OPPENHEIMER VARIABLE ACCOUNT FUNDS, 497, 1994-05-10

OPPENHEIMER VARIABLE ACCOUNT FUNDS
497, 1994-05-10

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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 securities 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"
companies, 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
securities, (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 COMMISSION 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.

<PAGE>
Table Of Contents

Page

Financial Highlights
Performance Information
The Funds and Their Investment Policies
Special Investment Methods
Investment Restrictions
Management of the Funds
Purchase of Shares
Redemption of Shares
Dividends, Distributions and Taxes
Additional Information
Appendix A: Description of Terms A-1
Appendix B: Description of Securities Ratings B-1
<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.

Financial Highlights
Oppenheimer Variable Account Funds
<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)
</TABLE>

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

2. For the year ended December 31.

3. Annualized.

See accompanying Notes to Financial Statements.

<PAGE>
Financial Highlights (Continued)
Oppenheimer Variable Account Funds
<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%
</TABLE>

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.

See accompanying Notes to Financial Statements.

<PAGE>
Financial Highlights (Continued)
Oppenheimer Variable Account Funds
<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%
</TABLE>

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.

See accompanying Notes to Financial Statements.

<PAGE>
Financial Highlights (Continued)
Oppenheimer Variable Account Funds
<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%
</TABLE>

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.

See accompanying Notes to Financial Statements.

<PAGE>
Financial Highlights (Continued)
Oppenheimer Variable Account Funds
<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%
</TABLE>

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

2. For the year ended December 31.

4. Annualized.

See accompanying Notes to Financial Statements.

Financial Highlights (Continued)
Oppenheimer Variable Account Funds
<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%
</TABLE>

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.

See accompanying Notes to Financial Statements.

Financial Highlights (Continued)
Oppenheimer Variable Account Funds
<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%
</TABLE>

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.

See accompanying Notes to Financial Statements.

Financial Highlights (Continued)
Oppenheimer Variable Account Funds
<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%
</TABLE>

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.

See accompanying Notes to Financial Statements.

<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 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.

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 Organizations"), 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 restrictions 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 liquidated 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' acceptances,
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 Corporation. 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
certificates 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 diversified 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 subsequently
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 securities, 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 securities 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 considered 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
government and foreign corporate debt securities (which may be denominated
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
collateralized 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 Association ("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 instruments.

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 instrumentalities 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 securities 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
exhausted.

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 Information.

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 participation
interests of the same issuing bank, which shall be participation 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 development), 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 investments 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 securities 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
Policies."

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-counter 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 obligations 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 diversification 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 expropriation
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 collateralized 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. High Income Fund, Capital Appreciation Fund,
Growth Fund, Multiple Strategies Fund, Global Securities Fund and
Strategic Bond Fund may each write, (i.e., sell) call options ("calls")
that are traded on a domestic securities exchange or quoted on NASDAQ.
High Income Fund, Global Securities Fund and Strategic Bond Fund may also
write calls that are traded on foreign securities exchanges and domestic
over-the-counter markets. Global Securities Fund and Strategic Bond Fund
may also write calls 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 requirements). Calls
on Futures (see "Hedging - High Income Fund, Global Securities Fund and
Strategic Bond Fund," below) must be covered by deliverable securities or
by liquid assets segregated to satisfy the Futures contract. Capital
Appreciation Fund, Growth Fund and Multiple Strategies Fund may each
purchase a call only in a "closing purchase transaction" to terminate its
obligation on a call which it has written. 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 High Income, Strategic Bond or Global Securities
Funds' total assets may be subject to calls, up to 25% of Capital
Appreciation or Multiple Strategies Funds' total assets may be subject to
calls, and up to 5% of Growth Fund's total assets 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 - Global Securities Fund, Strategic Bond Fund and High Income
Fund. For hedging purposes as a temporary defensive maneuver, Global
Securities Fund and Strategic Bond Fund may use Stock Index Futures;
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"), Forward Contracts (defined below), and
call and put options on securities, Futures (as applicable), broadly-based
indices and foreign currencies; 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)
facilitate 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. Global Securities Fund, Strategic Bond
Fund and High Income Fund will not use Futures and options on Futures for
speculation. The Hedging Instruments which Global Securities Fund,
Strategic Bond Fund and High Income Fund may use are described below.

Interest Rate Futures. 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. 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. 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. Global Securities Fund,
Strategic Bond Fund and High Income Fund may purchase calls on securities
or on Futures (as permitted by its investment policy), that are traded on
U.S. and foreign securities or commodities exchanges or the U.S. 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. Global Securities Fund and Strategic
Bond Fund may also purchase calls on securities or on Futures that are
traded on foreign over-the-counter markets. The value of debt securities
underlying calls purchased by any of these three Funds 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. Global Securities Fund, Strategic Bond
Fund and High Income Fund may purchase put options ("puts") which relate
to securities (whether or not it holds such securities in its portfolio)
or Futures (as permitted by its investment policy). They may also write
puts on securities or Futures (as permitted by its investment policy) only
if such puts are covered by segregated liquid assets. None of these three
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 security at
a disadvantageous price.

Foreign Currency Options. Global Securities Fund, Strategic Bond Fund and
High Income 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. Global Securities Fund, Strategic Bond Fund and High
Income 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. Any of these Funds may enter into a Forward Contract in
order to "lock in" the U.S. dollar price of a security denominated 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 the gain that
would otherwise result from a change in the relationship between the U.S.
dollar and a foreign currency. Forward Contracts include standardized
foreign currency futures contracts which are traded on exchanges and are
subject to procedures and regulations applicable to other Futures.

These three Funds may also enter into Forward Contracts to sell a
foreign currency denominated in a currency other than that in which the
underlying security is denominated. This is done in the expectation that
there is a greater correlation between the foreign currency of the Forward
Contract and the foreign currency of the underlying investment than
between the U.S. dollar and the foreign currency of the underlying
investment. This technique is referred to as "cross hedging." These
Funds may also cross hedge by entering into a Forward Contract to sell a
foreign currency and receive a second foreign currency, both of which
differ from the foreign currency in which the underlying security is
denominated. This is done in the expectation that there is a greater
correlation between the foreign currencies of the Forward Contract and the
foreign currency of the underlying investment than between the U.S. dollar
and the foreign currency of the underlying investment. The success of
cross hedging is dependent on many factors, including the ability of the
Manager to correctly identify and monitor the correlation between foreign
currencies and the U.S. dollar. To the extent that the correlation is not
identical, that Fund may experience losses or gains on both the underlying
security and the cross currency hedge.

None of these Funds will speculate in foreign currency exchange
contracts. There is no limit as to the percentage of these Funds' assets
that may be committed to foreign currency exchange contracts. These Funds
do not enter into such forward contracts or maintain a net exposure in
such contracts where that Fund would be obligated to deliver an amount of
foreign currency in excess of the value of that Fund's portfolio
securities denominated in that currency or, enter into a cross hedge
unless it is denominated in a currency or currencies that the Manager
believes will have price movements that tend to correlate closely with the
currency in which the investment being hedged is denominated.

Interest Rate Swap Transactions. 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). Strategic Bond Fund
will not use interest rate swaps for leverage. Swap transactions will be
entered into only as to security positions held by the Fund. Strategic
Bond Fund may not enter into swap transactions with respect to more than
50% of its total assets.

The Fund 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 Fund is
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 counterparty or another
creditworthy counterparty. See "Hedging - High Income Fund, Global
Securities Fund and Strategic Bond Fund - 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 High Income
Fund, Strategic Bond Fund or Global Securities Fund. 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 management; and (d) losses on Futures resulting from
interest rate movements not anticipated by the Manager.

Derivatives. The most common derivatives, also known as structured
financial products, in which the Funds (except Money Fund) may invest
include: (i) index-linked notes whose final payouts are dependent upon the
performance of one or more market indices, and (ii) relative performance
options whose cash settlement is a function of the differential returns
between two market indices. A risk of these derivatives is a decline in
value of the underlying instrument due to adverse movements in the index.
Investments in derivatives will be consistent with the Funds' respective
investment policies.

Portfolio Turnover. The Funds may engage frequently in short-term
trading. High turnover and short-term trading involve correspondingly
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. Global Securities Fund and Strategic Bond
Fund may sell securities short in "short sales against-the-box." No more
than 15% of Global Securities 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 guaranteed by the domestic parent), savings
and loan associations or in obligations issued by the federal government
and its agencies and instrumentalities; (5) deviate from the percentage
requirements and other restrictions listed under "Writing Covered Calls,"
"Hedging," "Warrants and Rights," and the first paragraph under
"Borrowing"; and (6) deviate from the percentage requirements listed under
"Short Sales Against-the-Box" (Global Securities Fund only). None of the
percentage limitations and restrictions described above and in the
Statement of Additional Information for Strategic Bond Fund with respect
to writing covered calls and Hedging is a fundamental 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 subsequent 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").

The monthly management fee payable to the Manager is computed on the
aggregate net assets of all the Funds as of the close of business each
day. Each Fund's share of the management fee is determined by the ratio
of its net assets to the aggregate net assets of all the Funds. Except
as stated below, the annual management fee rate is 0.50% of the first $250
million of aggregate Trust net assets, 0.45% of the next $50 million,
0.40% of the next $100 million, 0.35% of the next $400 million and 0.30%
of net assets in excess of $800 million. Money Fund's management fee rate
is reduced by 0.05% of the first $250 million of its net assets and by
0.05% of its net assets in excess of $4 billion. High Income Fund pays
an additional management fee at the annual rate of 0.15% of its net
assets. Global Securities Fund's annual management fee is 0.75% on the
first $200 million of aggregate Trust net assets, 0.72% on the next $200
million, 0.69% on the next $200 million, 0.66% on the next $200 million
and 0.60% on net assets in excess of $800 million. Strategic Bond Fund's
annual management fee is 0.65% of aggregate Trust net assets.

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 were as
follows:
Management Total Operating
Fund Fees Expenses
- ----------- -------------- --------------
Money Fund .37% .43%
High Income Fund .57 .68
Bond Fund .41 .46
Capital Appreciation Fund .41 .47
Growth Fund .42 .50
Multiple Strategies Fund .42 .48
Global Securities Fund .72 .92
Strategic Bond Fund(1) .65 .96
_______________
(1)Annualized.

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 transactions. 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 investors. "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 Appreciation 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 industries 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-average
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 reinvestment 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
Instruments. 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
distribution 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 proportionately 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.
APPENDIX A - DESCRIPTION OF TERMS

Some of the terms used in the Prospectus and the Statement of Additional
Information are described below:

Bank obligations include certificates of deposit which are negotiable
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 compliance 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.

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 referred to under
"Investment Policies -- Money Fund", and (ii) additional 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 conditions. 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 relative
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 issues 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 commercial 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 repayment,
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 considered
as upper-medium grade obligations. Factors giving security to principal
and interest are considered adequate but elements may be present which
suggest a susceptibility to impairment sometime in the future.

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

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

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

Caa: 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 differ 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, adverse
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 uncertainties or major risk exposures to adverse
conditions.

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

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 timely
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 highest 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 hypothetical $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.

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 representations must not be relied upon as
having been authorized by the Fund, 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.

STATEMENT OF ADDITIONAL INFORMATION

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

OPPENHEIMER VARIABLE ACCOUNT FUNDS (the "Trust") is an investment company
consisting of eight separate Funds (the "Funds"):

Oppenheimer Money Fund ("Money Fund")
Oppenheimer High Income Fund ("High Income Fund")
Oppenheimer Bond Fund ("Bond Fund")
Oppenheimer Capital Appreciation Fund ("Capital Appreciation Fund")
Oppenheimer Growth Fund ("Growth Fund")
Oppenheimer Multiple Strategies Fund ("Multiple Strategies Fund")
Oppenheimer Global Securities Fund ("Global Securities Fund")
Oppenheimer Strategic Bond Fund ("Strategic Bond Fund")

Shares of the Funds are sold only to provide benefits under variable life
insurance policies and variable annuity contracts (collectively the
"Accounts"), as described in the Account Prospectus.

This Statement of Additional Information (the "Additional Statement") is
not a Prospectus. This Additional Statement should be read in conjunction
with the Trust's Prospectus (the "Prospectus") dated May 1, 1994, and the
Account Prospectus.

TABLE OF CONTENTS

Page
Investment Objectives and Policies 2
Investment Restrictions 19
Trustees and Officers 20
Investment Management Services 23
Brokerage 25
Purchase, Redemption and Pricing of Shares 26
Performance and Tax Information 29
Additional Information 32
Report of Independent Auditors 34
Financial Statements 35

The date of this Additional Statement is May 1, 1994.

INVESTMENT OBJECTIVES AND POLICIES

The investment objectives and policies of each of the Funds are described
in the Prospectus. Set forth below is supplemental information about
those policies. Certain capitalized terms used in this Additional
Statement are defined in the Prospectus.

Investment Policies - Money Fund The Prospectus describes "Eligible
Securities" in which Money Fund may invest and indicates that if a
security's rating is downgraded, the Manager and/or the Board may have to
reassess the security's credit risk. If a security has ceased to be a
First Tier Security, the Manager will promptly reassess whether the
security continues to present "minimal credit risk." If the Manager
becomes aware that any Rating Organization has downgraded its rating of
a Second Tier Security or rated an unrated security below its second
highest rating category, the Trust's Board of Trustees shall promptly
reassess whether the security presents minimal credit risk and whether it
is in Money Fund's best interests to dispose of it; but if Money Fund
disposes of the security within 5 days of Oppenheimer Management
Corporation (the "Manager") learning of the downgrade, the Manager will
provide the Board with subsequent notice of such downgrade. If a security
is in default, or ceases to be an Eligible Security, or is determined no
longer to present minimal credit risks, the Board must determine whether
it would be in Money Fund's best interests to dispose of the security.
The Rating Organizations currently designated as such by the Securities
and Exchange Commission ("SEC") are Standard & Poor's Corporation, Moody's
Investors Services, Inc., Fitch Investors Services, Inc., Duff & Phelps,
Inc., IBCA Limited and its affiliate, IBCA, Inc., and Thomson BankWatch,
Inc. See Appendix B to the Prospectus for a description of the rating
categories of the Rating Organizations.

Time Deposits. The Fund may invest in fixed time deposits, which are
non-negotiable deposits in a bank for a specified period of time at a
stated interest rate, whether or not subject to withdrawal penalties;
however, such deposits which are subject to such penalties, other than
deposits maturing in less than 7 days, are subject to the 10% investment
limitation for illiquid securities set forth in "Special Investment
Methods - Restricted and Illiquid Securities" in the Prospectus.

Floating Rate/Variable Rate Notes. Money Fund may invest in
instruments with floating or variable interest rates. The interest rate
on a floating rate obligation is based on a stated prevailing market rate,
such as a bank's prime rate, the 90-day U.S. Treasury Bill rate, the rate
of return on commercial paper or bank certificates of deposit, or some
other standard, and is adjusted automatically each time such market rate
is adjusted. The interest rate on a variable rate obligation is also
based on a stated prevailing market rate but is adjusted automatically at
a specified interval of no less than one year. Some variable rate or
floating rate obligations in which Money Fund may invest have a demand
feature entitling the holder to demand payment at an amount approximately
equal to amortized cost or the principal amount thereof plus accrued
interest at any time, or at specified intervals not exceeding one year.
These notes may or may not be backed by bank letters of credit. Variable
rate demand notes may include master demand notes which are obligations
that permit Money Fund to invest fluctuating amounts, which may change
daily without penalty, pursuant to direct arrangements between Money Fund,
as lender, and the borrower. The interest rates on these notes fluctuate
from time to time. The issuer of such obligations normally has a
corresponding right, after a given period, to prepay in its discretion the
outstanding principal amount of the obligations plus accrued interest upon
a specified number of days' notice to the holders of such obligations.
Generally, the changes in the interest rate on such securities reduce the
fluctuation in their market value. As interest rates decrease or
increase, the potential for capital appreciation or depreciation is less
than that for fixed-rate obligations of the same maturity. Because these
obligations are direct lending arrangements between the lender and the
borrower, it is not contemplated that such instruments generally will be
traded, and there generally is no established secondary market for these
obligations, although they are redeemable at face value. Accordingly,
where these obligations are not secured by letters of credit or other
credit support arrangements, Money Fund's right to redeem is dependent
on the ability of the borrower to pay principal and interest on demand.
Such obligations frequently are not rated by credit rating agencies and
Money Fund may invest in obligations which are not so rated only if the
Manager determines that at the time of investment the obligations are of
comparable quality to the other obligations in which Money Fund may
invest. The Manager, on behalf of Money Fund, will consider on an ongoing
basis the creditworthiness of the issuers of the floating and variable
rate obligations in Money Fund's portfolio. There is no limit on the
amount of the Money Fund's assets that may be invested in floating rate
and variable rate obligations. Floating rate or variable rate obligations
which do not provide for recovery of principal and interest within seven
days' notice will be subject to the limitations applicable to illiquid
securities described in "Special Investment Methods - Restricted and
Illiquid Securities" in the Prospectus.

Master Demand Notes. Master demand notes are corporate obligations
that permit the investment of fluctuating amounts by Money Fund at varying
rates of interest pursuant to direct arrangements between Money Fund, as
lender, and the corporate borrower that issues the note. These notes
permit daily changes in the amounts borrowed. Money Fund has the right
to increase the amount under the note at any time up to the full amount
provided by the note agreement, or to decrease the amount. The borrower
may repay up to the full amount of the note at any time without penalty.
It is not generally contemplated that master demand notes will be traded
because they are direct lending arrangements between the lender and the
borrower. There is no secondary market for these notes, although they
are redeemable and thus immediately repayable by the borrower at face
value, plus accrued interest, at any time. Accordingly, Money Fund's
right to redeem is dependent upon the ability of the borrower to pay
principal and interest on demand. In evaluating the master demand
arrangements, the Manager considers the earning power, cash flow, and
other liquidity ratios of the issuer. If they are not rated, Money Fund
may invest in them only if, at the time of an investment, they are
Eligible Securities. The Manager will continuously monitor the borrower's
financial ability to meet all of its obligations because Money Fund's
liquidity might be impaired if the borrower were unable to pay principal
and interest on demand.

Investment Policies - Money Fund, High Income Fund, Bond Fund and
Strategic Bond Fund. The market value of fixed income securities in which
Money Fund, High Income Fund, Bond Fund and Strategic Bond Fund may invest
generally will be affected by changes in the level of interest rates. An
increase in interest rates will tend to reduce the market value of fixed
income investments, and a decline in interest rates will tend to increase
their value. In order to take advantage of differences in securities
prices and yields or of fluctuations in interest rates, consistent with
their respective investment objectives, these Funds may trade for short-
term profits.

High Yield Securities. As stated in the Prospectus, the corporate
debt in which High Income Fund and Strategic Bond Fund will principally
invest may be in the lower rating categories.

Risks of high yield securities include: (i) limited liquidity and
secondary market support, (ii) substantial market price volatility
resulting from changes in prevailing interest rates, (iii) subordination
to the prior claims of banks and other senior lenders, (iv) the operation
of mandatory sinking fund or call/redemption provisions during periods of
declining interest rates which may cause the Fund to invest premature
redemption proceeds in lower yielding portfolio securities, (v) the
possibility that earnings of the issuer may be insufficient to meet its
debt service, and (vi) the issuer's low creditworthiness and potential for
insolvency during periods of rising interest rates and economic downturn.
As a result of the limited liquidity of high yield securities, their
prices have at times experienced significant and rapid decline when a
substantial number of holders decided to sell. A decline is also likely
in the high yield bond market during an economic downturn. An economic
downturn or an increase in interest rates could severely disrupt the
market for high yield bonds and adversely affect the value of outstanding
bonds and the ability of the issuers to repay principal and interest. In
addition, there have been several Congressional attempts to limit the use
of tax and other advantages of high yield bonds which, if enacted, could
adversely affect the value of these securities and the net asset value of
these two Funds. For example, federally-insured savings and loan
associations have been required to divest their investments in high yield
bonds.

Investment Policies - Capital Appreciation Fund, Growth Fund, Multiple
Strategies Fund, Strategic Bond Fund and Global Securities Fund. The
investment risks and rewards of certain of the investment policies of
these five Funds are discussed below.

Securities of Growth-Type Companies. Capital Appreciation Fund,
Growth Fund and Global Securities Fund may emphasize securities of
"growth-type" companies. Such issuers typically are those whose goods or
services have relatively favorable long-term prospects for increasing
demand, or ones which develop new products, services or markets and
normally retain a relatively large part of their earnings for research,
development and investment in capital assets. They may include companies
in the natural resources fields or those developing industrial
applications for new scientific knowledge having potential for
technological innovation, such as nuclear energy, oceanography, business
services and new customer products.

Small Unseasoned Issuers. Each of these five Funds may invest in
small unseasoned issuers. 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. If other investment companies and
investors who invest in such issuers trade the same securities when one
of these Funds attempts to dispose of its holdings, that Fund may receive
lower prices than might otherwise be obtained.

Domestic Securities. Strategic Bond and Multiple Strategies Funds'
investments in fixed-income securities issued by domestic corporations may
include participation interests, asset-backed securities and other debt
obligations (bonds, debentures, notes, mortgage-backed securities and
CMOs) together with preferred stocks.

Investment Policies-Collaterized Securities. Each of the Funds may invest
in the collaterized securities described below. High Income Fund, Bond
Fund and Strategic Bond Fund are most likely to make such investments.

Asset-Backed Securities. The value of an asset-backed security is
affected by changes in the market's perception of the asset backing the
security, the creditworthiness of the servicing agent for the loan pool,
the originator of the loans, or the financial institution providing any
credit enhancement, and is also affected if any credit enhancement has
been exhausted. The risks of investing in asset-backed securities are
ultimately dependent upon payment of consumer loans by the individual
borrowers. As a purchaser of an asset-backed security, the Fund would
generally have no recourse to the entity that originated the loans in the
event of default by a borrower. The underlying loans are subject to
prepayments, which shorten the weighted average life of asset-backed
securities and may lower their return, in the same manner as described
above for prepayments of a pool of mortgage loans underlying mortgage-
backed securities.

Mortgage-Backed Securities. These securities represent participation
interests in pools of residential mortgage loans which may or may not be
guaranteed by agencies or instrumentalities of the U.S. Government. Such
securities differ from conventional debt securities which generally
provide for periodic payment of interest in fixed or determinable amounts
(usually semi-annually) with principal payments at maturity or specified
call dates. Mortgage-backed securities may be backed by the full faith
and credit of the U.S. Treasury (e.g., direct pass-through certificates
of Government National Mortgage Association); some are supported by the
right of the issuer to borrow from the U.S. Government (e.g., obligations
of Federal Home Loan Mortgage Corporation); and some are backed by only
the credit of the issuer itself. Those guarantees do not extend to the
value or yield of the mortgage-backed securities themselves or to the net
asset value of the Fund's shares. Any of those government agencies may
also issue collateralized mortgage-backed obligations, discussed below.

The yield on mortgage-backed securities is based on the average
expected life of the underlying pool of mortgage loans. The actual life
of any particular pool will be shortened by any unscheduled or early
payments of principal and interest. Principal prepayments generally
result from the sale of the underlying property or the refinancing or
foreclosure of underlying mortgages. The occurrence of prepayments is
affected by a wide range of economic, demographic and social factors and,
accordingly, it is not possible to predict accurately the average life of
a particular pool. Yield on such pools is usually computed by using the
historical record of prepayments for that pool, or, in the case of newly-
issued mortgages, the prepayment history of similar pools. The actual
prepayment experience of a pool of mortgage loans may cause the yield
realized by the Fund to differ from the yield calculated on the basis of
the expected average life of the pool.

Prepayments tend to increase during periods of falling interest
rates, while during periods of rising interest rates prepayments will most
likely decline. When prevailing interest rates rise, the value of a pass-
through security may decrease as do the values of other debt securities,
but, when prevailing interest rates decline, the value of a pass-through
security is not likely to rise to the extent that the values of other debt
securities rise, because of the prepayment feature of pass-through
securities. The Fund's reinvestment of scheduled principal payments and
unscheduled prepayments it receives may occur at times when available
investments offer higher or lower rates than the original investment, thus
affecting the yield of the Fund. Monthly interest payments received by
the Fund have a compounding effect which may increase the yield to the
Fund more than debt obligations that pay interest semi-annually. Because
of those factors, mortgage-backed securities may be less effective than
Treasury bonds of similar maturity at maintaining yields during periods
of declining interest rates. The Fund may purchase mortgage-backed
securities at a premium or at a discount. Accelerated prepayments
adversely affect yields for pass-through securities purchased at a premium
(i.e., at a price in excess of their principal amount) and may involve
additional risk of loss of principal because the premium may not have been
fully amortized at the time the obligation is repaid. The opposite is
true for pass-through securities purchased at a discount. The Fund may
purchase mortgage-backed securities at a premium or at a discount.

The Fund may invest in "stripped" mortgage backed securities, in
which the principal and interest portions of the security are separated
and sold. Stripped mortgage-backed securities usually have at least two
classes each of which receives different proportions of interest and
principal distributions on the underlying pool of mortgage assets. One
common variety of stripped mortgage-backed security has one class that
receives some of the interest and most of the principal, while the other
class receives most of the interest and remainder of the principal. In
some cases, one class will receive all of the interest (the "interest-
only" or "IO" class), while the other class will receive all of the
principal (the "principal-only" or "PO" class). Interest only securities
are extremely sensitive to interest rate changes, and prepayments of
principal on the underlying mortgage assets. An increase in principal
payments or prepayments will reduce the income available to the IO
security. In other types of CMOs, the underlying principal payments may
apply to various classes in a particular order, and therefore the value
of certain classes or "tranches" of such securities may be more volatile
that the value of the pool as a whole, and losses may be more severe than
on other classes.

- Collateralized Mortgage-Backed Obligations ("CMOs"). CMOs are
fully-collateralized bonds that are the general obligations of the issuer
thereof, either the U.S. Government, a U.S. Government instrumentality,
or a private issuer. Such bonds generally are secured by an assignment
to a trustee (under the indenture pursuant to which the bonds are issued)
of collateral consisting of a pool of mortgages. Payments with respect
to the underlying mortgages generally are made to the trustee under the
indenture. Payments of principal and interest on the underlying mortgages
are not passed through to the holders of the CMOs as such (i.e., the
character of payments of principal and interest is not passed through, and
therefore payments to holders of CMOs attributable to interest paid and
principal repaid on the underlying mortgages do not necessarily constitute
income and return of capital, respectively, to such holders), but such
payments are dedicated to payment of interest on and repayment of
principal of the CMOs. CMOs often are issued in two or more classes with
different characteristics such as varying maturities and stated rates of
interest. Because interest and principal payments on the underlying
mortgages are not passed through to holders of CMOs, CMOs of varying
maturities may be secured by the same pool of mortgages, the payments on
which are used to pay interest on each class and to retire successive
maturities (known as "tranches") in sequence. Unlike other mortgage-
backed securities (discussed above), CMOs are designed to be retired as
the underlying mortgages are repaid. In the event of prepayment on such
mortgages, the class of CMO first to mature generally will be paid down.
Therefore, although in most cases the issuer of CMOs will not supply
additional collateral in the event of such prepayment, there will be
sufficient collateral to secure CMOs that remain outstanding.

- Participation Interests. Strategic Bond Fund, Global Securities
Fund, High Income Fund and Multiple Strategies Fund may invest in
participation interests, subject to the limitation, described in
"Restricted and Illiquid Securities" in the Prospectus, on investments by
the Fund in illiquid investments. Participation interests provide the
Fund an undivided interest in a loan made by the issuing financial
institution in the proportion that the Fund's participation interest bears
to the total principal amount of the loan. It is currently intended that
no more than 5% of either Multiple Strategies Fund's or Strategic Bond
Fund's net assets can be invested in participation interests of the same
issuing bank. Participation interests are primarily dependent upon the
creditworthiness of the borrowing corporation, which is obligated to make
payments of principal and interest on the loan, and there is a risk that
such borrowers may have difficulty making payments. In the event the
borrower fails to pay scheduled interest or principal payments, the Fund
could experience a reduction in its income and might experience a decline
in the net asset value of its shares. In the event of a failure by the
financial institution to perform its obligation in connection with the
participation agreement, the Fund might incur certain costs and delays in
realizing payment or may suffer a loss of principal and/or interest.

Borrowing. From time to time, each of Capital Appreciation Fund,
Strategic Bond Fund, Growth Fund, Multiple Strategies Fund and Global Fund
may increase its ownership of securities by borrowing from banks on an
unsecured basis and investing the borrowed funds, subject to the
restrictions stated in the Prospectus. Any such borrowing will be made
only from banks and pursuant to the requirements of the Investment Company
Act. Growth Fund may borrow up to 5% of the value of its assets and
Global Securities Fund may borrow up to 10% of the value of its assets.
Capital Appreciation Fund, Strategic Bond Fund and Multiple Strategies
Fund may borrow to the extent that the value of that Fund's assets, less
its liabilities other than borrowings, is equal to at least 300% of all
borrowings including the proposed borrowing. If the value of such Fund's
assets so computed should fail to meet the 300% asset coverage
requirement, that Fund is required within three days to reduce its bank
debt to the extent necessary to meet such requirement and may have to sell
a portion of its investments at a time when independent investment
judgment would not dictate such sale. Borrowing for investment increases
both investment opportunity and risk. Interest on money borrowed is an
expense these five Funds would not otherwise incur, so that they may have
little or no net investment income during periods of substantial
borrowings. Since substantially all of these Funds' assets fluctuate in
value whereas borrowing obligations are fixed, when a Fund has outstanding
borrowings, its net asset value will tend to increase and decrease more
when its portfolio assets increase or decrease than would otherwise be the
case.

Foreign Securities. The obligations of foreign governmental entities may
or may not be supported by the full faith and credit of a foreign
government. Obligations of supranational entities include those of
international organizations designated or supported by governmental
entities to promote economic reconstruction or development and of
international banking institutions and related government agencies.
Examples include the International Bank for Reconstruction and Development
(the World Bank), the European Coal and Steel Community, the Asian
Development Bank and the Inter-American Development Bank. The
governmental members, or "stockholders," usually make initial capital
contributions to the supranational entity and in many cases are committed
to make additional capital contributions if the supranational entity is
unable to repay its borrowings. Each supranational entity's lending
activities are limited to a percentage of its total capital (including
"callable capital" contributed by members at the entity's call), reserves
and net income. There is no assurance that foreign governments will be
able or willing to honor their commitments.

Investing in foreign securities involves considerations and possible
risks not typically associated with investing in securities in the U.S.
The values of foreign securities will be affected by changes in currency
rates or exchange control regulations or currency blockage, application
of foreign tax laws, including withholding taxes, changes in governmental
administration or economic or monetary policy (in the U.S. or abroad) or
changed circumstances in dealings between nations. Costs will be incurred
in connection with conversions between various currencies. Foreign
brokerage commissions are generally higher than commissions in the U.S.,
and foreign securities markets may be less liquid, more volatile and less
subject to governmental regulation than in the U.S. Investments in foreign
countries could be affected by other factors not generally thought to be
present in the U.S., including expropriation or nationalization,
confiscatory taxation and potential difficulties in enforcing contractual
obligations, and could be subject to extended settlement periods.

Because each Fund, other than Money Fund, may purchase securities
denominated in foreign currencies, a change in the value of any such
currency against the U.S. dollar will result in a change in the U.S.
dollar value of each Fund's assets and each Fund's income available for
distribution. In addition, although a portion of each Fund's investment
income may be received or realized in foreign currencies, the Fund will
be required to compute and distribute its income in U.S. dollars, and
absorb the cost of currency fluctuations. High Income Fund, Strategic
Bond Fund and Global Securities Fund may engage in foreign currency
exchange transactions for hedging purposes to attempt to protect against
changes in future exchange rates. See "Hedging - Forward Contracts,"
below.

The values of foreign investments and the investment income derived
from them may also be affected unfavorably by changes in currency exchange
control regulations. Although each Fund, other than Money Fund, will
invest only in securities denominated in foreign currencies that at the
time of investment do not have significant government-imposed restrictions
on conversion into U.S. dollars, there can be no assurance against
subsequent imposition of currency controls. In addition, the values of
foreign securities will fluctuate in response to changes in U.S. and
foreign interest rates.

Investments in foreign securities offer potential benefits not
available from investments solely in securities of domestic issuers by
offering the opportunity to invest in foreign issuers that appear to offer
growth potential, or in foreign countries with economic policies or
business cycles different from those of the U.S., or to reduce
fluctuations in portfolio value by taking advantage of foreign stock
markets that do not move in a manner parallel to U.S. markets. From time
to time, U.S. government policies have discouraged certain investments
abroad by U.S. investors, through taxation or other restrictions, and it
is possible that such restrictions could be reimposed.

Warrants and Rights. As described in the Prospectus, each Fund other than
Money Fund may invest in warrants and rights. Warrants are options to
purchase equity securities at specified prices valid for a specific period
of time. Their prices do not necessarily move parallel to the prices of
the underlying securities. Any price paid for a warrant will be lost
unless the warrant is exercised prior to its expiration. Rights are
similar to warrants, but normally have a short duration and are
distributed directly by the issuer to its shareholders. Warrants and
rights have no voting rights, receive no dividends and have no rights with
respect to the assets of the issuer.

Repurchase Transactions. These Funds may acquire securities that are
subject to repurchase agreements in order to generate income while
providing liquidity as set forth in the prospectus. Money Fund's
repurchase agreements must comply with the collateral requirements of Rule
2a-7 under the Investment Company Act. In a repurchase transaction, a
Fund acquires a security from, and simultaneously resells it to, an
approved vendor (a U.S. commercial bank or the U.S. branch of a foreign
bank with assets of $1 billion or broker-dealer with net capital of at
least $50 million which has been designated a primary dealer in government
securities). The sale price exceeds the purchase price by an amount that
reflects an agreed-upon interest rate effective for the period during
which the repurchase agreement is in effect. The majority of these
transactions run from day to day, and delivery pursuant to resale
typically will occur within one to five days of the purchase. Repurchase
agreements are considered "loans" under the Investment Company Act,
collateralized by the underlying security. The Funds' repurchase
agreements require that at all times while the repurchase agreement is in
effect, the value of the collateral must equal or exceed the repurchase
price to fully collateralize the repayment obligation. Additionally, the
Funds' Manager will continuously monitor the collateral's value and will
impose creditworthiness requirements to confirm that the vendor is
financially sound.

Loans of Portfolio Securities. Each Fund may lend its respective
portfolio securities subject to the restrictions stated in "Loans of
Portfolio Securities" in the Prospectus. Under applicable regulatory
requirements (which are subject to change), the loan collateral must, on
each business day, at least equal the value of the loaned securities and
must consist of cash, bank letters of credit, U.S. Government securities,
or certain other cash equivalents. To be acceptable as collateral,
letters of credit must obligate a bank to pay amounts demanded by the
Trust if the demand meets the terms of the letter. Such terms and the
issuing bank must be satisfactory to the Trust. Any Fund lending its
securities receives amounts equal to the dividends declared or interest
paid on the loaned securities during the term of the loan as well as the
interest on the collateral securities, less any finders' or administrative
fees the Fund pays in arranging the loan. A Fund may share the interest
it receives on the collateral securities with the borrower as long as it
realizes at least a minimum amount of interest required by the lending
guidelines established by the Board of Trustees. The lending Fund will
not lend its portfolio securities to any officer, trustee, employee or
affiliate of the Fund or its Manager. The terms of a Fund's loans must
meet certain tests under the Internal Revenue Code and permit it to
reacquire loaned securities on five days' notice or in time to vote on any
important matter.

When-Issued and Delayed Delivery Transactions. Each Fund may purchase
securities on a "when-issued" basis, and may purchase or sell such
securities on a "delayed delivery" basis. Although a Fund will enter into
such transactions for the purpose of acquiring securities for its
portfolio or for delivery pursuant to options contracts it has entered
into, the Fund may dispose of a commitment prior to settlement. "When-
issued" or "delayed delivery" refers to securities whose terms and
indenture are available and for which a market exists, but which are not
available for immediate delivery. When such transactions are negotiated
the price (which is generally expressed in yield terms) is fixed at the
time the commitment is made, but delivery and payment for the securities
take place at a later date. During the period between commitment by a
Fund and settlement (generally within two months but not to exceed 120
days), no payment is made for the securities purchased by the purchaser,
and no interest accrues to the purchaser from the transaction. Such
securities are subject to market fluctuation; the value at delivery may
be less than the purchase price. The Fund will maintain a segregated
account with its Custodian, consisting of cash, U.S. Government
securities, or other high grade debt securities rated "A" or better by
Moody's or Standard & Poor's at least equal to the value of purchase
commitments until payment is made.

The Funds will engage in when-issued transactions in order to secure
what is considered to be an advantageous price and yield at the time of
entering into the obligation. When a Fund engages in when-issued or
delayed delivery transactions, it relies on the buyer or seller, as the
case may be, to consummate the transaction. Failure to do so may result
in the Fund losing the opportunity to obtain a price and yield considered
to be advantageous. If any of the Funds chooses to (i) dispose of the
right to acquire a when-issued security prior to its acquisition or (ii)
dispose of its right to deliver or receive against a forward commitment,
it may incur a gain or loss. At the time the Fund makes a commitment to
purchase or sell a security on a when-issued or forward commitment basis,
it records the transaction and reflects the value of the security
purchased, or if a sale, the proceeds to be received in determining its
net asset value.

To the extent any Fund engages in when-issued and delayed delivery
transactions, it will do so for the purpose of acquiring or selling
securities consistent with its investment objective and policies and not
for the purposes of investment leverage. Each Fund enters into such
transactions only with the intention of actually receiving or delivering
the securities, although (as noted above), when-issued securities and
forward commitments may be sold prior to settlement date. In addition,
changes in interest rates in a direction other than that expected by the
Manager before settlement will affect the value of such securities and may
cause loss to that Fund.

When-issued transactions and forward commitments allow a Fund a
technique to use against anticipated changes in interest rates and prices.
For instance, in periods of rising interest rates and falling prices, the
Fund might sell securities in its portfolio on a forward commitment basis
to attempt to limit its exposure to anticipated falling prices. In
periods of falling interest rates and rising prices, a Fund might sell
portfolio securities and purchase the same or similar securities on a
when-issued or forward commitment basis, thereby obtaining the benefit of
currently higher cash yields.

Covered Calls and Hedging

As described in the Prospectus, High Income Fund, Capital
Appreciation Fund, Growth Fund, Multiple Strategies Fund, Global
Securities Fund and Strategic Bond Fund may each write covered calls.
High Income Fund, Global Securities Fund and Strategic Bond Fund may also
employ one or more types of Hedging Instruments, including the futures
identified in the Prospectus ("Futures").

High Income, Global Securities and Strategic Bond Funds' strategy of
hedging with Futures and options on Futures will be incidental to each
such Fund's activities in the underlying cash market. When hedging to
attempt to protect against declines in the market value of the Fund's
portfolio, to permit the Fund to retain unrealized gains in the value of
portfolio securities which have appreciated, or to facilitate selling
securities for investment reasons, a given Fund would: (i) sell Futures,
(ii) purchase puts on such Futures or securities, or (iii) write covered
calls on securities or on Futures. When hedging to permit Global
Securities Fund to establish a position in the equities market as a
temporary substitute for purchasing individual equity securities (which
that Fund will normally purchase, and then terminate that hedging
position), or to attempt to protect against the possibility that High
Income, Global Securities or Strategic Bond Funds' portfolio debt
securities are not fully included in a rise in the debt securities market,
these funds may: (i) purchase Futures, or (ii) purchase calls on such
Futures or on securities.

When hedging to attempt to protect against declines in the dollar
value of a foreign currency-denominated security or in a payment on such
security, High Income Fund, Global Securities Fund and Strategic Bond Fund
would: (a) purchase puts on that foreign currency or on foreign currency
Futures, (b) write calls on that currency or on such Futures, or (c) enter
into Forward Contracts at a lower or higher rate than the spot ("cash")
rate. Additional information about the Hedging Instruments these Funds
may use is provided below. At present, High Income Fund, Global
Securities Fund and Strategic Bond Fund do not intend to purchase or sell
Futures or related options if, after any such purchase, the sum of initial
margin deposits on Futures and premiums paid for related options exceeds
5% of the value of that Fund's total assets. Certain options on foreign
currencies are considered related options for this purpose. In the
future, a Fund may employ Hedging Instruments and strategies that are not
presently contemplated but which may be developed, to the extent such
investment methods are consistent with that Fund's investment objective,
legally permissible and adequately disclosed.

Writing Covered Call Options. When either High Income Fund, Capital
Appreciation Fund, Growth Fund, Multiple Strategies Fund, Global
Securities Fund or Strategic Bond Fund writes a call on a security, it
receives a premium and agrees to sell the underlying security to a
purchaser of a corresponding call on the same security during the call
period (usually not more than 9 months) at a fixed exercise price (which
may differ from the market price of the underlying security), regardless
of market price changes during the call period. Such Fund has retained
the risk of loss should the price of the underlying security decline
during the call period, which may be offset to some extent by the premium.

To terminate its obligation on a call it has written, each such Fund
may purchase a corresponding call in a "closing purchase transaction."
A profit or loss will be realized, depending upon whether the net of the
amount of the option transaction costs and the premium received on the
call written was more or less than the price of the call subsequently
purchased. A profit may also be realized if the call expires unexercised,
because a Fund retains the underlying security and the premium received.
Any such profits are considered short-term capital gains for Federal
income tax purposes, and when distributed by each such Fund are taxable
as ordinary income. If the Fund could not effect a closing purchase
transaction due to lack of a market, it would have to hold the callable
securities until the call expired or was exercised. Call writing may
affect a Fund's turnover rate and brokerage commissions. The exercise of
calls written by a Fund may cause that Fund to sell related portfolio
securities, thus increasing its turnover rate in a manner beyond its
control.

High Income, Global Securities and Strategic Bond Funds may also
write (and purchase) calls on foreign currencies. A call written on a
foreign currency by one of these Funds is "covered" if the Fund owns the
underlying foreign currency covered by the call or has an absolute and
immediate right to acquire that foreign currency without additional cash
consideration (or for additional cash consideration held in a segregated
account by its custodian) upon conversion or exchange of other foreign
currency held in its portfolio. A call written by one of these Funds on
a foreign currency is for cross-hedging purposes if it is not covered, but
is designed to provide a hedge against a decline (due to an adverse change
in the exchange rate) in the U.S. dollar value of a security which the
Fund owns or has the right to acquire and which is denominated in the
currency underlying the option. In such circumstances, the Fund
collateralizes the option by maintaining in a segregated account with the
Fund's custodian, cash or U.S. Government securities in an amount not less
than the value of the underlying foreign currency in U.S. dollars marked-
to-market daily.

High Income Fund, Global Securities Fund and Strategic Bond Fund may
also write calls on Futures without owning a futures contract (or, with
respect to the High Income Fund, a deliverable bond) provided that at the
time the call is written, the Fund covers the call by segregating in
escrow an equivalent dollar amount of liquid assets. The Fund will
segregate additional liquid assets if the value of the escrowed assets
drops below 100% of the current value of the Future. In no circumstances
would an exercise notice require a Fund to deliver a futures contract; it
would simply put the Fund in a short futures position, which is permitted
by each Fund's hedging policies.

Hedging - High Income Fund, Global Securities Fund and Strategic Bond
Fund. Set forth below are the Hedging Instruments which High Income Fund,
Global Securities Fund and Strategic Bond Fund may use.

Writing Put Options. A put option on securities gives the purchaser
the right to sell, and the writer the obligation to buy, the underlying
investment at the exercise price during the option period. Writing a put
covered by segregated liquid assets equal to the exercise price of the put
has the same economic effect to a Fund as writing a covered call. The
premium the Fund receives from writing a put option represents a profit,
as long as the price of the underlying investment remains above the
exercise price. However, a Fund has also assumed the obligation during
the option period to buy the underlying investment from the buyer of the
put at the exercise price, even though the value of the investment may
fall below the exercise price. If the put expires unexercised, the Fund
(as the writer of the put) realizes a gain in the amount of the premium
less transaction costs. If the put is exercised, the Fund must fulfill
its obligation to purchase the underlying investment at the exercise
price, which will usually exceed the market value of the investment at
that time. In that case, the Fund may incur a loss, equal to the sum of
the sale price of the underlying investment and the premium received minus
the sum of the exercise price and any transaction costs incurred.

When writing put options on securities or on foreign currencies, to
secure its obligation to pay for the underlying security, the Fund will
deposit in escrow liquid assets with a value equal to or greater than the
exercise price of the underlying securities. The Fund therefore forgoes
the opportunity of investing the segregated assets or writing calls
against those assets. As long as the obligation of the Fund as the put
writer continues, it may be assigned an exercise notice by the exchange
or broker-dealer through whom such option was sold, requiring the Fund to
take delivery of the underlying security against payment of the exercise
price. The Fund may be assigned an exercise notice at any time prior to
the termination of its obligation as the writer of the put. This
obligation terminates upon expiration of the put, or such earlier time at
which the Fund effects a closing purchase transaction by purchasing a put
of the same series as that previously sold. Once the Fund has been
assigned an exercise notice, it is thereafter not allowed to effect a
closing purchase transaction.

The Fund may effect a closing purchase transaction to realize a
profit on an outstanding put option it has written or to prevent an
underlying security from being put. Furthermore, effecting such a closing
purchase transaction will permit the Fund to write another put option to
the extent that the exercise price thereof is secured by the deposited
assets, or to utilize the proceeds from the sale of such assets for other
investments by that Fund. The Fund will realize a profit or loss from a
closing purchase transaction if the cost of the transaction is less or
more than the premium received from writing the option. As above for
writing covered calls, any and all such profits described herein from
writing puts are considered short-term gains for Federal tax purposes, and
when distributed by the Fund, are taxable as ordinary income.

Purchasing Calls and Puts. When High Income Fund, Global Securities
Fund or Strategic Bond Fund purchases a call (other than in a closing
purchase transaction), it pays a premium and has the right to buy the
underlying investment from a seller of a corresponding call on the same
investment during the call period at a fixed exercise price. The Fund
benefits only if the call is sold at a profit or if, during the call
period, the market price of the underlying investment is above the sum of
the call price plus the transaction costs and the premium paid for the
call and the call is exercised. If the call is not exercised or sold
(whether or not at a profit), it will become worthless at its expiration
date and the Fund will lose its premium payment and the right to purchase
the underlying investment.

When such Fund purchases a put, it pays a premium and has the right
to sell the underlying investment to a seller of a put on a corresponding
investment during the put period at a fixed exercise price. Buying a put
on securities or Futures a Fund owns enables the Fund to attempt to
protect itself during the put period against a decline in the value of the
underlying investment below the exercise price by selling the underlying
investment at the exercise price to a seller of a corresponding put. If
the market price of the underlying investment is equal to or above the
exercise price and, as a result, the put is not exercised or resold, the
put will become worthless at its expiration date and the Fund will lose
its premium payment and the right to sell the underlying investment; the
put may, however, be sold prior to expiration (whether or not at a
profit).

Purchasing a put on either Futures or on securities it does not own
permits a Fund either to resell the put or, if applicable, to buy the
underlying investment and sell it at the exercise price. The resale price
of the put will vary inversely with the price of the underlying
investment. If the market price of the underlying investment is above the
exercise price, and, as a result, the put is not exercised, the put will
become worthless on its expiration date. In the event of a decline in
price of the underlying investment, the Fund could exercise or sell the
put at a profit to attempt to offset some or all of its loss on its
portfolio securities. When the Fund purchases a put on a Future or
security not held by it, the put protects the Fund to the extent that the
prices of the underlying Future or securities move in a similar pattern
to the prices of the securities in a Fund's portfolio.

Futures. No price is paid or received upon the purchase or sale of
a Future. Upon entering into a Futures transaction, a Fund will be
required to deposit an initial margin payment with the futures commission
merchant (the "futures broker"). The initial margin will be deposited
with the Fund's Custodian in an account registered in the futures broker's
name; however the futures broker can gain access to that account only
under specified conditions. As the Future is marked to market to reflect
changes in its market value, subsequent margin payments, called variation
margin, will be paid to or by the futures broker on a daily basis. Prior
to expiration of the Future, if the Fund elects to close out its position
by taking an opposite position, a final determination of variation margin
is made, additional cash is required to be paid by or released to the
Fund, and any loss or gain is realized for tax purposes. All futures
transactions are effected through a clearinghouse associated with the
exchange on which the contracts are traded.

Forward Contracts. A Forward Contract involves bilateral obligations
of one party to purchase, and another party to sell, a specific currency
at a future date (which may be any fixed number of days from the date of
the contract agreed upon by the parties), at a price set at the time the
contract is entered into. These contracts are traded in the interbank
market conducted directly between currency traders (usually large
commercial banks) and their customers.

High Income, Global Securities and Strategic Bond Funds may use
Forward Contracts to protect against uncertainty in the level of future
exchange rates. The use of Forward Contracts does not eliminate
fluctuations in the prices of the underlying securities the Fund owns or
intends to acquire, but it does fix a rate of exchange in advance. In
addition, although Forward Contracts limit the risk of loss due to a
decline in the value of the hedged currencies, at the same time they limit
any potential gain that might result should the value of the currencies
increase. None of these Funds speculates with Forward Contracts or
foreign currency exchange rates.

These Funds may enter into Forward Contracts with respect to specific
transactions. For example, when a Fund enters into a contract for the
purchase or sale of a security denominated in a foreign currency, or when
a Fund anticipates receipt of dividend payments in a foreign currency, a
Fund may desire to "lock-in" the U.S. dollar price of the security or the
U.S. dollar equivalent of such payment by entering into a Forward
Contract, for a fixed amount of U.S. Dollars per unit of foreign currency,
for the purchase or sale of the amount of foreign currency involved in the
underlying transaction. A Fund will thereby be able to protect itself
against a possible loss resulting from an adverse change in the
relationship between the currency exchange rates during the period between
the date on which the security is purchased or sold, or on which the
payment is declared, and the date on which such payments are made or
received.

These Funds may also use Forward Contracts to lock in the U.S. dollar
value of portfolio positions ("position hedge"). In a position hedge, for
example, when a Fund believes that foreign currency may suffer a
substantial decline against the U.S. dollar, it may enter into a forward
sale contract to sell an amount of that foreign currency approximating the
value of some or all of that Fund's portfolio securities denominated in
such foreign currency, or when a Fund believes that the U.S. dollar may
suffer a substantial decline against a foreign currency, it may enter into
a forward purchase contract to buy that foreign currency for a fixed
dollar amount. In this situation the Fund may, in the alternative, enter
into a Forward Contract to sell a different foreign currency for a fixed
U.S. dollar amount where that Fund believes that the U.S. dollar value of
the currency to be sold pursuant to the Forward Contract will fall
whenever there is a decline in the U.S. dollar value of the currency in
which portfolio securities of that Fund are denominated ("cross-hedge").

These Funds will not enter into such Forward Contracts or maintain
a net exposure to such contracts where the consummation of the contracts
would obligate that Fund to deliver an amount of foreign currency in
excess of the value of the Fund's portfolio securities or other assets
denominated in that currency. The Fund, however, in order to avoid excess
transactions and transaction costs, may maintain a net exposure to Forward
Contracts in excess of the value of the Fund's portfolio securities or
other assets denominated in that currency provided the excess amount is
"covered" by liquid, high-grade debt securities, denominated in that
foreign currency or U.S. dollars, at least equal at all times to the
amount of such excess. As an alternative, the Fund may purchase a call
option permitting the Fund to purchase the amount of foreign currency
being hedged by a forward sale contract at a price no higher than the
forward contract price or the Fund may purchase a put option permitting
the Fund to sell the amount of foreign currency subject to a forward
purchase contract at a price as high or higher than the forward contract
price. Unanticipated changes in currency prices may result in poorer
overall performance for the Fund than if it had not entered into such
contracts.

The precise matching of the Forward Contract amounts and the value
of the securities involved will not generally be possible because the
future value of such securities in foreign currencies will change as a
consequence of market movements in the value of these securities between
the date the Forward Contract is entered into and the date it is sold.
Accordingly, it may be necessary for a Fund to purchase additional foreign
currency on the spot (i.e., cash) market (and bear the expense of such
purchase), if the market value of the security is less than the amount of
foreign currency the Fund is obligated to deliver and if a decision is
made to sell the security and make delivery of the foreign currency.
Conversely, it may be necessary to sell on the spot market some of the
foreign currency received upon the sale of the portfolio security if its
market value exceeds the amount of foreign currency a Fund is obligated
to deliver. The projection of short-term currency market movements is
extremely difficult, and the successful execution of a short-term hedging
strategy is highly uncertain. Forward Contracts involve the risk that
anticipated currency movements will not be accurately predicted, causing
a Fund to sustain losses on these contracts and transactions costs.

At or before the maturity of a Forward Contract requiring any Fund
to sell a currency, the Fund may either sell a portfolio security and use
the sale proceeds to make delivery of the currency or retain the security
and offset its contractual obligation to deliver the currency by
purchasing a second contract pursuant to which the Fund will obtain, on
the same maturity date, the same amount of the currency that it is
obligated to deliver. Similarly, the Fund may close out a Forward
Contract requiring it to purchase a specified currency by entering into
a second contract entitling it to sell the same amount of the same
currency on the maturity date of the first contract. The Fund would
realize a gain or loss as a result of entering into such an offsetting
Forward Contract under either circumstance to the extent the exchange rate
or rates between the currencies involved moved between the execution dates
of the first contract and offsetting contract.

The cost to the Fund of engaging in Forward Contracts varies with
factors such as the currencies involved, the length of the contract period
and the market conditions then prevailing. Because Forward Contracts are
usually entered into on a principal basis, no fees or commissions are
involved. Because such contracts are not traded on an exchange, a Fund
must evaluate the credit and performance risk of each particular
counterparty under a Forward Contract.

Although each Fund values its assets daily in terms of U.S. dollars,
it does not intend to convert its holdings of foreign currencies into U.S.
dollars on a daily basis. The Fund may convert foreign currency from time
to time, and investors should be aware of the costs of currency
conversion. Foreign exchange dealers do not charge a fee for conversion,
but they do seek to realize a profit based on the difference between the
prices at which they buy and sell various currencies. Thus, a dealer may
offer to sell a foreign currency to the Fund at one rate, while offering
a lesser rate of exchange should that Fund desire to resell that currency
to the dealer.

Interest Rate Swap Transactions. The risk incurred by Strategic Bond
Fund in entering into a swap agreement is twofold: interest rate risk and
credit risk. There is a risk that, based on movements of interest rates
in the future, the payments made by the Fund under a swap agreement will
have been greater than those received by it. Credit risk arises from the
possibility that the counterparty will default. If the counterparty to
an interest rate swap defaults, the Fund's loss will consist of the net
amount of contractual interest payments that the Fund has not yet
received. The Manager will monitor the creditworthiness of counterparties
to the Fund's interest rate swap transactions on an ongoing basis. The
Fund will enter into swap transactions with appropriate counterparties
pursuant to master netting agreements. A master netting agreement
provides that all swaps done between the Fund and that counterparty under
the master agreement shall be regarded as parts of an integral agreement.
If on any date amounts are payable in the same currency in respect of one
or more swap transactions, the net amount payable on that date in that
currency shall be paid. In addition, the master netting agreement may
provide that if one party defaults generally or on one swap, the
counterparty may terminate the swaps with that party. Under such
agreements, if there is a default resulting in a loss to one party, the
measure of that party's damages is calculated by reference to the average
cost of a replacement swap with respect to each swap (i.e., the mark-to-
market value at the time of the termination of each swap). The gains and
losses on all swaps are then netted, and the result is the counterparty's
gain or loss on termination. The termination of all swaps and the netting
of gains and losses on termination is generally referred to as
"aggregation."

Additional Information About Hedging Instruments and Their Use. Each
Fund's Custodian, or a securities depository acting for the Custodian,
will act as that Fund's escrow agent, through the facilities of the
Options Clearing Corporation ("OCC"), as to the securities on which the
Fund has written options or as to other acceptable escrow securities, so
that no margin will be required for such transactions. OCC will release
the securities on the expiration of the option or upon the Fund's entering
into a closing transaction. An option position may be closed out only on
a market which provides secondary trading for options of the same series,
and there is no assurance that a liquid secondary market will exist for
any particular option.

When High Income Fund, Strategic Bond Fund or Global Securities Fund
writes an over-the-counter ("OTC") option, it will enter into an
arrangement with a securities dealer, which would establish a formula
price at which that Fund would have the absolute right to repurchase that
OTC option. This formula price would generally be based on a multiple of
the premium received for the option, plus the amount by which the option
is exercisable below for a put, above for a call, the market price of the
underlying security ("in-the-money"). For any OTC option which any of
these three Funds writes, it will treat as illiquid (for purposes of the
15% of net assets restriction on illiquid securities, stated in the
Prospectus) the mark-to-market value of any OTC option held by it. The
SEC is evaluating the general issue of whether or not OTC options should
be considered as liquid securities, and the procedure described above
could be affected by the outcome of that evaluation.

Each Fund's option activities may affect its turnover rate and
brokerage commissions. As noted above, the exercise of calls written by
a Fund may cause that Fund to sell related portfolio securities, thus
increasing its turnover rate in a manner beyond a Fund's control. The
exercise by a Fund of puts on securities or Futures may cause the sale of
related investments, also increasing portfolio turnover. Although such
exercise is within the Fund's control, holding a put might cause the Fund
to sell the underlying investment for reasons which would not exist in the
absence of the put. Each Fund will pay a brokerage commission each time
it buys or sells a call, buys a put or sells an underlying investment in
connection with the exercise of a put or call. Such commissions may be
higher than those which would apply to direct purchases or sales of the
underlying investments. Premiums paid for options are small in relation
to the market value of such investments and consequently, put and call
options offer large amounts of leverage. The leverage offered by trading
in options could result in a Fund's net asset value being more sensitive
to changes in the value of the underlying investment.

Regulatory Aspects of Hedging Instruments. High Income Fund, Global
Securities Fund and Strategic Bond Fund must each operate within certain
restrictions as to its long and short positions in Futures and options
thereon under a rule (the "CFTC Rule") adopted by the Commodity Futures
Trading Commission (the "CFTC") under the Commodity Exchange Act (the
"CEA"), which excludes the Fund from registration with the CFTC as a
"commodity pool operator" (as defined in the CEA) if it complies with the
CFTC Rule. Under these restrictions the Fund will not, as to any
positions, whether short, long or a combination thereof, enter into
Futures and related options for which the aggregate initial margins and
premiums exceed 5% of the fair market value of its total assets, with
certain exclusions as defined in the CFTC Rule. Under the restrictions,
the Fund also must, as to its short positions, use Futures and options
thereon solely for bona-fide hedging purposes within the meaning and
intent of the applicable provisions under the CEA. Certain options on
foreign currencies are considered related options for this purpose.

Transactions in options by these Funds are subject to limitations
established by each of the exchanges governing the maximum number of
options which may be written or held by a single investor or group of
investors acting in concert, regardless of whether the options were
written or purchased on the same or different exchanges or are held in one
or more accounts or through one or more exchanges or brokers. Thus, the
number of options which the Fund may write or hold may be affected by
options written or held by other entities, including other investment
companies having the same or an affiliated investment adviser. Position
limits also apply to Futures. An exchange may order the liquidation of
positions found to be in violation of those limits and may impose certain
other sanctions. Due to requirements under the Investment Company Act,
when a Fund purchases a Future, the Fund will maintain, in a segregated
account or accounts with its custodian bank, cash or readily-marketable,
short-term (maturing in one year or less) debt instruments in an amount
equal to the market value of the securities underlying such Future, less
the margin deposit applicable to it.

Tax Aspects of Hedging Instruments and Covered Calls. Each Fund
intends to qualify as a "regulated investment company" under the Internal
Revenue Code of 1986. That qualification enables each Fund to "pass-
through" its income and realized capital gains to shareholders without the
Fund having to pay tax on them. This avoids a "double tax" on that income
and capital gains, since shareholders will be taxed on the dividends and
capital gains they receive from the Funds. One of the tests for each
Fund's qualification is that less than 30% of its gross income must be
derived from gains realized on the sale of securities held for less than
three months. To comply with that 30% cap, the Funds will limit the
extent to which they engage in the following activities, but will not be
precluded from them: (i) selling investments, including Futures, held for
less than three months, whether or not they were purchased on the exercise
of a call held by that Fund; (ii) purchasing calls or puts which expire
in less than three months; (iii) effecting closing transactions with
respect to calls or puts purchased less than three months previously; (iv)
exercising puts held by that Fund for less than three months; and (v)
writing calls on investments held for less than three months.

Possible Risk Factors in Hedging. In addition to the risks with
respect to options discussed in the Prospectus and above, there is a risk
in using short hedging by: (i) selling Futures or (ii) purchasing puts on
broadly-based indices or Futures to attempt to protect against declines
in the value of the Fund's securities that the prices of the Futures or
applicable index (thus the prices of the Hedging Instruments) will
correlate imperfectly with the behavior of the cash (i.e., market value
prices) of the Fund's securities. The ordinary spreads between prices in
the cash and futures markets are subject to distortions due to differences
in the natures of those markets. First, all participants in the futures
markets are subject to margin deposit and maintenance requirements. Rather
than meeting additional margin deposit requirements, investors may close
futures contracts through offsetting transactions which could distort the
normal relationship between the cash and futures markets. Second, the
liquidity of the futures markets depend on participants entering into
offsetting transactions rather than making or taking delivery. To the
extent participants decide to make or take delivery, liquidity in the
futures markets could be reduced, thus producing distortion. Third, from
the point of view of speculators, the deposit requirements in the futures
markets are less onerous than margin requirements in the securities
markets. Therefore, increased participation by speculators in the futures
markets may cause temporary price distortions.

The risk of imperfect correlation increases as the composition of a
Fund's portfolio diverges from the securities included in the applicable
index. To compensate for the imperfect correlation of movements in the
price of the securities being hedged and movements in the price of the
Hedging Instruments, each Fund may use Hedging Instruments in a greater
dollar amount than the dollar amount of securities being hedged if the
historical volatility of the prices of such securities being hedged is
more than the historical volatility of the applicable index. It is also
possible that where a Fund has used Hedging Instruments in a short hedge,
the market may advance and the value of securities held in the Fund's
portfolio may decline. If this occurred, the Fund would lose money on the
Hedging Instruments and also experience a decline in value in its
securities. However, while this could occur for a very brief period or
to a very small degree, over time the value of a diversified portfolio of
equity securities will tend to move in the same direction as the indices
upon which the Hedging Instruments are based.

If a Fund uses Hedging Instruments to establish a position in the
securities markets as a temporary substitute for the purchase of
individual securities (long hedging) by buying Futures and/or calls on
such Futures, on securities, or on stock indices, it is possible that the
market may decline. If either Fund then concludes not to invest in such
securities at that time because of concerns as to possible further market
decline or for other reasons, that Fund will realize a loss on the Hedging
Instruments that is not offset by a reduction in the price of the equity
securities purchased.

Short Sales Against-the-Box. Global Securities Fund and Strategic Bond
Fund may sell securities short in "short sales against-the-box." In such
short sales, while the short position is open, the Fund must own an equal
amount of such securities, or by virtue of ownership of securities have
the right, without payment of further consideration, to obtain an equal
amount of the securities sold short. Short sales against-the-box may be
made to defer, for Federal income tax purposes, recognition of gain or
loss on the sale of securities "in the box" until the short position is
closed out.

INVESTMENT RESTRICTIONS

The significant investment restrictions of all the Funds are set
forth in the Prospectus. The following investment restrictions are also
fundamental policies and, together with the fundamental policies described
in the Prospectus, cannot be changed without the vote of a "majority" (as
defined in the Investment Company Act) of the outstanding shares of the
Trust (or of the Fund, as to matters affecting only that Fund). Under the
Investment Company Act, such a "majority" vote is defined as the vote of
the holders of the lesser of: (i) 67% or more of the shares present or
represented by proxy at such meeting, if the holders of more than 50% of
the outstanding shares are present or represented by proxy, or (ii) more
than 50% of the outstanding shares.

Under these additional restrictions, each of the Funds cannot: (1)
invest in commodities or in commodities contracts, other than the Hedging
Instruments permitted by any of its other fundamental policies, whether
or not any such Hedging Instrument is considered to be a commodity or a
commodity contract (High Income, Global Securities and Strategic Bond
Funds, only; none of the percentage limitations and restrictions for
Strategic Bond Fund regarding Hedging Instruments is a fundamental policy
of Strategic Bond Fund); (2) invest in oil or gas exploration or
development programs; (3) invest in real estate or in interests in real
estate, but may purchase securities of issuers holding real estate or
interests therein; (4) purchase securities on margin, except that a Fund
may make margin deposits in connection with any of the Hedging Instruments
which it may use (High Income, Global Securities and Strategic Bond Funds,
only); (5) make short sales of securities, except that Global Securities
Fund and Strategic Bond Fund may make short sales "against-the-box"; (6)
invest in companies for the purpose of acquiring control of management
thereof; (7) underwrite securities of other companies, except insofar as
it might be deemed to be an underwriter for purposes of the Securities Act
of 1933 in the resale of any securities held in its own portfolio; (8)
invest or hold securities of any issuer if those officers and trustees or
directors of the Trust or its adviser owning individually more than 1/2
of 1% of the securities of such issuer together own more than 5% of the
securities of such issuer; or (9) invest in other open-end investment
companies, or invest more than 5% of its net assets at the time of
purchase in closed-end investment companies, including small business
investment companies, nor make any such investments at commission rates
in excess of normal brokerage commissions.

New York's insurance laws require that investments of each Fund be
made with a degree of care of an "ordinarily prudent person." The Manager
believes that compliance with this standard will not have a negative
impact on the performance of any of the Funds. In addition, each Fund's
investments must comply with the diversification requirements contained
in Section 817(h) of the Internal Revenue Code, and Global Securities Fund
has undertaken to comply with the diversification requirements of Section
10506 of the California Insurance Code (see "Investment Policies -- Global
Securities Fund" in the Prospectus), and in each case with the regulations
adopted under those statutes.

TRUSTEES AND OFFICERS

The Trust's Trustees and officers and their principal occupations and
business affiliations during the past five years are listed below. All
of the Trustees are also trustees, directors or managing general partners
of Oppenheimer Equity Income Fund, Oppenheimer High Yield Fund,
Oppenheimer Strategic Funds Trust, Oppenheimer Strategic Investment Grade
Bond Fund, Oppenheimer Strategic Short-Term Income Fund, Oppenheimer
Strategic Income & Growth Fund, Centennial America Fund, L.P., Oppenheimer
Total Return Fund, Inc., Oppenheimer Cash Reserves, Oppenheimer Tax-Exempt
Cash Reserves, Oppenheimer Integrity Funds, Oppenheimer Tax-Exempt Bond
Fund, Oppenheimer Limited-Term Government Fund, Main Street Funds, Inc.,
Oppenheimer Champion High Yield Fund, Centennial Government Trust,
Centennial Money Market Trust, Centennial Tax Exempt Trust, Centennial
California Tax Exempt Trust, Centennial New York Tax Exempt Trust, Daily
Cash Accumulation Fund, Inc. and The New York Tax-Exempt Income Fund, Inc.
(all of the foregoing funds are collectively referred to as the "Denver
OppenheimerFunds"). Mr. Fossel is President and Mr. Swain is Chairman of
the Denver OppenheimerFunds. As of April 8, 1994, none of the Trustees
or officers were Account owners and thus none owned any Fund shares.

ROBERT G. AVIS, Trustee*
One North Jefferson Ave., St. Louis, Missouri 63103
Vice Chairman of A.G. Edwards & Sons, Inc. (a broker-dealer) and A.G.
Edwards, Inc. (its parent holding company); Chairman of A.G.E. Asset
Management and A.G. Edwards Trust Company (its affiliated investment
adviser and trust company, respectively).

WILLIAM A. BAKER, Trustee
197 Desert Lakes Drive, Palm Springs, California 92264
Management Consultant.

CHARLES CONRAD, JR., Trustee
6824 Vista de Oro, des Cruces, New Mexico 88005
Vice President, McDonnell Douglas Ltd.; formerly associated with the
National Aeronautics and Space Administration.

JON S. FOSSEL, President and Trustee*
Two World Trade Center, New York, New York 10048
Chairman, Chief Executive Officer and a director of the Manager; President
and a director of Oppenheimer Acquisition Corp. ("OAC"), the Manager's
parent holding company, and of HarbourView Asset Management Corp.
("HarbourView"), a subsidiary of the Manager; a director of Shareholder
Services, Inc. ("SSI") and Shareholder Financial Services, Inc. ("SFSI"),
transfer agent subsidiaries of the Manager; formerly President of the
Manager.

RAYMOND J. KALINOWSKI, Trustee
44 Portland Drive, St. Louis, Missouri 63131
Formerly Vice Chairman and a director of A.G. Edwards, Inc., parent
holding company of A.G. Edwards & Sons, Inc. (a broker-dealer), of which
he was a Senior Vice President.

C. HOWARD KAST, Trustee
2552 East Alameda, Denver, Colorado 80209
Formerly the Managing Partner of Deloitte Haskins & Sells (an accounting
firm).

ROBERT M. KIRCHNER, Trustee
7500 E. Arapahoe Road, Denver, Colorado 80209
President of The Kirchner Company (management consultants).

NED M. STEEL, Trustee
3416 South Race Street, Englewood, Colorado 80110
Chartered property and casualty underwriter; formerly Senior Vice
President and a director of Van Gilder Insurance Corp. (insurance
brokers).

JAMES C. SWAIN, Chairman and Trustee*
3410 South Galena Street, Denver, Colorado 80231
Vice Chairman of the Manager; President and a director of Centennial Asset
Management Corporation, an investment advisory subsidiary of the Manager
("Centennial"); formerly President and a director of Oppenheimer Asset
Management Corporation ("OAMC"), an in- vestment adviser which was a
subsidiary of the Manager and Chairman of the Board of SSI.

PAUL LAROCCO, Portfolio Manager, Capital Appreciation Fund
Two World Trade Center, New York, New York 10048
Assistant Vice President of the Manager; Associate Portfolio Manager for
other
OppenheimerFunds; formerly a securities analyst with Columbus Circle
Investors, prior to which he was investment analyst for Chicago Title &
Trust Co.

ROBERT C. DOLL, JR., Vice President; Growth Fund Portfolio Manager
Two World Trade Center, New York, New York 10048
Senior Vice President of the Manager; an officer of other
OppenheimerFunds.

DAVID P. NEGRI, Vice President; High Income Fund, Bond Fund, Multiple
Strategies Fund and Strategic Bond Fund Portfolio Manager
Two World Trade Center, New York, New York 10048
Vice President of the Manager; an officer of other OppenheimerFunds.

RICHARD H. RUBINSTEIN, Vice President; Multiple Strategies Fund Portfolio
Manager
Two World Trade Center, New York, New York 10048
Vice President of the Manager; an officer of other OppenheimerFunds;
formerly Vice President and Portfolio Manager/Security Analyst for
Oppenheimer Capital Corporation (an investment adviser).

ARTHUR J. ZIMMER, Vice President; Money Fund Portfolio Manager
3410 South Galena Street, Denver, Colorado 80231
Vice President of the Manager and Centennial; an officer of other
OppenheimerFunds; formerly Vice President of Hanifen Imhoff Management
Company (mutual fund investment adviser).

GEORGE EVANS, Vice President; Global Securities Fund Portfolio Manager
Two World Trade Center, New York, New York 10048
Assistant Vice President of the Manager; formerly an International
Equities Portfolio Manager/Analyst with Brown Brothers, Harriman & Co.

ANDREW J. DONOHUE, Vice President
Two World Trade Center, New York, New York 10048-0203
Executive Vice President and General Counsel of the Manager and
Oppenheimer Funds Distributor, Inc. ("OFDI"); an officer of other
OppenheimerFunds; formerly Senior Vice President and Associate General
Counsel of the Manager and the Distributor, Partner in Kraft & McManimon
(a law firm), an officer of First Investors Corporation (a broker-dealer)
and First Investors Management Company, Inc. (broker-dealer and investment
adviser), director and an officer of First Investors Family of Funds and
First Investors Life Insurance Company.

GEORGE C. BOWEN, Vice President, Secretary and Treasurer
3410 South Galena Street, Denver, Colorado 80231
Senior Vice President and Treasurer of the Manager: Vice President and
Treasurer of OFDI and HarbourView; Senior Vice President, Treasurer,
Assistant Secretary and a Director of Centennial; Vice President,
Treasurer and Secretary of SSI and SFSI; an officer of other
OppenheimerFunds; formerly Senior Vice President/Comptroller and Secretary
of OAMC.

ROBERT G. ZACK, Assistant Secretary
Two World Trade Center, New York, New York 10048
Senior Vice President and Associate General Counsel of the Manager;
Assistant Secretary of SSI and SFSI; an officer of other OppenheimerFunds.

ROBERT BISHOP, Assistant Treasurer
3410 South Galena Street, Denver, Colorado 80231
Assistant Vice President of the Manager/Mutual Fund Accounting; an officer
of other OppenheimerFunds; previously a Fund Controller for the Manager,
prior to which he was an Accountant for Resolution Trust Corporation and
previously an Accountant and Commissions Supervisor for Stuart James
Company Inc., a broker-dealer.

SCOTT FARRAR, Assistant Treasurer
3410 South Galena Street, Denver, Colorado 80231
Assistant Vice President of the Manager/Mutual Fund Accounting; an officer
of other OppenheimerFunds; previously a Fund Controller for the Manager,
prior to which he was an International Mutual Fund Supervisor for Brown
Brothers Harriman Co., a bank, and previously a Senior Fund Accountant for
State Street Bank & Trust Company, before which he was a sales
representative for Central Colorado Planning.

________________________
* A Trustee who is an "interested person" of the Trust as defined in the
Investment Company Act.

Remuneration of Officers and Trustees. The officers of the Trust,
(including Messrs. Swain and Fossel) are affiliated with the Manager and
receive no remuneration from the Trust. During the fiscal year ended
December 31, 1993, the remuneration (including expense reimbursements)
paid to all Trustees of the Trust (excluding Messrs. Swain and Fossel) for
services as Trustees and as members of one or more committees totaled
$19,358. The Trust has an Audit and Review Committee, comprised of
William A. Baker (Chairman), Charles Conrad, Jr. and Robert M. Kirchner.
This Committee meets regularly to review audits, audit procedures,
financial statements and other financial and operational matters of the
Funds.

Fund Shareholders. As of March 18, 1994, the holders of 5% or more of
the outstanding shares of any Fund were (i) Variable Account B of Monarch
Life Insurance Company ("Monarch"), Springfield, MA; (ii) Separate
Accounts P and Q of Bankers Security Life Insurance Society ("Bankers
Security"), Arlington, VA; (iii) Separate Accounts II and III of The Life
Insurance Company of Virginia ("Life of Virginia"), Richmond, VA; (iv)
Separate Accounts I and II of Nationwide Life Insurance Company
("Nationwide"), Columbus, OH; or (v) Separate Account A of Confederation
Life Insurance and Annuity Company ("Confederation"), Atlanta, GA, such
shares were held as follows:

Bankers Life of
Monarch Security Virginia Nationwide Confederation
<S> <C> <C> <C> <C> <C>
Money 32,673,768.90 15,909,358.23 * * 27,766,574.77
Fund

High Income 1,380,438.24 2,357,693.20 1,569,708.59 * 3,462,631.30
Fund

Bond Fund 913,187.55 * 1,169,360.68 6,343,848.67 1,570,052.24

Capital 770,670.95 1,529,581.41 1,147,130.77 * 1,351,070.73
Appreciation
Fund

Growth Fund 1,146,383.36 * 615,605.91 * 1,583,960.82

Multiple 4,135,966.72 3,602,445.21 1,879,275.62 6,332,100.70 3,554,132.24
Strategies
Fund

Global * 1,448,775.38 * 5,326,738.42 3,018,925.06
Securities
Fund

Strategic Bond * * * * 2,733,811.45
Fund
</TABLE>

INVESTMENT MANAGEMENT SERVICES

The Manager is a wholly-owned subsidiary of Oppenheimer Acquisition Corp.
("OAC"), a holding company controlled by Massachusetts Mutual Life
Insurance Company. OAC is also owned in part by certain of the Manager's
directors and officers, some of whom may also serve as officers of the
Funds, and two of whom (Messrs. Jon S. Fossel and James C. Swain) serve
as Trustees of the Trust.

The investment advisory agreements between the Manager and the Trust
for each of the eight Funds (the "Agreements") require the Manager, at its
expense, to provide each Fund with adequate office space, facilities and
equipment, and to provide and supervise the activities of all
administrative and clerical personnel required to provide effective
administration of each Fund, including the compilation and maintenance of
records with respect to its operations, the preparation and filing of
specified reports, and composition of proxy materials and registration
statements for continuous public sale of shares of each Fund. Under the
terms of the Agreements, expenses not expressly assumed by the Manager are
paid by the Trust. The Agreements list examples of expenses paid by the
Trust, the major categories of which relate to interest, taxes, brokerage
commissions, fees to certain Trustees, legal and audit expenses, custodian
and transfer agent expenses, share issuance costs, certain printing and
registration costs and non-recurring expenses, including litigation.
Expenses with respect to any two or more Funds are allocated in proportion
to the net assets of the respective Funds except where allocations of
direct expenses can be made. The management fees paid by the Funds to the
Manager for the Funds' most recent three fiscal years was as follows:

Fiscal year ended December 31,
1993 1992 1991
--------- -------- --------
Money Fund $212,358 $259,778 $335,025
High Income Fund(1) $382,629 $230,117 $151,864
Bond Fund $361,258 $215,989 $109,119
Capital Appreciation $407,611 $267,347 $171,571
Fund
Growth Fund $193,110 $121,993 $ 92,584
Multiple Strategies $831,139 $658,068 $573,026
Fund
Global Securities $227,226 $ 82,505 $ 24,885
Fund
Strategic Bond $ 18,509 -- --
Fund (2)
____________________
(1)Does not reflect expense reimbursements of $12,828 in the fiscal year
ended December 31, 1991.
(2)From May 3, 1993 (commencement of operations) to December 31, 1993.

The Agreements provide that the Manager is not liable for any loss
sustained by the Trust and/or any Fund in connection with matters to which
the Agreements relate, except a loss resulting by reason of the Manager's
willful misfeasance, bad faith or gross negligence in the performance of
its duties or reckless disregard for its obligations thereunder. The
Manager may act as investment adviser for any other person, firm or
corporation, and the Agreements permit the Manager to use the name
"Oppenheimer" in connection with other investment companies for which it
may act as investment adviser or general distributor. If the Manager
shall no longer act as investment adviser to the Trust, the right of the
Trust or any of the Funds to use the name "Oppenheimer" as part of their
names may be withdrawn.

Independently of the Agreements, the Manager has voluntarily
undertaken that the total expenses of Money Fund, High Income Fund, Bond
Fund, Capital Appreciation Fund, Growth Fund and Multiple Strategies Fund
in any fiscal year exclusive of taxes, interest, brokerage commissions and
any extraordinary non-recurring expenses, including litigation affecting
any Fund, shall not exceed 2.0% of the first $10 million of average net
assets of that Fund plus 1.5% of the next $20 million, plus 1% of average
net assets above $30 million for such year. The payment of the management
fee will be reduced or eliminated during any fiscal year in which such
payment would cause the expenses of these Funds to exceed the pro rata
expense limitation applicable to such Fund. The Manager and Monarch Life
Insurance Company, Bankers Security Life Insurance Society ("Bankers") and
Confederation Life Insurance and Annuity Company have also voluntarily
undertaken to limit the expenses of Money Fund, High Income Fund, Bond
Fund, Capital Appreciation Fund and Multiple Strategies Fund to 0.75% of
average annual net assets, after any other reimbursement by the Manager.
The reimbursement is based on the proportionate number of shares in the
accounts of the respective insurance companies. The undertaking by
Bankers extends to Multiple Strategies Fund only.

BROKERAGE

Provisions of the Agreements Affecting Capital Appreciation Fund, Growth
Fund, Multiple Strategies Fund, Global Securities Fund and Strategic Bond
Fund. One of the duties of the Manager under the Agreements is to arrange
the portfolio transactions for the Funds. The Agreements contain
provisions relating to employment of broker-dealers ("brokers") to effect
the Funds' portfolio transactions. In doing so, the Manager is authorized
by the Agreements to employ brokers, including "affiliated broker-
dealers," as that term is defined in the Investment Company Act, as may,
in its best judgment based on all relevant factors, implement the policy
of the Funds to obtain, at reasonable expense, the "best execution"
(prompt and reliable execution at the most favorable price obtainable) of
such transactions. The Manager need not seek competitive commission
bidding but is expected to be aware of the current rates of eligible
brokers and to minimize the commissions paid to the extent consistent with
the provisions of the Agreements and the interests and policies of the
Funds as established by the Board of Trustees.

Under the Agreements, the Manager is authorized to select brokers
which provide brokerage and/or research services for the Funds and/or the
other accounts over which the Manager or its affiliates have investment
discretion. The commissions paid to such brokers may be higher than
another qualified broker would have charged, if a good faith determination
is made by the Manager that the commission is reasonable and fair in
relation to the services provided.

Description of Brokerage Practices. Subject to the provisions of the
Agreements, allocations of brokerage are made by portfolio managers under
the supervision of executive officers of the Manager. Transactions in
securities other than those for which an exchange is the primary market
are generally done with principals or market makers. Brokerage
commissions are paid primarily for effecting transactions in listed
securities and otherwise only if it appears likely that a better price or
execution can be obtained. When the Funds engage in an option
transaction, ordinarily the same broker will be used for the purchase or
sale of the option and any transactions in the securities to which the
option relates. Where possible, concurrent orders to purchase or sell the
same security by more than one of the accounts managed by the Manager or
its affiliates are combined. The transactions effected pursuant to such
combined orders are averaged as to price and allocated in accordance with
the purchase or sale orders actually placed for each account. Option
commissions may be relatively higher than those which would apply to
direct purchases and sales portfolio securities.

Most purchases of money market instruments and debt obligations are
principal transactions at net prices. Instead of using a broker for those
transactions, the Funds normally deal directly with the selling or
purchasing principal or market maker unless it determines that a better
price or execution can be obtained using a broker. Purchases of these
securities from underwriters include a commission or concession paid by
the issuer to the underwriter, and purchases from dealers include a spread
between the bid and asked prices. The Funds seek to obtain prompt
execution of such orders at the most favorable net price.

The research services provided by a particular broker may be useful
only to one or more of the advisory accounts of the Manager and its
affiliates, and investment research for the commissions of those other
accounts may be useful both to the Funds and one or more of such other
accounts. Such research, which may be supplied by a third party at the
instance of a broker, includes information on particular companies and
industries as well as market or economic trends and portfolio strategy,
receipt of market quotations for portfolio valuations, information
systems, computer hardware and similar products and services. If a
research service also assists the Manager in a non-research capacity (such
as bookkeeping or other administrative functions), then only the
percentage or component that provides assistance to the Manager in the
investment decision-making process may be paid for in commission dollars.
The research services provided by brokers broaden the scope and supplement
the research activities of the Manager by making available additional
views for consideration and comparisons, and to enable the Manager to
obtain market information for the valuation of securities held in the
Funds' portfolios or being considered for purchase. The Board, including
the "Independent Trustees" (those Trustees of the Trust who are not
"interested persons," as defined in the Investment Company Act) annually
reviews information furnished by the Manager as to the commissions paid
to brokers furnishing such services so that the Board may ascertain
whether the amount of such commissions was reasonably related to the value
of benefit of such services. The Board of Trustees has permitted the
Manager to use concessions on fixed-price offerings to obtain research,
in the same manner as is permitted for agency transactions.

Money Fund, High Income Fund, Bond Fund and Strategic Bond Fund. As most
purchases made 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. Purchases of securities from underwriters
include a commission or concession paid by the issuer to the underwriter,
and purchases from dealers include a spread between the bid and asked
price. No principal transactions and, except under unusual circumstances,
no agency transaction for these Funds will be handled by any affiliated
securities dealer. In the unusual circumstance when these Funds pay
brokerage commissions, the above-described brokerage practices and
policies are followed. Money Fund's policy of investing in short-term
debt securities with maturities of less than 397 days results in high
portfolio turnover. However, since brokerage commissions, if any, are
small, high portfolio turnover does not have an appreciable adverse effect
upon the net asset value of that Fund. The Board of Trustees has
permitted the Manager to use concessions on fixed price offerings to
obtain research, in the same manner as permitted for agency transactions.

During the Funds' fiscal years ended December 31, 1991, 1992 and
1993, total brokerage commissions paid by the Funds (not including spreads
or concessions on principal transactions on a net trade basis) were
$84,370, $79,362 and $139,429, respectively, for Capital Appreciation
Fund; $3,871, $2,470 and $6,723, respectively, for High Income Fund;
$84,552, $32,228 and $33,497, respectively, for Growth Fund; $226,558,
$187,495 and $176,858, respectively, for Multiple Strategies Fund;
$18,464, $53,828 and $352,908, respectively for Global Securities Fund;
and none for Strategic Bond Fund. During the fiscal year ended December
31, 1993, $34,623, $23,090, $77,844, $10,565 and $2,948 was paid by
Capital Appreciation Fund, Growth Fund, Multiple Strategies Fund, Global
Securities Fund and High Income Fund, respectively, to dealers as
brokerage commissions in return for research services (including special
research, statistical information and execution); the aggregate amount of
those transactions was $12,683,148, $10,582,340, $31,720,843, 2,739,309
and $652,501 for Capital Appreciation Fund, Growth Fund, Multiple
Strategies Fund, Global Securities Fund and High Income Fund,
respectively.

PURCHASE, REDEMPTION AND PRICING OF SHARES

Determination of Net Asset Value Per Share. The sale of shares of the
Funds is currently limited to Accounts as explained on the cover page of
this Additional Statement and in the Prospectus. Such shares are sold at
their respective offering prices (net asset values without sales charges)
and redeemed at their respective net asset values as described in the
Prospectus.

The net asset value per share of each Fund is determined as of 4:00
P.M., New York time, each day the New York Stock Exchange (the "NYSE") is
open (a "regular business day") by dividing the value of the Fund's net
assets by the number of shares outstanding. The NYSE's most recent annual
holiday schedule (which is subject to change) states that it will close
New Year's Day, Presidents' Day, Good Friday, Memorial Day, Independence
Day, Labor Day, Thanksgiving Day and Christmas Day. The NYSE may also
close on other days. Dealers other than Exchange members may conduct
trading at times when the NYSE is closed (e.g., Good Friday). Trading may
occur in debt securities and in foreign securities at times when the NYSE
is closed (including weekends and holidays or after 4:00 P.M., New York
time, on a regular business day). Because the net asset value of the
Funds will not be calculated at such times, if securities held in a Fund's
portfolio are traded at such times, the net asset value per share of that
Fund may be significantly affected at times when shareholders do not have
the ability to purchase or redeem shares.

The Funds' Board of Trustees has established procedures for the
valuation of each Fund's (other than Money Fund's) securities as follows:
(i) equity securities traded on a securities exchange or on NASDAQ are
valued at the last sale prices on their primary exchange or NASDAQ that
day (or, in the absence of sales that day, at values based on the last
sales prices of the preceding trading day, or closing bid and asked
prices); (ii) NASDAQ and other unlisted equity securities for which last
sales prices are not regularly reported but for which over-the-counter
market quotations are readily available are valued at the highest closing
bid price at the time of valuation, or, if no closing bid price is
reported, on the basis of a closing bid price obtained from a dealer who
maintains an active market in that security; (iii) securities (including
restricted securities) not having readily-available market quotations are
valued at fair value under the Board's procedures; (iv) unlisted debt
securities having a maturity in excess of 60 days are valued at the mean
between the bid and asked prices determined by a portfolio pricing service
approved by the Fund's Board of Trustees or obtained from active market
makers in the security on the basis of reasonable inquiry; (v) short-term
debt securities having a remaining maturity of 60 days or less are valued
at cost, adjusted for amortization of premiums and accretion of discounts;
and (vi) securities traded on foreign exchanges or in foreign over-the-
counter markets are valued as determined by a portfolio pricing service
approved by the Board, based upon last sales prices reported on a
principal exchange or, if none, at the mean between closing bid and asked
prices and reflect prevailing rates of exchange to convert their values
to U.S. dollars. Foreign currency will be valued as close to the time
fixed for the valuation date as is reasonably practicable. The value of
securities denominated in foreign currency will be converted to U.S.
dollars at the prevailing rates of exchange at the time of valuation.

Trading in securities on European and Asian exchanges and over-the-
counter markets is normally completed before the close of the NYSE.
Events affecting the values of foreign securities traded in such markets
that occur between the time their prices are determined and the close of
the NYSE will not be reflected in that Fund's calculation of its net asset
value unless the Board of Trustees, or the Manager under procedures
established by the Board, determines that the particular event would
materially affect that Fund's net asset value, in which case an adjustment
would be made.

In the case of U.S. Government Securities, mortgage-backed
securities, foreign fixed-income securities and corporate bonds, when last
sale information is not generally available, such pricing procedures may
include "matrix" comparisons to the prices for comparable instruments on
the basis of quality, yield, maturity, and other special factors involved.
The Trust's Board of Trustees has authorized the Manager to employ a
pricing service to price U.S. Government Securities, mortgage-backed
securities, foreign government securities and corporate bonds. The
Trustees will monitor the accuracy of such pricing services by comparing
prices used for portfolio evaluation to actual sales prices of selected
securities.

Calls, puts and Futures are valued at the last sale prices on the
principal exchanges or on the NASDAQ National Market on which they are
traded, or, if there are no sales that day, in accordance with (i) above.
When a Fund writes an option, an amount equal to the premium received by
that Fund is included in its Statement of Assets and Liabilities as an
asset, and an equivalent deferred credit is included in the liability
section. The deferred credit is adjusted ("marked-to-market") to reflect
the current market value of the option.

Money Fund Net Asset Valuation. Money Fund will seek to maintain a net
asset value of $1.00 per share for purchases and redemptions. There can
be no assurance that it will do so. The Fund operates under SEC Rule 2a-
7, under which the Fund may use the amortized cost method of valuing its
shares. The amortized cost method values a security initially at its cost
and thereafter assumes a constant amortization of any premium or accretion
of any discount, regardless of the impact of fluctuating interest rates
on the market value of the security. The method does not take into
account unrealized capital gains or losses.

The Fund's Board of Trustees has established procedures intended to
stabilize Money Fund's net asset value at $1.00 per share. If the Fund's
net asset value per share were to deviate from $1.00 by more than 0.5%,
Rule 2a-7 requires the Board promptly to consider what action, if any,
should be taken. If the Trustees find that the extent of any such
deviation may result in material dilution or other unfair effects on
shareholders, the Board will take whatever steps it considers appropriate
to eliminate or reduce such dilution or unfair effects, including,
without limitation, selling portfolio securities prior to maturity,
shortening the average portfolio maturity, withholding or reducing
dividends, reducing the outstanding number of Fund shares without monetary
consideration, or calculating net asset value per share by using available
market quotations.

As long as it uses Rule 2a-7, the Money Fund must abide by certain
conditions described above and in the prospectus. For purposes of the
Rule, the maturity of an instrument is generally considered to be its
stated maturity (or in the case of an instrument called for redemption,
the date on which the redemption payment must be made), with special
exceptions for certain variable and floating rate instruments. Repurchase
agreements and securities loan agreements are, in general, treated as
having a maturity equal to the period scheduled until repurchase or
return, or if subject to demand, equal to the notice period.

While the amortized cost method provides certainty in valuation,
there may be periods during which the value of an instrument as determined
by amortized cost is higher or lower than the price the Fund would receive
if it sold the instrument. During periods of declining interest rates,
the daily yield on shares of the Fund may tend to be lower than a like
computation made by a fund with identical investments utilizing a method
of valuation based upon market prices or estimates of market prices for
its portfolio. Conversely, during periods of rising interest rates, the
daily yield on Fund shares will tend to be higher than that of a portfolio
priced at market value.

PERFORMANCE AND TAX INFORMATION

Money Fund Yield Information. Money Fund's current yield for a seven day
period of time is determined in accordance with regulations adopted under
the Investment Company Act as follows. First, a base period return is
calculated for the seven-day period by determining the net change in the
value of a hypothetical pre-existing account having one share at the
beginning of a seven day period. The change includes dividends declared
on the original share and dividends declared on any shares purchased with
dividends on that share, but such dividends are adjusted to exclude any
realized or unrealized capital gains or losses affecting the dividends
declared. Next, the base period return is multiplied by 365/7 to obtain
the current yield to the nearest hundredth of one percent. The compounded
effective yield for a seven-day period is calculated by (a) adding 1 to
the base period return (obtained as described above), (b) raising the sum
to a power equal to 365 divided by 7 and (c) subtracting 1 from the
result. For the seven days ended December 31, 1993, Money Fund's "current
yield" was 3.08% and its compounded "effective yield" for that period was
3.12%.

The yield as calculated above may vary for accounts less than
approximately $100 in value due to the effect of rounding off each daily
dividend to the nearest full cent. Since the calculation of yield under
either procedure described above does not take into consideration any
realized or unrealized gains or losses on the Fund's portfolio securities
which may affect dividends, the dividends declared during a period may not
be the same on an annualized basis as the yield for that period.

High Income Fund, Bond Fund and Strategic Bond Fund Yield Information.
The "yield" or "standardized yield" of High Income Fund, Bond Fund and
Strategic Bond Fund for a 30-day period is calculated using the following
formula set forth in the SEC rules:

a-b 6
Standardized Yield = 2 ((------ + 1) - 1)
cd

The symbols above represent the following factors:

a = dividends and interest earned during the 30-day period.
b = expenses accrued for the period (net of any expense reimbursements).
c = the average daily number of Fund shares outstanding during the 30-day
period that were entitled to receive dividends.
d = the Fund's maximum offering price (including sales charge) per share
on the last day of the period.

Each Fund's yield for a 30-day period may differ from its yield for
any other period. The SEC formula assumes that the yield for a 30-day
period occurs at a constant rate for a six-month period and is annualized
at the end of the six-month period. For the 30 days ended December 31,
1993, the yield of High Income Fund, Bond Fund and Strategic Bond Fund,
calculated as described above, was 8.66%, 6.10% and 7.30%, respectively.
The "standardized" yield is not based on distributions paid by a Fund to
shareholders in the 30-day period, but is a hypothetical yield based upon
the return on a Fund's portfolio investments, and may differ from a Fund's
"distribution return" described below.

From time to time High Income, Bond and Strategic Bond Funds may
quote a "dividend yield" or a "distribution return." Dividend yield is
based on that Fund's dividends derived from net investment income during
a stated period, and distribution return includes dividends derived from
net investment income and from realized capital gains declared during a
stated period. Under those calculations, the Fund's dividends and/or
distributions declared during a stated period of one year or less (for
example, 30 days) are added together, and the sum is divided by the Fund's
maximum offering price (equal to its net asset value) per share on the
last day of the period. The result may be annualized if the period of
measurement is less than one year. The dividend yield of High Income
Fund, Bond Fund and Strategic Bond Fund for the quarter ended December 31,
1993, was 9.44%, 7.28% and 5.63%, respectively.

Total Return. Any Fund, other than Money Fund, may quote its "total
return" or "average annual total return." "Average annual total return"
("T" in the formula below) is an average annual compounded rate of return.
It is the rate of return based on factors which include a hypothetical
initial investment of $1,000 ("P" in the formula below) over a number of
years ("n") with an Ending Redeemable Value ("ERV") of that investment,
according to the following formula:

( ERV ) 1/n
(-----) -1 = Average Annual Total Return
( P )

The cumulative "total return" calculation measures the change in value
of a hypothetical investment of $1,000 over a stated period. Its
calculation uses some of the same factors as average annual total return,
but it does not average the rate of return on an annual basis. Total
return is determined as follows:

ERV - P
- ------- = Total Return
P

Both formulas assume that all dividends and capital gains
distributions during the period are
reinvested at net asset value per share, and that the investment is
redeemed at the end of the period. Set forth below is the "average annual
total return" and "total return" for each Fund (using the method described
above) during the periods indicated:

Average Annual Total Return for:
---------------------------------------
Cumulative
Total
Return
From
Fiscal Five Year Incep
Year Period Incep- tion(1)
Ended Ended tion(1) to to
Fund 12/31/93 12/31/93 12/31/93 12/31/93
- ------------------ -------- --------- -------- -------
High Income Fund 26.34% 16.96% 14.70% 186.32%
Bond Fund 13.04% 11.61% 11.21% 153.16%
Capital Appreciation 27.32% 19.26% 16.46% 207.70%
Fund
Growth Fund 7.25% 11.83% 12.70% 184.51%
Multiple Strategies Fund 15.95% 11.01% 11.67% 114.08%
Global Securities Fund 70.32% -- 17.14% 64.23%
Strategic Bond Fund 6.50% -- 6.50% 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.

The total return on an investment made in shares of any one of these
Funds may be compared with performance for the same period of either the
Standard & Poor's 500 Index ("S&P 500") or the Dow Jones Industrial
Average ("Dow"). Both the S&P 500 and the Dow are widely recognized
indices of stock market performance consisting of unmanaged groups of
common stocks (the Dow consists of 30 such issues). The performance of
both indices includes a factor for the reinvestment of income dividends
but not capital gains and does not take sales charges or taxes into
consideration.

Performance Information - General. Yield and total return information may
be useful to investors in reviewing performance of the Funds. However,
a number of factors should be taken into account before using such
performance information as a basis for comparison with alternative
investments. An investment in any of these Funds is not insured. Their
performance is not guaranteed and will fluctuate over time. Yield and
total return for any Fund for any given past period is not an indication
or representation by that Fund of future yields or rates of return on its
shares. In comparing the performance of one Fund to another,
consideration should be given to each Fund's investment policy, portfolio
quality, portfolio maturity, type of instrument held and operating
expenses. When comparing yield, total return and investment risk of an
investment in any of the Funds with those of other investment instruments,
investors should understand that certain other investment alternative such
as money market instruments, certificates of deposits ("CDs"), U.S.
Government securities or bank accounts provide yields that are fixed or
that may vary above a stated minimum, and may be insured or guaranteed.
Finally, the performance quotations do not reflect the charges deducted
from an Account, as explained in the attached Prospectus for the Policies.
If these charges were deducted, that performance would be lower than as
described above.

From time to time the Trust may publish the ranking of any of the
Funds by Lipper Analytical Services, Inc. ("Lipper"), a widely-recognized
independent service. Lipper monitors the performance of regulated
investment companies, including the Funds, and ranks their performance for
various periods against all variable annuity funds and variable annuity
funds of the corresponding Lipper categories. These categories are money
market, fixed-income, equity and flexible managed funds. The Lipper
performance analysis includes the reinvestment of capital gains
distributions and income dividends but does not take sales charges or
taxes into consideration. From time to time the Trust may include in its
advertisements and sales literature performance information about the
Funds cited in other newspapers and periodicals, such as The New York
Times, which may include performance quotations from other sources,
including Lipper.

From time to time the Trust may publish the ranking of the
performance of any of the Funds by Morningstar, Inc., an independent
mutual fund monitoring service that ranks mutual funds, including the
Funds, in broad investment categories (equity, taxable bond, tax-exempt
and other) monthly, based upon each fund's three, five and ten-year
average annual total returns (when available) and a risk adjustment factor
that reflects Fund performance relative to three-month U.S. Treasury bill
monthly returns. Such returns are adjusted for fees. There are five
ranking categories with a corresponding number of stars: highest (5),
above average (4), neutral (3), below average (2) and lowest (1). Ten
percent of the funds, series or classes in an investment category receive
5 stars, 22.% receive 4 stars, 35% receive 3 stars, 22.5% receive 2 stars,
and the bottom 10% receive one star.

Distributions and Taxes. The Trust intends for each Fund to qualify
as a "regulated investment company" under Subchapter M of the Internal
Revenue Code. By so qualifying, the Funds will not be subject to Federal
income taxes on amounts paid by them as dividends and distributions, as
described in the Prospectus. Each Fund is treated as a single entity for
purposes of determining Federal tax treatment. The Trust will endeavor
to ensure that each Fund's assets are so invested so that all such
requirements are satisfied, but there can be no assurance that it will be
successful in doing so.

The Internal Revenue Code requires that a holder (such as a Fund)
of a zero coupon security accrue a portion of the discount at which the
security was purchased as income each year even though that Fund receives
no interest payment in cash on the security during the year. As an
investment company, each Fund must pay out substantially all of its net
investment income each year. Accordingly, when a Fund holds zero coupon
securities, it may be required to pay out as an income distribution each
year an amount which is greater than the total amount of cash interest the
Fund actually received. Such distributions will be made from the cash
assets of that Fund or by liquidation of portfolio securities, if
necessary. The Fund may realize a gain or loss from such sales. In the
event the Fund realizes net capital gains from such transactions, its
shareholders may receive a larger capital gain distribution than they
would have had in the absence of such transactions.

ADDITIONAL INFORMATION

Description of the Trust. The Trust's Declaration of Trust contains an
express disclaimer of shareholder or Trustee liability for the Trust's
obligations, and provides for indemnification and reimbursement of
expenses out of its property for any shareholder held personally liable
for its obligations. The Declaration of Trust also provides that the
Trust shall, upon request, assume the defense of any claim made against
any shareholder for any act or obligation of the Trust and satisfy any
judgment thereon. Thus, while Massachusetts law permits a shareholder of
a trust (such as the Trust) to be held personally liable as a partner
under certain circumstances, the risk of a shareholder incurring financial
loss on account of shareholder liability is limited to the relatively
remote circumstances in which the Trust would be unable to meet the
obligations described above. Any person doing business with the Trust,
and any shareholder of the Trust, agrees under the Trust's Declaration of
Trust to look solely to the assets of the Trust for satisfaction of any
claim or demand which may arise out of any dealings with the Trust, and
the Trustees shall have no personal liability to any such person, to the
extent permitted by law.

It is not contemplated that regular annual meetings of shareholders
will be held. Shareholders have the right, upon the declaration in
writing or vote of two-thirds of the outstanding shares of the Trust, to
remove a Trustee. The Trustees will call a meeting of shareholders to
vote on the removal of a Trustee upon the written request of the holders
of 10% of the Trust's outstanding shares. In addition, if the Trustees
receive a request from at least 10 shareholders (who have been
shareholders at least six months) holding shares of the Trust valued at
$25,000 or more or holding 1% or more of the Trust's outstanding shares,
whichever is less, that they wish to communicate with other shareholders
to request a meeting to remove a Trustee, the Trustees will then either
make the Trust's shareholder list available to the applicants or mail
their communication to all other shareholders at the applicants' expense,
or the Trustees may take such other action as is permitted by Section
16(c) of the Investment Company Act. At all shareholder meetings,
shareholders only vote on matters affecting their Fund, and each Fund
votes as an individual class on such matters. However, matters that
require a vote by all shareholders of the Trust are submitted to all the
shareholders, without individual class voting.

The Custodian and the Transfer Agent. The custodian's responsibilities
include safeguarding and controlling the Trust's portfolio securities,
collecting income on the portfolio securities, and handling the delivery
of portfolio securities to and from the Trust. The Manager has
represented to the Trust that its banking relationships with the Custodian
have been and will continue to be unrelated to and unaffected by the
relationship between the Trust and the Custodian. It will be the practice
of the Trust to deal with the Custodian in a manner uninfluenced by any
banking relationship the Custodian may have with the Manager and its
affiliates.

Oppenheimer Shareholder Services, as transfer agent, is
responsible for maintaining the Trus's shareholder registry and
shareholder accounting records, and for administrative functions.

Independent Auditors. The independent auditors of the Trust examine its
financial statements and perform other related audit services. They also
act as auditors for the Manager and certain other funds advised by the
Manager and its affiliates.

Independent Auditors' Report
Oppenheimer Variable Account Funds

The Board of Trustees and Shareholders of
Oppenheimer Variable Account Funds:

We have audited the accompanying statements of assets and liabilities,
including the statements of investments, of Oppenheimer Money Fund,
Oppenheimer High Income Fund, Oppenheimer Bond Fund, Oppenheimer Capital
Appreciation Fund, Oppenheimer Growth Fund, Oppenheimer Multiple Strategies
Fund, Oppenheimer Global Securities Fund and Oppenheimer Strategic Bond Fund
(all of which are series of Oppenheimer Variable Account Funds) as of
December 31, 1993, the related statements of operations for the year then
ended, the statements of changes in net assets for the periods ended December
31, 1993 and 1992, and the financial highlights for the applicable periods
ended December 31, 1993, 1992, 1991, 1990, 1989, 1988, 1987, and 1986, June
30, 1986 and December 31, 1985. These financial statements and financial
highlights are the responsibility of the Funds' management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit also includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. Our procedures included confirmation of securities
owned at December 31, 1993 by correspondence with the custodian and brokers;
where replies were not received from brokers, we performed other auditing
procedures. An audit also includes assessing the accounting principles used
and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, such financial statements and financial highlights present
fairly, in all material respects, the financial position of Oppenheimer Money
Fund, Oppenheimer High Income Fund, Oppenheimer Bond Fund, Oppenheimer
Capital Appreciation Fund, Oppenheimer Growth Fund, Oppenheimer Multiple
Strategies Fund, Oppenheimer Global Securities Fund and Oppenheimer Strategic
Bond Fund at December 31, 1993, the results of their operations, the changes
in their net assets, and the financial highlights for the respective stated
periods, in conformity with generally accepted accounting principles.

DELOITTE & TOUCHE

Denver, Colorado
January 21, 1994

Statement of Investments December 31, 1993
Oppenheimer Variable Account Funds- Money Fund

Face Market
Amount Value-Note 1

<C> <S> <C>
Repurchase Agreements -11.6%
$ 7,100,000 Repurchase agreement with J.P Morgan Securities, Inc., 3.23%,
dated 12/31/93 and maturing 1/3/94, collateralized by
Federal National Mortgage Assn. Participation Certificates,
5.50%, 12/1/08, with a value of $7,277,496 (Cost $7,100,000)....... $ 7,100,000

Direct Bank Obligations and Letters of Credit -7.3%
Abbey National PLC, guaranteeing commercial paper of:
2,500,000 Abbey National North America Corp., 3.28%, 3/18/94............. 2,482,952
ABN Amro Bank NV, guaranteeing commercial paper of:
2,000,000 ABN AMRO Bank Canada, 3.31%, 3/7/94............................ 1,988,228
Total Direct Bank Obligations (Cost $4,471,180)...................... 4,471,180

Short-Term Notes -71.4%
Asset-Backed -10.6%
2,000,000 Beta Finance, Inc., 3.27%, 2/16/94(3)................................ 1,991,643
2,000,000 Corporate Asset Funding Co., Inc., 3.15%, 1/18/94.................... 1,997,025
2,500,000 CXC, Inc., 3.40%, 1/21/94............................................ 2,495,278
6,483,946

Broker/Dealers -19.2%
2,500,000 Bear Stearns Cos., Inc., 3.375%, 1/3/94(1)........................... 2,500,000
2,500,000 Goldman Sachs Group L.P., 3.35%, 2/1/94.............................. 2,492,896
700,000 Lehman Brothers Holdings, Inc., 3.375%, 1/3/94(1).................... 700,000
1,400,000 Merrill Lynch & Co., Inc., 3.045%, 1/3/94(1)......................... 1,399,936
2,635,000 Morgan Stanley Group, Inc., 2.82%, 1/3/94(1)......................... 2,635,000
2,000,000 Shearson Lehman Brothers Holdings, Inc., 3.58%, 1/7/94(1)............ 2,000,000
11,727,832

Commercial Finance -5.9%
1,000,000 CIT Group Holdings, Inc., 3.59%, 5/9/94(2)........................... 1,000,000
2,600,000 Heller Financial, Inc., 3.32%, 1/4/94(1)............................. 2,600,000
3,600,000

Consumer Non-Cyclicals -3.3%
2,000,000 American Brands, Inc., 3.34%, 1/21/94................................ 1,996,289

Diversified Finance -7.4%
2,000,000 Ford Motor Credit Corp., 9.40%-9.45%, 5/20/94-5/26/94................ 2,043,963
2,500,000 General Electric Capital Corp., 3.35%, 1/24/94....................... 2,494,649
4,538,612

Financial Services: Miscellaneous -8.9%
3,000,000 Countrywide Funding Corp., 3.32%-3.40%, 1/13/94-3/28/94.............. 2,983,005
2,500,000 Fleet Mortgage Group, Inc., 3.45%, 1/13/94........................... 2,497,125
5,480,130
<PAGE>
Statement of Investments (Continued)
Oppenheimer Variable Account Funds- Money Fund

Face Market
Amount Value-Note 1
Industrial -4.1%
$ 2,500,000 BICC Cables Corp., guaranteed by BICC PLC, 3.55%, 1/4/94............. $ 2,499,260

Municipal -4.1%
2,500,000 North Slope Borough Alaska, 4.35%, 6/30/94........................... 2,500,000

Oil: Integrated International -3.2%
2,000,000 Petrofina (DE), Inc., 3.37%, 4/18/94................................. 1,979,968

Telecommunications -4.7%
2,900,000 NYNEX Corp., 3.40%, 3/28/94 ......................................... 2,876,445
Total Short-Term Notes (Cost $43,682,482)............................ 43,682,482

Short - Term U.S. Government Obligations -9.5%
5,453,090 Small Business Administration, 6.875%-7.875%, 1/1/94(1)
(Cost $5,815,623) ................................................. 5,815,623

Total Investments, at Value (Cost $61,069,285)............................... 99.8 61,069,285
Other Assets Net of Liabilities.............................................. .2 152,334
Net Assets...................................................................100.0 $ 61,221,619

<FN>
Short-term notes and direct bank obligations are generally traded on a discount
basis; the interest rate is the discount rate received by the Fund at the time of
purchase. Other securities normally bear interest at the rates shown.

1. Variable rate security. The interest rate, which is based on specific, or an
index of, market interest rates, is subject to change periodically and is the
effective rate on December 31, 1993.

2. Put obligation redeemable at full face value on the date reported.

3. Security purchased in private placement transaction, without registration
under the Securities Act of 1933 (the Act). The security was acquired
on August 19, 1993, is carried at amortized cost, and amounts to
$1,991,643, or 3.25% of the Fund's net assets.

See accompanying Notes to Financial Statements.

</TABLE>

<PAGE>
Statement of Investments December 31, 1993
Oppenheimer Variable Account Funds-High Income Fund

Face Market
Amount Repurchase Agreements--6.8% Value-Note 1
<C> <S> <C>
$ 6,300,000 Repurchase agreement with J.P. Morgan
Securities, Inc., 3.15%, dated 12/31/93 and
maturing 1/3/94, collateralized by U.S.
Treasury Bills, 2.93%, 2/3/94, with a value
of $6,437,138 (Cost $6,300,000).................................................................... $ 6,300,000

Short-Term Corporate Bonds and Notes--1.0%
1,000,000 (1) Citibank CD, 17.30%, 7/29/94 (4) (Cost $1,004,761)................................................... 947,137

Long-Term Government Obligations--5.5%
Argentina (Republic of):

470,000 Bonds, Bonos del Tesoro, Series II, 3.50%, 9/1/97 (3).............................................. 387,762
1,239,875 (1) Bonds, Bonos de Consolidacion de Deudas, Series I, 4.25%,
4/1/01 (3) (5)................................................................................... 983,769
1,000,000 Past Due Interest Bonds, 4.1875%, 3/31/05 (3)...................................................... 878,750
2,000,000 (1) Bank Negara Indonesia Bonds, 0%, 5/12/95 ............................................................ 778,117
1,000,000 Bariven SA Bonds, 10.75%, 7/8/97 (6)................................................................. 608,984
150,000,000 (1) Spain (Kingdom of) Bonds, 10.25%, 11/30/98 (6)....................................................... 1,156,550
500,000 Venezuela (Republic of) Front-Loaded Interest Reduction
Bonds, Series B, 6%, 3/31/07 (3)................................................................... 382,500
Total Long-Term Government Obligations
(Cost $4,860,148) ................................................................................. 5,176,432

Long-Term Corporate Bonds and Notes--76.2%
Aerospace/Defense --2.0%
1,750,000 GPA Delaware, Inc., 8.75% Gtd. Nts., 12/15/98........................................................ 1,345,313
500,000 Sequa Corp., 9.375% Sr. Sub. Nts., 12/15/03.......................................................... 505,000
1,850,313

Airlines --1.6%
825,000 AMR Corp., 10% Debs., 4/15/21........................................................................ 952,092
500,000 Trism, Inc., 10.75% Gtd. Sr. Sub. Nts., 12/15/00.................................................... 515,000
1,467,092

Broadcast Media/Cable TV--18.8%
750,000 Ackerley Communications, Inc., 10.75% Sr. Sec. Nts., Series A,
10/1/03 (7)....................................................................................... 783,750
1,000,000 Act III Broadcasting, Inc., 9.625% Sr. Sub. Nts., 12/15/03 ............................. 1,020,000
Cablevision Systems Corp.:
500,000 9.875% Sr. Sub. Debs., 2/15/13..................................................................... 583,750
500,000 9.875% Sr. Sub. Debs., 4/1/23...................................................................... 585,000
500,000 Centennial Cellular Corp., 8.875% Sr. Nts., 11/1/01.................................................. 497,500
500,000 Continental Broadcasting Ltd./Continental Broadcasting
Capital Corp., 10.625% Sr. Sub. Nts., 7/1/03....................................................... 513,750
Continental Cablevision, Inc.:
1,000,000 11% Sr. Sub. Debs., 6/1/07 ........................................................................ 1,177,500
700,000 9% Sr. Debs., 9/1/08 .............................................................................. 780,500
500,000 9.50% Sr. Debs., 8/1/13 ........................................................................... 560,000
500,000 General Media, Inc., 10.625% Sr. Sec. Nts., 12/31/00 (7)............................................. 512,500
1,000,000 Helicon Group LP/Helicon Capital Corp., 0%/9.50% Sr.
Sec. Nts., 11/1/03 (2) (7)......................................................................... 977,500
2,000,000 International CableTel, Inc., 0%/10.875% Sr. Def. Cpn.
Nts., 10/15/03 (2)................................................................................. 1,280,000

<PAGE>
Statement of Investments (Continued)
Oppenheimer Variable Account Funds-High Income Fund

Face Market
Amount Long-Term Corporate Bonds and Notes (Continued) Value-Note 1
Broadcast Media/Cable TV (Continued)
$ 500,000 Lamar Advertising Co., 11% Sr. Sec. Nts., 5/15/03....................................................$ 531,250
1,000,000 New City Communications, Inc., 11.375% Sr. Sub. Nts., 11/1/03 .... 1,035,000
500,000 Outlet Broadcasting, Inc., 10.875% Sr. Sub. Nts., 7/15/03............................................ 516,250
Panamsat LP/Panamsat Capital Corp.:
500,000 9.75% Sr. Sec. Nts., 8/1/00........................................................................ 531,250
2,500,000 0%/11.375% Sr. Sub. Disc. Nts., 8/1/03 (2)......................................................... 1,675,000
SCI Television, Inc.:
486,000 7.50% Sr. Sec. Nts., Series 1, 6/30/98............................................................. 473,546
750,000 11% Sr. Sec. Nts., 6/30/05......................................................................... 780,000
500,000 SFX Broadcasting, Inc., 11.375% Sr. Sub. Nts., 10/1/00............................................... 526,250
500,000 Sinclair Broadcasting Group, 10% Sr. Sub. Nts., 12/15/03............................................. 513,750
700,000 TKR Cable I, Inc., 10.50% Sr. Debs., 10/30/07........................................................ 854,000
700,000 Univision Television Group, Inc., 11.75% Sr. Sub. Nts., 1/15/01 ..................................... 780,500
17,488,546

Building Materials --2.4%
1,000,000 Pacific Lumber Co., 10.50% Sr. Nts., 3/1/03.......................................................... 1,037,500
1,000,000 Pt Inti Indorayon Utama, 9.125% Sr. Nts., 10/15/00 .................................................. 1,003,750
500,000 Triangle Wire & Cable, Inc., 13.50% Sr. Nts., 1/15/02* (7)........................................... 190,000
2,231,250

Chemicals/Plastics --2.8%
Harris Chemical North America, Inc.:
1,000,000 0%/10.25% Gtd. Sr. Sec. Disc. Nts., 7/15/01 (2).................................................... 858,750
750,000 10.75% Sr. Gtd. Sub. Nts., 10/15/03................................................................ 793,125
1,600,000 Talley Industries, Inc., 0%/12.25% Sr. Disc. Debs., 10/15/05 (2)..................................... 936,000
2,587,875

Consumer Goods: Manufacturing--3.7%
850,000 Amstar Corp., 11.375% Sr. Sub. Nts., 2/15/97......................................................... 871,250
2,000,000 Coleman Holdings, Inc., 0% Sr. Sec. Disc. Nts., Series B, 5/27/98 ................................... 1,295,000
1,000,000 Harman International Industries, Inc., 12% Sr. Sub. Nts., 8/1/02 .................................... 1,120,000
350,000 Revlon Worldwide Corp., 0% Sr. Sec. Disc. Nts., Series B, 3/15/98.................................... 180,250
3,466,500
Containers: Paper -- 0.3%
300,000 Equitable Bag, Inc., 12.375% Sr. Nts., 8/15/02....................................................... 261,000

Financial/Insurance -- 8.0%
750,000 Banco do Nordeste do Brasil, 10.375% Sr. Debs, 11/6/95 (7)........................................... 761,250
1,000,000 Banco Nacional de Mexico SA, 7% Exch. Sub. Debs.,
12/15/99 (7)....................................................................................... 1,245,000
500,000 Blue Bell Funding, Inc., 11.85% Extd. Sec. Nts., 5/1/99 (3).......................................... 552,500
1,600,000 Card Establishment Services, Inc., 10% Sr. Sub. Nts., 10/1/03 (7) ................................... 1,672,000
497,387 ECM Fund L.P.I., 14% Sub. Nts., 6/10/02 (7).......................................................... 557,819
493,943 GSPI Corp., 10.15% Fst. Mtg. Bonds, 6/24/10 (7)...................................................... 602,610
1,206,215 Residential Funding Corp., 7.97% Real Estate Trust
Pass-Through Ctfs., Series 1993-J2, Cl. B 1, 6/15/23 (7)............... 1,032,068
1,000,000 Tribasa Toll Road Trust, 10.50% Nts., Series 1993-A, 12/1/11 (7)..................................... 1,031,250
7,454,497

Food and Restaurants --2.6%
700,000 Di Giorgio Corp., 12% Sr. Nts., 2/15/03.............................................................. 761,250

<PAGE>
Statement of Investments (Continued)
Oppenheimer Variable Account Funds-High Income Fund

Face Market
Amount Long-Term Corporate Bonds and Notes (Continued) Value-Note 1
Food and Restaurants (Continued)
Restaurant Enterprises Group, Inc.:
$ 650,000 12.25% Sr. Sub. Nts., 12/15/96*....................................................................$ 640,250
1,500,000 12.75% Sub. Nts., 12/15/98*........................................................................ 990,000
2,391,500

Gaming/Hotels --2.0%
500,000 Casino America, Inc., Units.......................................................................... 517,500
500,000 Santa Fe Hotel, Inc., Units.......................................................................... 482,500
875,000 Treasure Bay Gaming & Resorts, Inc., Units (7)....................................................... 888,125
1,888,125

Healthcare/Medical Products--2.4%
500,000 Abbey Healthcare Group, Inc., 9.50% Sr. Sub. Nts., 11/1/02........................................... 513,125
1,000,000 Alco Health Distribution Corp., 11.25% Sr. Debs., 7/15/05 (5)........................................ 1,002,813
700,000 Eye Care Centers of America, Inc., Units (7)......................................................... 717,500
2,233,438

Home Building/Development-- 3.0%
750,000 Dal-Tile International, Inc., 0% Sr. Sec. Nts., 7/15/98.............................................. 453,750
1,000,000 NVR, Inc., 11% Gtd. Sr. Nts., 4/15/03................................................................ 1,057,500
640,000 Southdown, Inc., 14% Sr. Sub. Nts., Series B, 10/15/01............................................... 736,000
Trizec Corp. Ltd.:
500,000 (1) 11.125% Sr. Debs., 6/18/96* (6).................................................................... 272,847
500,000 (1) 10.25% Sr. Debs., 6/22/99* (6)..................................................................... 276,624
2,796,721

Information Technology-- 0.6%
500,000 Dell Computer Corp., 11% Sr. Nts., 8/15/00 (7)....................................................... 526,250

Leisure/Entertainment -- 0.6%
521,305 Gillett Holdings, Inc., 12.25% Sr. Sub. Nts., Series A, 6/30/02 ..................................... 570,829

Manufacturing: Diversified--2.1%
500,000 Collins & Aikman Group, Inc., 11.875% Sr. Sub. Debs., 6/1/01 ........................................ 515,000
400,000 Foamex LP/Foamex Capital Corp., 11.25% Sr. Nts., 10/1/02 ............................................ 438,000
1,000,000 Itel Corp., 13% Sr. Sub. Nts., 1/15/99............................................................... 1,043,750
1,996,750

Metals/Mining -- 3.5%
1,000,000 Carbide/Graphite Group, Inc. (The), 11.50% Sr. Nts., 9/1/03.......................................... 1,072,500
500,000 Jorgensen (Earle M.) Co., 10.75% Sr. Nts., 3/1/00.................................................... 536,875
500,000 Pace Industries, Inc., 10.625% Sr. Nts., 12/1/02 (7)................................................. 515,000
Stelco, Inc.:
500,000 (1) 10.875% Debs., 9/15/94 (6)......................................................................... 378,588
500,000 (1) 9.75% Debs., 4/1/95 (6)............................................................................ 374,811
500,000 (1) 10.40% Debs., 11/30/09 (6) ........................................................................ 369,147
3,246,921

Oil and Gas: Equipment and Services -- 0.6%
500,000 OPI International, Inc., 12.875% Gtd. Sr. Nts., 7/15/02................................... 582,500
Oil and Gas: Exploration and Production -- 4.7%
350,000 (1) BP America, Inc., 10.875% Nts., 8/1/01 (6)........................................................... 315,578
Maxus Energy Corp.:
1,000,000 8.50% Debs., 4/1/08................................................................................ 950,000
800,000 11.50% Debs., 11/15/15............................................................................. 844,000

<PAGE>
Statement of Investments (Continued)
Oppenheimer Variable Account Funds-High Income Fund

Face Market
Amount Long-Term Corporate Bonds and Notes (Continued) Value-Note 1
Oil and Gas: Exploration and Production (Continued)
Mesa Capital Corp.:
$ 1,000 0%/12.75% Disc. Nts., 6/30/96 (2)..................................................................$ 798
75,000 0%/12.75% Cv. Disc. Nts., 6/30/98 (2).............................................................. 107,063
957,000 0%/12.75% Sec. Disc. Nts., 6/30/98 (2)............................................................. 813,450
Presidio Oil Co.:
700,000 13.25% Sr. Sub. Gas Indexed Nts., 2/15/99 (3) (7).................................................. 742,000
525,000 11.50% Sr. Sec. Nts., Series A, 9/15/00............................................................ 552,563
4,325,452

Publishing --2.3%
1,700,000 Bell & Howell Holdings Co., 0%/11.50% Sr. Disc. Debs.,
Series B, 3/1/05 (2)............................................................................... 943,500
1,750,000 Marvel (Parent) Holdings, Inc., 0% Sr. Sec. Disc. Nts., 4/15/98...................................... 1,150,625
2,094,125

Railroads/Equipment -- 0.6%
500,000 Southern Pacific Transportation Co., 10.50% Sr. Sec. Nts.,
Series B, 7/1/99 .................................................................................. 555,625

Retail: Food and Drug--1.6%
500,000 Duane Reade, 12% Sr. Nts., Series B, 9/15/02......................................................... 542,500
1,000,000 Purity Supreme, Inc., 11.75% Sr. Sec. Nts., Series B, 8/1/99 ........................................ 985,000
1,527,500

Retail: Specialty --3.1%
500,000 AnnTaylor, Inc., 0%/14.375% Sr. Sub. Disc. Nts., 7/15/99 (2)......................................... 535,000
250,000 Comtroladora Commercial Mexicano SA, 8.75%
Gtd. Nts., 4/21/98 (7)............................................................................. 262,188
1,000,000 Mary Kay Corp., 12.75% Gtd. Sr. Nts., Series B, 12/6/00 (7) ......................................... 1,065,000
500,000 Musicland Group, Inc. (The), 9% Sr. Sub. Nts., 6/15/03............................................... 509,375
500,000 Zale Delaware Corp., 11% Sr. Sec. Nts., 6/1/00....................................................... 517,500
2,889,063

Services --1.0%
1,000,000 Protection One Alarm Monitoring, Inc., 12% Sr. Sub. Nts.,
11/1/03 (7)......................................................................................... 920,000

Telecommunications --2.0%
2,000,000 Cellular, Inc., 0%/11.75% Sr. Sub. Disc. Nts., 9/1/03 (2)............................................ 1,360,000
650,000 Horizon Cellular Telephone LP/Horizon Finance Corp.,
0%/11.375% Sr. Sub. Disc. Nts., 10/1/00 (2) (7).................................................... 471,250
1,831,250

Textiles/Apparel --0.0%
115,000 Farley, Inc., 0% Sub. Debs., 12/30/12................................................................ 12,650

Transportation--3.4%
Sea Containers Ltd.:
250,000 9.50% Sr. Nts., 7/1/03 ............................................................................ 251,563
500,000 12.50% Sr. Sub. Debs., Series A, 12/1/04........................................................... 565,625
350,000 12.50% Sr. Sub. Debs., Series B, 12/1/04........................................................... 386,750
1,500,000 Tiphook Financial Corp., 8% Gtd. Nts., 3/15/00....................................................... 1,230,000
1,500,000 Transtar Holdings LP, 0%/13.375% Sr. Disc. Nts.,
Series A, 12/15/08 (2)............................................................................. 746,250
3,180,188
<PAGE>
Statement of Investments (Continued)
Oppenheimer Variable Account Funds-High Income Fund

Face Market
Amount Long-Term Corporate Bonds and Notes (Continued) Value-Note 1
Utilities --0.5%
$ 500,000 Subic Power Corp., 9.50% Debs., 12/28/08 (7).........................................................$ 510,000
Total Long-Term Corporate Bonds and Notes
(Cost $67,518,869)................................................................................. 70,885,960

Derivative Securities --0.6%
Lehman Brothers Holdings, Inc., 3.20% S & P 500 Index-Linked
500,000 Nts., 2/9/94 (7) (Cost $625,000)................................................................... 542,900

Municipal Bonds and Notes--2.5%
975,000 Pinole, California Redevelopment Agency Tax Allocation
Taxable Bonds, Pinole Vista Redevelopment, Series B,
7.65%, 8/1/07...................................................................................... 1,040,368
500,000 Port of Portland, Oregon Taxable Special Obligation
Revenue Bonds, PAMCO Project, 9.20%, 5/15/22....................................................... 549,472
12,500,000 San Joaquin Hills, California Transportation Corridor Agency
Toll Road Capital Appreciation Revenue Bonds, Jr. Lien,
0%, 1/1/28......................................................................................... 754,312

Total Municipal Bonds and Notes (Cost $2,086,187).................................................... 2,344,152

Shares Common Stocks --3.5%
46,220 Berg Electronics Holdings Corp.* (7)................................................................. 73,952
150 ECM Fund L.P.I. (7) ................................................................................ 150,000
2,000 Finlay Enterprises, Inc., CI. A*..................................................................... 30,000
10,355 Gillett Holdings, Inc., Cl. 1* (7)................................................................... 225,221
300 Host Marriott Corp. ................................................................................. 2,738
19,212 Insilco Corp.*....................................................................................... 259,362
67,142 Leaseway Transportation Corp.*....................................................................... 1,141,409
8,400 LFC Holding Corp.*................................................................................... 140,700
300 Marriott International, Inc. ........................................................................ 8,700
45,360 Petrolane, Inc., Cl. B .............................................................................. 459,270
4,964 SCI Television, Inc.*................................................................................ 53,053
5,567 USG Corp.*........................................................................................... 162,835
56,802 Zale Corp. .......................................................................................... 525,419
Total Common Stocks (Cost $2,750,626)................................................................ 3,232,659

Preferred Stocks --3.8%
10,000 AMR Corp., $3.00 Cum. Cv. Depositary Shares, Series A (7)............................................ 525,000
10,429 Berg Electronics Holdings Corp., $3.4687 Exch., Series D*............................................ 273,761
3,500 Dell Computer Corp., 7% Cv.(7)....................................................................... 379,750
20,000 Glendale Federal Bank, $2.1875 Cv., Series E......................................................... 510,000
5,973 K-III Communications Corp., $11.625 Exch., Series B (5).............................................. 610,728
10,000 Navistar International Corp, $6.00 Cv., Series G..................................................... 535,000
10,000 Offshore Pipelines, Inc., $2.25 Cum. Cv. Exch. ...................................................... 402,500
50,000 Trizec Ltd., Sr. Cl. B, Series 3*.................................................................... 64,199
5,000 Unisys Corp., $3.75 Cv., Series A.................................................................... 241,875
Total Preferred Stocks (Cost $3,404,880)............................................................. 3,542,813

<PAGE>
Statement of Investments (Continued)
Oppenheimer Variable Account Funds-High Income Fund

Market
Units Rights, Warrants and Certificates -- 0.9% Value-Note 1
12,400 Ames Department Stores, Inc., Excess Cash Flow Payments Ctfs. .......................................$ 124
39,658 Ames Department Stores, Inc., Litigation Trust Units ................................................ 397
4,699 Digicon, Inc. Wts., Exp. 7/96........................................................................ 1,762
71,950 Gaylord Container Corp. Wts., Exp. 7/96.............................................................. 260,819
500 General Media, Inc. Wts., Exp. 12/00 (7)............................................................. 8,000
1,905 Hollywood Casino Corp. Wts., Exp. 4/98............................................................... 403,809
28,000 Protection One, Inc. Wts., Exp. 11/03 (7)............................................................ 89,880
2,599 Purity Supreme, Inc. Wts., Exp. 8/97 (7)............................................................. 52
50 Santa Fe Hotel, Inc. Wts., Exp. 12/96................................................................ 35,375
400 Southland Corp. Wts., Exp. 3/96...................................................................... 2,000
5,000 Triangle Wire & Cable, Inc. Wts., Exp. 1/98 (7)...................................................... 50
6,000 UGI Corp. Wts., Exp 3/98 ............................................................................ 10,200
Total Rights, Warrants and Certificates (Cost $313,508).............................................. 812,468

Total Investments, at Value (Cost $88,863,979)......................................................... 100.8% 93,784,521
Liabilities in Excess of Other Assets.................................................................. (.8) (773,188)

Net Assets............................................................................................. 100.0% $ 93,011,333

<FN>
* Non-income producing security.
1. Face amount is reported in foreign currency.
2. Represents a zero coupon bond that converts to a fixed rate of interest at a designated future date.
3. Represents the current interest rate for a variable rate security.
4. Indexed instrument for which the principal amount due at maturity is affected by the relative value of
a foreign security.
5. Interest or dividend is paid in kind.
6. Securities with an aggregate market value of $3,753,129 are segregated to collateralize outstanding
forward currency exchange contracts. See Note 5 of Notes to Financial Statements.
7. The Fund owns securities purchased in private placement transactions, without registration under
the Securities Act of 1933 (the Act). The securities are valued under methods approved by the Board
of Trustees as reflecting fair value. The Fund intends to invest no more than 10% of its net assets
(determined at the time of purchase) in restricted and illiquid securities, excluding securities eligible
for resale pursuant to Rule 144A of the Act that are determined to be liquid by the Board of Trustees
or by the Manager under Board-approved guidelines. Restricted and illiquid securities amount to
$2,731,042, or 2.94% of the Fund's net assets, at December 31, 1993.

</TABLE>

<TABLE>
<CAPTION>
Valuation Per
Acquisition Cost Unit as of
Security Date Per Unit December 31, 1993
<S> <C> <C> <C>
Ackerley Communications, Inc., 10.75% Sr. Sec. Nts.,
Series A, 10/1/03(8)....................................................... 10/1/93 $ 100.00 $ 104.50
AMR Corp., $3.00 Cum. Cv. Depositary Shares, Series A
Preferred Stock(8)......................................................... 12/2/93 $ 52.88 $ 52.50
Banco do Nordeste do Brasil, 10.375% Sr. Debs., 11/6/95(8)................... 4/26/93 $ 99.80 $ 101.50
Banco Nacional de Mexico SA, 7% Exch. Sub. Debs., 12/15/99(8)... 12/1/92-5/24/93 $ 102.40 $ 124.50
Berg Electronics Holdings Corp. Common Stock(8).............................. 4/28/93-8/11/93 $ 11.90 $ 1.60
Card Establishment Services, Inc., 10% Sr. Sub. Nts., 10/1/03(8)............. 10/5/93-12/1/93 $ 101.34 $ 104.50
Comtroladora Commercial Mexicano SA, 8.75% Gtd. Nts.,
4/21/98(8)................................................................. 4/2/93 $ 99.34 $ 104.88
Dell Computer Corp., 7% Cv. Preferred Stock (8).............................. 8/19/93 $ 100.00 $ 108.50
Dell Computer Corp., 11% Sr. Nts., 8/15/00(8)................................ 10/27/93 $ 101.00 $ 105.25
ECM Fund L.P.I. Common Stock................................................. 4/14/92 $1,000.00 $1,000.00
ECM Fund L.P.I., 14% Sub. Nts., 6/10/02...................................... 4/14/92 $ 100.00 $ 112.15

</TABLE>
<PAGE>
Statement of Investments (Continued)
Oppenheimer Variable Account Funds-High Income Fund

<TABLE>
<CAPTION>
Valuation Per
Acquisition Cost Unit as of
Security Date Per Unit December 31, 1993
<S> <C> <C> <C>
Eye Care Centers of America, Inc., Units(8).................................. 9/28/93 $ 100.00 $ 102.50
General Media, Inc., 10.625% Sr. Sec Nts., 12/31/00(8)....................... 12/14/93 $ 97.39 $ 102.50
General Media, Inc. Wts., Exp. 12/00(8)...................................... 12/14/93 $ .01 $ 16.00
Gillett Holdings, Inc., Cl. 1 Common Stock................................... 12/1/92 $ 10.50 $ 21.75
GSPI Corp., 10.15% Fst. Mtg. Bonds, 6/24/10(8)............................... 1/29/93 $ 102.40 $ 122.00
Helicon Group LP/ Helicon Capital Corp., 0%/9.50% Sr.
Sec. Nts., 11/1/03(8)...................................................... 10/20/93 $ 95.01 $ 97.75
Horizon Cellular Telephone LP/Horizon Finance Corp.,
0%/11.375% Sr. Sub. Disc. Nts., 10/1/00(8)................................ 9/24/93 $ 64.24 $ 72.50
Lehman Brothers Holdings, Inc., 3.20% S&P 500 Index-Linked
Nts., 2/9/94............................................................... 11/9/93 $ 125.00 $ 108.58
Mary Kay Corp., 12.75% Gtd. Sr. Nts., Series B, 12/6/00...................... 12/11/92-3/22/93 $ 106.50 $ 106.50
Pace Industries, Inc., 10.625% Sr. Nts., 12/1/02(8).......................... 12/3/93 $ 100.00 $ 103.00
Presidio Oil Co., 13.25% Sr. Sub. Gas Indexed Nts.,
2/15/99(8)................................................................. 2/23/93 $ 80.00 $ 106.00
Protection One Alarm Monitoring, Inc., 12% Sr. Sub. Nts.,
11/1/03(8)................................................................. 11/04/93 $ 91.10 $ 92.00
Protection One Alarm Monitoring, Inc., Wts., Exp. 11/03(8)................... 11/04/93 $ 3.18 $ 3.21
Purity Supreme, Inc. Wts., Exp. 8/97......................................... 7/29/92 $ -- $ .02
Residential Funding Corp., 7.97% Real Estate Trust Pass-Through
Ctfs., Series 1993-J2, Cl. B1, 6/15/23(8).................................. 6/29/93 $ 83.97 $ 85.56
Subic Power Corp., 9.50% Debs., 12/28/08(8).................................. 12/20/93 $ 99.93 $ 102.00
Treasure Bay Gaming & Resorts, Inc., Units(8)................................ 11/10/93 $ 100.00 $ 101.50
Triangle Wire & Cable, Inc., 13.50% Sr. Nts., 1/15/02........................ 1/13/92 $ 100.00 $ 38.00
Triangle Wire & Cable, Inc. Wts., Exp. 1/98.................................. 1/13/92 $ -- $ .01
Tribasa Toll Road Trust, 10.50% Nts., Series 1993-A, 12/1/11 (8)............. 11/8/93 $ 100.00 $ 103.13

</TABLE>

8 Transferable under Rule 144A of the Act.

See accompanying Notes to Financial Statements.

<PAGE>

Statement of Investments December 31, 1993
Oppenheimer Variable Account Funds -- Bond Fund

<TABLE>
<CAPTION>
Face Market
Amount Repurchase Agreements--17.9% Value-Note 1
<C> <S> <C>
$20,000,000 Repurchase agreement with First Chicago Capital Markets, Inc.,
3.125%, dated 12/31/93 and maturing 1/3/94, collateralized by
U.S. Treasury Nts., 3.875%, 3/31/95, with a value of
$20,406,039 (Cost $20,000,000).................................... $ 20,000,000

Short-Term Corporate Bonds and Notes--0.8%
Citibank CD:
500,000 (1) 17.35%, 7/28/94 (3) .............................................. 476,603
500,000 (1) 17.30%, 7/29/94 (3) .............................................. 473,569
Total Short-Term Corporate Bonds and Notes
(Cost $1,007,367) ................................................ 950,172

Long-Term Government Obligations--28.3%
3,000,000 (1) Bank Negara Indonesia Bonds, 0%, 5/12/95 ........................... 1,167,176
Corporacion Andina de Fomento:
1,000,000 Bonds, 6.625%, 10/14/98 (4) ..................................... 992,500
1,000,000 Nts., 7.25%, 4/30/98 (4) ........................................ 1,020,625
1,000,000 Czechoslovakia National Bank Nts., 7%, 4/16/96 (4) ................. 1,017,500
1,250,000 Empresa Columbiana de Petroleos Nts., 7.25%, 7/8/98 (4) ............ 1,270,313
Federal National Mortgage Assn. Gtd. Real Estate Mortgage
Investment Conduit Pass-Through Ctfs.:
3,000,000 8.75%, 11/25/05 .................................................. 3,214,830
2,000,000 10.40%, 4/25/19 .................................................. 2,239,800
1,450,000 Financiera Energetica Nacional Nts., 6.625%, 12/13/96 .............. 1,446,375
1,000,000 Petroliam Nasional Berhad Nts., 6.875%, 7/1/03(4) .................. 1,012,500
1,000,000 (1) Treasury Corp. of Victoria Gtd. Sr. Nts., 8.25%, 10/15/03 .......... 733,060
U.S. Treasury Bonds:
5,000,000 8%, 11/15/21 ..................................................... 5,923,399
1,000,000 7.25%, 8/15/22 ................................................... 1,091,560
U.S. Treasury Nts.:
1,000,000 6.875%, 8/15/94 .................................................. 1,020,930
3,000,000 5.875%, 5/15/95 .................................................. 3,075,930
1,000,000 7.875%, 6/30/96 .................................................. 1,087,180
1,000,000 6.375%, 6/30/97 .................................................. 1,052,490
3,000,000 6%, 12/31/97 ..................................................... 3,116,220
1,000,000 8.25%, 7/15/98 ................................................... 1,125,620

Total Long-Term Government Obligations
(Cost $29,898,884) ............................................... 31,608,008

Long-Term Corporate Bonds and Notes--44.7%
Airlines --1.0%
975,000 AMR Corp., 10% Debs., 4/15/21 ...................................... 1,125,200

<PAGE>
Statement of Investments (Continued)
Oppenheimer Variable Account Funds - Bond Fund

Face Market
Amount Long-Term Corporate Bonds and Notes(Continued) Value-Note 1
Automobiles, Trucks and Parts --0.9%
$ 800,000 Chrysler Corp., 10.95% Debs., 8/1/17 ............................... $ 964,874

Banks/Savings and Loans --1.8%
200,000 Chemical New York Corp., 9.75% Sub. Cap. Nts., 6/15/99 ............. 235,515
750,000 First Chicago Corp., 11.25% Sub. Nts., 2/20/01 ..................... 964,171
100,000 First Fidelity Bancorporation, 8.50% Sub. Cap. Nts., 4/1/98 ........ 109,444
475,000 Heller Financial, Inc., 7.75% Nts., 5/15/97 ........................ 508,995
165,000 NBD Bancorp, Inc., 7.25% Sub. Debs., 8/15/04 ....................... 175,922
1,994,047

Broadcast Media/Cable TV -- 7.4%
News America Holdings, Inc.:
500,000 12% Sr. Nts., 12/15/01 ........................................... 607,500
100,000 8.625% Sr. Nts., 2/1/03 .......................................... 110,375
500,000 10.125% Gtd. Sr. Debs., 10/15/12 ................................. 606,875
1,500,000 Time Warner Entertainment Co. LP, 8.375% Sr. Debs., 3/15/23 ........ 1,582,500
Time Warner, Inc.:
800,000 7.45% Nts., 2/1/98 ............................................... 842,000
220,000 7.95% Nts., 2/1/00 ............................................... 235,400
3,500,000 TKR Cable I, Inc., 10.50% Sr. Debs., 10/30/07 ...................... 4,270,000
8,254,650

Chemicals/Plastics --2.3%
2,100,000 Quantum Chemical Corp., 10.375% Fst. Mtg. Bonds, 6/1/01 ............ 2,560,341

Financial/Insurance --9.7%
1,000,000 Auburn Hills Trust, 12.375% Gtd. Exch. Ctfs., 5/1/20 (2) ........... 1,537,500
700,000 Conseco, Inc., 8.125% Sr. Nts., 2/15/03 ............................ 733,106
2,000,000 First Boston Mortgage Securities Corp., 7.04% Mtg. Pass-
Through Ctfs., 10/25/02 .......................................... 1,976,250
General Motors Acceptance Corp.:
700,000 8% Nts., 10/1/96 ................................................. 746,928
700,000 7.75% Nts., 4/15/97 .............................................. 744,556
300,000 5.50% Nts., 12/15/01 ............................................. 278,091
1,185,462 GSPI Corp., 10.15% Fst. Mtg. Bonds, 6/24/10 (4) .................... 1,446,264
450,000 PaineWebber Group, Inc., 7.75% Sub. Nts., 9/1/02 ................... 474,652
1,250,000 Republic American Corp., 9.50% Sub. Debs., 8/1/02 .................. 1,298,695
1,171,405 Resolution Trust Corp., 8.25% Mtg. Pass-Through Ctfs.,
Series 1992-CHF, Cl. C, 12/25/20 ................................. 1,218,994
350,000 Shearson Lehman Brothers Holdings, Inc., 8.375% Nts., 2/15/99 ...... 382,999
10,838,035

Food and Restaurants --1.5%
500,000 Philip Morris Cos., Inc., 8.875% Nts., 7/1/96 ...................... 546,917
1,000,000 RJR Nabisco, Inc., 10.50% Sr. Nts., 4/15/98 ........................ 1,105,000
1,651,917
<PAGE>
Statement of Investments (Continued)
Oppenheimer Variable Account Funds - Bond Fund

Face Market
Amount Long-Term Corporate Bonds and Notes(Continued) Value-Note 1
Gaming/Hotels --1.9%
$ 1,225,000 Circus Circus Enterprises, Inc., 6.75% Sr. Sub. Nts., 7/15/03 ...... $ 1,226,491
Host Marriott Hospitality, Inc.:
228,000 10.125% Sr. Nts., Series F, 1/15/99 .............................. 235,980
190,000 10.625% Sr. Nts., Series B, 2/1/00 ............................... 195,700
475,000 11% Sr. Nts., Series L, 5/1/07 ................................... 488,656
2,146,827

Healthcare/Medical Products -- 1.2%
1,178,824 Epic Properties, Inc., 11.50% Gtd. Fst. Priority Mtg. Nts.,
Cl. B-2, 7/15/01 ................................................. 1,326,176

Home Building/Development -- 2.3%
1,000,000 (1) Noranda Forest, Inc., 11% Debs., 7/15/98 ........................... 849,037
1,664,470 Scotia Pacific Holding Co., 7.95% Timber Collateralized Nts.,
7/20/15 .......................................................... 1,738,329
2,587,366

Leisure/Entertainment --1.4%
500,000 Columbia Pictures Entertainment, Inc., 9.875% Sr. Sub. Nts.,
2/1/98 ........................................................... 571,450
250,000 Eastman Kodak Co., 10% Nts., 6/15/01 ............................... 278,036
700,000 Mattel, Inc., 6.875% Sr. Nts., 8/1/97 .............................. 732,533
1,582,019

Oil and Gas: Equipment and Services -- 1.2%
400,000 McDermott, Inc., 9.375% Nts., 3/15/02 .............................. 454,866
250,000 Sonat, Inc., 9.50% Nts., 8/15/99 ................................... 286,861
500,000 Southwest Gas Corp., 9.75% Debs., Series F, 6/15/02 ................ 558,759
1,300,486

Oil and Gas: Exploration and Production -- 0.4%
375,000 Atlantic Richfield Co., 10.375% Nts., 7/15/95 ...................... 408,525

Oil and Gas: Integrated -- 1.1%
Tenneco, Inc.:
650,000 7.875% Nts., 10/1/02 ............................................. 696,255
400,000 10% Debs., 3/15/08 ............................................... 503,748
1,200,003

Railroads/Equipment --1.1%
700,000 American Car Line Co., 8.25% Equipment Trust Ctfs.,
Series 1993-A, 4/15/08 ........................................... 731,500
400,000 Union Pacific Corp., 9.65% Medium-Term Nts., 4/17/00 ............... 475,256
1,206,756
Telecommunications --0.5%
500,000 GTE Corp., 9.375% Debs., 12/1/00 ................................... 594,612
<PAGE>
Statement of Investments (Continued)
Oppenheimer Variable Account Funds - Bond Fund

Face Market
Amount Long-Term Corporate Bonds and Notes(Continued) Value-Note 1
Textiles/Apparel --1.0%
$ 1,097,000 Fruit of the Loom, Inc., 7% Debs., 3/15/11 ......................... $ 1,066,833

Transportation --1.2%
Tiphook Financial Corp.:
1,000,000 8% Gtd. Nts., 3/15/00 ............................................ 820,000
600,000 10.75% Sr. Gtd. Nts., 11/1/02 .................................... 531,000
1,351,000

Utilities --6.8%
750,000 Boise Cascade Corp., 9.90% Nts., 3/15/00 ........................... 847,162
650,000 (1) BP America, Inc., 10.875% Nts., 8/1/01 ............................. 586,073
Coastal Corp.:
700,000 8.75% Sr. Nts., 5/15/99 .......................................... 763,508
2,000,000 11.75% Sr. Debs., 6/15/06 ........................................ 2,320,000
Commonwealth Edison Co.:
550,000 6.50% Nts., 7/15/97 .............................................. 564,060
275,000 6.40% Nts., 10/15/05 ............................................. 260,512
500,000 Long Island Lighting Co., 7% Debs., 3/1/04 ......................... 485,454
1,000,000 Mitchell Energy & Development Corp., 9.25% Sr. Nts., 1/15/02 ....... 1,122,500
750,000 Public Service Company of Colorado, 8.75% Fst. Mtg. Bonds,
3/1/22 ........................................................... 841,434
7,790,703
Total Long-Term Corporate Bonds and Notes
(Cost $47,992,177)................................................ 49,950,370

Municipal Bonds and Notes -- 6.3%
City of New York Taxable General Obligation Bonds, Series D:
500,000 9%, 2/1/13 ....................................................... 564,632
500,000 9.90%, 2/1/15 .................................................... 588,588
650,000 Connecticut State Taxable General Obligation Bonds, 6.625%,
12/15/97 ......................................................... 686,732
Dade County, Florida Educational Facilities Authority Taxable
Exchange Revenue Bonds, University of Miami, MBIA Insured:
175,000 7.65%, 4/1/10 ................................................... 202,488
325,000 9.70%, 4/1/10 ................................................... 388,893
New York State Environmental Facilities Corp. State Service
Contract Taxable Revenue Bonds:
375,000 Series A, 9.625%, 3/15/21 ....................................... 431,862
Series B:
200,000 7.30%, 3/15/97 ............................................... 209,186
800,000 8.15%, 3/15/02 ............................................... 871,697
1,320,000 Pinole, California Redevelopment Agency Tax Allocation Taxable
Bonds, Pinole Vista Redevelopment, Series B, 8.35%, 8/1/17 ....... 1,419,890
1,500,000 Port of Portland, Oregon Taxable Special Obligation Revenue
Bonds, PAMCO Project, 9.20%, 5/15/22 ............................. 1,648,415

Total Municipal Bonds and Notes (Cost $6,306,380) .................. $ 7,012,383

<PAGE>
Statement of Investments (Continued)
Oppenheimer Variable Account Funds - Bond Fund
Market
Shares Common Stocks --0.0% Value-Note 1
1,413 Host Marriott Corp. ................................................ 12,894
1,413 Marriott International, Inc. ....................................... 40,977
Total Common Stocks (Cost $46,982) ................................. 53,871

Total Investments, at Value (Cost $105,251,790) ...................... 98.0% 109,574,804
Other Assets Net of Liabilities ...................................... 2.0 2,271,317
Net Assets ........................................................... 100.0% $ 111,846,121

<FN>
1. Face amount is reported in foreign currency.
2. Represents the current interest rate for a variable rate security.
3. Indexed instrument for which the principal amount due at maturity is affected by the
relative value of a foreign security.
4. The Fund owns securities purchased in private placement transactions, without registration
under the Securities Act of 1933 (the Act). The securities are valued under methods approved
by the Board of Trustees as reflecting fair value. The Fund intends to invest no more than more
than 10% of its net assets (determined at the time of purchase) in restricted and illiquid securit
excluding securities eligible for resale pursuant to Rule 144A of the Act that are determined
to be liquid by the Board of Trustees or by the Manager under Board-approved guidelines.

</TABLE>

Valuation Per
Acquistion Cost Unit as of
Security Date Per Unit December
<S> <C> <C> <C>
Corporacion Andina de Fomento:
Bonds, 6.625%, 10/14/98 (5).............................. 9/23/93 $ 99.95 $ 99.25
Nts., 7.25%, 4/30/98 (5)................................. 4/15/93 $ 99.38 $102.06
Czechoslovakia National Bank Nts., 7%, 4/16/96 (5).......... 3/11/93 $ 99.70 $101.75
Empresa Columbiana de Petroleos Nts., 7.25%, 7/8/98 (5)..... 6/24/93 $ 99.63 $101.63
GSPI Corp., 10.15% Fst. Mtg. Bonds, 6/24/10 (5)............. 1/29/93 $102.40 $122.00
Petroliam Nasional Berhad Nts., 6.875%, 7/1/03 (5).......... 7/28/93 $100.60 $101.25

</TABLE>

5. Transferable under Rule 144A of the Act.

See accompanying Notes to Financial Statements.

<PAGE>
Statement of Investments December 31, 1993
Oppenheimer Variable Account Funds - Capital Appreciation Fund

Face Market
Amount Repurchase Agreements--13.9% Value-Note 1
<C> <S> <C>
$19,000,000 Repurchase agreement with J.P. Morgan Securities, Inc.,
3.15%, dated 12/31/93 and maturing 1/3/94, collateralized
by U.S. Treasury Bills, 2.93%, 2/3/94, with a value of
$19,399,169 (Cost $19,000,000) ............................... $ 19,000,000

Corporate Bonds and Notes--4.1%
1,250,000 Aspect Telecommunications Corp., 5% Cv. Sub. Debs.,
10/15/03 (1) ................................................. 1,518,750
1,000,000 Intelcom Group, Inc., 7% Cv. Sub. Nts., 10/30/98 (1) ............. 777,840
1,000,000 Medaphis Corp., 6.50% Cv. Sub. Debs., 1/1/00 (1) ................. 1,225,000
750,000 RHI Entertainment, Inc., 6.50% Cv. Sub. Debs., 6/1/03 ............ 986,250
2,000,000 Solectron Corp., 0% Liq. Yld. Opt. Sub. Nts., 5/5/12 ............. 1,170,000

Total Corporate Bonds and Notes (Cost $4,604,064) ................ 5,677,840

Units Rights, Warrants and Certificates--0.1%
120,000 Tapistron International, Inc. Wts., Exp. 6/97 * .................. 135,000
381 Windmere Corp. Wts., Exp. 1/98 * ................................. -

Total Rights, Warrants and Certificates (Cost $52,860) ........... 135,000

Shares Common Stocks --84.9%
Basic Materials --0.8%
Metals: Miscellaneous --0.3%
20,000 Custom Chrome, Inc. * ............................................ 445,000

Steel --0.5%
17,000 Huntco, Inc., Cl. A .............................................. 716,125

Consumer Cyclicals --31.9%
Airlines --1.0%
40,000 Atlantic Southeast Airlines, Inc. ................................ 1,370,000

Auto Parts: After Market--2.7%
40,000 AutoZone, Inc. * ................................................. 2,290,000
20,000 Bailey Corp. * ................................................... 275,000
20,000 O'Reilly Automotive, Inc. * ...................................... 580,000
27,000 Stant Corp. ...................................................... 546,750
3,691,750
Broadcast Media--1.9%
25,200 EZ Communications, Inc., Cl. A ................................... 396,900
25,000 IDB Communications Group, Inc. * ................................. 1,375,000
50,000 Valuevision International, Inc., Cl. A * ......................... 768,750
2,540,650

<PAGE>
Statement of Investments (Continued)
Oppenheimer Variable Account Funds - Capital Appreciation Fund

Market
Shares Common Stocks (Continued) Value-Note 1
Consumer Cyclicals (Continued)
Entertainment --2.9%
21,000 Autotote Corp. * ................................................. $ 462,000
30,000 Hollywood Park, Inc. * ........................................... 900,000
47,000 Iwerks Entertainment, Inc. * ..................................... 1,257,250
40,000 Players International, Inc. * .................................... 990,000
24,000 RIO HOTEL & CASINO, INC. * ....................................... 384,000
3,993,250

Hotels / Motels--2.6%
30,000 Circus Circus Enterprises, Inc. * ................................ 1,110,000
50,000 Mirage Resorts, Inc. * ........................................... 1,193,750
26,000 Promus Cos., Inc. (The) * ........................................ 1,189,500
3,493,250

Household Furnishings and Applliances--1.4%
32,500 Heilig-Meyers Co. ................................................ 1,267,500
35,000 Rhodes, Inc. * ................................................... 586,250
1,853,750

Leisure Time--2.3%
20,000 Caesar's World, Inc. * ........................................... 1,067,500
32,000 Funco, Inc. * .................................................... 480,000
20,000 International Game Technology .................................... 590,000
20,000 Showboat, Inc. ................................................... 322,500
25,000 Sodak Gaming, Inc. * ............................................. 750,000
3,210,000

Restaurants--2.6%
45,000 Apple South, Inc. ................................................ 945,000
22,500 Brinker International, Inc. * .................................... 1,035,000
20,000 HomeTown Buffet, Inc. * .......................................... 565,000
27,000 Outback Steakhouse, Inc. * ....................................... 1,036,125
3,581,125

Retail: Specialty--9.7%
10,500 Barnes & Noble, Inc. ............................................. 261,188
30,000 Bed Bath & Beyond, Inc. * ........................................ 1,035,000
70,000 Blockbuster Entertainment Corp. .................................. 2,143,750
45,000 Bombay Co., Inc. (The) * ......................................... 2,025,000
35,000 CellStar Corp. * ................................................. 586,250
58,000 CML Group, Inc. .................................................. 1,370,250
72,000 General Nutrition Cos., Inc. * ................................... 2,052,000
12,000 Insurance Auto Auctions, Inc. * .................................. 447,000
33,500 Musicland Stores Corp. * ......................................... 695,125
20,000 Office Depot, Inc. * ............................................. 672,500

<PAGE>
Statement of Investments (Continued)
Oppenheimer Variable Account Funds - Capital Appreciation Fund

Market
Shares Common Stocks (Continued) Value-Note 1
Consumer Cyclicals (Continued)
Retail: Specialty (Continued)
16,000 PetsMart, Inc. * ................................................. $ 436,000
45,000 Rex Stores Corp. * ............................................... 1,018,125
30,000 Spiegel, Inc., Cl. A ............................................. 675,000
13,417,188

Retail: Specialty Apparel--0.2%
12,000 Urban Outfitters, Inc. * ......................................... 321,000

Retail Stores: Department Stores--1.1%
30,000 Kohls Corp. * .................................................... 1,507,500

Retail Stores: General Merchandise Chains--0.6%
35,000 Damark International, Inc. * ..................................... 796,250

Shoes--0.3%
20,000 Baker (J.), Inc. ................................................. 350,000

Textiles: Apparel Manufacturers--2.6%
30,000 Mohawk Industries, Inc. * ........................................ 1,027,500
25,000 Phillips-Van Heusen Corp. ........................................ 937,500
60,000 Tapistron International, Inc. * .................................. 300,000
41,000 Tommy Hilfiger Corp. * ........................................... 1,281,250
3,546,250

Consumer Non-Cyclicals--14.5%
Beverages: Soft Drinks--1.2%
36,000 Cott Corp. ....................................................... 877,500
30,000 Snapple Beverage Corp. * ......................................... 787,500
1,665,000

Drugs--3.9%
6,361 Copley Pharmaceutical, Inc. * .................................... 251,260
50,000 Ethical Holdings Ltd., ADR * ..................................... 437,500
62,500 Nature's Bounty, Inc. * .......................................... 1,296,875
40,000 Perrigo Co. * .................................................... 1,370,000
15,000 R.P. Scherer Corp. * ............................................. 566,250
35,000 Roberts Pharmaceutical Corp. * ................................... 1,391,250
5,313,135

Food Wholesalers--0.5%
40,000 Ridgefield * ..................................................... 650,000

Healthcare: Diversified--1.2%
30,000 IVAX Corp. ....................................................... 862,500
25,500 Value Health, Inc. * ............................................. 803,250
1,665,750

<PAGE>
Statement of Investments (Continued)
Oppenheimer Variable Account Funds - Capital Appreciation Fund

Market
Shares Common Stocks (Continued) Value-Note 1
Consumer Non-Cyclicals (Continued)
Healthcare: Miscellaneous--3.6%
20,000 Athena Neurosciences, Inc. * ..................................... $ 165,000
20,000 Celtrix Pharmaceuticals, Inc. * .................................. 220,000
10,000 Cygnus Therapeutic Systems * ..................................... 112,500
20,000 Elan Corp. PLC * ................................................. 847,500
25,000 Genesis Health Ventures, Inc. * .................................. 587,500
30,000 Genetic Therapy, Inc. * .......................................... 487,500
20,000 Intergroup Healthcare Corp. * .................................... 960,000
20,000 Isis Pharmaceuticals, Inc. * ..................................... 135,000
50,000 Martek Biosciences Corp. * ....................................... 450,000
20,000 Matrix Pharmaceutical, Inc. * .................................... 210,000
10,000 Medimmune, Inc. * ................................................ 110,000
15,000 PerSeptive Biosystems, Inc. * .................................... 431,250
10,000 Vertex Pharmaceuticals, Inc. * ................................... 185,000
4,901,250

Hospital Management--2.8%
15,000 American Medical Response, Inc. * ................................ 375,000
80,000 Horizon Healthcare Corp. ......................................... 1,610,000
50,000 Lincare Holdings, Inc. * ......................................... 1,243,750
30,000 Mariner Health Group, Inc. * ..................................... 648,750
3,877,500

Medical Products--1.3%
9,486 Applied Immune Sciences, Inc. * .................................. 94,860
10,000 Molecular Dynamics, Inc. * ....................................... 117,500
20,000 Ventritex, Inc. * ................................................ 785,000
25,000 Zoll Medical Corp. * ............................................. 750,000
1,747,360

Energy--2.4%
Natural Gas: Processing--0.7%
35,400 Louis Dreyfus Natural Gas Corp. * ................................ 566,400
20,000 Newfield Exploration Co. * ....................................... 352,500
918,900

Oil: Integrated Domestic--0.3%
40,000 Trident NGL Holding, Inc. * ...................................... 470,000

Oil and Gas Drilling--1.4%
12,500 Alexander Energy Corp. * ......................................... 60,938
30,800 Cross Timbers Oil Co. ............................................ 438,900
25,000 International Colin Energy Corp. * ............................... 318,750
7,083 International Pedco Energy Corp. * ............................... 11,181
50,000 St. Mary Land & Exploration Co. .................................. 612,500
35,000 Stone Energy Corp. * ............................................. 472,500
1,914,769

<PAGE>
Statement of Investments (Continued)
Oppenheimer Variable Account Funds - Capital Appreciation Fund

Market
Shares Common Stocks (Continued) Value-Note 1
Financial--8.0%
Financial Services: Miscellaneous--4.5%
30,000 Advanta Corp., Cl. B ............................................. $ 870,000
25,000 BHC Financial, Inc. * ............................................ 687,500
38,000 Countrywide Credit Industries, Inc. .............................. 954,750
48,400 First USA, Inc. .................................................. 1,730,300
41,000 Foothill Group, Inc. (The), Cl. A ................................ 681,625
10,000 Insignia Financial Group, Inc., Cl. A * .......................... 230,000
20,000 Servicios Financieros Quadrum SA, Sponsored ADR .................. 647,500
30,000 Vallicorp Holdings, Inc. ......................................... 375,000
6,176,675

Insurance: Life--0.6%
40,000 Bankers Life Holding Corp. ....................................... 860,000

Insurance: Multi-Line--1.2%
60,000 CCP Insurance, Inc. .............................................. 1,672,500

Insurance: Property and Casualty--1.6%
16,500 ACE Ltd. ......................................................... 513,563
25,000 Mid Ocean Ltd. * ................................................. 706,250
20,000 PartnerRe Holdings Ltd. .......................................... 435,000
45,000 Philadelphia Consolidated Holding Co. * .......................... 540,000
2,194,813

Savings and Loans/Holding Cos.--0.1%
2,733 Pacific Crest Capital, Inc. * .................................... 19,473

Industrial--4.9%
Conglomerates--1.1%
70,000 Grupo Carso SA, ADS * ............................................ 1,531,250

Electrical Equipment--0.9%
52,000 AER Energy Resources, Inc. * ..................................... 533,000
24,000 Kent Electronics Corp. * ......................................... 684,000
1,217,000

Machinery: Diversified--1.0%
23,000 Duracraft Corp. .................................................. 569,250
43,000 FSI International, Inc. * ........................................ 516,000
20,500 Quickturn Design System, Inc. * .................................. 256,250
1,341,500

Manufacturing: Diversified Industrials--1.7%
30,000 Johnstown America Industries, Inc. * ............................. 735,000
20,000 Trinity Industries, Inc. ......................................... 862,500
110,000 Zoltek Cos., Inc. * .............................................. 701,250
2,298,750
<PAGE>
Statement of Investments (Continued)
Oppenheimer Variable Account Funds - Capital Appreciation Fund

Market
Shares Common Stocks (Continued) Value-Note 1
Industrial (Continued)
Railroads--0.2%
11,300 RailTex, Inc. * .................................................. $ 313,575

Technology--22.4%
Communication: Equipment/Manufacturers--1.9%
26,800 Antec Corp. * .................................................... 670,000
15,000 BroadBand Technologies, Inc. * ................................... 476,250
15,000 Glenayre Technologies, Inc. * .................................... 652,500
15,000 Newbridge Networks Corp. * ....................................... 821,250
2,620,000

Computer Software and Services--10.5%
25,000 Acclaim Entertainment, Inc. * .................................... 531,250
30,000 Cheyenne Software, Inc. * ........................................ 828,750
22,000 Compuware Corp. * ................................................ 572,000
34,200 Cornerstone Imaging, Inc. * ...................................... 504,450
41,000 CUC International, Inc. * ........................................ 1,476,000
11,100 Danka Business System PLC, Sponsored ADR ......................... 444,000
39,000 Davidson & Associates, Inc. * .................................... 702,000
20,000 Electronic Arts, Inc. * .......................................... 600,000
90,000 EMC Corp. * ...................................................... 1,485,000
25,000 Fourth Shift Corp. * ............................................. 210,938
17,000 FTP Software, Inc. * ............................................. 450,500
12,000 GTECH Holdings Corp. * ........................................... 393,000
20,000 HBO & Co. ........................................................ 920,000
12,500 Information Resources, Inc. * .................................... 481,250
30,000 Lotus Development Corp. * ........................................ 1,650,000
24,000 Mercury Interactive Corp. * ...................................... 414,000
30,000 Pairgain Technologies, Inc. * .................................... 412,500
944 Sap AG, Preference ............................................... 877,933
16,000 SOFTIMAGE, Inc. * ................................................ 256,000
4,500 SPS Transaction Services, Inc. * ................................. 271,125
20,000 Sybase, Inc. * ................................................... 840,000
14,320,696

Computer Systems--4.7%
10,000 Cabletron Systems, Inc. * ........................................ 1,125,000
9,000 Cisco Systems, Inc. * ............................................ 581,625
25,000 First Data Corp. ................................................. 1,018,750
48,000 Golden Systems, Inc. * ........................................... 411,000
30,000 Pyxis Corp. * .................................................... 2,242,500
69,000 Union Switch & Signal, Inc. * .................................... 1,086,750
6,465,625

Electronics--0.4%
30,500 Itron, Inc. * .................................................... 549,000

<PAGE>
Statement of Investments (Continued)
Oppenheimer Variable Account Funds - Capital Appreciation Fund

Market
Shares Common Stocks (Continued) Value-Note 1
Technology (Continued)
Electronics: Instrumentation--1.5%
60,000 American Power Conversion Corp. * ................................ $ 1,425,000
75,000 CMC Industries, Inc. * ........................................... 637,500
2,062,500

Electronics: Semiconductors--0.6%
80,000 Advanced Technology Materials, Inc. * ............................ 470,000
32,100 MRS Technology, Inc. * ........................................... 417,300
887,300

Telecommunications--2.8%
20,000 Cencall Communications Corp. * ................................... 560,000
40,000 Davel Communications Group, Inc. ................................. 615,000
20,000 LCI International, Inc. * ........................................ 740,000
33,177 LDDS Communications, Inc. * ...................................... 1,600,790
45,000 WCT Communications, Inc. * ....................................... 264,373
3,780,163
Total Common Stocks (Cost $91,474,536) ........................... 116,267,572

Total Investments, at Value (Cost $115,131,460) ..................... 103.0% 141,080,412
Liabilities in Excess of Other Assets ............................... (3.0) (4,195,309)

Net Assets .......................................................... 100.0% $136,885,103

<FN>

* Non-income producing security.

1 The Fund owns securities purchased in private placement transactions, without registration
under the Securities Act of 1933 (the Act). The securities are valued under methods approved
by the Board of Trustees as reflecting fair value. The Fund intends to invest no more than 10% of
its net assets (determined at the time of purchase) in restricted and illiquid securities, excluding
securities eligible for resale pursuant to Rule 144A of the Act that are determined to be liquid by the
Board of Trustees or by the Manager under Board-approved guidelines. Restricted and illiquid
securities amount to $777,840, or .57% of the Fund's net assets, at December 31, 1993.

Valuation Per
Acquisition Cost Unit as of
Security Date Per Unit 12/31/93

Aspect Telecommunications Corp., 5% Cv. Sub Debs., 10/15/03(2) 9/14/93 $100.00 $121.50
Intelcom Group, Inc., 7% Cv. Sub. Nts., 10/30/98 ............ 11/2/93 $100.00 $ 77.78
Medaphis Corp., 6.50% Cv. Sub. Debs., 1/1/00 (2) ............ 12/22/92 $100.00 $122.50

2 Transferable under Rule 144A of the Act.

See accompanying Notes to Financial Statements.

</TABLE>

<PAGE>

Statement of Investments December 31, 1993
Oppenheimer Variable Account Funds - Growth Fund

Face Market
Amount Repurchase Agreements --12.9% Value-Note 1
<C> <S> <C>
$ 7,300,000 Repurchase agreement with J.P. Morgan Securities, Inc.,
3.15%, dated 12/31/93 and maturing 1/3/94, collateralized
by U.S. Treasury Bills, 2.93%, 2/3/94, with a value of
$7,454,315 (Cost $7,300,000) ............................... $ 7,300,000

Shares Common Stocks --86.2%
Basic Materials --1.4%
Chemicals --0.9%
7,000 Great Lakes Chemical Corp. ................................... 522,375

Chemicals: Diversified --0.5%
6,000 FMC Corp. * .................................................. 282,750

Consumer Cyclicals --15.3%
Auto Parts: After Market --1.3%
15,000 Goodyear Tire & Rubber Co. ................................... 686,250
2,700 SPX Corp. .................................................... 47,925
734,175
Automobiles --1.0%
13,000 Harley-Davidson, Inc. ........................................ 573,625

Broadcast Media --1.6%
12,000 Multimedia, Inc. * ........................................... 411,000
17,000 Tele-Communications, Inc., Cl. A * ........................... 514,250
925,250

Entertainment --1.1%
16,000 King World Productions, Inc. * ............................... 614,000

Leisure Time --1.1%
7,000 Caesar's World, Inc. * ....................................... 373,625
8,000 International Game Technology ................................ 236,000
609,625

Publishing --0.2%
4,000 Marvel Entertainment Group, Inc. * ........................... 109,000

Restaurants --1.6%
4,500 McDonald's Corp. ............................................. 256,500
28,000 Shoney's, Inc. * ............................................. 647,500
904,000

Retail: Specialty --5.5%
14,000 Blockbuster Entertainment Corp. .............................. 428,750
18,000 Circuit City Stores, Inc. .................................... 391,500
17,000 CML Group, Inc. .............................................. 401,620

<PAGE>
Statement of Investments (Continued)
Oppenheimer Variable Account Funds - Growth Fund

Market
Shares Common Stocks (Continued) Value-Note 1
Consumer Cyclicals (Continued)
Retail: Specialty (Continued)
14,000 Home Depot, Inc. (The) ....................................... $ 553,000
23,000 Michaels Stores, Inc. * ...................................... 822,250
8,000 Pier 1 Imports, Inc. ......................................... 78,000
7,000 QVC Network, Inc. * .......................................... 274,750
14,600 Service Merchandise Co., Inc. * .............................. 146,000
3,095,870

Retail Stores: General Merchandise Chains --0.7%
5,000 Mac Frugal's Bargains Close-Outs, Inc. *...................... 98,125
11,000 Wal-Mart Stores, Inc. ........................................ 275,000
373,125

Shoes --0.1%
3,000 Reebok International Ltd. .................................... 90,000

Textiles: Apparel Manufacturers --0.6%
14,000 Fruit of the Loom, Inc., Cl. A * ............................. 337,750

Toys --0.5%
11,000 Mattel, Inc. ................................................. 303,875

Consumer Non-Cyclicals --19.0%
Beverages: Soft Drinks --1.4%
10,000 Coca-Cola Co. (The) .......................................... 446,250
9,000 PepsiCo, Inc. ................................................ 367,875
814,125

Drugs --3.0%
6,500 Forest Laboratories, Inc. * .................................. 309,563
4,000 Marion Merrell Dow, Inc. ..................................... 72,000
7,500 Merck & Co., Inc. ............................................ 257,813
3,000 Mylan Laboratories, Inc. ..................................... 76,125
5,000 Pfizer, Inc. ................................................. 345,000
6,000 Schering-Plough Corp. ........................................ 411,000
4,000 Syntex Corp. ................................................. 63,500
6,000 Upjohn Co. ................................................... 174,750
1,709,751

Food Processing --0.9%
4,000 ConAgra, Inc. ................................................ 105,500
3,000 General Mills, Inc. .......................................... 182,250
6,000 Heinz (H.J.) Co. ............................................. 215,250
1,000 Tyson Foods, Inc., Cl. A ..................................... 24,000
527,000

Healthcare: Diversified --3.6%
13,000 Abbott Laboratories .......................................... 383,500

<PAGE>
Statement of Investments (Continued)
Oppenheimer Variable Account Funds - Growth Fund

Market
Shares Common Stocks (Continued) Value-Note 1
Consumer Non-Cyclicals (Continued)
Healthcare: Diversified (Continued)
4,500 American Home Products Corp. ................................. $ 291,375
4,500 Bristol-Myers Squibb Co. ..................................... 261,563
16,500 IVAX Corp. ................................................... 474,375
6,000 Johnson & Johnson ............................................ 268,500
4,000 Smithkline Beecham PLC, ADR .................................. 109,500
4,000 Warner-Lambert Co. ........................................... 270,000
2,058,813

Healthcare: Miscellaneous --3.9%
3,500 Amgen, Inc. * ................................................ 173,250
8,000 HealthCare COMPARE Corp. * ................................... 197,000
21,000 National Health Laboratories, Inc. ........................... 299,250
11,000 United Healthcare Corp. ...................................... 834,625
12,000 U.S. Healthcare, Inc. ........................................ 691,500

Hospital Management --0.4%
4,000 Healthtrust, Inc.-The Hospital Co. * ......................... 106,500
8,000 Novacare, Inc. * ............................................. 122,000
228,500

Household Products --1.2%
6,000 Colgate-Palmolive Co. ........................................ 374,250
5,500 Procter & Gamble Co. ......................................... 313,500

Medical Products --3.3%
13,000 Cordis Corp. * ............................................... 641,875
6,000 Medtronic, Inc. .............................................. 492,750
3,500 Rhone-Poulenc Rorer, Inc. .................................... 127,750
12,000 Sci-Med Life Systems, Inc. * ................................. 471,000
5,000 St. Jude Medical, Inc. ....................................... 132,500
1,865,875

Tobacco --1.3%
6,000 American Brands, Inc. ........................................ 199,500
5,500 Philip Morris Cos., Inc. ..................................... 306,625
6,000 UST, Inc. .................................................... 166,500
672,625

Energy --3.7%
Coal --.5%
10,000 Pittston Co. ................................................. 288,750

Oil: Exploration and Production --0.5%
52,000 Maxus Energy Corp. * ......................................... 286,000

<PAGE>
Statement of Investments (Continued)
Oppenheimer Variable Account Funds - Growth Fund

Market
Shares Common Stocks (Continued) Value-Note 1
Energy (Continued)
Oil: Integrated Domestic --0.7%
3,500 Pennzoil Co. ................................................. $ 186,375
15,500 Quaker State Corp. ........................................... 207,313
393,688

Oil: Integrated International --1.1%
3,000 Chevron Corp. ................................................ 261,375
3,500 Royal Dutch Petroleum Co. .................................... 365,313
626,688

Oil Well Services and Equipment --0.9%
15,000 McDermott International, Inc. ................................ 397,500
10,000 Western Co. of North America * ............................... 128,750
526,250

Financial --23.3%
Financial Services: Miscellaneous --9.7%
17,000 Advanta Corp., Cl. A ......................................... 565,250
25,994 Bear Stearns Cos., Inc. (The) ................................ 568,619
22,000 Countrywide Credit Industries, Inc. * ........................ 552,750
8,250 Credit Local de France ....................................... 684,368
5,700 Federal National Mortgage Assn. .............................. 447,450
16,000 Green Tree Financial Corp. ................................... 768,000
5,000 MBIA, Inc. ................................................... 314,375
19,500 PaineWebber Group, Inc. ...................................... 526,500
20,000 Primerica Corp. .............................................. 777,500
7,000 Student Loan Marketing Assn. ................................. 314,125
5,518,937

Insurance: Life --2.4%
11,250 AFLAC, Inc. .................................................. 320,625
14,000 Conseco, Inc. ................................................ 777,000
6,000 Torchmark Corp. .............................................. 270,000

Insurance: Multi-Line --0.6%
12,000 CCP Insurance, Inc. .......................................... 334,500

Insurance: Property and Casualty --1.8%
15,200 Progressive Corp. ............................................ 615,600
29,000 USF&G Corp. .................................................. 427,750
1,043,350

Insurance Brokers --0.2%
5,000 Alexander & Alexander Services, Inc. ......................... 97,500

Major Banks: Other --1.7%
21,000 Bank of Boston Corp. ......................................... 483,000

<PAGE>
Statement of Investments (Continued)
Oppenheimer Variable Account Funds - Growth Fund

Market
Shares Common Stocks (Continued) Value-Note 1
Financial (Continued)
Major Banks: Other (Continued)
9,000 Mellon Bank Corp. ............................................ $ 477,000
960,000

Major Banks: Regional --6.5%
11,625 BANC ONE CORP. ............................................... 454,828
5,000 First Fidelity Bancorporation ................................ 227,500
9,000 First Interstate Bancorp. .................................... 577,125
15,000 KeyCorp ...................................................... 530,625
19,000 Midlantic Corp. * ............................................ 484,500
18,000 Shawmut National Corp. ....................................... 391,500
20,000 Signet Banking Corp. ......................................... 695,000
9,000 UJB Financial Corp. .......................................... 213,750
4,000 Washington Mutual Savings Bank of Seattle .................... 96,500
3,671,328

Money Center Banks --.4%
6,000 Chase Manhattan Corp. ........................................ 203,250

Industrial --3.1%
Commercial Services --0.5%
30,000 ADT Ltd., ADR * .............................................. 270,000

Electrical Equipment --1.2%
6,000 Amphenol Corp., Cl. A * ...................................... 99,000
5,500 General Electric Co. ......................................... 576,813
675,813

Machine Tools --0.1%
2,000 Cincinnati Milacron, Inc. .................................... 44,000

Machinery: Diversified --0.8%
11,000 Varity Corp. * ............................................... 492,250

Transportation: Miscellaneous --0.5%
5,000 American President Cos. Ltd. ................................. 286,250

Technology --20.0%
Aerospace/Defense --0.4%
6,000 Northrop Corp. ............................................... 224,250

Computer Software and Services --5.5%
5,000 BMC Software, Inc. * ......................................... 240,000
14,600 Ceridian Corp. * ............................................. 277,400
16,000 Computer Associates International, Inc. ..................... 640,000
2,000 Computer Sciences Corp. * .................................... 199,000
26,000 EMC Corp. * .................................................. 429,000
8,000 General Motors Corp., Cl. E .................................. 234,000
6,200 Microsoft Corp. * ............................................ 499,875
20,000 Novell, Inc. * ............................................... 415,000
4,000 Oracle Systems Corp. * ....................................... 115,000
10,000 SHL Systemhouse, Inc. * ...................................... 72,500
3,121,775

<PAGE>
Statement of Investments (Continued)
Oppenheimer Variable Account Funds - Growth Fund

Market
Shares Common Stocks (Continued) Value-Note 1
Technology (Continued)
Computer Systems --6.8%
7,400 Applied Magnetics Corp. * .................................... $ 40,700
13,000 AST Research, Inc. * ......................................... 295,750
8,000 Cabletron Systems, Inc. * .................................... 900,000
12,500 Cisco Systems, Inc. * ........................................ 807,813
3,500 Compaq Computer Corp. * ...................................... 259,000
15,000 QMS, Inc. * .................................................. 135,000
7,000 Scitex Corp. Ltd. * .......................................... 173,250
20,000 Seagate Technology * ......................................... 475,000
9,000 Synoptics Communications, Inc. * ............................. 250,875
40,500 Unisys Corp. * ............................................... 511,313
3,848,701

Electronics: Defense --0.6%
8,500 General Motors Corp., Cl. H .................................. 330,438

Electronics: Instrumentation --2.3%
32,000 American Power Conversion Corp. * ............................ 760,000
30,000 Belden, Inc. * ............................................... 558,750
1,318,750

Electronics: Semiconductors --1.6%
12,000 Intel Corp. .................................................. 744,000
10,000 National Semiconductor Co. ................................... 161,250
905,250

Telecommunications --2.8%
4,800 American Telephone & Telegraph Co. ........................... 252,000
20,300 PacTel Corp. * ............................................... 504,963
12,000 Telefonos de Mexico SA, Sponsored ADR ........................ 810,000
1,566,963

Utilities --0.4%
Electric Cos. --0.1%
4,000 Niagara Mohawk Power Corp. ................................... 81,000

Telephone (New) --0.3%
2,500 BellSouth Corp. .............................................. 144,688

Total Common Stocks (Cost $39,727,358) ....................... 48,863,478

Total Investments, at Value (Cost $47,027,358) ..................... 99.1% $56,163,478
Other Assets Net of Liabilities .................................... 0.9 537,570

Net Assets ......................................................... 100.0% $56,701,048

<FN>

*Non-income producing security.

See accompanying Notes to Financial Statements.

</TABLE>
<PAGE>
Statement of Investments December 31, 1993
Oppenheimer Variable Account Funds-Multiple Strategies Fund

<TABLE>
<CAPTION>
Face Market
Amount Repurchase Agreements--10.0% Value-Note 1
<C> <S> <C>
$ 25,000,000 Repurchase agreement with First Chicago Markets,
3.125%, dated 12/31/93 and maturing 1/3/94, collateralized
by U.S. Treasury Bills, 3.875%, 3/31/95, with a value of
$25,506,287 (Cost $25,000,000) .................................. $ 25,000,000

Long-Term Government Obligations--25.9%
1,678,950 Argentina (Republic of) Bonds, Bonos de Consolidacion de
Deudas, Series I, 3.1875%, 4/1/01 (2)(3) ........................ 1,458,977
+ 1,400,000 Australia (Government of) Bonds, 12%, 5/15/06 .................... 1,298,435
Canada (Government of) Bonds:
+ 3,000,000 9.75%, 12/1/01 .................................................. 2,723,565
+ 1,500,000 8.50%, 4/1/02 ................................................... 1,277,379
Government National Mortgage Assn.:
2,450,763 8%, 7/15/22 ..................................................... 2,583,569
4,500,662 8%, 4/15/23 ..................................................... 4,748,199
+ 3,600,000 Queensland (Government of) Development Authority
Global Transferable Registered Nts., 10.50%, 5/15/03 ............ 3,068,564
Spain (Kingdom of) Bonds:
+175,000,000 13.45%, 4/15/96 ................................................. 1,363,388
+ 50,000,000 11.45%, 8/30/98 ................................................. 398,915
2,000,000 United Mexican States Gtd. Cv. Bonds, Series B, 6.25%,
12/31/19 ........................................................ 1,671,250
U.S. Treasury Bonds, STRIPS:
3,900,000 0%, 8/15/02 ..................................................... 2,359,086
2,500,000 0%, 8/15/03 ..................................................... 1,409,322
U.S. Treasury Nts.:
12,500,000 7.625%, 5/31/96 ................................................. 13,425,749
10,300,000 6.75%, 5/31/97 .................................................. 10,946,942
9,000,000 9.25%, 8/15/98 .................................................. 10,513,080
5,000,000 6.375%, 8/15/02 ................................................. 5,215,600
500,000 Venezuela (Republic of) Collateralized Par Bonds, Series
W-A, 6.75%, 3/31/20 ............................................. 372,188

Total Long-Term Government Obligations
(Cost $60,924,336) ............................................. 64,834,208

Corporate Bonds and Notes--14.4%
Adelphia Communications Corp.:
500,000 10.25% Sr. Debs., 7/15/00 (4) ................................... 530,000
500,000 12.50% Sr. Nts., 5/15/02 ........................................ 582,500
500,000 9.875% Sr. Debs., 3/1/05 ....................................... 552,500
750,000 Alco Health Distribution Corp., 11.25% Sr. Debs.,
7/15/05 (3) .................................................... 752,110
500,000 American Medical International, Inc., 13.50% Sr. Sub.
Nts., 8/15/01 ................................................... 585,625
500,000 American Standard, Inc., 9.875% Sr. Sub. Nts., 6/1/01 ............ 525,625
800,000 Amstar Corp., 11.375% Sr. Sub. Nts., 2/15/97 ..................... 820,000
Armco, Inc.:
351,000 13.50% Sr. Nts., 6/15/94 ........................................ 360,214
200,000 8.50% SF Debs., 9/1/01 ......................................... 195,000
400,000 Auburn Hills Trust, 12.375% Gtd. Exch. Ctfs., 5/1/20 (2) ........ 615,000

<PAGE>
Statement of Investments (Continued)
Oppenheimer Variable Account Funds-Multiple Strategies Fund

Face Market
Amount Corporate Bonds and Notes (Continued) Value-Note 1
$ 475,000 Aztar Corp., 11% Sr. Sub. Nts., 10/1/02 .......................... $ 484,500
500,000 Baldwin Co., 10.375% Sr. Nts., 8/1/03 (4)......................... 482,500
1,000,000 Bell & Howell Holdings Co., 0%/11.50% Sr. Disc. Debs.,
Series B, 3/1/05 (1) ............................................ 555,000
500,000 Cablevision Industries Corp., 9.25% Sr. Debs.,
Series B, 4/1/08 ............................................... 520,000
500,000 Calmar, Inc., 12% Sr. Sec. Nts., 12/15/97 ........................ 500,000
1,000,000 Card Establishment Services, Inc., 10% Sr. Sub Nts.,
10/1/03 (4) ..................................................... 1,045,000
500,000 Centennial Cellular Corp., 8.875% Sr. Nts., 11/1/01 .............. 497,500
500,000 Chrysler Financial Corp., 13.25% Sr. Nts., 10/15/99 .............. 667,690
500,000 Coastal Corp., 11.75% Sr. Debs., 6/15/06 ......................... 580,000
1,000,000 Coleman Holdings, Inc., 0% Sr. Sec. Disc. Nts., 5/27/98 .......... 647,500
600,000 Continental Cablevision, Inc., 9.50% Sr. Debs., 8/1/13 ........... 672,000
250,000 Di Giorgio Corp., 12% Sr. Nts., 2/15/03 .......................... 271,875
500,000 Envirosource, Inc., 9.75% Sr. Nts., 6/15/03 ...................... 487,500
875,000 Epic Holdings, Inc., 0%/12% Sr. Def. Cpn. Nts.,
3/15/02 (1) ..................................................... 638,750
491,176 Epic Properties, Inc., 11.50% Gtd. Fst. Priority Mtg.
Nts., Cl. B-2, 7/15/01 .......................................... 552,574
750,000 Farm Fresh, Inc., 12.25% Sr. Nts., 10/1/00 ....................... 796,875
750,000 Finlay Fine Jewelry Corp., 10.625% Sr. Nts., 5/1/03 .............. 776,250
First Chicago Corp.:
250,000 9% Sub. Nts., 6/15/99 ........................................... 285,850
250,000 11.25% Sub. Nts., 2/20/01 ....................................... 321,391
400,000 Flagstar Corp., 10.875% Sr. Nts., 12/1/02 ........................ 415,000
Foodmaker, Inc.:
500,000 14.25% Sr. Sub. Nts., 5/15/98 ................................... 536,875
500,000 9.25% Sr. Nts., 3/1/99 .......................................... 511,250
500,000 Gaylord Container Corp., 11.50% Sr. Sub. Disc. Debs.,
5/15/01 ......................................................... 535,000
500,000 GNF Corp., 10.625% Gtd. Fst. Mtg. Nts., 4/1/03 ................... 482,500
400,000 Grand Union Co., 11.25% Sr. Nts., 7/15/00 ........................ 422,000
500,000 Harmon International Industries, Inc. 12% Sr. Sub. Nts.,
8/1/02 .......................................................... 560,000
Harris Chemical North America, Inc.:
1,000,000 10.25% Sr. Sec. Disc. Nts., 7/15/01 ............................. 858,750
600,000 10.75% Sr. Sub. Nts., 10/15/03 .................................. 634,500
400,000 Horsehead Industries, Inc., 14% Sub. Nts., 6/1/99 ................ 366,000
800,000 International Cabletel, Inc., 10.875% Sr. Def. Cpn. Nts.,
10/15/03 ........................................................ 512,000
750,000 Lamar Advertising Co., 11% Sr. Sec. Nts., 5/15/03 ................ 796,875
500,000 Mediq, Inc., 7.50% Exch. Sub. Debs., 7/15/03 ..................... 480,625
Mesa Capital Corp.:
772,000 0%/12.75% Sec. Disc. Nts., 6/30/98 (1) .......................... 656,200
40,000 0%/12.75% Cv. Disc. Nts. 6/30/98 (1)............................. 57,100
900,000 Mosler, Inc., 11% Sr. Nts., Series A, 4/15/03 .................... 814,500
500,000 NVR, Inc., 11% Gtd. Sr. Nts., 4/15/03 ............................ 528,750
500,000 Owens-Illinois, Inc., 10% Sr. Sub. Nts., 8/1/02 .................. 533,125
925,000 Pacific Lumber Co., 10.50% Sr. Nts., 3/1/03 ...................... 959,687
Panamsat LP/Panamsat Capital Corp.:
500,000 9.75% Sr. Sec. Nts., 8/1/00 ..................................... 531,250
250,000 0%/11.375% Sr. Sub. Disc. Nts., 8/1/03 (1) ...................... 167,500
500,000 Quantum Chemical Corp., 10.375% Fst. Mtg. Nts.,
6/1/03 .......................................................... 609,605
800,000 Revlon Worldwide Corp., 0% Sr. Sec. Disc. Nts., 3/15/98 .......... 412,000

<PAGE>
Statement of Investments (Continued)
Oppenheimer Variable Account Funds-Multiple Strategies Fund

Face Market
Amount Corporate Bonds and Notes (Continued) Value-Note 1
RJR Nabisco, Inc.:
$ 400,000 10.50% Sr. Nts., 4/15/98 ........................................ $ 442,000
136,000 15% Sub. Debs., 5/15/01 ......................................... 149,260
500,000 8.625% Medium-Term Nts., 12/1/02 ................................ 492,149
500,000 SCI Television, Inc., 11% Sr. Sec. Nts., 6/30/05 ................. 520,000
500,000 Sealed Power Technologies LP, 14.50% Sr. Sub. Debs.,
5/15/99 ......................................................... 545,000
750,000 Station Casinos, Inc., 9.625% Sr. Sub. Nts., 6/1/03 .............. 761,250
300,000 Synthetic Industries, Inc., 12.75% Sr. Sub. Debs., 12/1/02 ....... 330,000
1,000,000 Talley Industries, Inc., 12.25% Sr. Disc. Debs., 10/15/05 ........ 585,000
500,000 Time Warner, Inc./Time Warner Entertainment LP, 10.15%
Sr. Nts., 5/1/12 ................................................ 620,000
500,000 Tiphook Finance Corp., 10.75% Sr. Gtd. Nts., 11/1/02 ............. 442,500
500,000 TKR Cable I, Inc., 10.50% Sr. Debs., 10/30/07 .................... 610,000
Unisys Corp.:
500,000 15% Credit Sensitive Nts., 7/1/97 ............................... 570,000
500,000 9.75% Sr. Nts., 9/15/16 ......................................... 510,000
USG Corp.:
500,000 10.25% Sr. Sec. Nts., 12/15/02 .................................. 515,000
300,000 8.75% Debs., 3/1/17 ............................................. 277,500

Total Corporate Bonds and Notes (Cost $ 34,881,201) .............. 36,052,080

Municipal Bonds--0.2%
500,000 Port of Portland, Oregon Special Obligation Taxable
Revenue Bonds, PAMCO Project, 9.20%, 5/15/22
(Cost $500,000) ................................................. 549,472

Units Rights, Warrants and Certificates--0.0%
16,412 Gaylord Container Corp. Wts., Exp. 7/96
(Cost $36,927) .................................................. 59,494

Shares Preferred Stocks --0.9.%
3,000 Alumax, Inc., $4.00 Cv., Series A ................................ 295,500
26,000 Chiquita Brands International, Inc., $1.28
Depositary Shares * ............................................ 354,250
6,000 Cyprus Amax Minerals Co., $4.00 Cv., Series A .................... 390,000
20 Dairy Farm International Holdings Ltd., $65.00 Cv. (4) ........... 30,800
10,000 Delta Airlines, Inc., $3.50 Cv. Depositary Shares, Series C* .... 535,000
20,000 K-III Communications Corp., Sr. Exch. ............................ 552,500
10,000 Liposome Co., Inc. (The), $1.9375 Cum. Cv. Exch.
Depositary Shares, Series A .................................... 187,500

Total Preferred Stocks (Cost $2,137,265) ......................... 2,345,550

Common Stocks --48.1%
Basic Materials --3.9%
Chemicals --1.4%
10,000 Air Products and Chemicals, Inc. ................................. 442,500
16,000 ARCO Chemical Corp. .............................................. 692,000
40,000 biosys * ......................................................... 230,000
8,500 Dow Chemical Co. (The) ........................................... 482,375
31,000 Hauser Chemical Research, Inc. * ................................. 248,000
29,700 Praxair, Inc. .................................................... 493,763
32,500 Sybron Chemical Industries, Inc. * ............................... 784,062
3,372,700

<PAGE>
Statement of Investments (Continued)
Oppenheimer Variable Account Funds-Multiple Strategies Fund

Market
Shares Common Stocks (Continued) Value-Note 1
Basic Materials (Continued)
Chemicals: Diversified--0.4%
4,850 Bayer AG, ADR .................................................... $ 1,023,350

Chemicals: Specialty --0.1%
750 Goldschmidt (T.H.) AG ............................................ 300,167

Gold--0.1%
85,000 Arimetco International, Inc. * ................................... 118,769

Metals: Miscellaneous --1.2%
60,500 Brush Wellman, Inc. .............................................. 862,125
48,100 Custom Chrome, Inc. * ............................................ 1,070,225
22,700 Inco Ltd. ........................................................ 610,063
11,000 Phelps Dodge Corp. (5) ........................................... 536,250
3,078,663

Paper and Forest Products--0.2%
30,000 Kimberly Clark de Mexico, Series A * ............................. 562,138

Steel --0.5%
20,000 Allegheny Ludlum Corp. ........................................... 477,500
20,600 Inland Steel Industries, Inc. * .................................. 682,375
1,159,875

Consumer Cyclicals --10.0%
Auto Parts: After Market--0.4%
30,000 Excel Industries, Inc. ........................................... 551,250
45,000 Hi-Lo Automotive, Inc. * ......................................... 444,375
995,625

Broadcast Media --1.5%
1,000 Capital Cities/ABC, Inc. ......................................... 619,500
49,500 Comcast Corp., Cl. A Special ..................................... 1,782,000
12,800 Grupo Televisa SA, ADS (4) ....................................... 896,000
42,000 SFX Broadcasting, Inc., Cl. A * .................................. 535,500
3,833,000

Entertainment --1.1%
20,000 Disney (Walt) Co. (5) ............................................ 852,500
19,000 King World Productions, Inc. * (5) ............................... 729,125
7,000 Paramount Communications, Inc. (5) ............................... 541,625
21,000 WMS Industries, Inc. * (5) ....................................... 603,750
2,727,000

Home Building --0.1%
50,000 Miles Homes, Inc. * .............................................. 300,000

Household Furnishings and Appliances--0.4%
50,000 Chromcraft Revington, Inc. * ..................................... 1,100,000

Leisure Time --0.9%
13,600 Caesar's World, Inc. * ........................................... 725,900
10,500 Eastman Kodak Co. * .............................................. 588,000
35,000 Funco, Inc. * .................................................... 525,000
17,000 International Game Technology .................................... 501,500
2,340,400

<PAGE>
Statement of Investments (Continued)
Oppenheimer Variable Account Funds-Multiple Strategies Fund

Market
Shares Common Stocks (Continued) Value-Note 1
Consumer Cyclicals (Continued)
Publishing --1.2%
40,000 Bowne & Co., Inc. ................................................ $ 870,000
8,500 McGraw-Hill, Inc. ................................................ 574,813
20,000 Time Warner, Inc. ................................................ 885,000
10,167 Wolters Kluwer NV ................................................ 642,282
2,972,095

Restaurants --0.4%
79,000 Quantum Restaurant Group, Inc. ................................... 967,750

Retail Stores: General Merchandise Chains --0.3%
8,000 Centros Comerciales Pryca ........................................ 105,790
30,000 Price/Costco, Inc. * ............................................. 577,500
683,290

Retail: Specialty --1.5%
15,300 Blockbuster Entertainment Corp. (5) .............................. 468,562
4,086 Castorama Dubois Investissements LP .............................. 610,357
22,000 CML Group, Inc. .................................................. 519,750
40,000 Inacom Corp. * ................................................... 540,000
30,000 Service Merchandise Co., Inc. * .................................. 300,000
38,700 Venture Stores, Inc. ............................................. 904,613
38,000 Waban, Inc., * ................................................... 517,750
3,861,032

Shoes --0.7%
64,000 Baker (J.), Inc. ................................................. 1,120,000
43,000 Justin Industries, Inc. .......................................... 634,250
1,754,250

Textiles: Apparel Manufacturers --0.8%
30,000 Authentic Fitness Corp. * ........................................ 843,750
21,000 Fruit of the Loom, Inc., Cl. A * ................................. 506,625
20,000 Warnaco Group, Inc. (The), Cl. A * ............................... 607,500
1,957,875

Toys --0.7%
47,000 Mattel, Inc. ..................................................... 1,298,375
7,000 Nintendo Co. ..................................................... 450,338
1,748,713

Consumer Non-Cyclicals--8.6%
Beverages: Alcoholic --0.3%
100,000 Guiness PLC ...................................................... 706,461

Beverages: Soft Drinks--0.3%
51,700 Whitman Corp. .................................................... 840,125

Cosmetics --0.7%
24,000 Avon Products, Inc. (5) .......................................... 1,167,000
30,000 Neutrogena Corp. ................................................. 615,000
1,782,000

<PAGE>
Statement of Investments (Continued)
Oppenheimer Variable Account Funds-Multiple Strategies Fund

Market
Shares Common Stocks (Continued) Value-Note 1
Consumer Non-Cyclicals (Continued)
Drugs --1.1%
22,000 Agouron Pharmaceuticals, Inc. * .................................. $ 258,500
15,500 Astra AB Free, Series A .......................................... 353,319
950 Ciba-Geigy AG .................................................... 575,746
13,700 Lilly (Eli) & Co. ................................................ 813,438
300 Sandoz AG ........................................................ 835,337
2,836,340

Food Processing --0.8%
1,541 Chiquita Brands International, Inc. .............................. 17,722
967,000 CP Pokphand Co. .................................................. 425,468
23,600 Nestle SA, Sponsored ADR ......................................... 1,020,700
40,000 Sanfilippo (John B.) & Son, Inc. ................................. 580,000
2,043,890

Healthcare: Diversified--1.3%
18,000 Abbott Laboratories .............................................. 531,000
16,500 Bristol-Myers Squibb Co. ......................................... 959,063
23,000 Carter-Wallace, Inc. ............................................. 491,625
1,025 Schering AG ...................................................... 669,941
7,000 Warner-Lambert Co. ............................................... 472,500
3,124,129

Healthcare: Miscellaneous--2.5%
9,000 Amgen, Inc. * (5) ................................................ 445,500
12,000 Biogen, Inc. * ................................................... 478,500
6,000 Chiron Corp. * ................................................... 504,000
50,000 FHP International Corp. * (5) .................................... 1,350,000
20,100 Genzyme Corp. * .................................................. 552,750
45,785 Manor Care, Inc. ................................................. 1,116,009
18,000 Matrix Pharmaceutical, Inc. * .................................... 189,000
14,000 Protein Design Labs, Inc. * ...................................... 339,500
23,400 U.S. Healthcare, Inc. (5) ........................................ 1,348,425
6,323,684

Hospital Management --0.2%
26,000 Medical Care America, Inc. * (5) ................................. 594,750

Medical Products --0.8%
18,500 Bard (C.R.), Inc. (5) ............................................ 467,125
9,000 Medtronic, Inc. (5) .............................................. 739,125
15,000 Molecular Dynamics, Inc. * ....................................... 176,250
20,000 Nellcor, Inc. * .................................................. 495,000
1,877,500

Retail Stores: Food Chains--0.3%
164,026 Dairy Farm International Holdings Ltd. ........................... 326,885
17,900 Giant Food, Inc., Cl. A .......................................... 460,925
787,810

Tobacco --0.3%
13,700 Philip Morris Cos., Inc. ......................................... 763,775

Energy --2.6%
Coal --0.3%
22,000 Ashland Coal, Inc. ............................................... 665,500

<PAGE>
Statement of Investments (Continued)
Oppenheimer Variable Account Funds-Multiple Strategies Fund

Market
Shares Common Stocks (Continued) Value-Note 1
Energy (Continued)
Oil: Exploration and Production--0.2%
29,600 Oryx Energy Co. .................................................. $ 510,600

Oil and Gas Drilling--0.2%
60,500 Santa Fe Energy Resources, Inc. .................................. 544,500

Oil: Integrated Domestic--0.7%
15,000 Ashland Oil, Inc. ................................................ 511,875
7,000 Atlantic Richfield Co. ........................................... 736,750
17,000 Unocal Corp. (5) ................................................. 473,875
1,722,500

Oil: Integrated International--0.9%
7,700 Amoco Corp. ...................................................... 407,137
10,000 Royal Dutch Petroleum Co. ........................................ 1,043,750
12,000 Saga Petroleum AS, Cl. A ......................................... 119,667
19,000 Saga Petroleum AS, Cl. B ......................................... 184,421
15,373 Total SA, Sponsored ADR .......................................... 416,993
2,171,968

Oil Well Services and Equipment--0.3%
12,400 McDermott International, Inc. (5) ................................ 328,600
52,700 Tuboscope Vetco International Corp. * ............................ 322,787
651,387

Financial --5.5%
Financial Services: Miscellaneous--1.9%
25,200 Bear Stearns Cos., Inc. (The) .................................... 551,250
96,100 Catellus Development Corp. * ..................................... 744,775
15,000 Dean Witter, Discover & Co. (5) .................................. 519,375
17,800 Merrill Lynch & Co., Inc. ........................................ 747,600
200,000 Peregrine Investment Holdings Ltd. ............................... 491,752
35,000 Plaza Home Mortgage Corp. * ...................................... 293,125
20,000 Salomon, Inc. (5) ................................................ 952,500
30,000 Santa Anita Realty Enterprises, Inc. (4) ......................... 521,250
4,821,627

Insurance: Life --0.5%
26,000 Bankers Life Holding Corp. ....................................... 559,000
27,000 First Colony Corp. ............................................... 685,125
1,244,125

Insurance: Multi-Line--0.6%
7,000 American International Group, Inc. ............................... 614,250
29,600 American Re Corp. * .............................................. 839,900
1,454,150

Insurance: Property and Casualty--0.2%
6,000 Loews Corp. * .................................................... 558,000

<PAGE>
Statement of Investments (Continued)
Oppenheimer Variable Account Funds-Multiple Strategies Fund

Market
Shares Common Stocks (Continued) Value-Note 1
Financial (Continued)
Major Banks: Other --0.5%
13,300 BankAmerica Corp. ................................................ $ 616,788
1,325 Deutsche Bank AG, ADR ............................................ 679,062
1,295,850

Major Banks: Regional--0.5%
24,200 NationsBank Corp. ................................................ 1,185,800

Money Center Banks --1.0%
13,000 Bank of New York Co., Inc. (The) (5) ............................. 741,000
12,000 Bankers Trust New York Corp. ..................................... 949,500
18,700 Chemical Banking Corp. ........................................... 750,337

Savings and Loans/Holding Cos.--0.3%
17,000 Golden West Financial Corp. ...................................... 663,000

Industrial --6.0%
Building Materials Group--0.6%
15,000 Masco Corp. ...................................................... 555,000
21,000 Owens-Corning Fiberglas Corp. * (5) .............................. 931,875
3,200 Thomas Industries, Inc. .......................................... 42,000
1,528,875

Commercial Services --0.3%
65,000 Mail Boxes Etc. * ................................................ 771,875

Conglomerates --0.4%
17,500 Tenneco, Inc. .................................................... 920,938

Electrical Equipment --1.1%
80,000 Amphenol Corp., Cl. A * .......................................... 1,320,000
10,000 ASEA AB, Sponsored ADR ........................................... 710,000
8,000 General Electric Co. ............................................. 839,000
2,869,000

Engineering and Construction--0.7%
25,000 Foster Wheeler Corp. ............................................. 837,500
44,150 Huarte SA ........................................................ 528,224
35,000 Insituform Mid-America, Inc., Cl. A .............................. 490,000
1,855,724

Heavy Duty Trucks and Parts--0.2%
24,000 Spartan Motors, Inc. (5) ......................................... 408,000

Machine Tools --0.1%
7,000 FANUC Ltd. ....................................................... 230,814

Machinery: Diversified--0.3%
45,000 Cognex Corp. * ................................................... 663,750

<PAGE>
Statement of Investments (Continued)
Oppenheimer Variable Account Funds-Multiple Strategies Fund

Market
Shares Common Stocks (Continued) Value-Note 1
Industrial (Continued)
Manufacturing-Diversified Industrials--0.9%
65,000 Instrument Systems Corp. * ....................................... $ 576,875
3,287 Mannesmann AG .................................................... 794,998
10,000 Siemens AG, ADR .................................................. 913,750
2,285,623

Pollution Control --0.3%
28,400 WMX Technologies, Inc. ........................................... 749,050

Railroads --0.4%
15,400 Burlington Northern, Inc. (5) .................................... 891,275

Transportation: Miscellaneous--0.7%
10 Dampskibsselskabet Svendborg, Cl. B .............................. 275,205
105,000 OMI Corp. ........................................................ 721,875
40,000 Stolt-Nielsen SA ................................................. 670,000
1,667,080

Technology --9.4%
Aerospace/Defense --1.0%
9,000 Allied-Signal, Inc. .............................................. 711,000
6,400 General Dynamics Corp. (5) ....................................... 590,400
4,000 McDonnell Douglas Corp. .......................................... 428,000
50,000 Methode Electronics, Inc., Cl. A ................................. 718,750
2,448,150

Communication: Equipment/Manufacturers--0.2%
7,500 QUALCOMM, Inc. * (5) ............................................. 397,500

Computer Software and Services--2.8%
11,000 BMC Software, Inc. ............................................... 528,000
12,000 Computer Associates International, Inc. .......................... 480,000
23,000 LEGENT Corp. * ................................................... 520,375
26,500 Lotus Development Corp. * (5) .................................... 1,457,500
46,000 Marcam Corp. * ................................................... 448,500
6,300 Microsoft Corp. .................................................. 507,938
50,000 Network General Corp. * (5) ...................................... 893,750
28,500 Novell, Inc. ..................................................... 591,375
500 Sap AG, Preference ............................................... 465,007
50,000 Structural Dynamics Research Corp. ............................... 862,500
45,000 Wild River Systems * ............................................. 286,875
7,041,820

Computer Systems --1.5%
11,000 International Business Machines Corp. * .......................... 621,500
70,000 Micropolis Corp. * ............................................... 490,000
60,000 Radius, Inc. * ................................................... 457,500
25,000 Seagate Technology * (5) ......................................... 593,750
31,700 Synoptics Communications, Inc. ................................... 883,637
59,400 Tandem Computers, Inc. ........................................... 645,975
3,692,362

Electronics: Defense --0.2%
115,000 CAE, Inc. * ...................................................... 618,882

<PAGE>
Statement of Investments (Continued)
Oppenheimer Variable Account Funds-Multiple Strategies Fund

Market
Shares Common Stocks (Continued) Value-Note 1
Technology (Continued)
Electronics: Instrumentation--0.4%
14,000 Hewlett-Packard Co. (5) .......................................... $ 1,106,000

Electronics: Semiconductors--1.4%
8,000 Cirrus Logic, Inc. * (5) ......................................... 296,000
32,800 Intel Corp. (5) .................................................. 2,033,600
11,500 Samsung Electronics Co. Ltd., Sponsored GDR * .................... 592,250
12,200 Xilinx, Inc. * (5) ............................................... 582,550
3,504,400
Office Equipment and Supplies--0.4%
10,500 Xerox Corp. (5) .................................................. 938,437

Telecommunications --1.5%
14,500 American Telephone & Telegraph Co. * ............................. 761,250
26,000 MCI Communications Corp. ......................................... 734,500
18,000 NEXTEL Communications, Inc., Cl. A ............................... 670,500
33,900 Rogers Cantel Mobile Communications, Inc., Cl. B, Sub.
Vtg. * .......................................................... 915,300
9,000 Telefonos de Mexico SA, Sponsored ADR ............................ 607,500
3,689,050

Utilities --2.1%
Electric Cos. --.6%
30,000 Public Service Enterprise Group, Inc. ............................ 960,000
9,400 Verbund Oest Electriz ........................................... 572,057
1,532,057

Natural Gas --0.2%
204,000 Hong Kong & China Gas ............................................ 591,344

Telephone (New) --1.3%
22,000 BCE, Inc. ........................................................ 767,250
25,000 Pacific Telesis Group ............................................ 1,350,000
26,300 US West Communications, Inc. ..................................... 1,206,513
3,323,763

Total Common Stocks (Cost $95,247,361) ........................... 120,192,769

Total Investments, at Value (Cost $218,727,090) ....................... 99.5% 249,033,573
Other Assets Net of Liabilities ....................................... .5 1,256,475

Net Assets ............................................................ 100.0% $250,290,048

<PAGE>

Statement of Investments (Continued)
Oppenheimer Variable Account Funds-Multiple Strategies Fund

<FN>

+ Face amount is reported in foreign currency.
* Non-income producing security.
1. Represents a zero coupon bond that converts to a fixed rate of interest at a designated future date.
2. Represents the current interest rate for a variable rate security.
3. Interest is paid in kind.
4. The Fund owns securities purchased in private placement transactions, without registration under the
Securities Act of 1933 (the Act). The securities are valued under methods approved by the Board of
Trustees as reflecting fair value. The Fund intends to invest no more than 10% of its net assets
(determined at the time of purchase) in restricted and illiquid securities, excluding securities eligible
for resale pursuant to Rule 144A of the Act that are determined to be liquid by the Board of Trustees
or by the Manager under Board-approved guidelines. Restricted and illiquid securities amount
to $521,250, or .20% of the Fund's net assets, at December 31, 1993.

Valuation Per
Acquisition Cost Unit as of
Security Date Per Unit December 31, 1993

Adelphia Communications Corp., 10.25% Sr. Debs., 7/15/00 ** ......... 7/21/93 $ 98.80 $ 106.00
Baldwin Co., 10.375% Sr. Nts., 8/1/03 ** ............................ 7/19/93 $ 100.88 $ 96.50
Card Establishment Services, Inc., 10% Sr. Sub. Nts., 10/1/03 ** .... 12/1/93 $ 104.00 $ 104.50
Dairy Farm International Holdings Ltd., $65.00 Cv. ** ............... 4/30/93 $1,000.00 $1,540.00
Grupo Televisa 8/20/92-
SA, ADS ** ......................................................... 8/26/92 $ 27.80 $ 70.00
Santa Anita Realty 5/28/93-
Enterprises, Inc. .................................................. 11/29/93 $ 17.96 $ 17.38

** Transferable under Rule 144A of the Act.

</TABLE>

<PAGE>
Statement of Investments (Continued)
Oppenheimer Variable Account Funds - Multiple Strategies Fund

5. Securities with an aggregate market value of $23,979,725 are held to cover
outstanding call options, as follows:

<TABLE>
<CAPTION>
Shares Expira-
Subject tion Exercise Premium Market Value -
to Call Date Price Received Note 1

<S> <C> <C> <C> <C> <C>
Amgen, Inc. .......................... 1,500 1/94 $ 50.00 $ 2,205 $ 2,062
Avon Products, Inc. .................. 4,800 4/94 55.00 5,280 4,200
Bank of New York Co., Inc. (The) ..... 2,000 1/94 60.00 5,190 750
Bard (C.R.), Inc. .................... 9,200 1/94 25.00 15,823 7,475
Bard (C.R.), Inc. .................... 9,300 4/94 30.00 13,089 4,650
Blockbuster Entertainment Corp. ...... 5,600 1/94 25.00 5,810 31,500
Blockbuster Entertainment Corp. ...... 5,700 3/94 30.00 6,241 12,825
Blockbuster Entertainment Corp. ...... 4,000 6/94 30.00 12,880 13,000
Burlington Northern, Inc. ............ 1,400 1/94 55.00 6,608 4,200
Burlington Northern, Inc. ............ 1,400 1/94 60.00 3,370 875
Cirrus Logic, Inc. ................... 4,000 3/94 30.00 17,379 31,500
Cirrus Logic, Inc. ................... 4,000 3/94 35.00 20,379 17,500
Dean Witter, Discover & Co. .......... 7,500 1/94 40.00 20,400 469
Dean Witter, Discover & Co. .......... 7,500 1/94 45.00 10,087 469
Disney (Walt) Co. .................... 4,000 4/94 40.00 10,380 17,500
FHP International Corp. .............. 5,000 3/94 25.00 20,449 15,625
General Dynamics Corp. ............... 1,600 2/94 95.00 6,744 3,800
Hewlett-Packard Co. .................. 2,800 2/94 85.00 5,929 3,500
Intel, Inc. .......................... 4,000 1/94 65.00 8,380 4,250
Intel, Inc. .......................... 3,000 4/94 70.00 12,285 7,500
King World Productions, Inc. ......... 3,800 2/94 45.00 7,624 3,325
Lotus Development Corp. .............. 4,000 1/94 40.00 18,379 62,000
Lotus Development Corp. .............. 4,000 4/94 50.00 26,879 34,000
Lotus Development Corp. .............. 5,200 4/94 60.00 24,543 15,600
McDermott International, Inc. ........ 6,200 2/94 30.00 11,051 1,550
McDermott International, Inc. ........ 6,200 5/94 35.00 6,045 1,550
Medtronic, Inc. ...................... 1,800 1/94 85.00 3,996 1,800
Medical Care America, Inc. ........... 13,000 4/94 25.00 35,359 22,750
Network General Corp. ................ 16,800 1/94 15.00 28,895 48,300
Network General Corp. ................ 8,400 7/94 20.00 19,697 19,950
Owens-Corning Fiberglas Corp. ........ 4,200 3/94 50.00 8,536 3,150
Paramount Communications, Inc. ....... 2,500 1/94 80.00 7,112 2,969
Paramount Communications, Inc. ....... 2,000 3/94 80.00 11,559 5,000
Paramount Communications, Inc. ....... 2,500 3/94 85.00 4,769 2,500
Phelps Dodge Corp. ................... 5,500 1/94 50.00 11,866 5,156
QUALCOMM, Inc. ....................... 4,000 1/94 50.00 26,379 20,000
QUALCOMM, Inc. ....................... 3,500 1/94 60.00 26,582 1,750
Salomon, Inc. ........................ 5,000 1/94 45.00 16,724 15,000
Salomon, Inc. ........................ 5,000 1/94 50.00 9,225 2,188
Salomon, Inc. ........................ 5,000 4/94 55.00 5,260 3,750
Seagate Technology ................... 12,500 3/94 20.00 40,249 51,562
Spartan Motors, Inc. ................. 4,000 3/94 22.50 9,130 1,500
Unocal Corp. ......................... 1,500 1/94 30.00 5,017 188
Unocal Corp. ......................... 1,500 1/94 35.00 2,017 281
U.S. Healthcare, Inc. ................ 5,700 1/94 55.00 24,616 23,512
WMS Industries, Inc. ................. 5,000 5/94 35.00 17,974 7,500
Xerox Corp. ......................... 2,000 4/94 85.00 5,690 14,000
Xilinx, Inc. ......................... 3,200 3/94 45.00 11,503 18,000
Xilinx, Inc. ......................... 3,200 3/94 50.00 11,104 10,400
Xilinx, Inc. ......................... 3,000 3/94 55.00 8,160 6,000
$ 654,848 $ 588,881

See accompanying Notes to Financial Statements.

</TABLE>
<PAGE>
Statement of Investments December 31, 1993
Oppenheimer Variable Account Funds-Global Securities Fund

Face Market
Amount Repurchase Agreements--14.7% Value-Note 1
<C> <S> <C>
$ 14,200,000 Repurchase agreement with First Chicago Capital Markets,
3.125%, dated 12/31/93 and maturing 1/3/94,
collateralized by U.S. Treasury Nts., 8.875%,
2/15/99, with a value of $14,501,606 (Cost $14,200,000) .......... $ 14,200,000

Corporate Bonds and Notes--0.9%
300,000 Jindal Strips Ltd., 4.25% Cv. Debs., 3/31/99 (2) .................. 389,250
375,000 Scici Ltd., 3.50% Cv. Bonds, 4/1/04 (2) ............................ 499,219

Total Corporate Bonds and Notes (Cost $675,000) .................... 888,469

Units Rights, Warrants and Certificates--1.4%
480,000 China Aerospace International Holdings
Ltd. Wts., Exp. 12/95 ............................................ 93,173
100 Ciba-Geigy AG Wts., Exp. 6/95 (1) .................................. 926
30,000 Eurotunnel SA Wts., Exp. 10/95 (1) ................................. 13,515
2,500 RWE AG Wts., Exp. 3/96 (1) ......................................... 319,602
6,980 Shinawatra Computer Communications Co.
Ltd. Rts., Exp 1/94 .............................................. 224,059
76,000 Societa Finanziora Telefonica SPA Wts., Exp. 9/94 (1) .............. 641,471

Total Rights, Warrants and Certificates (Cost $809,292) ............ 1,292,746

Shares Common Stocks--86.8%
Basic Materials--4.4%
Aluminum --0.6%
3,200 Wanderer-Werke AG (1) .............................................. 552,826

Chemicals: Diversified--0.3%
200,000 National Petrochemical Co. (2) ..................................... 258,366

Chemicals: Specialty--0.3%
180,000 Kurnia Kapuas Utama Glue ........................................... 341,030

Metals: Miscellaneous--0.4%
12,000 Hindalco Units ..................................................... 384,000

Paper and Forest Products--1.1%
40,000 Enso-Gutzeit Oy, Cl. A Free (1) .................................... 253,487
200,000 Indah Kiat ......................................................... 272,350
825,000 Rottneros Bruks AB, Free (1) ....................................... 593,863

Steel--1.7%
60,000 Dofasco, Inc. * .................................................... 1,053,656
6,300 Grupo Simec SA, ADR ................................................ 207,900
2,000 Maruichi Malaysia Steel Tube Berhad ................................ 5,085
5,000 Pohang Iron & Steel Co. Ltd. * ..................................... 398,005

Consumer Cyclicals--14.4%
Airlines--0.2%
3,500 Vienna International Airport (1) ................................... 166,496

<PAGE>
Statement of Investments (Continued)
Oppenheimer Variable Account Funds-Global Securities Fund

Market
Shares Common Stocks (Continued) Value-Note 1
Consumer Cyclicals (Continued)
Automobiles--4.6%
20,000 Compania Interamerican de Auto ..................................... $ 1,062,124
20,000 CONSORCIO G GRUPO DINA SA, Sponsored ADR ........................... 557,500
120,000 Mahindra & Mahindra Ltd., GDR ...................................... 1,167,000
7,000 STE Fonciere Financiere ET de Participations SA (1) ................ 397,155
20,000 Volvo AB, Series B Free (1) ........................................ 1,293,303
4,477,082

Broadcast Media--2.2%
375,000 Sistem Televisyen Malaysia Berhad .................................. 1,071,819
100,000 Television Broadcast ............................................... 414,107
3,500 Television Francaise I (1) ......................................... 291,049
10,000 United International Holdings, Inc., Cl. A * ....................... 342,500
2,119,475

Entertainment--0.5%
20,000 Iwerks Entertainment, Inc. * ....................................... 535,000

Hardware and Tools--0.8%
10,000 La Brosse et Dupont (1) ............................................ 740,283

Household Furnishings and Appliances--2.0%
2,500 Moulinex Espana (1) ................................................ 51,076
65,000 Philips Gloeilamp NV (1) ........................................... 1,338,634
15,000 Singer Co. NV (The) * .............................................. 560,625
1,950,335

Publishing--1.5%
500,000 Oriental Press Group ............................................... 446,459
40,000 Roto Smeets de Boer (1) ............................................ 947,341
1,393,800

Retail: Specialty--1.1%
50,000 PT Modern Photo Film Co. ........................................... 619,159
1,000 Vereinigte Baubeschlag (1) ......................................... 423,257
1,042,416

Retail Stores: General Merchandise Chains--1.5%
200,000 Berjaya Singar Berhad .............................................. 527,094
20,000 Modelo Supermercados SA ............................................ 445,953
5,000 Sears Roebuck de Mexico SA, ADR * (2) .............................. 192,500
16,000 Sears Roebuck de Mexico SA * ....................................... 308,049
1,473,596

Consumer Non-Cyclicals--11.0%
Beverages: Alcoholic--0.8%
19,000 Jinro Ltd. ......................................................... 461,376
8,000 Remy Cointreau (1) ................................................. 319,756
781,132

Beverages: Soft Drinks--0.9%
8,000 Coca-Cola FEMSA SA de CV * ......................................... 262,000
90,000 Fomento Economico Mexicano
SA, Sponsored Cl. B ADR * ........................................ 585,000
847,000

<PAGE>
Statement of Investments (Continued)
Oppenheimer Variable Account Funds-Global Securities Fund

Market
Shares Common Stocks (Continued) Value-Note 1
Consumer Non-Cyclicals (Continued)
Drugs--1.5%
40,750 Astra AB, Series A Free (1) ........................................ $ 928,887
12,000 Yuhan Corp. ........................................................ 490,615
1,419,502

Food Processing--2.4%
700,000 Grupo Herdez SA .................................................... 896,973
15,000 Hutamaki OY (1) .................................................... 468,814
170,000 PT Sinar Mass Agro Resources & Technology .......................... 567,673
130,000 United Foods Co., Inc. ............................................. 330,788
2,264,248

Healthcare: Diversified--0.3%
400 Schering AG (1) .................................................... 261,441

Healthcare: Miscellaneous--0.4%
11,000 Genzyme Corp. * .................................................... 302,500
9,104 Plant Genetics Systems International NV * (2) ...................... 140,931
443,431

Hospital Management--2.0%
25,000 Community Psychiatric Centers ...................................... 350,000
120 Rhoen Klinikum AG (1) .............................................. 71,176
660 Rhoen Klinikum AG, Preference (1) .................................. 347,762
300,000 Takare PLC (1) ..................................................... 1,167,326
1,936,264

Household Products--0.5%
90,000 Battery Technologies, Inc. * ....................................... 526,828

Medical Products--0.6%
41,200 Arjo AB * (1) ...................................................... 603,029

Retail Stores: Food Chains--1.6%
105,000 PT Fast Food Indonesia ............................................. 475,320
4,500 Spar Handels AG (1) ................................................ 1,033,957
1,509,277

Energy--5.9%
Natural Gas: Processing--0.8%
6,083 Voest-Alpine Eisenbahnsysteme AG (1) ............................... 790,778

Oil: Integrated International--0.7%
11,605 YuKong Ltd. ........................................................ 425,581
8,000 YPF Sociedad Anonima, Sponsored ADR * ............................. 208,000
633,581

<PAGE>
Statement of Investments (Continued)
Oppenheimer Variable Account Funds-Global Securities Fund

Market
Shares Common Stocks (Continued) Value-Note 1
Energy (Continued)
Oil and Gas Drilling--3.5%
33,600 Ampolex Ltd. (1) ................................................... $ 126,570
100,000 Compania Naviera Perez Co., Cl. A .................................. 623,446
4,000 Elf Gabon (1) ...................................................... 670,675
15,000 Global Marine, Inc. * .............................................. 61,875
75,000 Morgan Hydrocarbons, Inc. * ........................................ 249,245
30,000 Petroleum Geo-Services AS * (1) .................................... 977,283
33,800 Ross Offshore AS (1) ............................................... 247,179
69,400 Transocean Drilling AS (1) ......................................... 415,245
3,371,518

Oil Well Services and Equipment--0.9%
25,000 Coflexip SA, Sponsored ADR * (1) ................................... 406,250
85,000 Th Loy Industries Berhad ........................................... 495,357
901,607

Financial--13.8%
Financial Services: Miscellaneous--6.4%
12,000 BIS SA (1) ......................................................... 495,893
19,070 Central Investment & Finance Corp. ................................. 396,922
10,000 Coryo Securities Corp. ............................................. 218,051
5,000 Credit Local de France (1) ......................................... 414,769
10,000 Hyundai Securities Co. ............................................. 294,865
240,000 Industrial Finance Corp. of Thailand ............................... 582,500
10,000 Korea Investment and Securities .................................... 253,980
230,000 Peregrine Investment Holdings Ltd. ................................. 565,515
10,000 Sangyoug Investment & Securities ................................... 281,236
16,000 Servicios Financieros Quadrum SA, Sponsored ADR .................... 518,000
130,000 Sturge Holdings PLC (1) ............................................ 130,788
1,000,000 Sun Hung Kai and Co. ............................................... 808,802
8 Taipei Fund (2) .................................................... 668,000
14,800 Taiwan Fund, Inc. .................................................. 579,050
6,208,371

Major Banks: Other--7.4%
57,500 Banco de Galicia, Series B ......................................... 579,033
9,000 Banco de Santander SA (1) .......................................... 418,121
34,326 Banco Frances del Rio de la Plata SA ............................... 453,446
4,500 Banco LatinoAmericano de Exportaciones SA, Cl. E ................... 204,188
100,000 Commonwealth Bank of Australia ..................................... 648,189
55,000 Den Norske Bank, Cl. A Free (1) .................................... 140,775
80,000 Grupo Financiero Bancomer, Series C * .............................. 168,448
24,000 Grupo Financiero Bancomer, Series L ................................ 50,534
40,000 Korea First Bank ................................................... 594,685
370,000 PT Panin Bank (2) .................................................. 961,737
17,080 Shin Han Bank Ltd. ................................................. 287,788
100,000 Skandinaviska Enskilda Banken Group (1) ............................ 677,844
17,130 Standard Chartered Bank PLC (1) .................................... 314,770
57,500 Svenska Handelsbanken Inc., Cl. A (1) .............................. 779,521
80,000 Turkiye Garanti Bankasi AS, Sponsored ADR * (2) .................... 560,000
1,000 Verwalt & Privat-Bank AG-PC (1) .................................... 235,686
7,074,765

<PAGE>
Statement of Investments (Continued)
Oppenheimer Variable Account Funds-Global Securities Fund

Market
Shares Common Stocks (Continued) Value-Note 1
Industrial--22.6%
Building Materials Group--.9%
10,000 Internacional de Ceramica SA, Series B ADR * (2) ................... $ 321,958
25,000 Internacional de Ceramica SA, Series B ............................. 160,979
90,000 Sungei Way Holdings ................................................ 397,547
880,484

Capital Goods--0.2%
90,000 Ceramicas Carabobo CA,
Sponsored Series B ADR * ......................................... 194,940

Commercial Services--0.6%
100,000 PT Intraco Penta ................................................... 408,878
10,000 Serco Group (1) .................................................... 189,080

Conglomerates--4.0%
100,000 Brambles Industries Ltd. ........................................... 894,569
1,258 Compagnie Generale des Eaux (1) .................................... 622,768
30,000 Grupo Carso SA, ADS * .............................................. 656,250
350,000 Hopewell Holdings Ltd. ............................................. 457,458
80,000 Hutchison Whampoa Ltd. ............................................. 398,578
20,000 Kinnevik Investments AB, Series B Free (1) ......................... 436,700
6,200 Nederlandse Participatie Maatschappij NV (1) ....................... 176,205
2,500 Sophus Berendsen AS, Series B ...................................... 197,942
3,840,470

Containers: Metal and Glass--0.1%
100,000 M C Packaging Corp. Ltd. ........................................... 52,410

Containers: Paper--0.4%
164,000 PT Trias Sentosa ................................................... 421,409

Electrical Equipment--1.9%
1,004 Brown, Boveri & Co. Ltd., Part. Cert. (1) .......................... 734,224
80,000 Kabelmetal Indonesia PT * .......................................... 378,922
945 LEM Holdings SA (1) ................................................ 190,905
150,000 PT Trafindo Perkasa ................................................ 255,773
50,000 Supreme Cable Manufacturing (1) .................................... 274,719
1,834,543

Engineering and Construction--5.5%
10,000 BAU Holdings AF, Preference (1) .................................... 954,685
298 BAU Holdings AG * (1) .............................................. 28,841
15,000 Boskalis Westminster Koniniije (1) ................................. 356,798
14,000 Cubiertas Y Mzov SA Compania General (1) ........................... 1,048,102
2,850 Deutsche Babcock AG (1) ............................................ 413,583
6,732 Grontmij NV (1) .................................................... 237,423
30,000 Grupo Mexicano de Desarrollo SA, Sponsored
Series B ADR * ................................................... 720,000
30,000 Grupo Mexicano de Desarrollo SA, Sponsored
Series L ADR * ................................................... 738,750
18,000 IHC Caland NV (1) .................................................. 360,505
284,512 Leighton Holdings Ltd. ............................................. 438,354
5,297,041

<PAGE>
Statement of Investments (Continued)
Oppenheimer Variable Account Funds-Global Securities Fund

Market
Shares Common Stocks (Continued) Value-Note 1
Industrial (Continued)
Machinery: Diversified--4.5%
1,106 Bobst Bearers AG (1) ............................................... $ 1,340,580
900 Klein, Schanjlin & Becker AG, Preference (1) ....................... 193,835
150 Maschinenfabrik Berthold Hermle AG (1) ............................. 17,103
254,000 Powerscreen International PLC (1) .................................. 1,183,748
125 Schweizerische Industrie GmbH (1) .................................. 237,369
25 Schweizerische Industrie GmbH, Bearer (1) .......................... 47,474
300,000 Tampella OY AG (1) ................................................. 1,295,065
4,315,174

Manufacturing: Diversified Industrials--1.1%
20,000 Aalberts Industries NV (1) ......................................... 616,802
650 Siemens AG (1) ..................................................... 296,640
6,000 Welna NV (1) ....................................................... 138,394
1,051,836

Pollution Control--0.0%
100,000 Environmental Technologies International, Inc. * ................... 26,435

Transportation: Miscellaneous--3.4%
90,000 Eurotunnel SA (1) .................................................. 800,238
9,802 Kvaerner Industrier AS, Series B Free (1) .......................... 475,708
125,000 Lisnave-Estal Naval Lisboa ......................................... 834,748
150,000 Malaysian International Shipping Corp. ............................. 556,789
150,000 Singmarine Industries Ltd. ......................................... 454,944
10,000 Unitor Ships Service AS (1) ........................................ 168,864
3,291,291

Technology--11.8%
Aerospace/Defense--1.0%
2,400,000 China Aerospace International Holdings Ltd. ........................ 1,001,618

Computer Software and Services--0.9%
6,500 Sligos SA (1) ...................................................... 607,673
50,000 Virtuality Group PLC ............................................... 244,857
852,530

Electronics: Semiconductors--1.5%
19,000 Austia Mikro Systems AG * (1) ...................................... 807,218
11,500 Samsung Electronics Co. Ltd., Sponsored GDR * ...................... 592,250
1,399,468

Telecommunications--8.4%
2,600 Advanced Information Services Ltd. ................................. 114,606
16,000 Atlantic Tele-Network, Inc. ........................................ 228,000
11,000 Carlton Communications PLC, ADR (1) ................................ 154,282
32,185 Millicom, Inc. * ................................................... 756,348
600,000 Netas Telekomunik .................................................. 1,077,000
6,980 Shinawatra Computer Communications Co. Ltd. ........................ 234,989
400,000 SIP International * (1) ............................................ 840,186
115,000 Societa Finanziora Telefonica SPA (1) .............................. 295,762
140,000 Technology Resources Industries * ................................. 732,734
15,500 Telecomasia Corp. PLC, Sponsored GDR ............................... 817,625
90,000 Telecommunication de Argentina, Cl. B .............................. 566,333
4,500 Telefonica de Argentina SA, Cl. B ADR .............................. 327,375

<PAGE>
Statement of Investments (Continued)
Oppenheimer Variable Account Funds-Global Securities Fund

Market
Shares Common Stocks (Continued) Value-Note 1
Technology (Continued)
Telecommunications (Continued)
100,000 Telefonica de Espana SA, ADR (1) ................................... $ 1,304,880
3,000 Telefonos de Mexico SA, Sponsored ADR .............................. 202,500
15,000 United Communication Industries (2) ................................ 135,934
34,769 Vodafone Group, ADR (1) ............................................ 305,558
8,094,112

Utilities--2.9%
Electric Cos.--2.9%
20,000 Central Puerto SA, ADR * ........................................... 690,000
40,000 Consolidated Electric Power Asia Ltd., Sponsored ADR * ............. 720,000
25,000 Enersis SA, ADR * .................................................. 587,500
20,000 Korea Electric Power Co. * ......................................... 542,650
3,000 Verbund Oest Electriz (1) .......................................... 182,571
2,722,721

Total Common Stocks (Cost $68,312,122) ............................. 83,802,197

Total Investments, at Value (Cost $83,996,414) ........................ 103.8% 100,047,478
Liabilities in Excess of Other Assets ................................. (3.8) (3,622,967)

Net Assets ............................................................ 100.0% $ 96,424,511

<FN>

* Non-income producing security.
1. Securities with an aggregate market value of $37,803,067 are segregated to collateralize outstanding
forward foreign currency exchange contracts. See Note 5 of Notes to Financial Statements.
2. The Fund owns securites purchased in private placement transactions, without registration under
the Securities Act of 1933 (the Act). The securities are valued under methods approved by the
Board of Trustees as reflecting fair value. The Fund intends to invest no more that 10% of its net
assets (determined at the time of purchase) in restricted and illiquid securities, excluding
securities eligible for resale pursuant to Rule 144A of the Act that are determined to be liquid by
the Board of Trustees or by the Manager under Board-approved guidelines. Restricted and illiquid
securities amount to $808,931, or .8% of the Fund's net assets, at December 31, 1993.

Valuation
Acquisition Cost Per Unit as of
Security Date Per Unit December 31, 1993
Internacional de Ceramica SA, Series B ADR(3) ................ 2/10/93-2/11/93 $ 25.40 $ 32.20
Jindal Strips Ltd., 4.25% Cv. Debs., 3/31/99(3) ............. 11/9/93 $ 100.00 $ 129.75
National Petrochemical Co.(3) ................................ 11/30/93 $ 1.30 $ 1.29
Plant Genetics Systems International NV ...................... 5/27/92 $ 11.18 $ 15.48
PT Panin Bank(3) ............................................. 7/28/93 $ .86 $ 2.60
Scici Ltd., 3.50% Cv. Bonds, 4/1/04(3) ....................... 10/19/93 $ 100.00 $ 133.13
Sears Roebuck de Mexico SA, ADR(3) ........................... 3/16/92 $ 15.50 $ 38.50
Taipei Fund .................................................. 12/29/93 $80,000.00 $83,500.00
Turkiye Garanti Bankasi AS, Sponsored ADR(3) ................. 10/29/93 $ 7.19 $ 7.00
United Communication Industries(3) ........................... 12/3/93 $ 9.06 $ 9.06

3. Transferable under Rule 144A of the Act.

See accompanying Notes to Financial Statements.

</TABLE>
<PAGE>
Statement of Investments December 31, 1993
Oppenheimer Variable Account Funds-Strategic Bond Fund

Face Market
Amount Government Obligations --47.7% Value-Note 1
<C> <S> <C>
$ 300,000 Argentina (Republic of)
Bonds, Bonos del Tesoro,
Series II, 3.50%, 9/1/97 (3)...........................................$ 247,507
300,000 (1) Bariven SA
Bonds, 10.75%, 7/8/97 (6)............................................... 182,695
240,000 BEMGE Bonds,
10%, 1/15/96 .......................................................... 240,900
250,000 (1) Hydro-Ontario Global Bonds,
9%, 6/24/02 (6)....................................................... 212,165
250,000,000 (1) Italy (Republic of) Treasury Bonds,
11%, 6/1/03 (6)......................................................... 166,253
100,000 (1) New South Wales Treasury Corp.
Bonds, 9.25%, 2/18/03 .................................................. 76,929
30,000,000 (1) Spain (Kingdom of) Bonds,
9%, 2/28/97 (6)......................................................... 215,124
100,000 (1) Treasury Corp. of Victoria Gtd. Sr. Bonds,
9.25%, 9/18/03 ......................................................... 75,549
500,000 U.S. Treasury Bonds,
7.125%, 2/15/23 ........................................................ 541,245
U.S. Treasury Nts:
100,000 3.875%, 4/30/95 ........................................................ 99,968
2,350,000 4.25%, 5/15/96 ......................................................... 2,343,373
120,000 5.125%, 4/30/98 ........................................................ 120,337
250,000 Venezuela (Republic of) Front-Loaded Interest
Reduction Bonds, Series B, 6%,
3/31/07 (5)............................................................. 191,250

Total Government Obligations
(Cost $4,730,529)....................................................... 4,713,295

Corporate Bonds and Notes
--46.1%
Banks/Saving and Loans --1.1%
100,000 Bancomext Trust Division,
8% Nts., 8/5/03 ....................................................... 103,000

Broadcast Media/Cable TV
--10.3%
150,000 Cablevision Systems Corp.,
9.875% Sr. Sub. Debs.,
2/15/13 ................................................................ 175,125
350,000 Continental Cablevision,
Inc., 9.50% Sr. Debs.,
8/1/13 ................................................................. 392,000
200,000 International CabelTel,
Inc., 0%/10.875% Sr. Def. Cpn.
Nts., 10/15/03 (2)...................................................... 128,000
150,000 Lamar Advertising Co., 11%
Sr. Sec. Nts., 5/15/03 ................................................. 159,375

<PAGE>
Statement of Investments (Continued)
Oppenheimer Variable Account Funds-Strategic Bond Fund

Face Market
Amount Corporate Bonds and Notes (Continued) Value-Note 1
Broadcast Media/Cable TV (Continued)
$ 150,000 Panamsat LP/Panamsat
Capital Corp., 9.75% Sr.
Sec. Nts., 8/1/00 .....................................................$ 159,375
1,013,875

Building Materials--2.5%
250,000 PT Inti Indorayon Utama,
9.125% Sr. Nts., 10/15/00 ............................................. 250,937

Chemicals/Plastics --3.0%
130,000 Atlantis Group, Inc., 11%
Sr. Nts., 2/15/03 ...................................................... 137,150
150,000 Harris Chemical North
America, Inc., 10.75% Sr. Gtd.
Sub. Nts., 10/15/03 .................................................... 158,625
295,775

Consumer Goods:
Manufacturing --7.0%
200,000 Amstar Corp., 11.375% Sr.
Sub. Nts., 2/15/97 ..................................................... 205,000
150,000 Harman International
Industries, Inc., 12% Sr.
Sub. Nts., 8/1/02 ...................................................... 168,000
175,000 MacAndrews & Forbes
Holdings, Inc., 13% Sub.
Debs., 3/1/99 .......................................................... 176,094
150,000 Revlon Consumer Products
Corp., 9.375% Sr. Nts.,
Series B, 4/1/01 ....................................................... 147,375
696,469

Financial/Insurance --6.8%
200,000 Card Establishment
Services, Inc., 10% Sr.
Sub. Nts., 10/1/03 (7) ................................................. 209,000
200,000 Reliance Group Holdings,
Inc., 9.75% Sr. Sub. Debs.,
11/15/03 ............................................................... 206,500
250,000 Tribasa Toll Road Trust,
10.50% Nts., Series 1993-A, 12/1/11 (7)................................. 257,813
673,313

Gaming/Hotels--1.5%
150,000 Station Casinos, Inc.,
9.625% Sr. Sub. Nts.,
6/1/03 ................................................................. 152,250

<PAGE>
Statement of Investments (Continued)
Oppenheimer Variable Account Funds-Strategic Bond Fund

Face Market
Amount Corporate Bonds and Notes (Continued) Value-Note 1
Healthcare/Medical Products--1.5%
$ 150,000 Alco Health Distribution
Corp., 11.25% Sr. Debs.,
7/15/05 (4) ...........................................................$ 150,422

Home Building/Development--1.6%
150,000 NVR, Inc., 11% Gtd. Sr.
Nts., 4/15/03 .......................................................... 158,625

Office Equipment --1.4%
150,000 Mosler, Inc., 11% Sr. Nts.,
Series A, 4/15/03 ...................................................... 135,750

Oil and Gas : Exploration
and Production --1.5%
150,000 Maxus Energy Corp., 9.875%
Nts., 10/15/02 ......................................................... 150,375

Publishing --1.1%
200,000 Bell & Howell Co., 0%/11.50% Sr.
Disc. Debs., Series B,
3/1/05 (2) ............................................................. 111,000

Retail : Food and Drug--1.6%
150,000 Farm Fresh, Inc., 12.25%
Sr. Nts., 10/1/00 ...................................................... 159,375

Retail : Specialty --1.6%
150,000 Finlay Fine Jewelry Corp.,
10.625% Sr. Nts., 5/1/03 ............................................... 155,250

Transportation--1.0%
100,000 Transportacion Maritima
Mexicana SA, 8.50% Nts.,
10/15/00 ............................................................... 102,875

Utilities --2.6%
250,000 Subic Power Corp., 9.50%
Debs., 12/28/08 (7)..................................................... 255,000

Total Corporate Bonds and
Notes (Cost $4,476,279) ................................................ 4,564,291

Total Investments, at Value (Cost $9,206,808).............................. 93.8% 9,277,586
Other Assets Net of Liabilities ........................................... 6.2 608,932

Net Assets ................................................................ 100.0% $ 9,886,518

<PAGE>
Statement of Investments (Continued)
Oppenheimer Variable Account Funds-Strategic Bond Fund

<FN>

1. Face amount is reported in foreign currency.
2. Represents a zero cupon bond that converts to a fixed rate of interest at a
designated future date.
3. Represents the current interest rate for a variable rate security.
4. Interest or dividend is paid in kind.
5. Represents the current interest rate for a variable rate security.
6. Securities with an aggregate market value of $776,237 are segregated to collateralize
outstanding forward foreign currency exchange contracts. See note 5 of Notes to Financial
Statements.
7. The Fund owns securities purchased in private placement transactions, without registration
under the Securities Act of 1933 (the Act). The securities are valued under methods approved
by the Board of Trustees as reflecting fair value. The Fund intends to invest no more than 10%
of its net assets (determined at the time of purchase) in restricted and illiquid securities,
excluding securities eligible for resale pursuant to Rule 144A of the Act that are determined
to be liquid by the Board of Trustees or by the Manager under Board-approved
guidelines.

Valuation Per
Acquisition Cost Unit as of
Security Date Per Unit 12/31/93

Card Establishment Services, Inc., 10% Sr. Sub. Nts., 10/1/03 (8) 10/6/93 $102.00 $104.50
Subic Power Corp., 9.50% Debs., 12/28/08 (8) 12/20/93 $99.93 $102.00
Tribasa Toll Road Trust 1, 10.50% Nts., Series 1993-A, 12/1/11 (8) 11/8/93 $100.00 $103.13

8. Transferable under Rule 144A of the Act.

See accompanying Notes to Financial Statements

</TABLE>

<PAGE>

Statements of Assets and Liabilities December 31, 1993
Oppenheimer Variable Account Funds
<TABLE>
<CAPTION>
Oppenheimer Oppenheimer Oppenheimer Oppenheimer
Oppenheimer Oppenheimer Oppenheimer Capital Oppenheimer Multiple Global Strategic
Money High Income Bond Appreciation Growth Strategies Securities Bond
Fund Fund Fund Fund Fund Fund Fund Fund
<S> <C> <C> <C> <C> <C> <C> <C> <C>
ASSETS:
Investments, at value
(cost*)-see
accompanying
statements $61,069,285 $93,784,521 $109,574,804 $141,080,412 $56,163,478 $249,033,573 $100,047,478
$9,277,586
Unrealized
appreciation on
forward foreign
currency exchange
contracts-Note 5 - 21,075 9,773 - - - 121,554 13,803
Cash 24,247 - 217,997 135,607 62,630 237,293 2,847,588 193,222
Receivables:
Dividends and
interest 159,311 1,526,923 1,743,940 86,279 51,306 1,937,521 89,294 179,525
Shares of beneficial
interest sold 56,131 79,874 354,834 2,096,404 499,157 500,839 1,193,039 226,388
Investments sold 50,893 369,789 - 972,382 - 805,320 489,055 -
Other 6,099 6,041 2,912 8,155 6,359 14,748 6,850 5,503
Total assets 61,365,966 95,788,223 111,904,260 144,379,239 56,782,930 252,529,294 104,794,858
9,896,027
LIABILITIES:
Bank overdraft - 642,665 - - - - - -
Options written, at
value (premiums
received $654,848)
- see accompanying
statements-Note 4 - - - - - 588,881 - -
Payables and other
liabilities:
Dividends 77,910 - - - - - - -
Investments purchased - 645,000 - 6,225,965 58,750 1,601,677 7,647,135 -
Shares of beneficial
interest redeemed 47,596 1,447,251 33,445 1,246,838 363 813 718,335 -
Other 18,841 41,974 24,694 21,333 22,769 47,875 4,877 9,509
Total liabilities 144,347 2,776,890 58,139 7,494,136 81,882 2,239,246 8,370,347 9,509
NET ASSETS $61,221,619 $93,011,333 $111,846,121 $136,885,103 $56,701,048 $250,290,048 $ 96,424,511
$9,886,518
COMPOSITION OF NET
ASSETS:

Paid-in capital $61,220,647 $86,718,526 $107,660,538 $ 93,658,242 $47,524,055 $217,836,036 $ 77,586,765
$9,771,635
Undistributed
(distributions in
excess of) net
investment income - (525,482) 61,656 234,158 524,266 598,176 339,434 6,384
Accumulated net
realized gain
(loss) from
investment, written
option and foreign
currency
transactions 972 1,876,672 (208,860) 17,043,751 (483,393) 1,483,386 2,325,694 23,918
Net unrealized
appreciation on
investments and
options written-
Note 3 - 5,023,676 4,415,577 25,948,952 9,136,120 30,372,450 16,172,618 75,918
Net unrealized
appreciation
(depreciation) on
translation of
assets and
liabilities
denominated in
foreign currencies - (82,059) (82,790) - - - - 8,663
NET ASSETS $61,221,619 $93,011,333 $111,846,121 $136,885,103 $56,701,048 $250,290,048 $ 96,424,511
$9,886,518
SHARES OF BENEFICIAL
INTEREST
OUTSTANDING 61,220,647 8,442,958 9,601,796 4,325,853 3,202,704 18,025,972 5,917,113
1,929,958
NET ASSET VALUE,
REDEMPTION PRICE
AND OFFERING PRICE
PER SHARE $ 1.00 $ 11.02 $ 11.65 $ 31.64 $ 17.70 $ 13.88 $ 16.30 $ 5.12
*Cost $61,069,285 $88,863,979 $105,251,790 $115,131,460 $47,027,358 $218,727,090 $ 83,996,414
$9,206,808

<FN>
See accompanying Notes to Financial Statements.<PAGE>
Statements of Operations For the Year Ended December 31, 1993
Oppenheimer Variable Account Funds

</TABLE>

<TABLE>
<CAPTION>
Oppenheimer Oppenheimer Oppenheimer Oppenheimer
Oppenheimer Oppenheimer Oppenheimer Capital Oppenheimer Multiple Global Strategic
Money High Income Bond Appreciation Growth Strategies Securities Bond
Fund Fund Fund Fund Fund Fund Fund Fund
<S> <C> <C> <C> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest $2,043,327 $ 6,932,131 $6,683,478 $ 478,491 $ 196,602 $ 8,165,314 $ 91,732 $188,838
Dividends - 554,337 99 204,562 555,809 1,655,585 429,261 -
Total income 2,043,327 7,486,468 6,683,577 683,053 752,411 9,820,899 520,993 188,838
EXPENSES:
Management fees-Note 6 212,358 382,629 361,258 407,611 193,110 831,139 227,226 18,509
Legal and auditing fees 16,544 13,808 11,714 10,939 11,756 18,510 5,937 3,201
Custodian fees and
expenses 13,412 41,798 10,374 19,120 17,239 61,089 31,983 1,391
Trustees' fees and
expenses 2,032 1,699 1,606 2,557 1,642 7,291 2,342 189
Registration and filing
fees - 11,796 14,102 17,383 5,310 24,121 20,481 3,280
Other 3,309 2,317 2,605 3,600 1,441 7,469 4,562 797
Total expenses 247,655 454,047 401,659 461,210 230,498 949,619 292,531 27,367
NET INVESTMENT INCOME 1,795,672 7,032,421 6,281,918 221,843 521,913 8,871,280 228,462
161,471
REALIZED AND UNREALIZED
GAIN (LOSS) ON
INVESTMENTS AND
OPTIONS WRITTEN:
Net realized gain
(loss) on investments
and options written
(including premiums
on options exercised) 972 2,997,007 595,806 17,171,028 (416,658) 2,955,823 2,546,181 9,787
Net realized gain on
closing and
expiration of option
contracts written-
Note 4 - - - - - 219,623 - 7,110
Net realized gain
(loss) 972 2,997,007 595,806 17,171,028 (416,658) 3,175,446 2,546,181 16,897
Net change in
unrealized
appreciation
(depreciation) on
investments and
options written:
Beginning of year - 93,026 1,393,576 17,936,209 5,758,542 12,654,079 (781,639) -
End of year-Note 3 - 5,023,676 4,415,577 25,948,952 9,136,120 30,372,450 16,172,618 75,918
Net change - 4,930,650 3,022,001 8,012,743 3,377,578 17,718,371 16,954,257 75,918
NET REALIZED AND
UNREALIZED GAIN ON
INVESTMENTS AND
OPTIONS WRITTEN 972 7,927,657 3,617,807 25,183,771 2,960,920 20,893,817 19,500,438
92,815
NET INCREASE IN NET
ASSETS RESULTING FROM
OPERATIONS BEFORE
FOREIGN EXCHANGE GAIN
(LOSS) 1,796,644 14,960,078 9,899,725 25,405,614 3,482,833 29,765,097 19,728,900 254,286
REALIZED AND UNREALIZED
FOREIGN EXCHANGE GAIN
(LOSS):
Net realized gain
(loss) on foreign
currency
transactions - (126,242) (164,183) - - - - 7,021
Net change in
unrealized
appreciation
(depreciation) on
translation of assets
and liabilities
denominated in
foreign currencies:
Beginning of year - (88,389) (240,141) - - - - -
End of year - (82,059) (82,790) - - - - 8,663
Net change - 6,330 157,351 - - - - 8,663
NET REALIZED AND
UNREALIZED FOREIGN
EXCHANGE GAIN (LOSS) - (119,912) (6,832) - - - - 15,684
NET INCREASE IN NET
ASSETS RESULTING FROM
OPERATIONS $1,796,644 $14,840,166 $9,892,893 $25,405,614 $3,482,833 $29,765,097 $19,728,900
$269,970
</TABLE>

See accompanying Notes to Financial Statements.
<PAGE>
Statements of Changes in Net Assets
Oppenheimer Variable Account Funds
<TABLE>
<CAPTION>
Oppenheimer Oppenheimer Oppenheimer Oppenheimer
Money High Income Bond Capital Appreciation
Fund Fund Fund Fund
1993 (1) 1992 (1) 1993 (1) 1992 (1) 1993 (1) 1992 (1) 1993 (1) 1992 (1)
OPERATIONS:
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net investment income $ 1,795,672 $ 2,307,212 $ 7,032,421 $ 4,453,990 $ 6,281,918 $ 3,568,280 $ 221,843 $
168,695
Net realized gain
(loss) on investments
and options written 972 72,940 2,997,007 2,174,668 595,806 (110,978) 17,171,028 3,471,235
Net realized gain
(loss) on foreign
currency transactions - - (126,242) (165,639) (164,183) (437,791) - -
Net change in
unrealized
appreciation or
depreciation on
investments and
options written - - 4,930,650 (823,806) 3,022,001 (99,126) 8,012,743 7,083,362
Net change in
unrealized
appreciation or
depreciation on
translation of assets
and liabilities
denominated in
foreign currencies - - 6,330 (40,785) 157,351 (82,013) - -
Net increase in net
assets resulting from
operations 1,796,644 2,380,152 14,840,166 5,598,428 9,892,893 2,838,372 25,405,614 10,723,292
NET CHANGE IN
EQUALIZATION - - 1,194,413 590,409 747,196 458,394 - -
DIVIDENDS AND
DISTRIBUTIONS TO
SHAREHOLDERS:
Dividends from net
investment income (1,795,672) (2,307,212) (7,933,113) (4,895,490) (6,021,196) (3,674,661) (173,608) (274,327)
Distributions from net
realized gain on
investments and
options written - (79,555) - - - - (3,478,465) (1,117,628)
BENEFICIAL INTEREST
TRANSACTIONS:
Net increase (decrease)
in net assets
resulting from
beneficial interest
transactions-Note 2 2,954,149 (436,361) 44,092,559 12,216,279 43,872,915 30,970,048 31,796,464
24,632,437
NET ASSETS:
Total increase
(decrease) 2,955,121 (442,976) 52,194,025 13,509,626 48,491,808 30,592,153 53,550,005 33,963,774
Beginning of year 58,266,498 58,709,474 40,817,308 27,307,682 63,354,313 32,762,160 83,335,098
49,371,324
End of year $61,221,619 $58,266,498 $93,011,333 $ 40,817,308 $111,846,121 $63,354,313 $136,885,103
$83,335,098
</TABLE>

1. For the year ended December 31.

See accompanying Notes to Financial Statements.

Statements of Changes in Net Assets (Continued)
Oppenheimer Variable Account Funds
<TABLE>
<CAPTION>
Oppenheimer Oppenheimer Oppenheimer Oppenheimer
Growth Multiple Strategies Global Securities Strategic Bond
Fund Fund Fund Fund
1993 (1) 1992 (1) 1993 (1) 1992 (1) 1993 (1) 1992 (1) 1993 (1)
OPERATIONS:
<S> <C> <C> <C> <C> <C> <C> <C>
Net investment income $ 521,913 $ 350,171 $ 8,871,280 $ 6,430,572 $ 228,462 $ 116,252 $ 161,471
Net realized gain
(loss) on investments
and options written (416,658) 1,452,406 3,175,446 1,920,255 2,546,181 (213,298) 16,897
Net realized gain on
foreign currency
transactions - - - - - - 7,021
Net change in
unrealized
appreciation or
depreciation on
investments and
options written 3,377,578 2,410,316 17,718,371 3,761,960 16,954,257 (990,204) 75,918
Net change in
unrealized
appreciation or
depreciation on
translation of assets
and liabilities
denominated in
foreign currencies - - - - - - 8,663
Net increase (decrease)
in net assets
resulting from
operations 3,482,833 4,212,893 29,765,097 12,112,787 19,728,900 (1,087,250) 269,970
DIVIDENDS AND
DISTRIBUTIONS TO
SHAREHOLDERS:
Dividends from net
investment income (339,216) (532,602) (8,601,104) (6,262,811) - (35,139) (155,087)
Distributions from net
realized gain on
investments and options
written (768,083) - - - - (35,139) -
BENEFICIAL INTEREST
TRANSACTIONS:
Net increase in net
assets resulting
from beneficial interest
transactions 17,831,569 10,781,610 69,662,484 28,980,030 63,158,438 7,355,765 9,771,635
NET ASSETS:
Total increase 20,207,103 14,461,901 90,826,477 34,830,006 82,887,338 6,198,237 9,886,518
Beginning of year 36,493,945 22,032,044 159,463,571 124,633,565 13,537,173 7,338,936 -
End of year $ 56,701,048 $ 36,493,945 $250,290,048 $159,463,571 $96,424,511 $13,537,173
$9,886,518
</TABLE>

1. For the year ended December 31.

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

See accompanying Notes to Financial Statements.

<PAGE>
Financial Highlights
Oppenheimer Variable Account Funds
<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)
</TABLE>

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

2. For the year ended December 31.

3. Annualized.

See accompanying Notes to Financial Statements.

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%
</TABLE>

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

2. For the year ended December 31.

4. Annualized.

See accompanying Notes to Financial Statements.

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%
</TABLE>

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

2. For the year ended December 31.

4. Annualized.

See accompanying Notes to Financial Statements.

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.

3. For the year ended December 31.

5. Annualized.

See accompanying Notes to Financial Statements.

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%
</TABLE>

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

2. For the year ended December 31.

4. Annualized.

See accompanying Notes to Financial Statements.

<PAGE>
Financial Highlights (Continued)
Oppenheimer Variable Account Funds
<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%
</TABLE>

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.

See accompanying Notes to Financial Statements.

<PAGE>
Financial Highlights (Continued)
Oppenheimer Variable Account Funds
<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%
</TABLE>

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.

See accompanying Notes to Financial Statements.

<PAGE>
Financial Highlights (Continued)
Oppenheimer Variable Account Funds
<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%
</TABLE>

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

3. Annualized.

See accompanying Notes to Financial Statements.

<PAGE>
Notes to Financial Statements
Oppenheimer Variable Account Funds
1. Significant Accounting Policies Oppenheimer Money Fund (OMF),
Oppenheimer High Income Fund (OHIF), Oppenheimer Bond Fund (OBF),
Oppenheimer Capital Appreciation Fund (OCAP), Oppenheimer Growth Fund
(OGF), Oppenheimer Multiple Strategies Fund (OMSF), Oppenheimer Global
Securities Fund (OGSF) and Oppenheimer Strategic Bond Fund (OSBF)
(collectively, the Funds) are separate funds of Oppenheimer Variable
Account Funds (the Trust), a diversified, open-end management investment
company registered under the Investment Company Act of 1940, as amended. The
Trust's investment adviser is Oppenheimer Management Corporation (the
Manager). The following is a summary of significant accounting policies
consistently followed by the Funds.

Investment Valuation-Portfolio securities of OMF are valued on the basis of
amortized cost, which approximates market value. Portfolio securities of
OHIF, OBF, OCAP, OGF, OMSF, OGSF and OSBF are valued at 4:00 p.m. (New
Yorktime) on each trading day. Listed and unlisted securities for which such
information is regularly reported are valued at the last sale price of the
day or, in the absence of sales, at values based on the closing bid or asked
price or the last sale price on the prior trading day. Long-term debt
securities are valued by a portfolio pricing service approved by the Board of
Trustees. Long-term debt securities which cannot be valued by the approved
portfolio pricing service are valued by averaging the mean between the bid
and asked prices obtained from two active market makers in such securities.
Short-term debt securities having a remaining maturity of 60 days or less are
valued at cost (or last determined market value) adjusted for amortization to
maturity of any premium or discount. Securities for which market quotes are
not readily available are valued under procedures established by the Board of
Trustees to determine fair value in good faith. A call option is valued based
upon the last sales price on the principal exchange on which the option is
traded or, in the absence of any transactions that day, the value is based
upon the last sale on the prior trading date if it is within the spread
between the closing bid and asked prices. If the last sale price is outside
the spread, the closing bid or asked price closest to the last reported sale
price is used. Forward foreign currency contracts are valued at the forward
rate on a daily basis.

Security Credit Risk-OHIF invests in high yield securities, which may be
subject to a greater degree of credit risk, greater market fluctuations and
risk of loss of income and principal, and may be more sensitive to economic
conditions than lower yielding, higher rated fixed income securities. The Fund
may acquire securities in default, and is not obligated to dispose of
securities whose issuers subsequently default. At December 31, 1993,
securities with an aggregate market value of $2,369,721, representing 2.47%
of the Fund's total assets, were in default.

Foreign Currency Translation-The accounting records of the Funds are
maintained in U.S. dollars. Prices of securities purchased by OHIF, OBF,
OCAP, OGF, OMSF, OGSF and OSBF that are denominated in foreign currencies are
translated into U.S. dollars at the closing rates of exchange. Amounts
related to the purchase and sale of securities and investment income are
translated at the rates of exchange prevailing on the respective dates of
such transactions.

Forward foreign currency exchange contracts are generally entered into as a
hedge, upon the purchase or sale of a security denominated in a foreign
currency. In addition, OHIF, OBF, OGSF and OSBF may enter into such contracts
as a hedge against changes in foreign currency exchange rates on portfolio
positions. A forward exchange contract is a commitment to purchase or sell a
foreign currency at a future date, at a negotiated rate. Risks may arise from
the potential inability of the counterparty to meet the terms of the contract
and from unanticipated movements in the value of a foreign currency relative
to the U.S. dollar.

OCAP, OGF, OMSF and OGSF account for gains and losses on foreign currency
transactions with the transactions that gave rise to the exchange gain or
loss. The net gain or loss resulting from changes in foreign currency
exchange rates is reported separately in the Statement of Operations by OHIF,
OBF and OSBF.

Repurchase Agreements-The Funds require the custodian to take possession, to
have legally segregated in the Federal Reserve Book Entry System or to have
segregated within the custodian's vault, all securities held as collateral
for repurchase agreements. If the seller of the agreement defaults and the
value of the collateral declines, or if the seller enters an insolvency
proceeding, realization of the value of the collateral by the Funds may be
delayed or limited.

<PAGE>
Notes to Financial Statements (Continued)
Oppenheimer Variable Account Funds

Call Options Written-OHIF, OCAP, OGF, OMSF, OGSF and OSBF may write covered
call options. When an option is written by a Fund, the Fund receives a
premium and becomes obligated to sell the underlying security at a fixed
price, upon exercise of the option. In writing an option, the Fund bears the
market risk of an unfavorable change in the price of the security underlying
the written option. Exercise of an option written by the Fund could result in
the Fund selling a security at a price different from the current market
value. All securities covering call options written are held in escrow by the
custodian bank.

Federal Income Taxes-The Trust intends for each Fund to continue to comply
with provisions of the Internal Revenue Code applicable to regulated
investment companies and to distribute all of its taxable income, including
any net realized gain on investments not offset by loss carryovers, to
shareholders. Therefore, no federal income tax provision is required.

Equalization-Prior to September 25, 1993, OHIF and OBF followed the
accounting practice of equalization, by which a portion of the proceeds from
sales and costs of redemptions of Fund shares equivalent on a per share basis
to the amount of undistributed net investment income were credited or charged
to undistributed income. The cumulative effect of the change in accounting
practice resulted in a reclassification of $2,119,310 and $1,577,200 for OHIF
and OBF, respectively, from undistributed net investment income to paid-in
capital.

Distributions to Shareholders-Dividends and distributions to shareholders of
OHIF, OBF, OCAP, OGF, OMSF, OGSF and OSBF are recorded on the ex-dividend
date. OMF intends to declare dividends from net investment income each
regular business day and pay such dividends monthly. To effect its policy of
maintaining a net asset value of $1.00 per share, OMF may withhold dividends
or make distributions of net realized gains.

Other-Investment transactions are accounted for on the date the investments
are purchased or sold (trade date) and dividend income is recorded on the
ex-dividend date. Discount on securities purchased by OHIF, OBF, OCAP, OGF,
OMSF, OGSF and OSBF is amortized over the life of the respective securities,
in accordance with federal income tax requirements. Realized gains and losses
on investments and unrealized appreciation and depreciation are determined on
an identified cost basis, which is the same basis used for federal income tax
purposes. Dividends in kind are recognized as income on the ex-dividend date,
at the current market value of the underlying security. Interest on
payment-in-kind debt instruments is accrued as income at the coupon rate and
a market adjustment is made on the ex-date.

Notes to Financial Statements (Continued)
Oppenheimer Variable Account Funds

2. Shares of Beneficial Interest The Funds have authorized an unlimited number
of no par value shares of beneficial interest. Transactions in shares of
beneficial interest were as follows:
<TABLE>
<CAPTION>
Oppenheimer Money Fund Oppenheimer High Income Fund
Year Ended Year Ended Year Ended Year Ended
December 31, 1993 December 31, 1992 December 31, 1993 December 31, 1992
Shares Amount Shares Amount Shares Amount Shares Amount
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Sold 102,985,240 $ 102,985,240 108,040,063 $ 108,040,063 10,942,819 $113,254,844 4,550,213 $ 43,344,229

Dividends and
distributions
reinvested 1,805,107 1,805,107 2,400,795 2,400,795 743,446 7,814,552 503,051 4,788,432
Redeemed (101,836,198) (101,836,198) (110,877,219) (110,877,219)(7,432,492) (76,976,837) (3,769,287)
(35,916,382)
Net increase
(decrease) 2,954,149 $ 2,954,149 (436,361) $ (436,361) 4,253,773 $ 44,092,559 1,283,977 $ 12,216,279
</TABLE>

<TABLE>
<CAPTION>
Oppenheimer Bond Fund Oppenheimer Capital Appreciation Fund
Year Ended Year Ended Year Ended Year Ended
December 31, 1993 December 31, 1992 December 31, 1993 December 31, 1992
Shares Amount Shares Amount Shares Amount Shares Amount
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Sold 4,694,025 $ 53,668,794 4,231,648 $ 46,316,359 4,925,361 $ 134,864,285 5,202,028 $117,665,463
Dividends and
distributions
reinvested 518,084 5,957,407 333,812 3,653,072 151,099 3,652,073 61,185 1,391,955
Redeemed (1,375,924) (15,753,286) (1,739,301) (18,999,383) (3,951,312) (106,719,894) (4,187,015) (94,424,981)
Net increase 3,836,185 $ 43,872,915 2,826,159 $ 30,970,048 1,125,148 $ 31,796,464 1,076,198 $ 24,632,437
</TABLE>

<PAGE>
Notes to Financial Statements (Continued)
Oppenheimer Variable Account Funds
<TABLE>
<CAPTION>
Oppenheimer Growth Fund Oppenheimer Multiple Strategies Fund
Year Ended Year Ended Year Ended Year Ended
December 31, 1993 December 31, 1992 December 31, 1993 December 31, 1992
Shares Amount Shares Amount Shares Amount Shares Amount
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Sold 3,164,464 $ 53,547,991 3,914,464 $ 59,289,671 6,332,739 $ 84,477,261 3,370,345 $ 41,125,816
Dividends and
distributions
reinvested 66,987 1,107,299 36,133 532,602 644,161 8,601,104 517,276 6,262,811
Redeemed (2,180,502) (36,823,721) (3,251,618) (49,040,663) (1,742,975) (23,415,881) (1,516,315) (18,408,597)
Net increase 1,050,949 $ 17,831,569 698,979 $ 10,781,610 5,233,925 $ 69,662,484 2,371,306 $ 28,980,030
</TABLE>

<TABLE>
<CAPTION>
Oppenheimer Strategic
Oppenheimer Global Securities Fund Bond Fund
Year Ended Year Ended Year Ended
December 31, 1993 December 31, 1992 December 31, 1993(1)
Shares Amount Shares Amount Shares Amount
<S> <C> <C> <C> <C> <C> <C>
Sold 4,921,273 $68,947,505 904,052 $ 9,354,667 2,316,566 $11,749,598
Dividends and
distributions
reinvested - - 6,630 70,278 30,366 155,087
Redeemed (419,042) (5,789,067) (203,135) (2,069,180) (416,974) (2,133,050)
Net increase 4,502,231 $63,158,438 707,547 $ 7,355,765 1,929,958 $ 9,771,635
</TABLE>

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

<PAGE>
Notes to Financial Statements (Continued)
Oppenheimer Variable Account Funds

3 Unrealized Gains and Losses on Investments and Options Written
At December 31, 1993, net unrealized appreciation on investments and options
written consisted of the following:
<TABLE>
<CAPTION>
Oppenheimer Oppenheimer Oppenheimer Oppenheimer
Oppenheimer Oppenheimer Capital Oppenheimer Multiple Global Strategic
High Income Bond Appreciation Growth Strategies Securities Bond
Fund Fund Fund Fund Fund Fund Fund
<S> <C> <C> <C> <C> <C> <C> <C>
Gross appreciation $ 5,972,717 $ 4,941,642 $ 28,473,570 $11,310,180 $ 35,083,777 $17,370,800 $ 137,575
Gross depreciation (949,041) (526,065) (2,524,618) (2,174,060) (4,711,327) (1,198,182) (61,657)
Net unrealized
appreciation $ 5,023,676 $ 4,415,577 $ 25,948,952 $ 9,136,120 $ 30,372,450 $16,172,618 $ 75,918
</TABLE>

Purchases and sales of investment securities (excluding short-term
securities) for the year ended December 31, 1993 were
as follows:

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
Purchases $122,623,355 $61,383,497 $135,905,785 $20,752,925 $109,074,871 $74,160,213 $14,669,367
Sales $ 83,369,171 $28,260,510 $110,913,591 $ 5,059,824 $ 60,759,536 $20,095,636 $ 5,485,104
</TABLE>

4 Call Option Activity
Call option activity for the year ended December 31, 1993 was as follows:

<TABLE>
<CAPTION>
Oppenheimer Multiple Strategies Fund Oppenheimer Strategic Bond Fund
Number of Amount of Number of Amount of
Options Premiums Options Premiums
<S> <C> <C> <C> <C>
Options outstanding at December 31,
1992 1,314 $ 250,967 - $ -
Options written 5,764 1,484,776 500 7,110
Options cancelled in closing
purchase transactions (1,564) (438,445) - -
Options expired prior to exercise (1,431) (295,659) (500) (7,110)
Options exercised (1,698) (346,791) - -
Options outstanding at December 31,
1993 2,385 $ 654,848 - $ -
</TABLE>

The cost of cancelling options in closing purchase transactions was $514,481,
resulting in a net short-term capital loss of $76,036 for OMSF Premiums
received on expired options resulted in short-term capital gains of $295,659
and $7,110 for OMSF and OSBF, respectively.

<PAGE>
Notes to Financial Statements (Continued)
Oppenheimer Variable Account Funds

5 Forward Foreign Currency Exchange Contracts
At December 31, 1993, outstanding forward exchange currency contracts to
purchase and sell foreign currencies were as follows:

<TABLE>
<CAPTION>
Oppenheimer High Income Fund

Contract Valuation
Contracts to Purchase Expiration Date Amount as of December 31, 1993 Unrealized Appreciation
<S> <C> <C> <C> <C>
Canadian Dollar 1/10/94 $ 179,198 $ 181,246 $ 2,048
Contracts to Sell
Spanish Peseta 1/05/94 $1,092,780 $1,090,596 2,184
Canadian Dollar 1/10/94 2,198,670 2,198,059 611
Deutsche Mark 1/13/94 585,138 568,906 16,232
$3,876,588 $3,857,561 $21,075
</TABLE>

<TABLE>
<CAPTION>
Oppenheimer Bond Fund

Contract Valuation
Contracts to Purchase Expiration Date Amount as of December 31, 1993 Unrealized Appreciation
<S> <C> <C> <C> <C>
Canadian Dollar 1/10/94 $834,716 $844,254 $9,538

Contracts to Sell
Canadian Dollar 1/10/94 $844,489 $844,254 235
$9,773
</TABLE>

<TABLE>
<CAPTION>
Oppenheimer Global Securities Fund

Contract Valuation Unrealized Appreciation
Contracts to Sell Expiration Date Amount as of December 31, 1993 (Depreciation)
<S> <C> <C> <C> <C>
Austrian Schilling 1/20/94 $ 2,009,452 $ 1,981,062 $ 28,390
British Pound 1/20/94 1,992,023 1,997,666 (5,643)
Deutsche Mark 1/20/94 2,712,762 2,672,717 40,045
Finnish Markka 1/20/94 989,034 1,003,039 (14,005)
French Franc 1/20/94 3,166,097 3,181,513 (15,416)
Italian Lira 1/20/94 1,010,246 989,836 20,410
Netherlands Guilder 1/20/94 1,403,058 1,387,215 15,843
Norwegian Krone 1/20/94 1,409,615 1,388,872 20,743
Spanish Peseta 1/20/94 1,020,784 986,678 34,106
Swedish Krona 1/20/94 3,164,686 3,148,612 16,074
Swiss Franc 1/20/94 1,265,522 1,284,515 (18,993)
$20,143,279 $20,021,725 $121,554
</TABLE>

<TABLE>
<CAPTION>
Oppenheimer Strategic Bond Fund

Contract Valuation
Contracts to Sell Expiration Date Amount as of December 31, 1993 Unrealized Appreciation
<S> <C> <C> <C> <C>
Canadian Dollar 1/10/94 $199,879 $199,778 $ 101
Deutsche Mark 1/13/94 175,541 170,671 4,870
Italian Lira 1/13/94 156,527 152,791 3,736
Spanish Peseta 1/13/94 199,636 194,540 5,096
$731,583 $717,780 $13,803
</TABLE>

Notes to Financial Statements (Continued)
Oppenheimer Variable Account Funds

6. Management Fees and Other Transactions with Affiliates
Management fees paid to the Manager were in accordance with the investment
advisory agreements with the Trust. Except as stated below, the annual fees
are .50% on the first $250 million of aggregate Trust net assets, .45% on the
next $50 million, .40% on the next $100 million, .35% on the next $400
million and .30% on net assets in excess of $800 million. OMF fees are
reduced by .05% on the first $250 million of Fund net assets, as well as on
Fund net assets in excess of $4 billion. OHIF pays an additional management
fee of .15% of its net assets annually. OGSF fees are .75% on the first $200
million of aggregate Trust net assets with a reduction of .03% on each $200
million thereafter to $800 million, and .60% on net assets in excess of $800
million. OSBF fees are .65% of net assets annually. Fees are allocated
ratably to each Fund based on the relative value of Fund net assets to total
Trust net assets as of the close of business each day. The Manager has agreed
to reimburse OMF, OHIF, OBF, OCAP, OGF, OMSF and OSBF if aggregate Fund
expenses (with specified exceptions) exceed 2% of the first $10 million of
average annual net assets, 1.50% of the next $20 million and 1% of average
annual net assets in excess of $30 million. The Manager and Monarch Life
Insurance Company, Bankers Security Life Insurance Society (Bankers) and
Confederation Life Insurance and Annuity Company have also voluntarily
undertaken to limit the expenses of OMF, OHIF, OBF, OCAP, OGF and OMSF to
.75% of average annual net assets, after any other reimbursement by the
Manager. The reimbursement is based on the proportionate number of shares in
the accounts of the respective insurance companies. The undertaking by
Bankers extends to OMSF only.

<PAGE>
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
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