an
officer of other OppenheimerFunds. Mr. George Evans is a Vice
President of the Manager who serves as a Portfolio Manager of
Global Securities Fund. Since February, 1991, he has been the
person principally responsible for the day-to-day management of
that Fund's portfolio. During the past five years, he has also
served as an international equities portfolio manager/analyst with
Brown Brothers Harriman & Co. Mr. Arthur Zimmer is a Vice
President of the Manager who serves as a Portfolio Manager of Money
Fund. Since October, 1990, he has been the person principally
responsible for the day-to-day management of that Fund's portfolio.
During the past five years, he has also served as an officer of
other OppenheimerFunds and formerly served as Vice President of
Hanifen Imhoff Management Company (mutual fund investment adviser).
Mr. Robert Doll is a Senior Vice President of the Manager who
serves as a Portfolio Manager of Growth Fund. Since April, 1991,
he has been the person principally responsible for the day-to-day
management of that Fund's portfolio. During the past five years,
he has also served as an officer of other OppenheimerFunds. Mr.
Paul LaRocco is an Assistant Vice President and a Portfolio Manager
of the Manager who serves as Portfolio Manager of Capital Apprecia-
tion Fund. Since January, 1994, he has been the person principally
responsible for the day-to-day management of the Fund's portfolio.
During the past five years, he has also served as Associate
Portfolio Manager for other OppenheimerFunds and formerly served as
a securities analyst with Columbus Circle Investors, prior to which
he was an investment analyst for Chicago Title & Trust Co. Messrs.
Richard Rubinstein and David Negri are Vice Presidents of the
Manager and serve as Portfolio Managers of Multiple Strategies
Fund, since April, 1991 and July, 1989, respectively. During the
past five years, Mr. Rubinstein has served as an officer of other
OppenheimerFunds and was formerly Vice President and Portfolio
Manager/Security Analyst for Oppenheimer Capital Corp., an
investment adviser. Each of the Portfolio Managers named above are
also Vice Presidents of the Trust. For more information about the
Trust's other Trustees and Officers, see "Trustees and Officers" in
the Statement of Additional Information.

The Manager has operated as an investment adviser since April 30,
1959. It and its affiliates currently advise U.S. investment
companies with assets aggregating over $27 billion as of December
31, 1993, and having more than 1.8 million shareholder accounts.
The Manager is owned by Oppenheimer Acquisition Corp., a holding
company owned in part by senior management of the Manager, and
ultimately controlled by Massachusetts Mutual Life Insurance
Company, a mutual life insurance company which also advises pension
plans and investment companies.

Management's Discussion of Performance. During the Funds' fiscal
year ended December 31, 1993, the Managers emphasized the following
investment strategies and techniques. For High Income Fund, bonds
of cyclical companies in the automotive, paper and metals indus-
tries were emphasized, in expectation that they would benefit from
stronger U.S. economic growth, and once a recovery takes hold in
Europe and Japan. The strengthening of the U.S. economy and
continued low inflation and interest rate levels resulted in
favorable performance of high yield, lower rated bonds, which more
than offset modest declines in yields as interest rates move lower.
For Bond Fund, bonds were emphasized in areas which are expected to
experience high growth rates, such as telecommunications, or in
areas which are regarded as undervalued, such as oil and gas
companies. Intermediate U.S. treasury securities were purchased
for that Fund to position it for a possible increase in interest
rates. For Capital Appreciation Fund, stocks of companies were
emphasized in health care, technology and telecommunications, and
specialty retailing, in expectation that an improving economy will
support the prospects for stocks of small companies. For Growth
Fund, stocks were emphasized in financial service companies
positioned to benefit from low interest rates, health care
companies, and other global companies regarded as having above-ave-
rage long-term prospects. Multiple Strategies Fund's fixed income
portfolio emphasized high-yield corporate issues and foreign bonds,
notably from Canadian, Australian and Latin American issuers, which
are expected to benefit from the improving global economy and be
less sensitive to changes in U.S. interest rates. That Fund's
equity portfolio focused on health care and technology stocks that
are expected to provide new products or services, and international
stocks expected to capitalize on the prospects of strong economic
growth offshore. For Global Securities Fund, banks and financial
services in emerging markets and developed countries, consumer
industries servicing emerging markets, telecommunications and
energy logistics were emphasized in anticipation of increased
capital requirements to support development, growth and demand of
emerging consumer markets, and an anticipated pick up in global
economies and markets. For Strategic Bond Fund, corporate bonds
were emphasized in the paper, metals and automotive industries, to
take advantage of price appreciation in the event of economic
recovery, and foreign fixed income securities were emphasized to
take advantage of growth rates in foreign countries (including
Europe, Australia, Canada New Zealand, Latin America, Indonesia and
Eastern Europe) that are higher than in the U.S.

Comparison of Change in Value of $10,000 Hypothetical Investment in
High Income Fund Versus Salomon Brothers High Yield Market Index

(Chart comparing total return of High Income Fund shares to
performance of Salomon Brothers High Yield Market Index)

Average Annual Total Return at 12/31/93

1 year 5 years Life of Fund (1)

26.34% 16.96% 14.70%

Comparison of Change in Value of $10,000 Hypothetical Investment in
Bond Fund Versus Lehman Brothers Corporate Bond Index

(Chart comparing total return of Bond Fund shares to performance of
Lehman Brothers Corporate Bond Index)

Average Annual Total Return at 12/31/93

1 year 5 years Life of Fund (1)

13.04% 11.61% 11.21%

Comparison of Change in Value of $10,000 Hypothetical Investment in
Capital Appreciation Fund Versus S&P 500 Index

(Chart comparing total return of Capital Appreciation Fund shares
to performance of S&P 500 Index)

Average Annual Total Return at 12/31/93

1 year 5 years Life of Fund (1)

27.32% 19.26% 16.46%

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

(Chart comparing total return of Growth Fund shares to performance
of S&P 500 Index)

Average Annual Total Return at 12/31/93

1 year 5 years Life of Fund (1)

7.25% 11.83% 12.70%

Comparison of Change in Value of $10,000 Hypothetical Investment in
Multiple Strategies Fund Versus S&P 500 Index and Lehman Brothers
Aggregate Bond Index

(Chart comparing total return of Multiple Strategies Fund shares to
performance of S&P 500 Index and Lehman Brothers Aggregate Bond
Index)

Average Annual Total Return at 12/31/93

1 year 5 years Life of Fund (1)

15.95% $11.01% 11.67%

Comparison of Change in Value of $10,000 Hypothetical Investment in
Global Securities Fund Versus Morgan Stanley World Index

(Chart comparing total return of Global Securities Fund shares to
performance of Morgan Stanley World Index)

Average Annual Total Return at 12/31/93

1 year Life of Fund (1)

70.32% 17.14%

Comparison of Change in Value of $10,000 Hypothetical Investment in
Strategic Bond Fund Versus Lehman Brothers Aggregate Bond Index and
Salomon Brothers World Government Bond Index

(Chart comparing total return of Strategic Bond Fund to performance
of Lehman Brothers Aggregate Bond Index and Salomon Brothers World
Government Bond Index)

Cumulative Total Return at 12/31/93

Life of Fund (1)

4.25%

- ----------------
(1)Inception dates are as follows: April 30, 1986 for High Income
Fund; April 3, 1985 for Bond Fund and Growth Fund; August 15, 1986
for Capital Appreciation Fund; February 9, 1987 for Multiple
Strategies Fund; November 12, 1990 for Global Securities Fund.; and
May 3, 1993 for Strategic Bond Fund.

Indices. The Salomon Brothers High Yield Market Index is an
unmanaged index of below-investment grade (but rated at least
BB+/Ba1 by Standard & Poor's or Moody's) U.S. corporate debt
obligations, widely-recognized as a measure of the performance of
the high-yield corporate bond market, the market in which High
Income Fund principally invests. The Lehman Brothers Corporate
Bond Index is an unmanaged index of publicly-issued non-convertible
investment grade corporate debt of U.S. issuers, widely recognized
as a measure of the U.S. fixed-rate corporate bond market. The S&P
500 Index is an unmanaged index of 500 widely held common stocks
traded on the New York and American Stock Exchanges and the
over-the-counter market, and is widely recognized as a general
measure of stock market performance. The Lehman Brothers Aggregate
Bond Index is a broad-based, unmanaged index of U.S. corporate bond
issues, U.S. government securities and mortgage-backed securities,
widely recognized as a measure of the performance of the domestic
debt securities market. The Morgan Stanley World Index is an
unmanaged index of issuers listed on the stock exchanges of 20
foreign countries and the U.S., and is widely recognized as a
measure of global stock market performance. The Salomon Brothers
World Government Bond Index is an unmanaged index of fixed-rate
bonds having a maturity of one year or more, and is widely
recognized as a benchmark of fixed income performance on a
world-wide basis. The performance of each index reflects reinvest-
ment of income but not capital gains or transaction costs, and none
of the data shown above shows the effect of taxes. While index
comparisons may be useful to provide a benchmark for the Funds'
performance, it must be noted that the Funds' investments are not
limited to the securities in any one index and the index data does
not reflect any assessment of the risk of the investments included
in the index.

Purchase Of Shares

Shares of each Fund are offered only for purchase by Accounts as an
investment medium for variable life insurance policies and variable
annuity contracts, as described in the accompanying Account
Prospectus. The sale of shares will be suspended during any period
when the determination of net asset value is suspended and may be
suspended by the Board of Trustees whenever the Board judges it in
that Fund's best interest to do so.

Shares of each Fund are offered at their respective offering price,
which (as used in this Prospectus and the Statement of Additional
Information) is net asset value (without sales charge). Under Rule
2a-7, the amortized cost method is used to value Money Fund's net
asset value per share, which is expected to remain fixed at $1.00
per share except under extraordinary circumstances; see "Purchase,
Redemption and Pricing of Shares - Money Fund Net Asset Valuation"
in the Statement of Additional Information for further information.
There can be no assurance that Money Fund's net asset value will
not vary.

All purchase orders are processed at the offering price next
determined after receipt by the Trust of a purchase order in proper
form. The offering price (and net asset value) is determined as of
4:00 P.M., New York time, each day the New York Stock Exchange is
open. Net asset value per share of each Fund is determined by
dividing the value of that Fund's net assets by the number of its
shares outstanding. The Board of Trustees has established
procedures for valuing each Fund's securities. In general, those
valuations are based on market value, with special provisions for:
(i) securities not having readily available market quotations; (ii)
short-term debt securities; and (iii) calls and Hedging Instru-
ments. Further details are in "Purchase, Redemption and Pricing of
Shares" in the Statement of Additional Information.

Redemption Of Shares

Payment for shares tendered by an Account for redemption is made
ordinarily in cash and forwarded within seven days after receipt by
the Trust's transfer agent, Oppenheimer Shareholder Services (the
"Transfer Agent"), of redemption instructions in proper form,
except under unusual circumstances as determined by the SEC. The
Trust understands that payment to the Account owner will be made in
accordance with the terms of the accompanying Account Prospectus.
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
Funds is subject to daily fluctuations and the net asset value of
the Funds' shares (other than shares of the Money Fund) will
fluctuate accordingly. Therefore, the redemption value may be more
or less than the investor's cost.

Dividends, Distributions
And Taxes

Dividends of the Money Fund. The Trust intends to declare all of
Money Fund's net income, defined below, as dividends on each day
the New York Stock Exchange is open for business. Such dividends
will be payable on shares held of record at the time of the
previous determination of net asset value. Daily dividends accrued
since the prior dividend payment will be paid to shareholders
monthly as of a date selected by the Board of Trustees. Money
Fund's net income for dividend purposes consists of all interest
income accrued on portfolio assets, less all expenses of that Fund
for such period. Accrued market discount is included in interest
income; amortized market premium is treated as an expense.
Although distributions from net realized gains on securities, if
any, will be paid at least once each year, and may be made more
frequently, Money Fund does not expect to realize long-term capital
gains, and therefore does not contemplate payment of any capital
gains distribution. Distributions from net realized gains will not
be distributed unless Money Fund's capital loss carry forwards, if
any, have been used or have expired. Money Fund seeks to maintain
a net asset value of $1.00 per share for purchases and redemptions.
To effect this policy, under certain circumstances the Money Fund
may withhold dividends or make distributions from capital or
capital gains (see "Purchase, Redemption and Pricing of Shares" in
the Statement of Additional Information).

Dividends and Distributions of High Income Fund, Bond Fund,
Strategic Bond Fund and Multiple Strategies Fund. The Trust
intends to declare High Income Fund, Bond Fund, Strategic Bond Fund
and Multiple Strategies Fund dividends quarterly, payable in March,
June, September and December.

Dividends and Distributions of Capital Appreciation Fund, Growth
Fund and Global Securities Fund. The Trust intends to declare
Capital Appreciation Fund, Growth Fund and Global Securities Fund
dividends on an annual basis.

Dividends and Distributions: General. Any Fund (other than Money
Fund) may make a supplemental distribution annually in December out
of any net short-term or long-term capital gains derived from the
sale of securities, premiums from expired calls written by the
Fund, and net profits from hedging transactions, realized from
November 1 of the prior year through October 31 of the current
year. Each such Fund may also make a supplemental distribution of
capital gains and ordinary income following the end of its fiscal
year. All dividends and capital gains distributions paid on shares
of any of the Funds are automatically reinvested in additional
shares of that Fund at net asset value determined on the distribu-
tion date. There are no fixed dividend rates and there can be no
assurance as to the payment of any dividends or the realization of
any capital gains.

Tax Treatment to the Account As Shareholder. Dividends paid by
each Fund from its ordinary income and distributions of each Fund's
net realized short-term or long-term capital gains are includable
in gross income of the Accounts holding such shares. The tax
treatment of such dividends and distributions depends on the tax
status of that Account.

Tax Status of the Funds. If the Funds qualify as "regulated
investment companies" under the Internal Revenue Code, the Trust
will not be liable for Federal income taxes on amounts paid as
dividends and distributions from any of the Funds. The Funds did
qualify during their last fiscal year and the Trust intends that
they will qualify in current and future years. However, the Code
contains a number of complex tests relating to qualification which
any Fund might not meet in any particular year (see, e.g., "The
Funds and Their Investment Policies - Portfolio Turnover"). If any
Fund does not so qualify, it would be treated for tax purposes as
an ordinary corporation and would receive no tax deduction for
payments made to shareholders of that Fund. The above discussion
relates solely to Federal tax laws. This discussion is not
exhaustive and a qualified tax adviser should be consulted.

Additional Information

Description of the Trust and its Shares. The Declaration of Trust
permits the Board of Trustees to issue an unlimited number of full
and fractional shares of beneficial interest of separate series,
without par value, and from time to time to create additional
series and to fix and determine the relative rights and preferences
among the different series. Shares of eight series have been
authorized, which constitute interests in the Funds described
herein; the Trustees have authority to create additional series
(without shareholder approval) which would constitute new funds.
Shares of each Fund represent an interest in that Fund proportion-
ately equal to the interest of each other share of that Fund and
entitle their holders to one vote per share (with proportionate
voting for fractional shares) on matters submitted to their vote,
as explained in the Statement of Additional Information. Shares do
not have cumulative voting rights, or conversion, preemptive or
subscription rights, and are fully transferable. Shares of each
Fund have liquidation rights as to the assets of that Fund. It is
not contemplated that regular annual meetings of shareholders will
be held. Under certain circumstances, shareholders have the right
to remove a Trustee. See "Additional Information - Description of
the Trust" in the Statement of Additional Information for details.

As of December 31, 1993, Monarch Life Insurance Company's Variable
Account B may be deemed to control Money Fund and Growth Fund;
Bankers Security Variable Annuity Funds P and Q may be deemed to
control High Income Fund and Capital Appreciation Fund; Nationwide-
's Separate Accounts I and II may be deemed to control Bond Fund,
Multiple Strategies Fund and Global Securities Fund; Confederation
Life Insurance and Annuity Company's Separate Account A may be
deemed to control High Income Fund, Capital Appreciation Fund,
Global Securities Fund, Growth Fund and Strategic Bond Fund; in
each case by virtue of owning more than 25% of the shares of such
Fund. See "Trustees and Officers - Fund Shareholders" in the
Statement of Additional Information. Except as provided under the
Investment Company Act, the Accounts will vote their shares in
accordance with instructions received from Account Policyowners;
this is explained further in the accompanying Account Prospectus.

Shareholder Inquiries. Inquiries by policyowners for Account
information are to be directed to the insurance company issuing the
Account at the address or telephone number shown on the first page
of the accompanying Account Prospectus.

The Custodian and the Transfer Agent. The Custodian of the assets
of the Trust is The Bank of New York. The Manager and its
affiliates have banking relationships with the Custodian. See
"Additional Information" in the Statement of Additional Information
for further details. Cash balances with the Custodian in excess of
$100,000 are not protected by Federal deposit insurance. Such
uninsured balances may at times be substantial. Oppenheimer
Shareholder Services, a division of the Manager, acts as transfer
agent on an at-cost basis for the Trust. It also acts as transfer
agent and shareholder servicing agent for certain other open-end
funds advised by the Manager.

From time to time the "total return" and "average annual total
return" for any of the Funds may be advertised. Each such Fund's
"average annual total return" for a particular period is computed
by determining the average annual compounded rate of return over
the period, using the initial amount invested at the beginning of
the period and the redeemable value of the investment at the end of
the period. "Total return" for a particular period is a cumulative
rate of return over the entire period, also using the initial
amount invested and the redeemable value at the end of the period.
The redeemable value of the investment assumes that all dividends
and capital gains distributions have been reinvested at net asset
value without sales charge. Each such Fund's "total return" and
"average annual total return" indicate the investment results an
investor would have experienced over the stated period from changes
in share price and reinvestment of dividends and distributions.

<PAGE>
<PAGE>
Appendix A -
Description of Terms

Some of the terms used in the Prospectus and the Statement of Addi-
tional Information are described below:

Bank obligations include certificates of deposit which are negotia-
ble certificates evidencing the indebtedness of a commercial bank
to repay funds deposited with it for a definite period of time
(usually 14 days to one year) at a stated interest rate. Bankers'
acceptances are credit instruments evidencing the obligation of a
bank to pay a draft which has been drawn on it by a customer; these
instruments reflect the obligation both of the bank and of the
drawer to pay the face amount of the instrument upon maturity.
Time deposits are non-negotiable deposits maintained in a banking
institution for a specified period of time at a stated interest
rate. Bank notes are short-term direct credit obligations of the
issuing bank or bank holding company.

Commercial paper consists of short-term (usually 1 to 270 days)
unsecured promissory notes issued by corporations in order to
finance their current operations. Variable rate master demand
notes are obligations that permit the investment of fluctuating
amounts at varying rates of interest pursuant to direct arrangement
between the holder and the borrower. The holder has the right to
increase the amount under the note at any time up to the face
amount, or to decrease the amount borrowed, and the borrower may
repay up to the face amount of the note without penalty.

Corporate obligations are bonds and notes issued by corporations
and other business organizations, including business trusts, in
order to finance their long-term credit needs.

Letters of credit are obligations by the issuer (a bank or other
person) to honor drafts or other demands for payment upon compli-
ance with specified conditions.

Securities issued or guaranteed by the United States Government or
its agencies or instrumentalities include issues of the United
States Treasury, such as bills, certificates of indebtedness, notes
and bonds, and issues of agencies and instrumentalities established
under the authority of an act of Congress. Such agencies and
instrumentalities include, but are not limited to, Bank for
Cooperatives, Federal Financing Bank, Federal Home Loan Bank,
Federal Intermediate Credit Banks, Federal Land Banks, Federal
National Mortgage Association and Tennessee Valley Authority.
Issues of the United States Treasury are direct obligations of the
United States Government. Issues of agencies or instrumentalities
are (i) guaranteed by the United States Treasury, or (ii) supported
by the issuing agency's or instrumentality's right to borrow from
the United States Treasury, or (iii) supported by the issuing
agency's or instrumentality's own credit.

<PAGE>
Appendix B - Description of Securities Ratings

This is a description of (i) the two highest rating categories for
Short Term Debt and Long Term Debt by the Rating Organizations re-
ferred to under "Investment Policies - Money Fund", and (ii) addi-
tional rating categories that apply principally to investments by
High Income Fund, Strategic Bond Fund and Bond Fund. The rating
descriptions are based on information supplied by the Rating
Organizations to subscribers.

Short Term Debt Ratings.

Moody's Investors Service, Inc. ("Moody's"): The following rating
designations for commercial paper (defined by Moody's as promissory
obligations not having original maturity in excess of nine months),
are judged by Moody's to be investment grade, and indicate the
relative repayment capacity of rated issuers:

Prime-1: Superior capacity for repayment. Capacity will normally
be evidenced by the following characteristics: (a) leveling market
positions in well-established industries; (b) high rates of return
on funds employed; (c) conservative capitalization structures with
moderate reliance on debt and ample asset protection; (d) broad
margins in earning coverage of fixed financial charges and high
internal cash generation; and (e) well established access to a
range of financial markets and assured sources of alternate
liquidity.

Prime-2: Strong capacity for repayment. This will normally be
evidenced by many of the characteristics cited above but to a
lesser degree. Earnings trends and coverage ratios, while sound,
will be more subject to variation. Capitalization characteristics,
while still appropriate, may be more affected by external condi-
tions. Ample alternate liquidity is maintained.

Standard & Poor's Corporation ("S&P"): The following ratings by
S&P for commercial paper (defined by S&P as debt having an original
maturity of no more than 365 days) assess the likelihood of
payment:

A-1: Strong capacity for timely payment. Those issues determined
to possess extremely strong safety characteristics are denoted with
a plus sign (+) designation.

A-2: Satisfactory capacity for timely payment. However, the rela-
tive degree of safety is not as high as for issues designated "A--
1".

Fitch Investors Service, Inc. ("Fitch"): Fitch assigns the
following short-term ratings to debt obligations that are payable
on demand or have original maturities of generally up to three
years, including commercial paper, certificates of deposit,
medium-term notes, and municipal and investment notes:

F-1+: Exceptionally strong credit quality; the strongest degree of
assurance for timely payment.

F-1: Very strong credit quality; assurance of timely payment is
only slightly less in degree than issues rated "F-1+".

F-2: Good credit quality; satisfactory degree of assurance for
timely payment, but the margin of safety is not as great as for is-
sues assigned "F-1+" or "F-1" ratings.

Duff & Phelps, Inc. ("Duff & Phelps"): The following ratings are
for commercial paper (defined by Duff & Phelps as obligations with
maturities, when issued, of under one year), asset-backed commer-
cial paper, and certificates of deposit (the ratings cover all
obligations of the institution with maturities, when issued, of
under one year, including bankers' acceptance and letters of
credit):

Duff 1+: Highest certainty of timely payment. Short-term
liquidity, including internal operating factors and/or access to
alternative sources of funds, is outstanding, and safety is just
below risk-free U.S. Treasury short-term obligations.

Duff 1: Very high certainty of timely payment. Liquidity factors
are excellent and supported by good fundamental protection factors.
Risk factors are minor.

Duff 1-: High certainty of timely payment. Liquidity factors are
strong and supported by good fundamental protection factors. Risk
factors are very small.

Duff 2: Good certainty of timely payment. Liquidity factors and
company fundamentals are sound. Although ongoing funding needs may
enlarge total financing requirements, access to capital markets is
good. Risk factors are small.

IBCA Limited or its affiliate IBCA Inc. ("IBCA"): Short-term
ratings, including commercial paper (with maturities up to 12
months), are as follows:

A1+: Obligations supported by the highest capacity for timely
repayment.

A1: Obligations supported by a very strong capacity for timely
repayment.

A2: Obligations supported by a strong capacity for timely repay-
ment, although such capacity may be susceptible to adverse changes
in business, economic, or financial conditions.

Thomson BankWatch, Inc. ("TBW"): The following short-term ratings
apply to commercial paper, certificates of deposit, unsecured
notes, and other securities having a maturity of one year or less.

TBW-1: The highest category; indicates the degree of safety
regarding timely repayment of principal and interest is very
strong.

TBW-2: The second highest rating category; while the degree of
safety regarding timely repayment of principal and interest is
strong, the relative degree of safety is not as high as for issues
rated "TBW-1".

Long Term Debt Ratings.

These rating categories apply principally to investments by High
Income Fund, Strategic Bond Fund and Bond Fund. For Money Fund
only, the two highest rating categories of each Rating Organization
are relevant for securities purchased with a remaining maturity of
397 days or less, or for rating issuers of short-term obligations.

Moody's: Bonds (including municipal bonds) are rated as follows:

Aaa: Judged to be the best quality. They carry the smallest
degree of investment risk and are generally referred to as "gilt
edge." 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, such changes as
can be visualized are most unlikely to impair the fundamentally
strong positions of such issues.

Aa: 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 in "Aaa" securities or
fluctuations 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 in "Aaa" securities.

A: Possess many favorable investment attributes and are to be con-
sidered 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: Considered medium grade obligations, i.e., they are neither
highly protected nor poorly secured. Interest payments and prin-
cipal 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: 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 in-
vestment. Assurance of interest and principal payments or of main-
tenance of other terms of the contract over any long period of time
may be small.

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

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.

Moody's applies numerical modifiers "1", "2" and "3" in each
generic rating classification from "Aa" through "B" in its
corporate bond rating system. The modifier "1" indicates that the
security ranks in the higher end of its generic rating category;
the modifier "2" indicates a mid-range ranking; and the modifier
"3" indicates that the issue ranks in the lower end of its generic
rating category.

Standard & Poor's: Bonds are rated as follows:

AAA: The highest rating assigned by S&P. Capacity to pay interest
and repay principal is extremely strong.

AA: A strong capacity to pay interest and repay principal and dif-
fer from "AAA" rated issues only in small degree.

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

BB, B, CCC, CC: 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 equality and
protective characteristics, these are outweighed by large uncer-
tainties 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.

Fitch:

AAA: Considered to be investment grade and of the highest credit
quality. The obligor has an exceptionally strong ability to pay
interest and repay principal, which is unlikely to be affected by
reasonably foreseeable events.

AA: Considered to be investment grade and of very high credit
quality. The obligor's ability to pay interest and repay principal
is very strong, although not quite as strong as bonds rated "AAA".
Plus (+) and minus (-) signs are used in the "AA" category to
indicate the relative position of a credit within that category.

Because bonds rated in the "AAA" and "AA" categories are not
significantly vulnerable to foreseeable future developments,
short-term debt of these issuers is generally rated "F-1+".

Duff & Phelps:

AAA: The highest credit quality. The risk factors are negligible,
being only slightly more than the risk-free U.S. Treasury debt.

AA: High credit quality. Protection factors are strong. Risk is
modest but may vary slightly from time to time because of economic
conditions. Plus (+) and minus (-) signs are used in the "AA"
category to indicate the relative position of a credit within that
category.

IBCA: Long-term obligations (with maturities of more than 12
months) are rated as follows:

AAA: The lowest expectation for investment risk. Capacity for
timely repayment of principal and interest is substantial such that
adverse changes in business, economic, or financial conditions are
unlikely to increase investment risks significantly.

AA: A very low expectation for investment risk. Capacity for tim-
ely repayment of principal and interest is substantial. Adverse
changes in business, economic, or financial conditions may increase
investment risk albeit not very significantly.

A plus (+) or minus (-) sign may be appended to a long term rating
to denote relative status within a rating category.

TBW: TBW issues the following ratings for companies. These
ratings assess the likelihood of receiving payment of principal and
interest on a timely basis and incorporate TBW's opinion as to the
vulnerability of the company to adverse developments, which may
impact the market's perception of the company, thereby affecting
the marketability of its securities.

A: Possesses an exceptionally strong balance sheet and earnings
record, translating into an excellent reputation and unquestioned
access to its natural money markets. If weakness or vulnerability
exists in any aspect of the company's business, it is entirely
mitigated by the strengths of the organization.

A/B: The company is financially very solid with a favorable track
record and no readily apparent weakness. Its overall risk profile,
while low, it not quite as favorable as for companies in the high-
est rating category.

<PAGE>
APPENDIX TO PROSPECTUS

Graphic material included in Prospectus of Oppenheimer Variable
Account Funds: "Comparison of Total Return of Oppenheimer Variable
Account Funds with Broad-Based Indices - Changes in Value of a
$10,000 Hypothetical Investment"

Linear graphs will be included in the Prospectus of
Oppenheimer Variable Account Funds (the "Funds") depicting the
initial account value and subsequent account value of a hypotheti-
cal $10,000 investment in shares of the Funds for the life of each
Fund (except Oppenheimer Money Fund) and comparing such values with
the same investments over the same time periods in the 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 S&P 500 Index, is
set forth in the Prospectus under "Fund Performance Information
- - Management's Discussion of Performance."

<TABLE>
<CAPTION>
Salomon
Brothers
Fiscal High Yield
Year Ended High Income Fund Market Index
<S> <C> <C>
04/30/86(1) $10,000 $10,000
12/31/86 $10,473 $10,510
12/31/87 $11,318 $10,990
12/31/88 $13,081 $12,664
12/31/89 $13,715 $13,012
12/31/90 $14,352 $12,096
12/31/91 $19,220 $16,851
12/31/92 $22,664 $19,859
12/31/93 $28,632 $24,878

</TABLE>

<TABLE>
<CAPTION>
Lehman
Brothers
Fiscal Corporate
Year Ended Bond Fund Bond Index
<S> <C> <C>
04/03/85(1) $10,000 $10,000
12/31/85 $11,882 $11,819
12/31/86 $13,084 $13,770
12/31/87 $13,415 $14,112
12/31/88 $14,618 $15,352
12/31/89 $16,565 $17,526
12/31/90 $17,877 $18,811
12/31/91 $21,028 $22,325
12/31/92 $22,395 $24,294
12/31/93 $25,315 $27,209
</TABLE>

<TABLE>
<CAPTION>
Fiscal Capital
Year Ended Appreciation Fund S&P 500 Index
<S> <C> <C>
08/15/86(1) $10,000 $10,000
12/31/86 $ 9,835 $ 9,684
12/31/87 $11,245 $10,192
12/31/88 $12,754 $11,880
12/31/89 $16,269 $15,638
12/31/90 $13,530 $15,152
12/31/91 $20,938 $19,758
12/31/92 $24,167 $21,261
12/31/93 $30,770 $23,400
</TABLE>

<TABLE>
<CAPTION>
Fiscal
Year Ended Growth Fund S&P 500 Index
<S> <C> <C>
04/03/85(1) $10,000 $10,000
12/31/85 $10,950 $12,076
12/31/86 $12,894 $14,331
12/31/87 $13,322 $15,083
12/31/88 $16,265 $17,581
12/31/89 $20,101 $23,141
12/31/90 $18,450 $22,422
12/31/91 $23,163 $29,238
12/31/92 $26,528 $31,463
12/31/93 $28,451 $34,628
</TABLE>

<TABLE>
<CAPTION>
Lehman
Brothers
Fiscal Multiple Aggregate
Year Ended Strategies Fund S&P 500 Index Bond Index
<S> <C> <C> <C>
02/09/87(1) $10,000 $10,000 $10,000
12/31/87 $10,397 $ 8,923 $10,063
12/31/88 $12,700 $10,401 $10,857
12/31/89 $14,701 $13,690 $12,434
12/31/90 $14,421 $13,265 $13,549
12/31/91 $16,941 $17,297 $15,716
12/31/92 $18,463 $18,613 $16,879
12/31/93 $21,408 $20,486 $18,525
</TABLE>

<TABLE>
<CAPTION>
Morgan
Fiscal Global Stanley
Year Ended Securities Fund World Index
<S> <C> <C>
11/12/90(1) $10,000 $10,000
12/31/90 $10,040 $10,211
12/31/91 $10,380 $12,148
12/31/92 $ 9,642 $11,582
12/31/93 $16,423 $14,261

</TABLE>

<TABLE>
<CAPTION>
Lehman Salomon
Brothers Brothers World
Fiscal Strategic Aggregate Government
Year Ended Bond Fund Bond Index Bond Index
<S> <C> <C> <C>
05/03/93(1) $10,000 $10,000 $10,000
12/31/93 $10,425 $10,453 $10,426

</TABLE>
________________________
(1) Commencement of operations.

<PAGE>

OPPENHEIMER VARIABLE
ACCOUNT FUNDS

Investment Adviser
Oppenheimer Management Corporation
Two World Trade Center
New York, New York 10048-0203

Transfer Agent
Oppenheimer Shareholder Services
P.O. Box 5270
Denver, Colorado 80217

Custodian of Portfolio Securities
The Bank of New York
One Wall Street
New York, New York 10015

Independent Auditors
Deloitte & Touche
1560 Broadway
Denver, Colorado 80202

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

No dealer, 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 representa-
tions must not be relied upon as having been authorized by
Oppenheimer Variable Account Funds, Oppenheimer Management
Corporation 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.